Re: Opinion Capitalists and Other Psychopaths

i'm beginning to wonder if the FEDS are even allowed to see that
bank's trades in derivatives and how they failed, if not, HOLY SHIT!!

On 5/14/12, nominal9-Bomb-Throwin-Anarchist <nominal9@yahoo.com> wrote:
> Another one....by Krugman, now...
> http://www.nytimes.com/2012/05/14/opinion/krugman-why-we-regulate.html
>
> Op-Ed Columnist Why We Regulate By PAUL
> KRUGMAN<http://topics.nytimes.com/top/opinion/editorialsandoped/oped/columnists/paulkrugman/index.html?inline=nyt-per>
> Published:
> May 13, 2012
>
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>
>
> One of the characters in the classic 1939 film "Stagecoach" is a banker
> named Gatewood who lectures his captive audience on the evils of big
> government, especially bank regulation — "As if we bankers don't know how
> to run our own banks!" he exclaims. As the film progresses, we learn that
> Gatewood is in fact skipping town with a satchel full of embezzled cash.
> Fred R. Conrad/The New York Times
>
> Paul Krugman
> Go to Columnist Page
> »<http://topics.nytimes.com/top/opinion/editorialsandoped/oped/columnists/paulkrugman/index.html>
> Blog: The Conscience of a Liberal <http://krugman.blogs.nytimes.com/>
> Related News
>
> - JPMorgan Chase Executive Resigns in Trading
> Debacle<http://www.nytimes.com/2012/05/14/business/jpmorgan-chase-executive-to-resign-in-trading-debacle.html?ref=opinion>(May
> 14, 2012)
> - Dimon Says JPMorgan Made an 'Egregious
> Mistake'<http://www.nytimes.com/2012/05/14/business/dimon-says-jpmorgan-made-an-egregious-mistake.html?ref=opinion>(May
> 14, 2012)
>
> Related in Opinion
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>
> As far as we know, Jamie
> Dimon<http://topics.nytimes.com/top/reference/timestopics/people/d/james_dimon/index.html?inline=nyt-per>,
>
> the chairman and C.E.O. of JPMorgan Chase, isn't planning anything similar.
>
> He has, however, been fond of giving Gatewood-like speeches about how he
> and his colleagues know what they're doing, and don't need the government
> looking over their shoulders. So there's a large heap of poetic justice —
> and a major policy lesson — in JPMorgan's shock announcement that it
> somehow managed to lose $2 billion in a failed bit of financial
> wheeling-dealing.
>
> Just to be clear, businessmen are human — although the lords of finance
> have a tendency to forget that — and they make money-losing mistakes all
> the time. That in itself is no reason for the government to get involved.
> But banks are special, because the risks they take are borne, in large
> part, by taxpayers and the economy as a whole. And what JPMorgan has just
> demonstrated is that even supposedly smart bankers must be sharply limited
> in the kinds of risk they're allowed to take on.
>
> Why, exactly, are banks special? Because history tells us that banking is
> and always has been subject to occasional destructive "panics," which can
> wreak havoc with the economy as a whole. Current right-wing mythology has
> it that bad banking is always the result of government intervention,
> whether from the Federal Reserve or meddling liberals in Congress. In fact,
>
> however, Gilded Age America — a land with minimal government and no Fed —
> was subject to panics roughly once every six years. And some of these
> panics inflicted major economic losses.
>
> So what can be done? In the 1930s, after the mother of all banking panics,
> we arrived at a workable solution, involving both guarantees and oversight.
>
> On one side, the scope for panic was limited via government-backed deposit
> insurance; on the other, banks were subject to regulations intended to keep
>
> them from abusing the privileged status they derived from deposit
> insurance, which is in effect a government guarantee of their debts. Most
> notably, banks with government-guaranteed deposits weren't allowed to
> engage in the often risky speculation characteristic of investment banks
> like Lehman Brothers.
>
> This system gave us half a century of relative financial stability.
> Eventually, however, the lessons of history were forgotten. New forms of
> banking without government guarantees proliferated, while both conventional
>
> and newfangled banks were allowed to take on ever-greater risks. Sure
> enough, we eventually suffered the 21st-century version of a Gilded Age
> banking panic, with terrible consequences.
>
> It's clear, then, that we need to restore the sorts of safeguards that gave
>
> us a couple of generations without major banking panics. It's clear, that
> is, to everyone except bankers and the politicians they bankroll — for now
> that they have been bailed out, the bankers would of course like to go back
>
> to business as usual. Did I mention that Wall Street is giving vast sums to
>
> Mitt Romney, who has promised to repeal recent financial reforms?
