Lawrence Lessig wrote Systemic Denial
"The first is that things are actually much worse than anyone ever talks about. The pivot points of our financial system -- the infrastructure that lets free markets produce real wealth -- have become profoundly corrupted. Balance sheets are 'fictions,' as Professor Frank Partnoy put it. Trillions of dollars in liability hide behind these fictions. And as expert after expert demonstrated, practically every one of the design flaws that led to the collapse of the past few years remains essentially unchanged within our financial system still. That bubble burst, but we can already see the soaring profits of the same firms that sucked billions in taxpayer funds. The cycle has started again.
But the second point was even worse. Expert after expert spoke as if the problems we faced were simple math errors. As if regulators had just miscalculated, like a pilot who accidentally overshoots the run way, or an engineer who mis-estimates the weight of cargo on a plane. And so, because these were mere errors, people spoke as if these errors could be corrected by a bunch of good ideas. The morning was filled with good ideas. An angry earnestness was the tone of the day.
There were exceptions. The increasingly prominent folk-hero for the middle class, Elizabeth Warren, tied the endless list of problems to the endless power of 'the banking lobby.' But that framing was rare. Again and again, we were led back to a frame of bad policies that smart souls could correct. At least if 'the people' could be educated enough to demand that politicians do something sensible.
This is a profound denial. The gambling on Wall Street was not caused by the equivalent of errors in arithmetic. It was caused by a corruption of the system by which we regulate those markets. "
No comments:
Post a Comment