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Skin in the Game

A Capitalist Horror Story

Foreword by JR

The reviews by Ralph Nader of N. Nicholas Taleb’s three books are despite his highly biased Wall Street and background, worth reading. This is especially the case for me particularly with his first book Black Swan and to a lesser extent Anti-fragile which interested me given my academic background and continued interest in probability theory.

The stock market meltdowns, a gargantuan global economic debacle that began on Wall Street throughout 2007-09 and subsequent government bailouts was inaccurately deemed a “black swan event” by Taleb.

After all, the crash was predicted by a few skeptical and renegade economists (anti-yes men) such as Noriel Roubini who was described as a deluded lunatic and crack pot by the group think mainstream capitalist yes men and boot licking neo-liberal economists on Wall Street and business news channels. This event was in many ways worse than the 1929 crash that created the Great Depression as the markets in those dismal days took three decades to recover.

Having failed everyone badly, capitalism should have been over and dead in the water back then. But in the 2009 financial debacle, the Great Depression crash pales in comparison as trillions of dollars of fictitious capital appeared out of a vacuum to bail out the mafia banks and criminal corporations with their greedy, psychopathic and incompetent CEOs and CFO’s. Call it iterations of the capitalism racket, the infamous BBBB (Boom-Bubble-Bust-Bailout) that now appear with predictable regularity, the last being the 2020 Federal Reserve Chairman Jerome “Whatever it Takes” Powell’s golden parachute for the stock markets with trillions more of fictitious capital once again created with a magic wand. Heads we capitalists win, tails the credulous hoi polloi lose. As the late George Carlin rightly said, “the game is rigged; they own you”. The moral degenerate Powell was only concerned about the impact of covid-19 on mafia banks and monopoly capitalism's farcical manipulated stock markets rather than the millions in the US who died (the worst death rate in the world) from the virus which continues to mutate, infect and kill people. Like the cancerous capitalism that is destroying the natural world, this deadly plague will very likely not go away anytime soon.

Where is accountability and who have the real “entitlements”? Homelessness is now a disgraceful epidemic throughout the West as the destitute poor have been thrown off the bourgeoisie bus that serves the 1%. And it’s only the poor and those with the wrong color who are jailed and punished for violating the capitalist rule of law. However, there was pyramid scheme con man Bernie Maddoff in the US who made the mistake of bilking the rich and corporate criminal Canadian "Lord" (is this pompous ass really a god?) Conrad Black who swindled both his Canadian and American corporatist cohorts and business partners. Lard Black was eventually extradited to the US and ultimately convicted of fraud and conspiracy in, spending his brief jail time in an American country club prison before being not surprisingly pardonned by the alcoholic doltish clown President George W Bush.These two huckster are a rarity in that they actually went to jail for their crimes.

There are baboons of randomness and ignoramuses of probability - like the idiots at gambling casinos and the latest mania peddled endlessly on every television sporting event and the equally deluded bozos who buy lottery tickets duped by con men capitalists of randomness. But Taleb’s corrective is the same for even the mathematically challenged who blow their pay checks on once illegal loser lotteries like Lotto 6-49 and the endless pro sports betting scams peddled endlessly on TV these days: they must have “skin in the game” in a capitalist culture for which anything is legal if for profiteering is the objective. This skin in the game mantra is required to ensure people think rationally and avoid stupidity by learning from their mistakes. After all, we're informed what many children learn by junior high school: in a deeply immoral capitalist one must learn that unless you are blessed with the silver spoon in this vile socio-economic sewer one must learn to not trust your neighbor and learn the capitalist lesson of "dog eat dog" "screw your neighbor" that like a weed killer exterminates failure which in many cases up in destitution, poverty and homelessness. Even the pathetic bullshitting corporatist betting platforms are  attempting to exonerate themselves from elementary moral responsibility by hypocritically promoting “responsible betting”. Where is my vomit bag? Face the facts of elementary probability theory - and moral principles of justice and fairness pretty much all children seem to intuitively understand - but which is beaten out of them by the vile ideology of legalized theft called corporate capitalism. The churches, schools and corporate media carry out most of the required indoctrination.

