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Clayton M. Christensen: The New Church of Finance: Deeply held belief systems and complex codes must be changed

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  • Beart SAINT LOUIS, MO
    Dec. 18, 2012 9:18 a.m.

    Interesting that no one has mentioned the blind elephant in the room (Mr Romney). Based solely on his stated positions during the presidential campaign, he would appear to be a card carrying member of that church of finance. A bit of a conflict of interest, unless he is blind to the conflict, as I intimated above, not to mention all the LDS voters who did not call him on those positions. In that case, I have only to say, as others also have, there is none so blind as he (or she) who WILL not see.

  • rick122948 boise, id
    Dec. 17, 2012 10:27 p.m.

    And what is worse we give the same tax incentives meant to create jobs and grow our economy in world markets, but instead just as Christensen points out the 1% aren't creating jobs they are simply manipulating the rest of us and taking the lion's share of any income there is available and then scream about being taxed on it.

  • Jim Allman Draper, UT
    Dec. 17, 2012 9:01 p.m.

    I believe Utah's economy is built largely on 'Efficient Innovations' Perhaps it's time to lead in 'Empowering Innovations' as well. Another enlightening article by Clayton Christensen:

  • John Brown 1000 Laketown, UT
    Dec. 17, 2012 2:55 p.m.

    More articles like these please!

  • Bone Ignorant Hick Pittsburg, PA
    Dec. 17, 2012 11:56 a.m.

    Part 2 of 2

    DC3, like most US manufacturing, and Marriot (which manages but does not own most of its hotels, like the new church of finance advocates) have outsourced almost everything but their brand name. Maybe, those in academia who created the New Church of Finance understood this and operationlized it forumlaically. Taiwan and Asian companies are neither subject to nor compliant with the US’ ridiculous environmental and labor regulations. Therefore they can afford to build $10B factories. Not even the most subsidized US company could pull that off
    with the NLRB and EPA itching to sue them out of existence.

    With Big Labor, Big Gov’t, Big Bailouts, and the Fed’s devaluation of the USD, who would park capital in the US economy for more than one year? If the fed gov't needs revenue, guess how much Wal-Mart, Home Depot, Lowes, and Target employees and the corporation pay to that?

  • Bone Ignorant Hick Pittsburg, PA
    Dec. 17, 2012 11:27 a.m.

    Part 1 of 2

    So...angel investing, seed funding, venture capital, etc. in Silicon Valley has been far less than then the money flowing into efficiency innovations over the past 20 years? Not sure about that, as it nullifies Google, Facebook, LinkedIn, etc. IPO's.

    Efficiency innovations, such as Wal-Mart, have a negative effect on employment and their "resulting efficiency gains allow financial capital to be invested elsewhere." This is a good thing and displaced employees are eventually able to find better jobs after their jobs are disruptively innovated, right? When the "resulting efficiency gains allow financial capital to be invested elsewhere," the article assumes this also has a negative effect on employment. Any basis for these claims?

    "A healthy economy creates and sustains more jobs before squeezing out inefficiencies," but for the ever-expanding management consulting sector, mergers & acquisitions, and other healthy market segment vertical and horizontal consolidation.

  • Seattleview Federal Way, WA
    Dec. 16, 2012 11:42 p.m.

    Very interesting article. I have had friends who worked at Boeing complain about the influence that the McDonald Douglas CEo created within Boeing (after Boeing bought them and he came with the deal) when he brought his ROE ratios. It lead to incredibly short sited decisions and practises.

    Sounds like another reason why the US needs real financial and tax reform. Maybe after Obama gets his promised raise of tax rates on the wealthy he will try to do something in this area.

  • GreyWolf Weston, ID
    Dec. 14, 2012 5:04 p.m.

    I think everyone should consider a couple of points. One, while it may be true that businesses can take advantage of people, government can too. Government is necessary for a free society, but if we can't rely on ourselves as individuals to be informed what we are buying and from where, how can we rely on ourselves to elect people who will? Individuals don't automatically become wiser or more knowledgeable, or less subject to corruption, just because they are elected or appointed to public office.

