Saturday, 26 November 2011

The limits of shamelessness

I saw Yves Smith of Naked Capitalism on the PBS News Hour Thursday, an unusual showcase for someone so defiantly critical of both Democratic and Republican postures on economic topics. (Outfits like PBS usually permit ‘debate’ only when strictly bounded by the two major parties such that their differences, while often real, just as often mask deeper agreement on core issues. It is probably not an accident that Smith was invited onto a show sponsored by Bank of America on perhaps the least-viewed day of the year. But I digress.)

The subject was the lack of criminal prosecutions for fraud emerging from the financial crisis of 2008, whose aftereffects remain with us. Four experts were invited to comment, limiting them to two substantial comments each in the ten-minute segment. Three of the four trotted out lame excuses: the cases are SO complicated; the regulatory agencies have SO few staff; the requirement to prove intent is SO high a bar. Smith demolished those arguments to the extent possible in three minutes (the evidence of fraud is massive, the Nevada attorney general is prosecuting with a tiny operation, the Sarbanes-Oxley Act requires CEOs to sign off on the company’s books and attest to their accuracy).

But more significant, to my mind, was what was left unsaid. No one argued that the accusations of fraud are false, that the bank execs should be left alone, that they’re ‘doing God’s work’, as the inimitable Blankfein said, that the prosecutions are a partisan Democratic attack, that free markets should be left alone to function according to their inherent perfection, that attacking banks is an expression of foolish, Luddite anarchy. One of the four was a former Republican congressional aide and certainly would have gladly poured on those arguments had he dared. But he didn’t.

Contrast that silence with the active defense of torture, indefinite detention, military tribunals, and the wholesale stripping of our Fourth, Fifth, Sixth, Seventh and Eighth Amendments. While many objections to these abuses continued to be voiced, whole presidential campaigns are being mounted to actively defend such worthy acts as waterboarding and all the rest of it. My conclusion is that the banker class is extremely isolated, and this should have interesting consequences if another financial panic ensues, as appears more than likely given the ill winds blowing in from Europe.

P.S. One comment on Yves’ blog referred to the ‘Petroleum Broadcasting Network’, which given the steady stream of insufferable bullshit from Chevron featured there, strikes me as very fair.

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