Tue Aug 24th, 2010 at 04:04:28 PM EST
The last 5 months I have been on paternity leave, mostly spending time with my son and wife but also staying abreast (as best as possible) of current events. Viewing the world a little bit through the eyes of a child, one thing that struck me again and again was that the world is full of cheaters.
I really wonder where the morals/ethics of our society have gone to (at least regarding the "elites" currently in charge).
Just some examples of stuff that any child learns that the elites (or whatever you want to call them) don't seem to need to follow:
- When you borrow a toy from a friend, be careful, don't break it and give it back.
- When you play a game, don't break the rules. If you do, you get punished and/or lose.
- When you play a game, you can't (retroactively) change the rules as you're playing just so that you can win (and others unfairly lose).
- Don't argue with your parents, it'll just make things worse (ok, a bit far fetched but I need it as an example later).
- Don't lie.
For all five "principles" you could find hundreds of examples where these basic rules are not being followed. I'll name just a few which have crossed me the last few days surfing the internets...
- "strategically defaulting" seems to be something on the rise among middle-class Americans whose houses are worth less than their debt. WTF? Taking on a loan is like borrowing a toy, except that it's money. So it has to be given back. Period. If my son ever borrows a friend's toy, sells it to someone else to get money (sorta like a home-equity loan) and then uses the money to buy ice cream which he eats and then doesn't have money to buy the toy back. Well, he'll get grounded for sure...
- OK, I assume we can safely say that all of Wall Street and most big banks just about broke all kinds of rules. Anyone get punished yet? No. Can't believe it. Worst of all the Hedge Fund industry with all kinds of insider trading ranging from classical insider trading to High Frequency Trading which should be outlawed immediately.
- Now, this is a nice one and one that is in some ways even worse than number 2. For example, the investment banks were exempt from all kinds of oversight but in return didn't have access to the Fed's discount window to refinance. The deal was essentially, investors in investment banks (bond and stock investors) knew the risk was a bit higher but so was the return. And then the market liquidity went away in 2007/2008 (in part because of the investment banks' shenanigans), suddenly the investment banks were able to use the discount window (and all kinds of other quickly set up lines/guarantees/AIG bailouts/etc.. to refinance/save their asses. WTF? The reason I hate this kind of cheating even more than upfront rule breaking is that if you straight out break a rule you get punished and the other players at get some sort of "reward" (if only retribution) for doing the right thing, but here, the honest player really really gets screwed and has no incentive whatsoever to ever be careful/law-abiding again. Be reckless, you'll get saved in the end anyway.... Another, albeit older example that really make me angry: back-dating / repricing of stock options.
- One current example, the German nuclear energy lobby blackmailing the government. Don't understand me wrong, I think nuclear needs to be used for a transition period (during which I'd much rather turn off coal powered plants than nukes) but the arrogance and audacity of the utilities (supported by certain bankers!!!) makes we want to throw up! Who are they threatening the GOVERNMENT???? It seems the financial crisis where everyone clamored for governments help has not made people/corporations humbler but even more obnoxious! It is really time that governments start wielding a more powerful fist against opportunist rent-seekers like bankers and in this case utilities!!! The teenagers called Wall Street and Utilities (oh, and Big Oil, see below) need to get grounded, get a real job and get their pocket money taken away.
- Lying. BP. Need I say more? Didn't think so. What also amazed me in connection with the spill was that for some reason stock market rules are more important than national law (e.g. it was not allowed to report in some areas as the information there might be materially relevant for the stock). WTF??? Same as above number 4, the governments needs to reassert who is boss!
Ok, enough ranting, my son is looking way too interested at that electrical socket, and regardless whether it is being fed by nuclear, wind or coal, that is just too dangerous...