Thomas Piketty's Capital in the 21st Century

Thomas Piketty’s Capital in the 21st Century is a bestselling economics tome whose combination of deep, careful presentation of centuries’ worth of data, along with an equally careful analysis of where capitalism is headed has ignited a global conversation about inequality, tax, and policy. Cory Doctorow summarizes the conversation without making you read 696 pages (though you should).

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Best-paid CEOs perform the worst


In Performance for Pay? The Relation Between CEO Incentive Compensation and Future Stock Price Performance , a paper from U of Utah business-school professors, the relationship between executive performance and executive pay is intensively investigated. The authors carefully document that the highest-paid executives in the 1,500 companies with the biggest market cops from 1994-2013 perform the worst, and that the higher a CEO's pay, the more likely it is that he'll perform worse than his low-paid colleagues. The effect was most pronounced in the 150 highest-paid CEOs.

The authors propose that sky-high pay leads CEOs to be overconfident -- after all, if they're getting $37M for a year's work, they must be pretty damned smart, so anyone who disagrees with them is clearly an idiot, after all, look at how little that critic is paid! The longer a CEO is in office, the worse his performance becomes, because he is able to pack the board with friendly cronies who keep hiking his pay and overlooking his underperformance. And CEOs suck at figuring out when to exercise their stock options, generally getting less money than they would by following conventional financial advice.

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Piketty's inherited-wealth dystopia: private capital millionaires multiply


Thomas Piketty's much-discussed economics bestseller Capital in the Twenty First Century prophesies a future where inherited wealth dominates the world, because the rate of return on capital outstrips the rate of growth in the economy, meaning the money your ancestors earned will always outstrip what you could earn. A new Boston Consulting Group report confirms Piketty's hypothesis, concluding that the share of wealth due to capital increased by 14% last year

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Matt Taibbi's The Divide: incandescent indictment of the American justice-gap

Matt Taibbi’s
The Divide: American Injustice in the Age of the Wealth Gap
is a scorching, brilliant, incandescent indictment of the widening gap in how American justice treats the rich and the poor. Taibbi’s spectacular financial reporting for Rolling Stone set him out as the best running commentator on the financial crisis and its crimes, and The Divide — beautifully illustrated by Molly Crabapple — shows that at full length, he’s even better. Cory Doctorow reviews The Divide.

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UK Tory MP who helped kill Legal Aid is wiped out by defending himself against sexual assault claim

Alan sez, "At least he's got the sense to own up and say he's sorry. Nigel Evans used to be in Parliament. While there he helped cut legal aid. As a result, people who are charged by the government but found innocent can't recover costs. Mr Evans is now looking at a (UKP) 130,000 legal bill (plus VAT) after defending successfully against an allegation of sexual assault. Of course, were he in the US he'd be in the same or worse shape."

He's been wiped out, and has pledged to try to undo the damage he's done to Legal Aid if he gets reelected. Meanwhile, the real victims of this are poor crime victims, especially women in abusive relationships, who are grappling with a system where only rich people get lawyers.

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How airlines treat the one-percenters

Qantas A380's fully flat Skybed in business class

In the April 21 edition of The New Yorker, David Owen describes the luxuries of premium-class seating and visits the firms that design jet interiors.

Seven years ago, I flew business class on Qantas from Australia to California, a thirteen-hour trip. I hadn’t had much experience outside economy, but I didn’t want to look like a front-of-the-plane rookie, so I stowed my “amenity kit” without ripping it open, declined the first cocktail a flight attendant offered me, and tried to appear engrossed in a book while the passenger nearest me bounced around like a four-year-old at a birthday party. I didn’t begin to play with my own seat until after dinner, when I lowered it into its fully extended position, and stretched out -- not to sleep, which is something I hardly ever manage on airplanes, but to see how the thing worked. The concave back of the seat shell formed a domed enclosure over my head, like a demi-cocoon. Suddenly, I heard people speaking in loud voices and banging things around. I sat up, indignant -- and realized that the noise was the sound of breakfast being served. I’d slept for eight hours straight, something I never do even at home. In a little while, we began our descent into Los Angeles.

Game of Thrones: How airlines woo the one per cent

Study: American policy exclusively reflects desires of the rich; citizens' groups largely irrelevant

In Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens [PDF], a paper forthcoming in Perspectives on Politics by Princeton's Martin Gilens and Northwestern's Benjamin Page, the authors analyze 1,779 over the past 20+ years and conclude that policy makers respond exclusively to the needs of people in the 90th wealth percentile to the exclusion of pretty much every one else. Mass-scale intervention from citizens' groups barely registers, while the desires of the richest ten percent of America dictate practically the entire national policy landscape.

In a summary in the Washington Post, Larry Bartels writes,

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HOWTO buy your way out of a California speeding ticket

Pricenomics revisits the perennial scandal of the 11-99 Foundation, which benefits California Highway Patrol officers and their families in times of crisis. Major donors to the foundation receive a license-plate frame that, drivers believe, acts as a license to speed on California highways. The plates were withdrawn in 2006 after a CHP commissioner's investigation seemed to validate the idea that CHP officers would let off drivers with the frames. The frames are back now, thanks to a funding crisis from 11-99, and some posters on cop-message boards say that the frames themselves aren't enough to get you out of a ticket -- because many of them are counterfeits -- but if you have a member's card, too, well, that's another story, wink, nudge.

