30 October 2008

Damn you for not doing things that I didn't want you to do in the first place!

I will admit to indulging in no small amount of schadenfreude directed at failing financiers, even though (or perhaps especially because?) their suffering is causing no small amount of harm to myself, my friends and my family. But I'm sensing a lot of desire to crush would-be masters of the universe beneath the iron heel of The People, and that doesn't make a lot of sense to me.

I've seen a lot of remarks from the less introspective segments of the commentariat to the effect of "Those greedy Wall Street people! Their mistakes are hurting regular Americans. We should make them pay for their hubris! Bankrupt them! Arrest them! Off to the labor camps!"*

Besides being so very French Revolution, what irks me is that these comments mostly come from the same sorts of people who didn't like Wall Street when it was flying high. Now they like it even less now that it's in the dumps. Which is it, Goldilocks? You don't want Wall Street to be very successful, but you don't want it to be unsuccessful. Is there some invisible sweet spot of mild success that only you can see?

There are multitudes of people who insisted, and continue to insist, that finance somehow isn't real work and doesn't really contribute to society; that it's some kind of shell game where people from Wall Street wearing slick suits con people from Main Street wearing blue jeans out of money. I don't see how you can reconcile this with a desire to punish Wall Street now that they've crashed and burned. You can't claim that financial voodoo is bad when it's going on, but also bad when it isn't going on. I just don't understand the logic behind a decision matrix that looks like this:
Bankers are succeeding ---> soak the rich!
Bankers are failing ---> soak the rich!
(At the very least you should have the honesty to admit that you don't care what's going on in the world, you just don't like wealthy people and want them to suffer.)

If Wall Street contributed nothing to society then the fall of Wall Street should be a good thing. If the fall of Wall Street is a bad thing then whatever it is that they used to do, but are no longer doing now, must have been a good thing. A lot of people are running around screaming about how terrible Wall Street is for failing to provide services which they were just terrible for providing a year ago. Whatever financial activities America is now dearly missing (and they're usually left unspecified in these sorts of rants) must have been pretty good for America back when they were actually happening, otherwise we wouldn't be missing them so.

[NB: If this post seems a little ...un-nuanced... then that's only because most of the anti-Wall Street diatribes I read are even more absolutist. I'm not trying to justify an unequivocal defense of financiers, and I understand that some middle ground is possible between a nation where finance was the single largest sector of the economy, and one with almost no profitable financial companies. But the people running about with torches and pitchforks don't seem too eager to find middle ground, so I feel justified in ignoring it. I feel like most of the people who make these arguments would defend themselves with something along the lines of "I was only complaining about the bad parts of the financial sector, but now even the good parts are gone." (A) Few op-ed or blog criticisms of Wall Street were ever considerate enough to accurately identify what the bad parts were supposed to be, and (B) this is a little like complaining to everyone who will listen about how awful your job is, but then being angry when you get fired. Sometimes you have to take the good with the bad, or take nothing at all.]

* e.g. "[Senator] Tester said people 'want to see the executives that drove Wall Street into the ground in orange suits picking up cans along the side of the road.'" (via)


  1. The frustration of some critics (including myself, a staunch capitalist) is the feeling that the great returns and very high pay enjoyed by these bankers was not based on producing real wealth. Instead, these bankers reaped benefits from the illusion of wealth created by the real estate bubble. And although many of us suspected the existence of the bubble, we still trusted they were creating wealth and placed our savings with them. Now I drive a Chrysler instead of the Porsche I could have purchased with what I lost with the market downturn (and I would still have the car).

    Therefore, I do not place myself on the camp of those who always criticize bankers. I do believe that they contribute to society and they largely earn their pay (I cannot do what they do). But not this time.

  2. I suppose what I was getting at was that there were perfectly legitimate complaints that can be made now (ie post-crash), and fewer but still legitimate complaints to be made pre-crash. I'm not trying to short change those positions, merely recognize that there are a lot of people that use any and all conditions to back up their prior convictions. That brings us to "Too much revenue: bad! Too little revenue: bad!"