One More Thought About Elitism

If Anne Applebaum wants to know why Americans hate elites, well, here's why:

About three dozen of the top publicly held securities and investment-services firms—which include banks, investment banks, hedge funds, money-management firms and securities exchanges—are set to pay $144 billion in compensation and benefits this year, a 4% increase from the $139 billion paid out in 2009, according to the survey. Compensation was expected to rise at 26 of the 35 firms.

The data showed that revenue was expected to rise at 29 of the 35 firms surveyed, but at a slower pace than pay. Wall Street revenue is expected to rise 3%, to $448 billion from $433 billion, despite a slowdown in some high-profile activities like stock and bond trading.

Where revenue falls short, analysts and experts expect that Wall Street will lay off employees in order to keep bonus pools high. U.K.-based Barclays Capital and Credit Suisse have cut some staff, while Morgan Stanley has a hiring freeze in place.

Read the story and the pattern becomes clear: If a company's revenue goes down, pay for top executives goes up. If a company's revenue goes up, pay for top executives goes up even faster. And some companies are willing to lay off people to make sure the the "top" people get their money.

There is no "down" button on the meritocratic elevator, in other words. No matter how well or bad their businesses do, the elites do better -- sometimes at the expense of the not-so-elite. If Americans think that "success" is disconnected from actual success, well, who can blame them?

Typo nearly wipes out your retirement savings

That 1,000-point drop on Wall Street today? Guess how it happened?

In one of the most dizzying half-hours in stock market history, the Dow plunged nearly 1,000 points before paring those losses in what possibly could have been a trader error. According to multiple sources, a trader entered a “b” for billion instead of an “m” for million in a trade possibly involving Procter & Gamble [PG 60.75 -1.41 (-2.27%) ], a component in the Dow.

That set off a chain-reaction panic on trading floors. As Daniel Foster at National Review noted:

P&G's 37 percent nosedive was only responsible for 172 points of the 992.60 the Dow lost in the slump. The rest was market reaction — and part of that was computerized and automated.

You know, capitalism and free trade generally make a lot of sense. But our current method of allocating capital -- Wall Street being the big mover in that process -- keeps finding new ways to make itself look dangerously insane. Terminator was about how computers and robots set off an apocalyptic attack on humanity; turns out they don't need nuclear weapons to do that, just mindless programming instructions to start selling if somebody else is selling -- even if that sale is the result of a "fat finger" typographical error. Holy crap.