The reality is for anyone with even rudimentary understanding of elementary probability theory that there is no such thing as “responsible” gambling; it's merely one of many variations of human impulsiveness, ignorance stupidity and lack of self-discipline.

According to the inculcated mythical capitalist rule of “Flourish or Die” (like the ludicrous bullshit fairy tales of the meritocracy and self- made man) those “entrepreneurs”, con men and hucksters who fail must face ruin, or death but not today with the predictable iterations of the aforementioned BBBB. When are these moral degenerate irresponsible banking cockroaches going to be held accountable? They never have and never will as a 21^st century version of Mark Twain’s Gilded Age called neo-liberalism and neo-conservatism prevail as the current economic dystopias that plague all but the privileged 1%. And do they give a damn about the ugly facts of our overpopulated natural world dying a slow death by the disease called Kamikaze Godzilla capitalism? The people bail the bastards out as we’re informed that the failed bad ass banks and criminal corporations are “too big to fail” which makes no more sense than “too small to fail”. Then there’s the moral vacuum immunity to the rule of law they created as the neo-lib and neo-con capitalist governments hand out “get out of jail free cards” to their corporate welfare bum buddies. Accountability ZERO!

Most of the diminishing middle class and de-unionized working classes have skin in the game, real liabilities, shitty bullshit jobs and personal responsibility and accountability as no one saves them from dead end jobs, starvation and destitution. No one bails them out of their loss of a foreclosed home like the mafia banking bastards and cockroach corporations. For the retirees with unlivable pensions there are the scams of “reverse mortgages” (after 30 years of mortgage payments, the larcenous banks want your home back) as these poisonous scams are peddled by celebrities bereft of ethics.

To cite one obvious rare example of genuine skin in the game are physicians who follow moral codes such as The Hippocratic Oath and have professional pride and reputation with serious legal consequences for error or malpractice, a deep understanding of complex systems and centuries of accrued ethical codes and professional standards. And what about the integrity and alleged risk of so-called “entrepreneurs”, rapacious Gordon “Greed is Good” Gekko psychopathic monsters of gross inequality such as Donald Trump and the world’s richest man Leon Skum (yeah this Trump loving asshole with several wives and 12 kids adding to a pre-existing overpopulation crisis of 8 billion dumb and dumber homo saps is apparently dyslexic)? NADA, ZILCH! ZERO! Where are my tax rebates, corporate welfare checks and stock options? Or the corporate stock buybacks (AKA insider trading); or my ill-gotten scammed billions stored in offshore tax havens? These are the same insatiable creeps who write the laws and structures of hierarchy and power that serve their interests. And if this fails there are the serve and protect hired thugs called cops who will be called out to crack skulls and kill if necessary. If that does not work, there's the military. Remember the Kent State University incident in the early 1970s when President Nixon called out the National Guard who opened fire and killed several peacefully demonstrating college kids. This was what Neil Young's great song "Ohio" was all about. It’s called “democracy” folks!

https://www.youtube.com/watch?v=JCS-g3HwXdc

And who are these pampered parasites – a few listed below….

Below is a Counterpunch article by Ralph Nader from 2012 following up on the 2007-09 version of the BBBB debacle that all but the bailed out wealthy elites are still dealing with – authoritarianism (dystopian fascism is back), austerity, grotesque economic inequality, inflation, ecosystem collapse, a dying natural world and out of control homelessness on a global scale. Democracy of course has never existed and we are as far from it as we were in the Dark Ages when theocracy and autocracy ruled (as they still do).

Skin in the Game

White House and Wall Street “Yes Men”

By Ralph Nader, December 7, 2012

Nassim Nicholas Taleb’s new tour de force book Antifragile: Things that Gain From Disorder is a frame-of-reference altering work that a Wall Street Journal reviewer confessed he would have to read “again and again” presumably to figure out its “somersaults of the mind,” to borrow a phrase from Yoko Ono.