    Two, the transfer of money from one to another is not a loss to either in most circumstances. When someone buys something, they are trading their money for something that is worth more to them than that money. If both parties do not benefit, at least in their own perception, then the transaction would not take place.

  • Sneaky Jimmy Bay Area, CA
    Dec. 14, 2012 10:09 a.m.

    This is one of the best articles to appear in any US newspaper. The DN should be congratulated and encouraged to continue with this kind of journalism. I will now present my proposal for righting what is wrong with the US economy.
    1) repeal the 16th (income tax) amendment. Let the local govt tax the people.

    That's all. That would solve a multitude of problems and be the innovation to stimulate job creation.

  • Dan Bishop Lehi, UT
    Dec. 13, 2012 3:34 p.m.

    Fifty years ago, the typical investor was a doctor, dentist, lawyer, etc, who had more than enough to live on and invested his surplus for the long term, The internet and laptop traders changed that. The people I saw doing it were middle class with a touch of greed. The stock market has become crazy with rumors and news spread around the globe at the speed of light causing investors who can hardly afford to loose a cent to bail. We need incentives to keep people from selling like this, for sure.

  • marxist Salt Lake City, UT
    Dec. 11, 2012 11:23 p.m.

    Clayton, you need some Marx to give a more complete perspective, as he sheds light on the relationship between capital and labor. But then Marx is not discussed in the top business schools (to a major degree out of fear and the need for political correctness). I'm sure this comment will be summarily dismissed.

  • KanataHal Ottawa, 00
    Dec. 11, 2012 10:07 p.m.

    If the federal government is unable to effectively regulate business activities, then it is a very serious problem. It is much more difficult to regulate a knowledge-based economy than a traditional manufacturing economy, but failure to do so increases the potential of the US being displaced from its top spot in the world. If this were to happen, a lot of the levers of power would then be outside the country and there would be a huge correction downwards. Everyone would lose money. I think that raising the tax rate would allow the government to respond proactively to these financial threats and keep America from being displaced as a superpower. Continuing the present laissez-faire, low taxation policy might lead to financial problems that it might not be able to solve. This is what happened to Britain about 100 years ago, when most of their wealth came from banking. We cannot expect that America will be forever immune from this, either.

  • Ann Amberly Greenbelt, MD
    Dec. 11, 2012 8:05 p.m.

    Good points by Clayton Christensen, but to go further I think it's time he asked his wife what an economy is for. Any mother will tell you that an economy is for giving people the capacity to feed, clothes, and educate their children, and ensure their children have a way to do the same for their own children by being able to get a job. But our economic models do not see things in this way. If they did, then the ratio of number of living wage jobs created divided by profit would be the figure I would want to see. The lower the figure, the higher that company's tax rate.

    Time to have some mothers create our economic models . . . . have you thought of including them, Clayton?

  • Conservative Cedar City, UT
    Dec. 11, 2012 3:17 p.m.

    The economist descriptive terms are very complex. I think the basic situation America faces is that our workforce is not willing to work for $8 an hour. I'm sure not. But, there are millions in other contries that are ready to work for that wage. And countries like China and India have mobilized their workforces and provided the environment for them to mass produce what we consume. And their workforce makes a descent wage.

    I learned more from the presidential campaign regarding taxes and outsourcing and job creation. Americans with the money (such as Mitt) are not at all interested in improving America's economy. They are focused on their own wealth. So, that leads to outsourcing production to 2nd or 3rd world countries. That's where they can insure a huge profit.

    Walmart is the perfect model of this. Nearly everything in the store comes from the absolute least-cost source, much of it overseas. So the economists can theorize and explain till the clock runs out. But in the end it comes down to greed, not concern for the national economy.

  • Rod Mann Highland, UT
    Dec. 11, 2012 2:44 p.m.

