Another Long Howl
Wovon Man Nicht Sprechen Kann, Darüber Muss Man Schweigen
("About what you cannot speak, you are obligated to be silent.")
-- Ludwig Wittgenstein (1889 - 1951)
As an analytical Dog, I take pleasure in nosing around various sites on the Intertubes dealing with finance, and the analysis of data sets to reach certain conclusions about The Future -- whether financial, political, or cultural.
The finance analyst community is varied, and contains as much opinion as hard fact. The Best among them present unambiguous data, which point to specific conclusions:
That's what these numbers mean (And a good example is
Bill McBride's Calculated Risk).
Others use that data and their conclusions as a point of departure for observations about the psychology of market investing (or markets, period), strategies for the future; and a running commentary on what the events of the past four years of the Financial Crisis mean (the best among them being
Barry Ritholtz's The Big Picture).
But like anywhere else in Blogtopia (this blog is no exception), there are commentators who simply use the anonymity of the Intertubes to behave like blowhard know-it-alls whose opinions are so precious and sublime that they
must share them with a wider humanity (again, this blog is no exception).
Yes; Even Jonah Loadpants And Erik The Red and Grand TurtleBear
Bachmann Get To Say Stuff 'Cause It's The Intertubes An' Stuff.
But when a self-styled 'investment banker' does so... well, the results aren't pretty. Particularly when their defense of the financial and investment "community" boils down to
Hey! The blame for all dat stuff what happened to th' Economy? It cuts so many ways. It's, whadyacallit -- complicated! How ya gonna say anyone is guilty? Hah?
The Epicurian Dealmaker quotes an article by Roger Lowenstein, investment analyst and advisor-commentator,
beloved by the Street for saying that there were
so many reasons for the real-estate-and-derivatives implosion -- including the greed of homeowners who accepted mortgage loan terms they could not meet, and individual investors who paid for investments they knew carried 'some risk'.
Obligatory Cute Small Animal Photo In Middle Of Blog Rant
It couldn't be the fault of the Banksters alone; that's Lowenstein's basic line, and he's well received by the well-paid Masters Of The Universe for speaking in their defense.
The 'Epicurean', in support of this line, bubbled that a recent Lowenstein op-ed piece in
Business Week (
"Wall Street Not Guilty") of the same ilk needed
...to be read by everyone and their brother carrying a pitchfork and torch towards the ramparts of Wall Street. There was a protest on Wall Street earlier this week wherein many of the demonstrators carried placards emblazoned with the slogan "Make the Banks Pay." If those people are truly interested in educating themselves about the sources of the financial crisis and perhaps even preventing another one in the future, they would have been far better served spending fifteen minutes reading this, instead of chanting slogans at a bunch of straw men.
I'll skip to this person's, uh (cough), 'Money Quotes':
But screaming "criminal," "bankster," and the like is far more satisfying — not to mention lucrative — to filmmakers like Charles Ferguson and polemicists like Matt Taibbi, who, after all, have tickets and magazines to sell. It also resonates nicely with the average American, who feels victimized by impersonal forces beyond his or her control or understanding. But it does nothing to help those Americans or their elected officials either understand or address the issues at hand.
As Lowenstein writes, the financial crisis resulted from the confluence of many different forces, which fell upon a system the checks and balances of which appear in retrospect to have been very badly designed and managed...
Writing about the ratings agencies... Lowenstein makes a point which applies generally to the entire crisis:
To call [this kind of behavior] criminal is to call the culture criminal, which is a point of rhetoric, not law.
"Dunno Why The Fuk I Be Heah; Um juss a Businessman; Capiche?"
Goldman BSD Blankfein Swears, Kinda, To Talk 'Bout Somethin', Maybe
(Photo: Jason Reed / Reuters / ABC News Online)
Well, I certainly won't argue with calling (at least) Wall Street's culture 'criminal'. Later, Roger states that
It's worth remembering that in the American legal system, people who merely act badly or unwisely do not do time. And people who contribute to a financial collapse aren't guilty of a crime absent specific violations that make them so.
The statutes which would have rendered the behavior most culpable for the financial crisis criminal—greed, stupidity, arrogance, willful recklessness—were not on the books in 2007 and 2008. Therefore, the people who committed those acts did not commit crimes. Period, end of story.
...But's [sic] let put a lid on the rabble rousers jumping up and down screaming "Criminals!" at the top of their lungs. They are nothing but a distraction to the proper focus and task at hand, and the energy and anger which they are stirring up among the public is getting frittered away in purchases of movie tickets, magazines, and overheated exposés of the crisis, not to mention increasingly unhinged and disconnected comments on blog posts and news articles.
