For ever so long, many have taken it for granted that in power hierarchies, those on top coast from privilege to privilege and are secure.
Often forgotten, however, is the old saying, “shirtsleeves to shirtsleeves in three generations.”
Now, in hierarchies of rent extraction – dictatorships and crony capitalist systems – something like what you have today will be there tomorrow, only more so, does seem to apply to the top ranks.
But in free market capitalism, risk is not fully under control and so losses can occur.
General Electric is splitting itself into three independent companies, a failure of its once so profitable and so admired business model.
Goldman Sachs’s profit just slid 43%, so the company is reorganizing, the better to survive volatility in financial markets and to earn fees, no matter what the economy does. The company will fold investment banking and trading into one profit center and merge asset and wealth management into another.
The company’s CEO is shifting priority away from once very profitable high-risk, high-return lines of business to products and services that generate consistent fees. Wealth management is less remunerative, but steady.