>
> Enter Mr. Dimon. JPMorgan, to its — and his — credit, managed to avoid many
>
> of the bad investments that brought other banks to their knees. This
> apparent demonstration of prudence has made Mr. Dimon the point man in Wall
>
> Street's fight to delay, water down and/or repeal financial reform. He has
> been particularly vocal in his opposition to the so-called Volcker
> Rule<http://topics.nytimes.com/top/reference/timestopics/subjects/v/volcker_rule/index.html?inline=nyt-classifier>,
>
> which would prevent banks with government-guaranteed deposits from engaging
>
> in "proprietary trading," basically speculating with depositors' money.
> Just trust us, the JPMorgan chief has in effect been saying; everything's
> under control.
>
> Apparently not.
>
> What did JPMorgan actually do? As far as we can tell, it used the market
> for derivatives — complex financial instruments — to make a huge bet on the
>
> safety of corporate debt, something like the bets that the insurer A.I.G.
> made on housing debt a few years ago. The key point is not that the bet
> went bad; it is that institutions playing a key role in the financial
> system have no business making such bets, least of all when those
> institutions are backed by taxpayer guarantees.
>
> For the moment Mr. Dimon seems chastened, even admitting that maybe the
> proponents of stronger regulation have a point. It probably won't last; I
> expect Wall Street to be back to its usual arrogance within weeks if not
> days.
>
> But the truth is that we've just seen an object demonstration of why Wall
> Street does, in fact, need to be regulated. Thank you, Mr. Dimon.
> A version of this op-ed appeared in print on May 14, 2012, on page
> A23of the New
> York edition with the headline: Why We Regulate.
>
>
> On Monday, May 14, 2012 3:28:57 PM UTC-4, nominal9-Bomb-Throwin-Anarchist
> wrote:
>>
>> 71.... you like the NY Times, don't you?
>>
>> http://www.nytimes.com/2012/05/13/opinion/sunday/fables-of-wealth.html?_r=1
>> By WILLIAM DERESIEWICZ Published: May 12, 2012
>>
>> - Facebook
>> - Twitter
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>> - Email
>> - Share
>> -
>> Print<http://www.nytimes.com/2012/05/13/opinion/sunday/fables-of-wealth.html?_r=1&pagewanted=print>
>> - Reprints
>> -
>> <http://www.nytimes.com/adx/bin/adx_click.html?type=goto&opzn&page=www.nytimes.com/yr/mo/day&pos=Frame4A&sn2=72270860/53be7632&sn1=a33298ef/27a2b70c&camp=FSL2012_ArticleTools_120x60_1787506b_nyt5&ad=BOSW_120x60_May4_NoText&goto=http%3A%2F%2Fwww%2Efoxsearchlight%2Ecom%2Fbeastsofthesouthernwild>
>>
>>
>> THERE is an ongoing debate in this country about the rich: who they
>> are, what their social role may be, whether they are good or bad. Well,
>> consider the following. A recent
>> study<http://theweek.com/article/index/225046/why-is-wall-street-full-of-psychopaths>found
>> that 10 percent of people who work on Wall Street are "clinical
>> psychopaths," exhibiting a lack of interest in and empathy for others and
>>
>> an "unparalleled capacity for lying, fabrication, and manipulation." (The
>>
>> proportion at large is 1 percent.) Another study
>> <http://www.pnas.org/content/early/2012/02/21/1118373109.abstract>concluded
>>
>> that the rich are more likely to lie, cheat and break the law.
>>
>> The only thing that puzzles me about these claims is that anyone would
>> find them surprising. Wall Street is capitalism in its purest form, and
>> capitalism is predicated on bad behavior. This should hardly be news. The
>>
>> English writer Bernard Mandeville asserted as much nearly three centuries
>>
>> ago in a satirical-poem-cum-philosophical-treatise called "The Fable of
>> the
>> Bees."
>>
>> "Private Vices, Publick Benefits" read the book's subtitle. A Machiavelli
>>
>> of the economic realm — a man who showed us as we are, not as we like to
>> think we are — Mandeville argued that commercial society creates
>> prosperity
>> by harnessing our natural impulses: fraud, luxury and pride. By "pride"
>> Mandeville meant vanity; by "luxury" he meant the desire for sensuous
>> indulgence. These create demand, as every ad man knows. On the supply
>> side,
>> as we'd say, was fraud: "All Trades and Places knew some Cheat, / No
>> Calling was without Deceit."
>>
>> In other words, Enron, BP, Goldman, Philip Morris, G.E., Merck, etc., etc.