    Great article. My take away is that many businesses are playing defense when they invest exclusively in sustaining and efficiency innovations Over the long term the best defense is a good offense. When offense is neglected (empowering innovation) the long-term prognosis is not good. The focus on short-term gains is an significant issue. From my vantage point the root cause is selfishness. Tax policies can be changed but I believe in reality they are a reflection of the morals of society as a whole. Not sure we change the "I want it and I want it now" thinking that is so pervasive. In any case current tax policy makes it easier for businesses to operate based on short term goals but it doesn't force them to do it.

  • Ultra Bob Cottonwood Heights, UT
    Dec. 11, 2012 7:45 a.m.

    rnoble.

    No mater what you call it, the transfer of money/wealth from one person to another, is income to one and loss/cost to another.

    Raw income is the best measure of a persons benefit of being an American that we have.

  • one old man Ogden, UT
    Dec. 10, 2012 9:14 p.m.

    DN censors -- how in the world is this comment inappropriate?

    page 118 "Who Stole the American Dream" by Hedrick Smith.

    Arthur Leavitt, former head of SEC tells of an attempt to stem dishonest stock options accounting practices for top executives, "During my 7-1/2 years in Washington nothing astonished me more than witnessing the powerful special interest groups in full swing when they thought a proposed rule or piece of legislation might hurt them, giving nary a thought to how {it} might help the investing public. With laserlike precision, groups representing Wall Street firms, mutual fund companies, accounting firms, or corporate managers would quickly set about to defeat even minor threats. Individual investors, with no organized labor or trade associations to represent their views in Washington, never knew what hit them."

    This book should be read by anyone who sincerely cares and wants to go beyond spouting propaganda from either side. We are in big trouble in this country and solving the problems requires informed voters.

    The big problem, however, is that too few are willing to make an effort to become informed of just what the truth really is -- or isn't.

  • Waffle Street Lititz, PA
    Dec. 10, 2012 8:32 p.m.

    This article, long on allegations and short on substance, is hardly worthy of its author. The entire purpose of capitalism is to maximize returns on capital by creating as much customer value with as few resources as possible. Indeed, high prospective returns on capital are the clearest signal as to where the market (read: customers) wants resources allocated.

    Here's the heart of the matter: economic growth becomes increasingly knowledge-, rather than capital-intensive in mature economies. Massive fallout in the labor markets is the unfortunate byproduct of this transition. Compare the skill set of the average Apple or Google employee to that of the typical mom and pop retail proprietor.

    Structural unemployment and stagnant wages for many workers are symptoms, but the disease of today's economy isn't the Church of Finance. Rather, it's the increasing disparity between the skill sets demanded by the knowledge-intensive labor market and the skills possessed by the displaced workers.

  • one old man Ogden, UT
    Dec. 10, 2012 8:06 p.m.

    From page 104 in "Who Stole the American Dream:"

    Two trends are responsible for today's hyperconcentration of wealth in America -- collective decisions over time by corporate elite to take a far bigger share of business earnings for themselves, and increasingly pro-rich, pro-business tilt in Washington since late 1970's.

    "The U.S. tax code is the most political law in the word," Jonathan Blattmachr, tax attorney at Milbank, Tweed, Hadley & McCloy.

    According to Forbes, capital gains account for 60% of the income of wealthiest Americans.

    15% tax rates for gains means that most of the megawealthy pay only 15% on the majority of their incomes -- far less in tax than their secretaries, charffeurs, or butlers.

    And ordinary employees pay higher payroll tax - 7.65% than very wealthy whose taxes are capped on anything over $106,800. As a result, super-rich pay as little as 1 or 2% of their earned income in payroll taxes.

    About half of all capital gains go to just 315,000 people at the top -- out of 315 million Americans.

    Read Hedrick Smith's book and learn something.

  • rnoble Pendleton, OR
    Dec. 10, 2012 3:17 p.m.

