If you’re interested in the ongoing financial calamity, or maybe even if you’re not, and whether or not you think you understand what happened, I highly recommend that you set aside a few minutes to read Michael Lewis’ remarkable The End. I find myself, off and on, suffering from unmanageably severe anger at the financial professionals who paid themselves millions for driving the economy into a brick wall at high speed, then walking away while we pick up the pieces. Reading The End didn’t help. So what are we going to do?
Lewis of course first burst onto the scene with Liar’s Poker, all about the Eighties flavor of Wall Street, and I’ve sung his praises here while reviewing Moneyball. He’s an outstanding writer and good at picking the right subjects to cover.
The Scumbags · That’s what they are. They bid up each others’ prices so it somehow seemed reasonable and natural to pay traders tens of millions and executives hundreds of millions, all to make high-risk bets with other people’s money leveraged at a factor of forty to one; when it all went sideways, the pension plans of a lot of honest men and women went in the toilet.
“Don’t obsess about your pension-plan statement, don’t even look at it,” they say. Well, sorry, I did, and I’m extremely angry. I don’t think I’m alone right now, and I’m going to be less alone as exposés like Lewis’ work the truth into the popular consciousness.
I suspect that the political class of the developed world is so busy staving off catastrophe (quite appropriately) that they haven’t really woken up to how incredibly angry the general population is with the clique of liars and thieves in really good suits who frittered away our pension funds and are now enjoying the proceeds. People are going to want to see some heads on pikestaffs. I want to see some heads on pikestaffs.
Let’s Get Real · We are after all, thank goodness, a government of laws rather than men, and probably these guys mostly didn’t break too many laws, at least too obviously. And while a public lynching of a representative sample of the population chosen from among hedgies and i-bankers and ratings-agency folk would be terribly satisfying, that’s not how we do things. I assume that to the extent that laws were broken, the guilty will get hauled into court. It occurs to me that a lot of financial executives signed SarbOx assertions that their financials were accurate, right? Which obviously they weren’t.
I’ve already offered some opinions as to how we can keep the next group who gets its hands on the financial steering wheel from steering the truck into the wall. But at the end of the day, I do actually believe in markets. And in that context, I’ve come to a conclusion as an individual, one I hope that a lot of other individuals come to.
For a living, I’m an IT generalist and a Web specialist. For doing this, I get paid reasonably well and thus I have some savings to take care of. My conclusion: it is neither fair, nor is it sane, for me to hand them over to people who get paid ten times and up what I do. So I’m not gonna. If that means I have to deal my nest-egg out among real estate, gold, and cash under the mattress, so be it.
So if anyone wants to help me with my money, I’m going to insist on complete transparency as to how they’re getting paid and how much they’re getting paid, and if it’s really a lot more than me, then I’ll know I can’t afford their services.
Which should have been obvious a long time ago. If a lot of other people come to similar conclusions, maybe we can bring some sanity to the money business.
A Request · Dear governments of the world: Can you please identify at least a few lawbreakers so we can watch the perps walk? It would make your citizens feel so much better.