Sunday, March 29, 2009

Croaking at a banker

[Brad Delong deleted a version of this comment from the end of this thread, giving a defender of the abuses of the banking system the last word. 2009.09.28: minor copy error corrected.]

"If you only love those who love you, what is your reward? Even the tax-gatherers do as much."

You are judging people by their behavior with their friends and colleagues, and that tells little about their conduct with outsiders. You object that physicists are no more or less ethical than investment bankers. But physicists are not looting the global financial system. Why would I share your insider's judgment? I am not an insider; as tnh memorably said, "You're not a member, never will be." So why would I--why would any outsider--buy into bankers views of themselves?

I've no doubt that the bankers you know are mostly pleasant people to hang out with, if you are also a banker, if you are "one of them." But they are still participants in the looting of the global financial system. And memory is selective and malleable. Because you like these people, because you are one of the tribe, you remember less of their flaws than you would of a stranger, or an enemy. Outsiders see simply a tribe of looters, and you a member. If you want to change the world's view of your tribe, reform your tribe.

And, you know, you're a johnny-come-lately. Your erudition is not respected by the old timers, and they'll jettison you in a second if they think you might be a liability. You are not an insider, not really, not where it counts.



Unknown said...

I'm very disappointed with a lot of Brad's work, for one. To hear he scalped that from his blog means that I will soon be demoting him from my blogroll, or even just cut him completely from my Google Reader account.

I read Brad's post and immediately was up in arms over his argument that he isn't a tool of Wall Street. (A well connected lobbyist-friend told me exactly the opposite when I sat down with him in December, "he's been in the bankers' pocket for so long they have nothing to worry about." I knew it was bad at the time...but it just keeps going.)

I'm not usually a commenter, except for a post here and there to say 'that's crap', or if I have a further question to go after, but Brad has gotten on my nerves. It's time to blow up economics as at this point it is a pseudo science that is so wildly manipulable.

Oh, and congrats, you're on my Reader account now! Keep up the good work.

Unknown said...

I posted this in response to your and Twofish's back and forth on delong's blog: Twofish and Raven, after working my way through everything here, this is quite a discussion, but I'd like to point out that this should not be a question of just the profession of banking, or these wide angle sideswipes. There is a real thing going on here, and you guys are having an academic argument.

The real thing is that there is real corruption, Tim Geithner is a connected man of Wall Street (I've gotten accounts of such from DC lobbyists with decent grasp), and that this is not a swipe on all of Wall Street (or shouldn't be), but rather in the way this has all been handled. Investment bankers run the show (or enough of it), between the lobbying/campaign finance/intellectual firepower/pure profit, they are by far the most powerful lobby. If government is a business, they are taking a nice profit from it. Now, which investment bankers is a good question, for it is not all, bankers are shrewd business persons, not everyone knows everything. Subsequently, they run great shell games, and putting the pieces together is the hardest part. So we deal with what we do know, and what we do know is ugly. Some evidence: Zero Hedge got a good account as to how AIG ended up being the main reason that several large banks were profitable in the last couple of months:

Or we have Simon Johnson's account:
And of course, there is much, much more, anyone is free to ask questions, I will promptly respond.

So yes, a colluded game is going on. One that is not beneficial to the United States as a country, or to most of the populace, unless if there is some greater plan - of course I have no idea, and to even go beyond musing such an idea would be mind boggling to me (maybe not, but I shouldn't have to have such thought, that is the whole idea behind transparency - which we no longer have in government in this country).

In the US, there is bankruptcy for failure, period. However, this no longer applies to those with the most significant monied interests. This has to stop. Otherwise we are stuck with the old line of let them eat cake.

No bankruptcy, no transparency, no effective populist political party, no real prosecution (Madoff, or Mozilo, or Cramer (yes pumping and dumping is a crime)), and we are supposed to believe that the issue is a lack of proper regulation, or mistakes? No, I was in politics too long to not understand the concept of qui bono.

The regulatory system was dismantled, it did not just fall behind although falling behind played a role as well. The regulations that you are talking about for equities/bonds are not there in the CDS market (see the Zero Hedge post). The CDS market is not the equity/bond market. Not that there isn't corruption there as well, either dealing with the ratings agencies, or the fraudulent lending practices, or the misinformation provided in the offering of so many of the sub-prime bonds, or the pump/dump schemes, or the depth of naked shorting in the market. The list can go on and on and on. Yes, there are plenty of good people in banking, but business is business, and for many, business wins over a public ethic. When so few could amass such influence, they ran away with it. That's kinda where I agree with you Twofish, it is more difficult to do something about the morality/ethics of a large group of people. At the end, I'm disappointed with the banker fraternity and the American Idol great unwashed. I'm disappointed with myopic professors and McMansion hair dressers. I'm disappointed to such an extent, I'm writing this at 1:30 AM, and I won't sleep an easy night until much more is done to fix all of this. Crime must lead to punishment, and the longer we go on thinking that “As long as the music is playing, you’ve got to get up and dance,” Charles O. Prince told The Financial Times, “We’re still dancing.” And that music is just in a few people's heads, we are going to have problems beyond belief.

These are all things that are part of life, but still, don't tell me this was just a mistake. Don't piss in my cup and tell me it's lemonade. I don't appreciate it.

Raven Onthill said...

Thanks for dropping by, Independent--I very much appreciate it. Also, I mostly agree with you; I am just trying to look beyond the current disaster. Also, I'm prepared to allow nationalization as a substitute for bankruptcy if it means avoiding financial system disaster--I won't stick by the rules, if the rules are destructive. The problem, of course, is that we have neither bankruptcy nor nationalization.

I find it very much discouraging that Prof. Delong has decided to throw in with Geithner, when it seems unlikely the Geithner plan will do anything but reward the corrupt for their corruption. But the truth of the matter is that Prof. Delong has always had an unfortunate and unreasonable respect for authority. No matter how often his hopes are dashed, he comes back to it.