Charlie Rose had Ted Forstmann on for a segment Wednesday night. Forstmann is a private equity pioneer who forecast the junk bond scandal some years back, and who anticipated the current credit crisis.
As expected, most of the interview deals with the financial mess. Forstmann also touches on his work with education -- he's done great work over the years trying to give poor kids access to quality schooling -- and his admiration for Nelson Mandela.
He also said a couple more things of note. First, that the top earners in America are already getting soaked by the government, and that if Uncle Sam keeps going to them for more and more, they'll just stop producing. I don't want to get political, but the commonsense of that view just strikes me as obvious. Of course, someone a lot smarter than me said that the problem with democracy is that once the general populace figures out it can vote itself entitlements, well, you get the idea.
The second thing is when Forstmann said we should work to create equality of opportunity, not equality of result. Equality of result is not possible, with all the differences between individuals.
Yet we can be sure that no shortage of politicians will ignore that truth. Especially in election years.
"Democracy is the theory that the common people know what's best for them, and that they deserve to get it good and hard"
"Elections are an advance auction sale on stolen goods"
(quotations from H. L. Mencken)
Posted by: d kim | October 31, 2008 at 05:26 PM
d kim: I'm a big Mencken fan, so the quotes are much appreciated.
Posted by: John | October 31, 2008 at 08:33 PM
One more, apropos of this election season's cultish Obamamania:
"Democracy is also a form of worship. It is the worship of Jackals by Jackasses."--H.L. Mencken
Posted by: d kim | October 31, 2008 at 11:32 PM
Point taken, though I should add that Mencken wouldn't find much appealing about the other side. Or most politicians. Remember what he said about Grover Cleveland -- that he was a "good man in a bad trade." :-)
Posted by: John | November 02, 2008 at 08:45 PM
If the "top earners" stop producing, other hungry individuals who are more than happy to net $600K on $1MM will be happy to take their place. Besides, most of the top earners got lucky, they are not more skilled than the next 30% below them.
Posted by: Thomas | November 03, 2008 at 02:21 PM
Thomas: My hunch is that the "top earners" Forstmann referst to include those making less that the figures you give. But perhaps I'm wrong.
Posted by: John | November 03, 2008 at 07:14 PM
Recently saw a video from Juan something or other, saying that (effectively) the entitlements the populace has been voting for themselves over the past 20 year is ... low taxes.
That the infrastructure is decaying, the debt climbing massively, the "security" of social security falling apart, US education worsening (check it out against international students) indicates to me that this is true. And too low of taxes, was the speaker said, a loan taken out against today's children.
I don't know what countries in the world where a high-income earner is more likely to retain so much of his income as compared to the US. Might be a handful at best, but few with the numerous other competitive advantages doing business in the US confers.
Jay Walker
The Confused Capitalist
Posted by: Jay Walker | November 08, 2008 at 02:12 AM
Jay: Count me among those who believe people are entitled to keeping what they earn.
Posted by: John | November 09, 2008 at 10:08 PM