Antifragile, following Taleb’s Black Swan that sold 3 million copies and was a world-wide bestseller, is actually six books in one, as Taleb says. Most reviewers did not comment on “book six” titled “Skin in the Game.” In Washington, D.C. and on Wall Street, the absence of skin in the game is the presence of power without responsibility or vulnerability.

Taleb writes: “The worst problem of modernity lies in the malignant transfer of fragility and antifragility from one part to the other, with one getting the benefits, the other one (unwittingly) getting the harm, with such transfer facilitated by the growing wedge between the ethical and the legal.”

Recognizing the use of self-serving law by the powerful as an instrument of oppression to engage in blatantly unethical conduct, Taleb offers former Secretary of the Treasury, Robert Rubin, as an illustrative. With Bill Clinton, Rubin pressed Congress in 1999 to repeal the Glass-Steagall Act. Just before the repeal’s passage, he resigned and quickly joined Citigroup, the giant financial conglomerate where he was making $40 million within a few months.

It was not a coincidence that Citigroup was the major lobbyist for repealing Glass-Steagall, an FDR-era success, separating commercial banking from investment banking to assure stability and minimize conflicts of interest that were very risky to trusting investors. But, it wasn’t Rubin who took any risks. After disastrously co-directing Citibank’s strategy to the edge of bankruptcy, he proceeded to rack up millions of dollars in bonuses while pushing to make sure that Washington directly bailed out his bank and other financial giants.

Because of Rubin’s avaricious and wrongheaded behavior, pension funds, mutual funds, individual investors, taxpayers and workers all paid the price for the 2008 Wall Street Collapse. Despite this wreckage, Rubin pops up after Obama’s election as part of the group of the president-elect’s leading advisers.

This is what Taleb means when he says this type of “heads I win, tails you lose” privilege is possessed by executives.  He adds that “this system is called ‘incentive-based’ and supposed to correspond to capitalism. Supposedly managers’ interests are aligned with those of the shareholders. What incentive? There is upside and no downside, no disincentive at all.” In short, “no skin in the game.”

Likewise, when Congress abdicated their constitutional war-declaring authority to President George W. Bush in 2003, members of Congress and their families had no skin in the game. These politicians who gave Bush the power to unlawfully invade Iraq paid no price. Indeed, they retained their upwardly mobile status. The White House with its mass propaganda machine and the cowardly Congress paid no penalties for violating the Constitution.

Had there been a law requiring the drafting of able-bodied age-qualified members of their families (CCRs fortunate sons) whenever the government plunged the country into war, these legislators would have had a personal downside risk of horrific injuries and death. There would have been deliberative public hearings, where some of the hundreds of vocal anti-war retired high military, national security and diplomatic officials would have exposed the Bush/Cheney lies, deceptions and cover-ups leading to catastrophe for the people of Iraq, the U.S. economy, and military families who especially suffered the downsides.

Taleb gives examples from history where high performance came from being forced to have “skin in the game,” as in Roman times when engineers had “to spend some time under the bridge they built – something,” he says, “that should be required of financial engineers today.”

To those oligarchic capitalists who take little risk (and are bailed out when they fail) and accept huge rewards while imposing political and economic power over the people, we should ask them at every opportunity, do you have skin in the game?”

The virtue of Anti-Fragile is that it is hard to summarize because, in the words of Random House executive editor Will Murphy, it attempts nothing less than to build a guide to thriving – as societies and individuals – in a world too complex to understand: a world governed by the unforeseen events which Taleb, in his previous book, dubbed “Black Swans.”

Daniel Kahneman, Nobel laureate and author of the book Thinking Fast and Slow – no slouch himself – says of Taleb’s writings that they “changed my view of how the world works.”

Antifragile, a book drawing on the wisdom of many ancient cultures is an explanation for all ages and all tunnel visions – a boisterous and witty antidote to bureaucratic and individual anomie.

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