    Ultra Bob

    All income is not equal. Short term trading, otherwise known as "day-trading" creates income by betting that someone else will lose. That is not the same as a man taking a piece of wood and creating a fine top or bowl or chair for sale. Neither is it the same as a man agreeing to perform work on that top or bowl or chair for part of the proceeds. Capital that supports the conversion of natural resources in providing goods and services is not the same as capital used in speculation that a given stock will be worth more in a few hours because of some specific news item and then the extraction of that worth by selling to someone who has guessed differently than yourself. If I get income because I just plain steal it is already subject to confiscation and return to its previous owner. Speculation, especially if there is unequal knowledge concerning the possibilities, (known as having an edge) is not far removed from stealing. That's the way I see things. Maybe 90 or 95% would be an appropriate tax rate in stock manipulation gains.

  • Ultra Bob Cottonwood Heights, UT
    Dec. 10, 2012 2:29 p.m.

    How about we stop all this nonsense about certain kinds of income being taxed at different rates. Income is income, capital gains are income, just the same as you get on your savings account, just the same as you get from your employer. It all has the same value and spends the same.

  • rnoble Pendleton, OR
    Dec. 10, 2012 12:59 p.m.

    Mr Christensen has hit the nail squarely once again. And I think the message will be ignored. Capital gains taxes should be revamped drastically to both discourage short term thinking and to address asset classes more effectively. We already have asset classes defined for purposes of depreciation and the capital gains tax rules should reflect that better for investors.

    My proposal:
    1) Any gain from any class of asset held shorter than thirty days should have a 75% capital gains tax and should not be adjusted because of other losses.
    2) Other gains should be pro-rated over time so that a ten or more year age would qualify as ordinary income for tax purpose; 75% tax reduced to ordinary income tax over ten years with the largest reductions in the last 7-8 years would effectively encourage long- range thinking among non-owner investors.
    3) Gains on the sale of physical assets should qualify for half the capital gains tax rates automatically.

  • Seminole sandy, UT
    Dec. 10, 2012 10:58 a.m.

    MWest Tallahassee, twittered.

  • Pssst LOGAN, UT
    Dec. 10, 2012 9:48 a.m.

    It is federal and local government and the biggest of all banks that are taking money from the economy and putting it into their own pockets. They are stealing money from the middle class directly and indirectly by their personal and business taxes and have made the economy mostly a sick game between the money makers (national bank) and the money confiscators (taxers).

  • Ultra Bob Cottonwood Heights, UT
    Dec. 10, 2012 8:40 a.m.

    Mike.

    A long time overdue YEA MIKE for explaining the real nature of taxes. That all taxes are paid by the consumer.

    The often hidden truth of that is that raising or lowering the tax on business has very little to do with the price paid by the consumer. However it does effect the taxes that the consumer pays on his income. Theoretically if one taxpayer pays more then another taxpayer pays less. And of the tax load on the consumer is less, he will have more money to spend on consumption.

    The statements: “They base their business decisions on maximizing profits using every LEGAL means”, and “Congress determines what is legal”, are nearly absolute truth. The unsaid part of the truth is that business controls Congress.

    David.

    Why is government the enemy of business?

    Because business has made itself an enemy of the government who is charged to protect the people. Even with all our rules and regulations business often does harm to the public. The other thing is that since business control Congress, businesses often the enemies of each other use government to fight each other.

  • donahoe NSL, UT
    Dec. 10, 2012 6:57 a.m.

    Professor Christensen:

    Thank you for your continuing contribution to the business community. You show your gift of bringing clarity to problems.

    The recent anti-intellectual fashion is finally ending. Let's hope common sense rules, as you imply.

  • Tekakaromatagi Dammam, Saudi Arabia
    Dec. 9, 2012 7:54 p.m.

    I knew a CEO who liked to talk about ratios. I think that it made him feel like he was smart. He wasn't. Knowing about ratios didn't help him.

    People who manage companies are like congressman and bureaucrats in terms of competency. Fortunately for business there are faster results so being held accountable is sooner.

  • David Centerville, UT
    Dec. 9, 2012 4:52 p.m.

    Like One Old Man, I realize how little I know and understand. I own a small business but I do not completely understand what the author was writing about. I am forwarding this to my CPA and also my brother-in-law (Harvard MBA grad) to seek their help.

