Greed Is. . . Oops!

So Wall Street is back on a roll after the Fed gave up the half-point interest rate cut it was angling for last week. How nice for all the gang who work downtown—we read last December that the average salary in one of the big investment banks was 600 thousand a year, and that’s including the receptionists.

Meanwhile, the people who got bamboozled into taking the scam mortgages will continue to lose everything. Let’s see if our Democratic party guys, eyes lifted toward Hyde Park and the grave of FDR, will step up and find a way to give them a similar break.

I have to admit to mixed feelings about the whole thing for selfish reasons: my retirement accounts run by these geniuses both announced to me in their monthly statements that they managed to lose 11% of my total assets in the month of August. Good going, guys. The blurbs in these depressing statements I’m getting in the mail are quite similar: it was a ‘perfect storm,’ they insist, entirely unprecedented, a freak combination of events no one could have predicted.

Yeah, right. They say they’ll make it back, and no doubt they will. But even I, a mere curious lay mortal, noticed signs of trouble in the financial pages for months, not to mention the anecdotal evidence: a friend of mine told me her roommate, who works for minimum wage in a fast-food shop, got a mortgage for a condo in June with no down payment required. You didn’t need an MBA to know that something was screwy and couldn’t last, but none of the financial sharpies in charge of my old age thought to take a more conservative approach and scramble for the exits.

The Market, praised be its name, has its own logic and order, to which its high priests bow down with predictable slavish awe. Many commentators have remarked on the inexorable force of any bubble and how smart speculators will and in fact should pile on even while knowing that it will burst as long as they can bail out in time.

That suggests that our Goddess of the Invisible Hand is just as temperamental and dangerous as Hera and Athena and requires the balancing intervention of other deities. Greenspan, despite his long-standing godlike status, never bothered using the Fed’s regulatory faculties to protect us. (Perhaps he feared getting nailed to a rock and having his liver eaten by an eagle.) Let’s see if the new crop of anointed fiscal emperors can use this gigantic opening to do better.