>>
>> Accounting fraud, tax evasion, toxic dumping, product safety violations,
>> bid rigging, overbilling, perjury. The Walmart bribery scandal, the News
>> Corp. hacking scandal — just open up the business section on an average
>> day. Shafting your workers, hurting your customers, destroying the land.
>> Leaving the public to pick up the tab. These aren't anomalies; this is how
>>
>> the system works: you get away with what you can and try to weasel out
>> when
>> you get caught.
>>
>> I always found the notion of a business school amusing. What kinds of
>> courses do they offer? Robbing Widows and Orphans? Grinding the Faces of
>> the Poor? Having It Both Ways? Feeding at the Public Trough? There was a
>> documentary several years ago called "The Corporation" that accepted the
>> premise that corporations are persons and then asked what kind of people
>> they are. The answer was, precisely, psychopaths: indifferent to others,
>> incapable of guilt, exclusively devoted to their own interests.
>>
>> There are ethical corporations, yes, and ethical businesspeople, but
>> ethics in capitalism is purely optional, purely extrinsic. To expect
>> morality in the market is to commit a category error. Capitalist values
>> are
>> antithetical to Christian ones. (How the loudest Christians in our public
>>
>> life can also be the most bellicose proponents of an unbridled free market
>>
>> is a matter for their own consciences.) Capitalist values are also
>> antithetical to democratic ones. Like Christian ethics, the principles of
>>
>> republican government require us to consider the interests of others.
>> Capitalism, which entails the single-minded pursuit of profit, would have
>>
>> us believe that it's every man for himself.
>>
>> There's been a lot of talk lately about "job creators," a phrase begotten
>>
>> by Frank Luntz, the right-wing propaganda guru, on the ghost of Ayn Rand.
>>
>> The rich deserve our gratitude as well as everything they have, in other
>> words, and all the rest is envy.
>>
>> First of all, if entrepreneurs are job creators, workers are wealth
>> creators. Entrepreneurs use wealth to create jobs for workers. Workers use
>>
>> labor to create wealth for entrepreneurs — the excess productivity, over
>> and above wages and other compensation, that goes to corporate profits.
>> It's neither party's goal to benefit the other, but that's what happens
>> nonetheless.
>>
>> Also, entrepreneurs and the rich are different and only partly overlapping
>>
>> categories. Most of the rich are not entrepreneurs; they are executives of
>>
>> established corporations, institutional managers of other kinds, the
>> wealthiest doctors and lawyers, the most successful entertainers and
>> athletes, people who simply inherited their money or, yes, people who work
>>
>> on Wall Street.
>>
>> MOST important, neither entrepreneurs nor the rich have a monopoly on
>> brains, sweat or risk. There are scientists — and artists and scholars —
>> who are just as smart as any entrepreneur, only they are interested in
>> different rewards. A single mother holding down a job and putting herself
>>
>> through community college works just as hard as any hedge fund manager. A
>>
>> person who takes out a mortgage — or a student
>> loan<http://topics.nytimes.com/top/reference/timestopics/subjects/s/student_loans/index.html?inline=nyt-classifier>,
>>
>> or who conceives a child — on the strength of a job she knows she could
>> lose at any moment (thanks, perhaps, to one of those job creators) assumes
>>
>> as much risk as someone who starts a business.
>>
>> Enormous matters of policy depend on these perceptions: what we're going
>> to tax, and how much; what we're going to spend, and on whom. But while
>> "job creators" may be a new term, the adulation it expresses — and the
>> contempt that it so clearly signals — are not. "Poor Americans are urged
>> to
>> hate themselves," Kurt Vonnegut wrote in "Slaughterhouse-Five." And so,
>> "they mock themselves and glorify their betters." Our most destructive
>> lie,
>> he added, "is that it is very easy for any American to make money." The
>> lie
>> goes on. The poor are lazy, stupid and evil. The rich are brilliant,
>> courageous and good. They shower their beneficence upon the rest of us.
>>
>> Mandeville believed the individual pursuit of self-interest could redound
>>
>> to public benefit, but unlike Adam Smith, he didn't think it did so on its
>>
>> own. Smith's "hand" was "invisible" — the automatic operation of the
>> market. Mandeville's involved "the dextrous Management of a skilful
>> Politician" — in modern terms, legislation, regulation and taxation. Or as
>>
>> he versified it, "Vice is beneficial found, / When it's by Justice lopt,
>> and bound."
>>
>> An essayist, critic and the
>> author<http://www.amazon.com/William-Deresiewicz/e/B001HCXOYO/ref=ntt_athr_dp_pel_1/190-0104963-3035747>of
>> "A Jane Austen Education."
>>
>
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