Financial Crisis - Somebody Must Pay!
It happens with partners. So long as the business is growing, the money's rolling in, and everything's coming up green, they're the best of friends. But when business sours and profits wither, the other partner becomes the cause of it all, a total incompetent and maybe a thief to boot. What was once mutual admiration turns into mutual litigation.
It's the same with stockbrokers and their clients. In boom times, when it would take a kind of perverse genius to lose money, the Investment Counselor or Financial Adviser -- no longer a mere broker -- is a brilliant innovator, a deep thinker, a patron of the arts, an all-around scholar and gentleman from whom all blessings flow.
No doubt that's how many of their clients once saw
But let the bottom fall out, and those who were only too glad to collect the too-good-to-be-true profits now want to hang the scoundrel. When in disgrace with fortune and men's eyes ... it's got to be somebody else's fault. Let's get him!
The surest aftermath of every economic collapse is the hunt for scapegoats. Congressional committees convene, and even the sleepiest watchdogs awake -- and start barking.
Even the long moribund
When folks started talking bitterly about
It certainly wouldn't have done for the
No, better to investigate a firm already none too popular. And when folks are looking for somebody to blame for a financial panic, do you really need all that much evidence? Isn't it enough just to show that an awful lot of money was lost? The time was ripe for a financial version of McCarthyism to sweep the land.
Never mind that the same, awful lot of money was made by some speculator who bet on the other side of the deal. Nobody likes a financier who bets on a collapse. It's un-American. It's not Positive Thinking.
Goldman's best defense at trial may be that the selection of losers that
In today's climate, someone like John Maynard Keynes, the once and future hero of liberal economists, would come under suspicion because, when he wasn't writing groundbreaking economic treatises, he was doing remarkably well as a short-seller during the Great Depression, raking in record returns by betting on the market's continuing collapse. As bursar of
Today, no doubt, Lord Keynes would be raked over the coals by the likes of some grandstander like
Senator Levin didn't seem to understand the difference between an investment adviser, who has a duty to look after his clients' interests, and a market maker, who just puts buyers and sellers together without guaranteeing either a profit. Like a stock exchange.
Or maybe the senator only pretended not to understand the difference in order to give his demagoguery a final fillip. When Goethe said there is nothing more frightening than ignorance in action, he overlooked the rich possibilities of pretending ignorance. At least when those of us in the media fail to make so elemental a distinction, our ignorance is sincere.
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Financial Crisis - Somebody Must Pay!
(c) 2010 Paul Greenberg