    What I did understand was that government tax law set up these financiers to operate the way they did (and still do) to gain profit. If I understand Clayton Christensen then changing tax law to encourage long-term investment would benefit many more: middle class jobs, reinvestment into manufacturing and industry, and the capitalists would also benefit.

    But how would government revenue be affected?

    It seems that everyone is greedy: the venture capitalists, the investors, the bankers...but so is the government. And our government today is as greedy as any venture capitalist. I was nodding my head throughout Mike Richards post regarding government taking so much from small business to the extent that the business can be threatened for survival. Why is government the enemy of business?

    Change the tax code. Make it simpler, and encourage long-term investment.

  • The Taxman Los Angeles, CA
    Dec. 9, 2012 4:24 p.m.

    Since I criticized Dr. Christensen's idea (of tax-exempting gains on longer-term held securities) as demonstrably ineffective, I feel compelled to offer better alternatives.

    One more effective alternative would be to disallow all short-term performance-based compensation in the USA. Currently, outside investors encourage short-term focus through rewarding short-term successes by stock price changes. Dr. Christensen's idea (unsuccessfully) attempts to remedy this problem. But corporate insiders are also rewarded for short-term decisions through bonuses, raises and stock-based compensation based on short-term achievements. Disallowing all short-term performance-based compensation in the USA (in favor of longer-term measurements), would immediately lessen the strong personal incentives CEOs and other employees have to make decisions that temporarily increase income at the expense of long-term growth.

    Another simple, yet more effective way to slow down stock trading (speculation) is to impose a meaningful financial transactions tax. I recently paid $8 for a stock trade that 20 years ago would have cost $200. Day trading would literally cease if the cost of each transaction were substantially raised so that only long-term investing made economic sense.

  • Mike Richards South Jordan, Utah
    Dec. 9, 2012 4:11 p.m.

    Is anyone so foolish to think that any business pays taxes WITHOUT first charging every tax dollar owed to his customers? If government demands that a businessman "contribute" half of an employee's SS, then that businessman passes that tax on to his customers.

    Obama's tax increase on the wealthy is just an indirect tax on every American.

    "Loopholes" are creations of the House to shift responsibility to pay for services from one person to another. Businessmen know those "loopholes". They are not idiots. They base their business decisions on maximizing profits using every LEGAL means. Congress determines what is legal.

    We can demand that Congress raise taxes on the wealthy, but unless we are totally self-sufficient, we are just telling Congress to indirectly tax us into oblivion.

  • Ultra Bob Cottonwood Heights, UT
    Dec. 9, 2012 3:30 p.m.

    Business has changed from the notion of sharing skills and benefiting the group to a system of legalized robbery of the weaker members. While we try to snuff out actually slavery, what we have now is simply “voluntary slavery” where people voluntarily set aside their rights and freedoms under the threat of starvation. Voluntary slavery is not something new, it is just the concession made by the rich and powerful when society said they couldn’t have slaves.

    It is our own lazy nature that has done us in. Always seeking the easier, faster and better way to do everything. But so doing has brought us near the point where our physical and mental efforts are no longer needed and we are facing the notion that people are obsolete. If we are to survive beyond the next few years, there needs to be some changes to the paradigm of life for humans.

    We must find a new way of sharing the benefits of the world. The old way of capitalism, voluntary slavery and legalized robbery, is not working any more. The events of the world would tell us that if we would only listen.

  • JoeBlow Far East USA, SC
    Dec. 9, 2012 3:12 p.m.

    "within 3 lines, you completely contradict yourself.

    So, Which is it?

    1) "if I ignored any "loophole", there would be little or no profits."
    OR
    2) "Businessmen are not fools. They will make a profit. The consumer will always pay 100% of the taxes."

  • Kent C. DeForrest Provo, UT
    Dec. 9, 2012 2:13 p.m.

    Excellent piece by one of the world's best unconventional thinkers. Sometime after the year 2000, the financial sector overtook manufacturing as the largest sector in the economy. It used to be that finance existed to serve production. Now it's the other way around. When money, which is no product at all, becomes the most sought after product, something is wrong with our economy.

