The Bishop and the Butterfly: Murder, Politics, and the End of the Jazz Age

    The Mortgage Crisis same old , same old

    By Flavius on Wed, 05/18/2011 - 9:37am |

    This was started as a comment to Richard Day's excellent blog but I've decided to post it separately

    Several  comments ,the first specific to this situation. The others  I've made here repeatedly. 

    1. Where Birnbaum says he needed to have his memory refreshed of the 2007 power point presentation that is a lie. He remembererd it. To begin with you do , And in particular he would remember that one because of the level to which it was being addressed and the subject:a pitch for more compensation.He probably took it home to show whomever he lives with.Might even have kept it at home for a while to admire his work. 

    2. Every company for which  I worked behaved illegally.Not in every activity all the time. But at least in some significant transaction of which I was aware.A large enough sample that it's reasonable to omit the qualifier for which I worked.

    3. That is to be expected since self interest is immensely powerful a motivator far more  than the desire to benefit society as a whole cf the tragedy of the commons., Therefore it's illogical to expect  a capitalist to honestly  work very hard, very smart and very long but then draw the line at working somewhat dishonestly rather than fail to achieve an important goal.

    4. Honestly examine whether we would  have done differently .All the time? If your wife needs money for a life- saving operation?

    5.Calibrate outrage.As individuals and as a society. Discriminate  between  technical violations of the rules of the market such as price fixing  as compared to violations of the  essential rules of a workable society -which I'll label  the "Natural Law". :unsafe working conditions, cars that are unsafe at any speed, poisonous food, unsafe drugs. 

    6.While pressing the government to enforce all laws  insist it similarly  calibrate its enforcement efforts ..

    7. Revoke laws  such as those against insider trading where any harm to is insufficient to justify diverting efforts from those  violations of the Natural Law..Any company secrets an analyst can learn  by suborning an insider can  be  learned as easily   by  having a drink at the nearest bar-and already has been by the competitors. Removing legal sanctions for use of "propietory" information would level the playing field and free DOJ resources for the infinitely  more useful job of protecting victims  from real offences  like the sub prime marketing that preceded the bubble. 

    8  And realize we can't  eliminate all offences without creating a society not worth  living in.  .

    Comments

    I am sorry I missed this, although you are up for another day anyway.

    You have good ideas here.

    We know what went wrong even when the felons would have you believe fairy tales.

    But how do we fix the problem, not that legislators will consider our ideas!

    We must 'key in' on those sins that hurt most Americans and with one in eight homes in foreclosure over the last few years, most Americans have been hurt one way or the other.

    At any rate you have me thinking and I can add this to my working paper.


    by Richard Day on Wed, 05/18/2011 - 10:43pm

    Bookends

    .The financial crisis starts with  what Father O'Malley would call a sin-inducing  a family to sign on to a mortgage which will inevitably lead  for them  to the heart break of homelessness ,and for society to for example , the entire population of  Ireland facing years of privation. 

    And ends with what Rabbi Herschel  would label a sin- the banks criminal  foreclosure of mortgages to which they can't demonstrate ownership..

    Regretably we irreligious need some other designation. Capitalism, I guess.

    In the 50s Galbraith wrote "American Capitalism, the concept of Counterveiling Powers".

    (At a social event years later I was unwillingly  dragged up to him by the host. Desperately searching for something not stupid to say I told him that that book had shaped my thinking.He looked as if he really wished  I'd said something else!)

    But applying his concept , face it,, the inevitable  effect of self interest working through a market economy is something like this financial crisis. Unless opposed by an equivalent counter veiling power,

    Maybe there isn't a fix. Maybe it's a cocktail of fixes. One simple minded one could be to recoup the ill gotten gains .If we can't stop them stealing , take the money back. Just reinstall the  1956 tax code with a  90% tax rate on marginal income..

     


    by Flavius on Thu, 05/19/2011 - 9:08am