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Here is the Divide

April 27, 2010

    Matthew Yglesias, in rare form, identified a fundamental partisan divide in a blog post today. One that I completely disagree with.

    Becoming obscenely wealthy in the business world and then hoarding your money is, itself, morally wrong.

    I’m not very knowledgeable in formal moral philosophy, and not nearly as knowledgeable as Matthew…but I’m sure that there is a formal construct within which you can draw this logical conclusion. Perhaps “Rawlsian equality”? I’m assuming Matthew wouldn’t simply take “god” at his word on this one…Of course it easily follows from this statement that the government does, in fact, own your wealth…and can compel you to give it up for any means it desires, especially if it is deemed that your level and use of wealth is “morally wrong”.

    I find that to be complete nonsense, and rooted deep within the nonsense is a fundamental misunderstanding about what money is, and how it works. I wonder if Matthew would like Blankfein to divest the portion of his wealth that is in government securities? Maybe he would like everyone to do this? Or perhaps he believes that Blankfein has all of his money in cash, in his basement, and he just makes cash mountains and swims in it — in which case, he should probably stop blogging about financial regulation.

    I think the likely excuse is that this is how Matthew really feels, something for which he doesn’t need an underlying framework — it just “feels wrong”, or “he knows it when he sees it”.

    As I said, I don’t agree with the statement. Just my two cents, but this seems like the major divide between Yglesias and Me.

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5 Comments leave one →
  1. April 27, 2010 7:56 pm

    Isn’t the wealth Blankfein has in government securities being reinvested into the economy by the government, though? In a way, Blankfein is hoarding but the government is unhoarding it for him.

    I don’t really get what Yglesias is suggesting either, though… because his statement as you quote it would be true, if at least marginally, only within the scenario of McScrooge McDuck’s money bin.

    Unless I’m just completely confused. That might be it, too, even if I’m right here.

    • April 27, 2010 8:24 pm

      That is correct. In fact I would go out on a limb and say that 99.99% of Blankfein’s net worth is tied up in a mix of liquid and illiquid assets…all of which facilitate investment. Unless he happens to be a drug dealer, he probably has very little in cash.

      The houses he owns facilitated builders. The securities (bonds and stocks) he owns allows corporations and governments to fund their various projects…etc.

      As I said, it’s a confusion of how money works…and it may be an accident that he is thinking that way, but that doesn’t make his statement correct.

  2. Ryan Vann permalink
    April 29, 2010 9:29 pm

    I find most the Myspace USP crowd to be a waste of time; they exhibit far too much confirmation bias. Then, there is the problem of everyone feigning to be aloof. Some just seem unwilling to admit understanding of plain English.

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