Wednesday, October 14, 2009

Moral outrage at the financial sector's risky behavior

Barry Ritholtz is one of the bravest and clearest commentators on Wall Street behavior today.  This post of Goldman Sachs' bonuses is especially good.

Everyone is upset about the bonuses.  No one bothers to understand or remember the genuine structural problems that actually caused the problem.  The bonuses did not contribute to the problem, but it's the only thing that the main stream media can pay attention to.

If I were a truly skeptical person (hint: I am) I might suggest that the monied Wall Street masters have cut some sort of deal with the main stream media to keep the public's attention off of the scandalously unethical and dangerous behavior that actually caused this crash.  If that risky behavior was a large part of the reason for their spectacular profits leading up to the crash, and if the Wall Street masters understand that, then they should be trying every trick in their bag to protect their profits.

I've got the moral outrage.  I'm outraged at the dangerous unethical behavior that Wall Street masters have conspired to engage in.  And I'm outraged at the main stream media that actively ignores the real story.

I've seen that members of the tin-foil hat crowd have accused Henry Paulson and his cronies of deliberately causing this disaster so they could increase Wall Street's power over Washington.  Whether or not that was deliberate (I don't know, personally), that has been one of the biggest effects of this crisis.  Others have accused Washington power brokers like Barney Frank and Phil Gramm of helping to orchestrate the collapse so that Washington could use the clean-up to get more control over Wall Street.  Again, I don't know if the Washington crowd is that smart.  But they have indeed gotten their hooks in.

The sad fact is, though, that in each skirmish Wall Street has won.  The war for control is far from over, but Wall Street is winning.

The real problem is that whether Wall Street or Washington wins this was, Main Street will lose.

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