  • Mike Richards South Jordan, Utah
    Dec. 9, 2012 2:07 p.m.

    An excellent article, but doesn't the conclusion just "kick the can" further down the road?

    Should tax policy dictate business policy? It does. I had no idea, when I opened my first business, just how deep Uncle Sam had his fingers in my wallet. He never swept the floors or cleaned the restrooms. He never, once, showed up for work, but his "take" from my business greatly exceeded my own. I had to meet payroll. I had to payoff loans. I had to pay suppliers. I had to find capital and risk capital, but good old Uncle Sam got the lion's share.

    The government told me what my equipment was worth and how much I could depreciate every year. The government taxed me on my earnings and then again if I earned interest by saving some of those earnings for future needs.

    The government made my business decisions for me, because, if I ignored any "loophole", there would be little or no profits.

    That philosophy is not what America is about, but that is what America has become. Businessmen are not fools. They will make a profit. The consumer will always pay 100% of the taxes.

  • MarkMAN West Columbia, TX
    Dec. 9, 2012 1:55 p.m.

    Probably a couple of correction should be in order. Both Apple and SAM manufacture processor chips in the US not just Intel. (In fact, they do so just down the road from where I live.) Second, government regulation has done far far far more damage than ratio controls of business. I was taught always fix the bigger problems first. As one who watched the government regulation move very important business out, and had to move several times because they did, I have had some very real first hand experience.


    Mark

  • one old man Ogden, UT
    Dec. 9, 2012 12:45 p.m.

    This is an article with a lot of food for thought. It explains some things I didn't quite understand as I read "Who Stole the American Dream."

    It also brings to light another thing I've noticed. The more I try to learn about subjects like these, the more I realize how very little I actually know. (Or understand, since understanding must come before knowledge.)

    It also brings into sharp focus the fact that most of us who post our comments frequently here really have no idea what we're talking about. We have read or heard a few snippets of stuff here and there and jump to the assumption that we are now world class experts.

    Then our egos take over and our minds turn off. We post and post and post the same old messages over and over again. In the process we drive ourselves farther and farther apart. Then we wonder why we live in a divided nation.

    Perhaps we all need to spend more time learning than posting. Then, when we post, we might actually have some measure of credibility.

  • Twin Lights Louisville, KY
    Dec. 9, 2012 12:26 p.m.

    Great piece. The corollary here is educating the human "assets". When we outsource, we do not simply take the hard asset off of our books, we outsource the jobs. In the first generation, those jobs are menial. But the next generation includes floor supervisors and lower level engineers. By the third generation, they have all the locally grown engineering expertise they need. And, with the money they have been making, the banking industry similarly develops.

    Now, this can be good to help other countries gain wealth. But we are absolutely kidding ourselves if we think that shipping jobs overseas does not mean shipping the expertise as well - the human "asset" or capital (your choice).

    Even ignoring these issues, our focus on short term profitability (what did we do this quarter?) causes our businesses to make many decisions that they would not using a longer term view. Some businesses become like monkeys that dance to the tune of the organ grinder so that folks will toss a few coins.

    Watch the (now) old movie Other Peoples Money. Instructive.

  • Hutterite American Fork, UT
    Dec. 9, 2012 12:00 p.m.

    The new church of finance is kind of like the old church of religion. It tends to become self interested and it abandons those that it should be helping.

  • The Taxman Los Angeles, CA
    Dec. 9, 2012 11:36 a.m.

    As Dr. Christensen points out, this "New Church" has been around for 40 years. I received a masters degree in business from a top school 30 years ago and they were teaching these short-sighted ratios, so I assume Dr. Christensen or at least his peers also teach them at Harvard.
    I agree with what he says in the article, but it certainly would be more useful if he were to suggest better ratios to use than "more tons of money is better than less tons of money". And I don't think the tiny step of reducing taxes on longer-held securities (although I am not opposed to it) will change behavior in the current "trading" world one iota.
    Thirty years ago, the average holding period for a stock was approximately 5 years. Now the average share is held less than one year and huge businesses specialize in making stock trades cheap and providing up-to-the-minute information about their ratios (being taught at Harvard). If "investors" are not even holding shares long enough to take advantage of the 366-day incentive, what makes Dr. Christensen think his new proposed incentive will work?

