Calexis

Gaming the System

May 2, 2010

Some people seem to spend a lot of their time “gaming the system.”  That is trying to figure out what inputs or actions of theirs will get them the most from the economic or government infrastructure.

At this time of year, everyone is focused on what they can claim on their taxes.   It is also the time of year when everyone realizes how much the government is slipping out of their paycheque.  Ouch!

I recently finished reading the Michael Lewis book, The Big Short.  The book made it clear that the Wall Street boys have been gaming the system for years.

Goldman Sachs is now in Washington trying to look like they had a right to take cookies from the economic cookie jar.  Do they really think that they are entitled to multimillion dollar bonuses?   Did they contribute that much value to the economic system?  There are not too many believers of their story, nor are there many Goldman Sachs fans out there on main street.

True there were other Wall Street Einsteins who ended up biting the big biscuit by being the dumb money at the table for mortgage.  But they turned failure into success because they continued to successfully “game the system” and ended up with a basket of billions of government bail-out dollars.

What we saw in Wall Street was Capitalism at its worst.  The scumbags who successfully gamed the system believing they were entitled to their million dollar bonuses.

Communism, on the other hand, had just as large a number of citizens who constantly gamed the system.  There were the elite who ended up buying major state assets for a pittance, becoming ridiculously rich and acting like Nouveau riche.

But Communism also encouraged almost all citizens to game the system,   I visited a Communist country as they were throwing out the Communist system.  People were generally clueless about what was going to happen.  They generally felt that they would all have cars, credit cards and big TVs within a couple weeks, like there were capitalism trucks lined up at the border ready to deliver.

Folks generally held more than one job, working for two competitive organizations and sharing what they learned at one organization with the other.  Putting in for eight hours work at both jobs and rarely showing up at either.  Everyone did it.  They were all gaming the system.  It took a few years, okay, quite a few years, for them to understand that the rules had changed.  Their instincts were to find out what the new solution was for their entitlements.

The other news story this week is the Greek economy which is also plagued by citizens who will not give and inch from their entitlements as their country goes down the economic toilet.

Which brings me to a conclusion that “entitlement” is what really games the system.  People believing that they are entitled to wage levels, who convince themselves that they DESERVE to make a certain amount of money.

When I worked in a third world country, I was approached by a worker reporting to me who told me that he needed a raise for a number of reasons:

  1. His wife was expecting
  2. He needed a larger apartment for his larger family
  3. His kids were coming up to school age and he wanted to send them to private school
  4. And, his mistress wanted him to take her to nicer restaurants and clubs.

To him, this was a solid argument for a raise.  Didn’t work.  Sorry, Jorge.  I tried to ask him how he could improve company performance or profitability.  He was confused at my questions.  What did company profits have to do with him?

But he did give me an understanding of the deep sense of entitlement that many people have.  He didn’t think he was gaming the system, he was just asking for what he thought was due to him.

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