you don't understand, loki: greed is virtuous! man is invested with the sovereign and unalienable right to care not ONE WHIT about his neighbor, and ultimately MUST acknowledge that the greatest service man can do is to look completely after his own interest -- and, of course, to proselytize as many shallow axioms about self-sufficiency as necessary to ensure that everyone else ALSO embraces that credo! once we are all perfectly self-sufficient, the gates to economic nirvana will open; free market jesus will return to break loaves of gold into monetarily-sound fishes for all his unshackled followers; and the lambs, thus feed from the tyranny of social welfare, will lay down with the john galt-esque lions! it's so simple! LIBERTOPIA AWAITS!
this crisis is caused because we didn't respect greed ENOUGH -- we, in the evil of our regulatory bodies, tried to slap the hands of titans, leading them to only half-heartedly invest the great works of their minds and bodies. had we let them pursue their noble course, they would have become flush with the wealth of their clever economic mathematics, their unfathomably brilliant securities and derivatives labyrinths, and their long-term investment visions (don't you DARE call them "ponzi schemes")! then, enlightened as they are, would have used that wealth to give every man and woman who was willing to apply the sweat of their brow in the service of capital with a REAL JOB making REAL (gold backed, of course) MONEY.
doesn't it all just make a lovely sense? how can you deny this!
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there is a real fear among libertarian types when it comes to the notion of a greater social consciousness and responsibility. when you try to view the world through the chiaroscuro lens of personal economy -- what gives you a meaningful roi and what doesn't -- acknowledging and adapting to meet the weaknesses of your fellow man probably seems very, very unrewarding. hence, we see the facade of sociopathy painted large, and the bumper sticker justifications that completely, wholly, and utterly fail to acknowledge the reality of being human in a world of fucked-up humans. :'(
Awesome post. You have a lot more patience for this stuff than I do nowadays. Lately I just find myself lol'ing at everything, utterly incapable of summoning the energy to post an actual response. People will always believe what they want to believe regardless of how cogent your arguments are, how persuasive your rhetoric is, or how much data you have on your side.
As an aside, when do you think we'll see any of the following measures enacted. I told my friend this weekend that one of the only ways I'll believe that it isn't "business as usual" in this country is when one or more of the following come to pass (most of which should have been among the first things done in the wake of the Bear and Lehman catastrophes):
- Repeal of the Gramm-Leach-Bliley Act
- A hard cap on leverage (say, 8-10:1) reinstituted; I believe restraints on leverage were lifted by way of a Bush era law, though I forget which one in particular.
- Mandating that all mortgages and loans remain with the issuing institutions (this would provide an incentive for local banks to ensure that borrowers did not enter into default, and would also mean that dozens of other institutions wouldn't end up with toxic assets on their balance sheets; had this been in place 5-7 years ago, this entire crisis could have been averted, or at least drastically reduced in scope).
- Requiring that all future financial "innovations" be vetted by regulatory agencies before being put into widespread practice. This could have prevented the entire CDS debacle. The fact of the matter is that developments in the financial sector have been occurring far too rapidly, and have outpaced the ability of agencies to properly analyze them. They insinuate themselves into the system too quickly for any systemic effects to be analyzed on a smaller scale before they end up being $40+ trillion pandemics like the global CDS market.
ultimately, this all boils down to letting people gamble when the house sets ALL the rules. if you are going to permit risk --especially risk by proxy -- you need to control that risk. what the hopeless lolbertarians fail to acknowledge that all human endeavors move towards organization, be it a government or a marketplace (or both), and that they begin to gradually dictate the terms by which they interoperate with society at large. (why i hafta repeat this to them i'll never know.) when these large organizations become proxies for risk, offering their services in engaging said risk, they must agree to and abide by specific rules under which their performance can be evaluated. (this is also true for government, of course.) what's necessary is to ensure through ANY mechanism -- governmmental regulation being the most obvious and reliable -- to set the common rules and to ensure compliant behavior. the counterargument is, of course, that they will naturally behave in the best interest of their constituents if their financial well-being is threatened (despite all the historical evidence to the contrary -- they'll only do that when it's too late), and that they will be transparent and consistent simply because to be otherwise will make them unviable, allowing a competitor to take their place. unfortunately, above a certain size, that simply doesn't happen -- when a business is called to accountability, it's too late, and the risk has become almost completely socialized, even to non-participants. the parallels to democracy and the democratic election of governments should be completely apparent to them, but libertarianism is a religion -- and yet it is also why i am not a real socialist by any definition beyond the nominal respect for the web of social contracts that define our existence. inasmuch as i protest when the executive office changes the rules of the game to minimize its own risk and socialize everyone else's (see: bush), so do i actively dislike it when businesses do the same -- but it's always too late, and i am more interested in reality than ideological fantasy.
soooooooo...i very much want to see the rules re-engraved with an eye towards ensuring protection for the middle-class participants, which definitely includes seeing gramm-leach-bliley get deep-sixed and an end to the great de-leveraging under reagan. i also want to see mark-to-market (sorry, brad). i want rules on stock shorting, and on bear market gamesmanship. i want complete financial transparency and accountability from any financial institution that is publically held. i want the risk to primarily rest with the paid "experts" who collect fees for their services. i want economic risk -- because it *is* gambling, regardless of its beneficial side-effects -- taxed taxed TAXED, and the taxes used to further mitigate society's exposure. i want those who commit capital fraud to be tried as full-on criminals, and punished in the same manner as anyone who KNOWINGLY ruins lives and families, destroys homes, steals large sums of money, and diminishes the very fabric of american society -- as traitors and crooks of the worst order. (france had this one right.) they are not the ideologically pure answers i'd like, but again, reality first. (if i were ideologically minded, i'd ask that they ultimately not staff the sec and the treasury with the wolves the moment the henhouse door yawns a little, but good luck with that one, me!)
right now, i want the banks nationalized, expurgated of their toxic elements -- especially their leadership as well as their bum assets and securities holdings -- and resold in their new lobotomized form, ready for a good reprogramming. bankers and fund managers need to FEAR the wrath of the people they knowingly defrauded. let 'em climb the financial golgotha they erected. i want to rebuy the public trust with blood, and the expiation of the sinners.