  • Wally West SLC, UT
    Dec. 9, 2012 10:49 a.m.

    Avarice is the reason for the disconnect between Corporate ledgers and jobs.

    John Stossel pointed out recently how the US tax code was manageable in 1913 but since has gotten massively & incredibly humongous.

    What else happened in 1913? The creation of the Fed. Coincedence?

  • Screwdriver Casa Grande, AZ
    Dec. 9, 2012 9:50 a.m.

    The banks get most of our paychecks in the form of interest payments, only a small portion of that pays down our debts. How is it they were the ones that went "broke" and needed US to collectively bail them out?

  • Gildas LOGAN, UT
    Dec. 9, 2012 9:32 a.m.

    We need to produce more in Utah, and stop attracting big corporations into the state that provide low paid, boring jobs, that expect you to work on weekends, day and night, and to ask for permission to use the restroom.

    We could produce more of our own food and clothing. We could encourage local companies and industries by giving the tax breaks to domestic, local companies. We could manufacture cars and trucks. We could encourage artisanship so we could get a tradesman who doesn't say he can't get to your roject for one or two months.

  • 10CC Bountiful, UT
    Dec. 9, 2012 9:29 a.m.

    Excellent, refreshingly candid assessment of a key part of the American economy.

    This "Church of Finance" metaphor also explains how rifts in American society have emerged, as the people with economic means operate in a more sterile, numbers-driven reality than other Americans do, who are occupied with making a house payment, educating and raising children, and looking toward what has become an increasingly tenuous economic future.

    We need more cohesion, more of a common purpose, and incentivizing capital to stay and be more stable within US corporations would help stimulate employment stability, and growth. Human beings need faith in the future, they need stability, otherwise everyone bunkers in and focuses on their own interests more intently, divisions and suspicions arise beyond immediate social bonds.

    Obama talked about "Economic Patriotism", and we need leadership from the economic powers to help revitalize the American Dream, otherwise we're doomed to a more Walmart-style, bottom_line_only economic future, with more Americans falling out of the middle class and really not giving a darn about anything, their American Dream a cynical smirk.

    This is poisonous, we've seen enough of this, we should be investing in a common, prosperous future, together.

  • Roland Kayser Cottonwood Heights, UT
    Dec. 9, 2012 8:47 a.m.

    Excellent piece. I would add just one thing. The main reason that all this has been happening is that Wall Street's "Masters of the Universe" have figured out how to put an ever expanding share of the national economy in their own pockets, leaving much less for the rest of us.

    Looking at lists of America's wealthiest people from thirty or forty years ago, one finds that it was dominated by people who made things. Today it is dominated by financiers.

  • JoeBlow Far East USA, SC
    Dec. 9, 2012 5:52 a.m.

    Interesting Article.

    Actually, a great concept - Graduate the long term capital benefit.

    Today, we may go from a 35% tax rate for an asset held for 364 days to a 15% rate once we hit 366 days.

    How about a 7% reduction every year until we get to 15% to encourage sound business practice, rather than sound tax practice.

  • Emajor Ogden, UT
    Dec. 9, 2012 4:16 a.m.

    This is not a very complimentary article about how money is being made in this nation. I would feel much better about the American financial system and could maybe believe the job-creator myth if there were fewer people getting rich off these kinds of balance-sheet manipulations and more people getting rich from providing goods and services that actually led to job creation.

  • micawber Centerville, UT
    Dec. 9, 2012 3:21 a.m.

    This was the best piece I have read in the Deseret News in a long time. Thank you. I hope Utah's Congressional delegation takes this to heart and works with Professor Christensen to craft capital gains legislation that would help.