Yeah. In a former life, I would have observed that Herr Lowenstein was right --
If it isn't illegal, I can't arrest you for it, though I could step in to prevent something from happening which, based on common sense, would harm others, whether it was covered by a P.C. statue or not (The question that would follow would be whether by doing so, I placed others at risk, or opened the agency I worked for to bad press or civil action).
BSD Angelo Mozilo Of Countrywide Mortgage (J.Balin/Bloomberg)
If your argument is, "It wasn't illegal, so what's your problem?", that's a massively short-sighted and narcissistic perspective when considering the amount of damage that's been done by the Real Estate / Derivatives Scheme - and, to whom that damage has been done.
Those like the 'Epicurean' hate the Matt Taibbis of the world:
[Goldman-Sachs] was not the only target of Wall Street and the Financial Crisis: Anatomy of a Financial Collapse, the 650-page report just released by the Senate Subcommittee on Investigations... [The] unusually scathing bipartisan report also includes case studies of Washington Mutual and Deutsche Bank, providing a panoramic portrait of a bubble era that produced the most destructive crime spree in our history — "a million fraud cases a year" is how one former regulator puts it.
But the mountain of evidence collected against Goldman by [U.S. Senator Carl] Levin's small, 15-desk office of investigators — details of gross, baldfaced fraud delivered up in such quantities as to almost serve as a kind of sarcastic challenge to the curiously impassive Justice Department — stands as the most important symbol of Wall Street's aristocratic impunity and prosecutorial immunity produced since the crash of 2008.
It isn't against the law to be wealthy (many might offer the corollary to the Golden Rule as
those with the gold make the rules). However, the methods by which money is gotten, and how established wealth is maintained,
may be. And even if allowed under law, if a series of actions results in recognizable and actual harm...
Apologists for the Banksters, such as Lowenstein and 'Epicurean', like to point out that the nature of investment is
risk, and everyone understands a prime concern of business should be to reduce it. The Banksters, in creating the crisis, could only be accused of
creating an unacceptable level of risk -- bad management, bad decisions; nothing more; certainly not criminal behavior.
But in
Taibbi's writing for Rolling Stone about the RE / CDO scheme (the one linked to above in particular), he indicates that there was a crime: Most recently,
that Little Lloyd Blankfein, among others, came before Congress to testify in 2010 about the crisis they helped to create, and lied -- spectacularly, in Blankfein's case, as Goldman's own emails quoted in the Senate subcommittee report prove.
I agree with Loewenstein, insofar as there were many players in the action between 1998, when Glass-Stegall was repealed, and 2007, when the wheels came off the little red wagon built by nearly the entire American real estate, banking and investment sectors. Demand drove the Market, Roger claims; the Consumers were the engine driving all this.
They were the ones trying to ape the rich and live
above their station beyond their means, and now must share in the blame.
That sounds suspiciously like the age-old defense of the rapist:
Hey; She Was Askin' For It! She Wanted It! It's really the fault of the mortgage borrowers and the clients to whom Goldman sold
what they referred to internally as 'complete shit' and 'pigs' those bad investments, because... the Consumers; man, well -- they all wanted it. They demanded we give them loans with bizarre terms, and the CDO buyers all waved money at us. They forced us to do dat stuff. Not our fault, man.
And our Epicurean friend doesn't ask the simplest question when dealing with a potential crime: What happened since the fall of 2007 and 2008? Who benefited? Loewenstein simply dismisses the observations of a Matt Tabibbi by saying, essentially,
ahh, this is business; these things happen. Grow up. A buncha people got hurt; a buncha people got rich. You're just mad it wasn't you. Now shut up with this 'criminal' fakakta,
and go get a real job, ya dirty hippie.
Uh-Huh. The 'Epicurean' took great care to deliver this message ('Shut up, you bunch of whining peasants!') with the supercilious flair of someone who
aspires. They
want to be a Mellon or a Scaife; a Biddle or a Walker; a Koch or a Harriman or a Saltonstall (not understanding you have to be
born into that milieu), and so axiomatically defend the system which maintains them. He even uses a
Wittgenstein quote at the top of this post -- a sign of education and taste, surely.
Except (sadly, for Ep, and Loewenstein), Ludwig said it because the world is filled with people who have nothing to say; but even so, simply cannot or will not shut up -- a proper definition of the modern Rightist pundit, if nothing else.
It's why I don't spend time reading right-wing apologistas for the Owner class, or their political hirelings. They defend the indefensible and confuse the tail of the Elephant for the whole mammal, and subtract from the sum of human knowledge every time they open their mouths. As
Herr Doktor-Professor Edward Teller once said to me in another context, they are "boring; irrelevant; and nobody's business".
One tip-off was finding that
The Epicurean Dealmaker (a Blogger-hosted site like this one) has
switched off the ability for readers to leave a Comment --
aber natürlich, a hallmark of discussion and the free exchange of views which might lead to insight, and learning... something Wittgenstein certainly believed in.
