The God Who Failed

Alan Greenspan has conceded that "the (financial) meltdown had revealed a flaw in a lifetime of economic thinking and had left him in a 'state of shocked disbelief.'" The "flaw"? Read on. "Greenspan acknowledged he had made a mistake in believing that banks, operating in their own self-interest (note the Any Rand subtext there), would do what was necessary to protect their shareholders and institutions." Well, that might actually have been an accurate model back when banks were run by people who gave a damn. The people in charge these days, however, seem to be, by and large, sociopaths who want nothing more than to grab the money and run -- i.e. to loot whatever institution has the misfortune to hire them, drive it into the ground, and get out on the last lifeboat just before the whole thing goes under. So Greenspan's "model that defines how the world works" might have been OK way back when, but things have morphed considerably since. And why has this occurred? I believe one of the main culprits has to be government itself, which spreads the virus of non-accountability to everything it touches. If there are no punishments for poor performance, and no sanctions for stealing, what you're going to get is both... and people who aren't interested in taking part in the racket will leave in disgust, and apply their talents elsewhere. The "robber barons" of old may have been ruthless, but at least they weren't whores for the government -- at least not at first. And their stockholders could count on them to be aggressive in pursuit of profits, not just for their own benefit but for the benefit of everyone who had an interest. What happens now is that boards of directors hire warriors, hoping they will lead the firm to victory over its competitors. But what happens is that the warriors sell out the interests of their companies at the earliest possible opportunity, pull a few scams and con games, and then get out at exactly the right time, leaving everyone else, right down to the poor schmuck with mutual fund shares, holding the bag. And the way is paved by government, which is ever ready to cushion the fall by stepping in with a bail-out, which adds even more largesse to the already-bloated pie that the "wheels" are keeping all to themselves. So yes, the system as it is now is designed to encourage, aid, abet, and reward failure -- but that's only "failure" to the many, not to the few... and it is the few who hold all the cards... especially the ones with high government officials' faces on them. So when we hear talk about "some structural changes" being needed, we can take that as another way of saying "business as usual" and thanks anyway, but we'll just wait for the next round of suckers.