Thursday, October 23, 2008

Greenspan is Shocked, Shocked!

I was listening to the radio today, and had the "pleasure" of listening repeatedly to Alan Greenspan's testimony to Congress about how his ideology / world view seemed to have a flaw in it. How he was "shocked" that absent regulation, the bankers would so betray their shareholders as to get into a pickle with credit-default swaps and other instruments and endanger the livelihood of their institutions.

Are all economists this stupid? First the whole nonsense about trickle-down economics, when a giraffe could tell you that if consumer spending has been what's buoyed the economy for the past umpteen years, through the dot-com burst and other travails, then you're best off ensuring the masses keep more of their money, rather than letting the rich trade money as they gamble in the stock market. Now this eminent banker is stunned that people who make their money by engaging in risky behavior, and who never actually suffer the consequences of their company getting into trouble ("thanks for the retention bonus, Mr. Bankruptcy Judge!"), would do anything else?

The corporate liability shield is what will destroy this world: people who direct the companies should absolutely be held liable for what they direct their companies to do. No one will take a chance? Maybe that'd be better. People would act properly if they knew they'd pay for acting improperly.

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