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Rich, admitted child rapist granted probation because he "would not not fare well" in prison [trigger warning]

Robert H. Richards IV, a wealthy heir to the du Pont fortune, has been spared prison after being convicted of raping his three year old daughter. Delaware Superior Court Judge Jan Jurden sentenced the admitted serial child-rapist to probation on the ground that he "would not fare well" in prison. The case echoes the affluenza scandal in which a judge spared a rich child a prison sentence after he had killed four people on the grounds that he was so rich that he couldn't distinguish right from wrong.

As the long, excellent article in the News Journal notes, it's nice to hear judges focusing on the rehabilitative dimension of the justice system, but it's enraging and offensive to see that this kind of mercy is disproportionately dispensed to the wealthiest members of society, especially as America sinks further into its decades-old scandal of mass-incarceration, becoming one of history's most prolific imprisoners of poor people and people of color.

The prosecutor bears some responsibility here too, having agreed to a plea bargain for a lesser charge without a mandatory minimum sentence -- the kind of prosecutorial discretion that we'd have loved to have seen in the Aaron Swartz case and many other cases involving people who are not trust-fund multi-millionaires.

Richards is a healthy, imposing man in early middle age. Many others who would "not fare well" in prison, including trans* people and people with disabilities are routinely sentenced to long, brutal incarceration. It would be nice to see the American judicial system extend this mercy to them. In particular Judge Jurden has a reputation as a "tough sentencing judge" (except when confronted with child-rapists from one of America's largest family fortunes).

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Photos from the Rothschilds' 1972 surrealist ball


Hang the Bankers has a set of photos from 1972 surrealist ball hosted by Marie-Hélène de Rothschild at the Château de Ferrières, with Salvador Dali in attendance. Hang the Bankers cites this as evidence of "the underlying ideology and the mind state of the occult elite," which sounds like hogwash to me. I mean, I'm all for reflexively condemning the hyper-rich, but if you're a weird shadowy billionaire aristo, better you should be spending your unimaginable riches on cool dress-up parties than tacky mega-yachts or sabotaging health care bills.

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Archbishop of Newark builds himself a palace while the church shuts down schools for lack of funding

The Catholic Archdiocese of Newark is shutting down its schools due to lack of funding, but it still has a fortune it can use to build a small palace for its archbishop John J Myers, who is soon to retire after a career whose highlights include dismissing victims of sexual abuse and shielding abusing priests. Also, he insists on being addressed as "Your Grace." He's a made-in-America version of Germany's disgraced "Luxury Bishop." Cory 34

Report from a meeting of Wall Street's secret, tasteless plutocrats' club


In the process of writing his just-released book Young Money, an investigative look at the bankers who've joined Wall Street since the crash of 2008, author Kevin Roose snuck into a meeting of the secretive Kappa Beta Phi club -- an organization of hyper-rich Wall Street bankers.

Roose recorded the captains of of industry, whose shady dealing had crashed the world economy and plunged millions into untold misery, cavorting on stage, making jokes about poor people and Hillary Clinton, dressing up in drag, and singing an anthem about how much bailout money they'd suckered out of the feds, to the tune of Dixie: "In Wall Street land we’ll take our stand, said Morgan and Goldman. But first we better get some loans, so quick, get to the Fed, man."

New York Magazine has a membership roll of the Kappa Beta Phis, which is a who's who of the richest, most powerful men on Wall Street.

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For sale: Swiss Scrooge McDuck swimming pool/vault full of shiny coins


If you've ever dreamed of owning a bank-vault mounded high with shiny coins in which you can bathe like Scrooge McDuck, now is your chance. A Swiss bank-vault filled with 8 million Swiss 5-cent pieces is up for auction. The vault was made in 1913 for the Schweizer Volksbank. The coins -- 15 tons' worth -- were used in a 2013 installation in which they were dumped in a public square, with no security, as an exercise in public trust. The coins and the safe are presently in Basel. You will have to relocate them.

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HSBC settlement approved: no criminal charges, 5 weeks' profit in fines, deferred bonuses for laundering billions for narco-terrorists


Remember when HSBC got caught laundering billions for Mexican narco-terror cartels? Remember how they offered to pay five weeks' profits in fines and to defer their executive bonuses to escape criminal charges?

The crime-fighting legal eagles at the Department of Justice approved the settlement last week. Remember, though, if you are suspected of laundering money or selling drugs, the DoJ will take your house away and put you in jail for the rest of your life. Nice to be "too big to jail." Still, deferring multimillion-dollar bonuses has gotta hurt, huh?

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Why the hyper-rich turn into crybabies when "one percent" is invoked

Yesterday, the Wall Street Journal published a letter by Tom Perkins (the "Perkins" in the venture capital firm "Kleiner Perkins") in which he compared rhetoric about the unjust riches of the "1 percent" to the events of Kristallnacht, the overture to the Holocaust. In a terrific editorial, Josh Marshall explains why the hyper-rich turn into such crybabies when it's pointed out that they've gamed the system so that they grow richer and richer while everyone else gets poorer:

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