Nov 28, 2008
The Stupids are back. You remember--that fictional family who appear in series of books portrayed as incompetent
to the point of confusing the most simple concepts and tasks. The books
were themselves denounced as irresponsible and inspired films
which were dismissed as stupid plus.
But now the Stupids seems to
have inspired a column by none other than Thomas Friedman of the not-your-father's-New York Times. In a new column by this best selling
hero of all serious media, we finally have a easy to read explanation
of the financial crisis--namely the nerds on Wall Street were just
plain dumb, or to use an overused term, "stupid."
The author of The World Is
Flat, which one reader in Australia described as a book about "financial
geniuses who were beating our olive trees into Lexuses!," calls the
Wall Street wunderkinds:
"...overrated dopes who had no idea what
they were selling, or greedy cynics who did know and turned a blind
eye. But it wasn't only the bankers. This financial meltdown involved
a broad national breakdown in personal responsibility, government regulation
and financial ethics."
Tom then lays out who was complicit
in all this--with nary a mention of the media that spent years hyping
the "financial innovation on Wall Street." His answer: all of us.
Everyone, he concludes, was involved so you can't really blame anyone,
much less prosecute the fraudsters and, to use an FDRism, "banksters"
who bamboozled the gullible and laughed all the way to the bank or their
high priced condo--whichever came first.
"This financial meltdown
involved a broad national breakdown in personal responsibility, government
regulation and financial ethics," he divines.
"So many people were in on
it: people who had no business buying a home, with nothing down and
nothing to pay for two years; people who had no business pushing such
mortgages, but made fortunes doing so; people who had no business bundling
those loans into securities and selling them to third parties, as if
they were AAA bonds, but made fortunes doing so; people who had no business
rating those loans as AAA, but made a fortunes doing so; and people
who had no business buying those bonds and putting them on their balance
sheets so they could earn a little better yield, but made fortunes doing
America: Confess your guilt.
Because as long we all did it, as long as unsophisticated borrowers
and subprime victims are treated in Friedman speak as equally to blame
with shrewd lenders pedaling products they knew were unaffordable, then
no one can ever be held responsible. To him, the bankers and brokers
were not driven by avarice and self-interest but by ignorance and idiocy.
He quotes a piece by writer
Michael Lewis saluting former CitiBank analyst Meredith Whitney for
warning the "Citi that never sleeps" that it was headed for the
"This woman wasn't saying
that Wall Street bankers were corrupt," he added. "She was saying
they were STUPID" (caps mine). (That word again, finally used in polite
company.) Her message was clear. If you want to know what these Wall
Street firms are really worth, take a hard look at the crappy assets
they bought with huge sums of borrowed money, and imagine what they'd
fetch in a fire sale..."
Here's one more whistle blower
who was only concerned about profitability, not the morality and criminality
that the FBI says was pervasive in the mortgage industry. When you are
complicit in enabling criminals, or profit from their dirty deeds, you
become a criminal. Or so say any number of prosecutors who routinely
use RICO laws to jail criminal conspiracies.
A number of New York Times
readers denounced this moral obtuseness and media simplification.
Wrote Mary Lou from Springfield MO with great brevity: "And still no suits
not even fired, let alone in cuffs."
from Maine: "The ones at the top have walked away with vast fortunes,
while the humble taxpayer pays to clean up after them."
At the same
time, Friedman blankly repeats the central mantra that is keeping these
criminals rich, to wit: Citi is too big to fail. If anyone was held
responsible the shock would destroy the system, and without the system,
why, heaven forbid that we should even contemplate such a grim prospect."
chimes in from Houston: "Quit blaming sub-prime mortgages as the sole
culprit of this mess. It started at the Fed and its misguided policies... .
The simplification of this mess by a daily column cannot be done. It
let's too many off the hook."
Why is it that Friedman and
so many of his colleagues have not fully examined the "subcrime"
scams that deliberately (with malice and forethought) talked so many
into taking on debts they could never pay back? Why haven't they connected
the dots with those who bought up these mortgages to package and profit
from them as securities?
Can't they see the connection
to a predatory and well institutionalized Ponzi scheme with a chain
of complicity? These players were at the same time interdependent and
in it together. It was a cartel of sleazy operators and securitizers,
big and small, connecting small town brokers to big time bankers.
These erudite journos assume
that the homeowners who have still not been really helped by all the
plans, TARPS and Bailouts were just plain stupid or even deserving of
being dumped in the street.
Who are the Stupids here--the people who are losing everything or the media wise men who turn
their eyes and pens away from examining the crimes of Wall Street who
write in well-polished generalities that seem critical at first reading,
but then reveal themselves as totally superficial?
Can it be that people who live
in big houses, can't see or FEEL the pain of the people shackled by
debt in smaller abodes down the street, the folks who are just waiting
for the sheriff to toss them out?
Tom Friedman lives in one of
those very big houses--you can see it on the Internet at sustainelane.com--but he also purports to be guided
by a moral compass even as he blames us all for the sins of a few, concluding:
how we got here--a near total breakdown of responsibility at every
link in our financial chain, and now we either bail out the people who
brought us here or risk a total systemic crash. These are the wages
of our sins."
One sin Tom doesn't comment
on is the failure of our media to do a better job of assessing how that
irresponsibility was permitted, even encouraged, and who should be held
accountable. He was also taken to task for this glib meditation on sin
by yet another Times reader in Arkansas who calls himself "Death By
are the wages of our sins." Watch that
"our" stuff, buddy. My family has not sinned. We're not the brightest
bulbs in the pack, but we arrive at this disaster with our house paid
off, our cars paid off and no credit card debt. We've lived the way
Wall Street bankers have not.
We all may be guilty in the
eyes of the Archbishop of the New York Times but some are far, far guiltier.
Why don't we find out just who, with a National Commission of Investigation
with subpoena power and the right to seize documents and cross-examine,
is the "someone" that has to be held accountable!
As I have been saying for over
a year, it's time for a JAILOUT, not just a bailout.
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