Bill Moyers: But here’s the problem for journalism. When we write about inequality, we use numbers that are profound but numbing. I mean, here’s something I just read: over the past twenty years, the elite 1 percent of Americans saw their share of the nation’s income double, from 11.3 percent to 22.1 percent, but their tax burden shrank by about one-third. Now, those facts tell us something very important: that the rich got richer as their tax rates shrank. But it doesn’t seem to start people’s blood rushing.
David Simon: You start talking about a social compact between the people at the bottom of the pyramid and the people at the top, and people look at you and say, “Are you talking about sharing wealth?” Listen, capitalism is the only engine credible enough to generate mass wealth. I think it’s imperfect, but we’re stuck with it. And thank God we have that in the toolbox. But if you don’t manage it in some way that incorporates all of society, if everybody’s not benefiting on some level and you don’t have a sense of shared purpose, national purpose, then it’s just a pyramid scheme. Who’s standing on top of whose throat?
I am very cynical about institutions and their willingness to address themselves to reform. I am not cynical when it comes to individuals and people.
Bill Moyers: I read something you recently told The Guardian in London: “Oh, to be a state or local official in America”—without newspapers—“it’s got to be one of the great dreams in the history of American corruption.”
David Simon: Well, I was being a little hyperbolic.
Bill Moyers: But it’s happening.
David Simon: Yes. It absolutely is. To find out what’s going on in my own city I often find myself at a bar somewhere, writing stuff down on a cocktail napkin that a police lieutenant or some schoolteacher tells me because these institutions are no longer being covered by beat reporters who are looking for the systemic. It doesn’t exist anymore.
“We were doing our job, making the world safe for democracy. And all of a sudden, terra firma shifted, new technology. Who knew that the Internet was going to overwhelm us?” I would buy that if I wasn’t in journalism for the years that immediately preceded the Internet. I took the third buyout from theBaltimore Sun. I was about reporter number eighty or ninety who left, in 1995, long before the Internet had had its impact. I left at a time when the Baltimore Sun was earning a 37-percent profit.
We now know this because it’s in bankruptcy and the books are open. All that R&D money that was supposed to go into making newspapers more essential, more viable, more able to explain the complexities of the world went to shareholders in the Tribune Company. Or the L.A. Times Mirror Company before that. And ultimately, when the Internet did hit, they had an inferior product that was not essential enough that they could charge online for it.
I mean, the guys who are running newspapers over the last twenty or thirty years have to be singular in the manner in which they destroyed their own industry. It’s even more profound than Detroit in 1973 making Chevy Vegas and Pacers and Gremlins and believing that no self-respecting American would buy a Japanese car. Except it’s not analogous, in that a Nissan is a pretty good car and a Toyota is a pretty good car. The Internet, while it’s great for commentary and froth, doesn’t do very much first-generation reporting at all. The economic model can’t sustain that kind of reporting. They had contempt for their own product, these people.
Bill Moyers: The publishers. The owners.
David Simon: You know, for twenty years, they looked upon the copy as being the stuff that went around the ads. The ads were God. And then all of a sudden the ads were not there, and the copy they had contempt for. They had actually marginalized themselves.
I was being a little flippant with The Guardian, but what I was saying was, you know, until they figure out the new model, there’s going to be a wave of corruption.
That transaction with Mr. Madoff, according to the suit, was documented by a single letter drafted in part by Mr. Tepper on Mets letterhead that falsely described the loan as an “investment” by Ruth Madoff in the company that would become the SNY network. It was signed by Mr. Wilpon, Mr. Katz and by Ms. Madoff, though the suit says the men never spoke with her.
Instead, for Thiel, the bubble that has taken the place of housing is the higher education bubble. “A true bubble is when something is overvalued and intensely believed,” he says. “Education may be the only thing people still believe in in the United States. To question education is really dangerous. It is the absolute taboo. It’s like telling the world there’s no Santa Claus.”
But Thiel’s issues with education run even deeper. He thinks it’s fundamentally wrong for a society to pin people’s best hope for a better life on something that is by definition exclusionary. “If Harvard were really the best education, if it makes that much of a difference, why not franchise it so more people can attend? Why not create 100 Harvard affiliates?” he says. “It’s something about the scarcity and the status. In education your value depends on other people failing. Whenever Darwinism is invoked it’s usually a justification for doing something mean. It’s a way to ignore that people are falling through the cracks, because you pretend that if they could just go to Harvard, they’d be fine. Maybe that’s not true.”
“If you need somebody to kill somebody, you need workers — it takes all kinds of meat to make a good sauce,” said the onetime restaurateur, catering consultant and coffee truck owner, referring to what he said were Mr. Basciano’s skills both as a killer and as an earner for the crime family.
Governments have always had an “invisible hand” in the markets, acting indirectly to influence stock prices via the setting of artificial interest rates via Central Banks or gold prices via the London Gold Pool, and at key points in history have been known to intervene directly. But the U.S. was largely a freely traded stock market until the 1987 crash, when President Reagan created the “President’s Working Group on Capital Markets” (i.e. the Plunge Protection Team) to directly intervene in financial markets at times of crisis.
Carl Icahn from Icahn Partners – apparently generated his first investing stake by winning $4,000 playing poker while in the US Army after graduating from Princeton.
David Einhorn (Greenlight Capital) – demonstrated the link between poker and investing in reverse. After setting up Greenlight and achieving extraordinary investment returns over a 10 year period, Einhorn decided to learn poker. Within a few years he had mastered the game and finished 18th in the World Series of Poker
James Simons of Renaissance Technologies – retired from Renaissance (which he founded in 1977) and has one of the top hedge fund returns track records, resulting in Simons making some huge performance fee paychecks. Simons was an avid poker player at MIT, and according to Rachel Ziemba in the book Scenarios for Risk Management and Global Investment Strategies (The Wiley Finance Series) Simons started Renaissance with a focus on gambling related concepts which were retained in the trading models that underpinned Renaissance’s returns
Steve Cohen of SAC Capital – Along with James Simons, Ken Griffin, and John Paulson, Cohen is one of the top hedge fund managers of the past 20 years. Cohen played poker frequently in high school, often playing through the night. According to his brother, Cohen excelled at poker and would have lots of cash stored at his desk. Cohen eventually quit his part time job to focus on poker and says that it taught him how to take risks. Cohen continued to play poker successfully at Wharton while earning his economics degree and developing a fascination with the stock market.
Jeff Yass founded Susquehanna with some of his poker playing friends and has turned it into one of the largest options trading firms in the world.
Faber’s recommends an investment portfolio that is 25% real estate, 25% equities, 25% precious metals and 25% cash and short term corporate — not government — bonds. At then end of each year put your profits into the asset class that performed worst in the previous year.