https://www.nakedcapitalism.com/2018/09/double-whammy-implicit-subsidies-great-financial-crisis.html
Initially published here but kudos again to Naked Capitalism for aggregating links!
https://www.ineteconomics.org/perspectives/blog/double-whammy-implicit-subsidies-and-the-great-financial-crisis
"A financial industry safety net enriches bankers and their shareholders — at our expense"
"I contend that successful efforts to secure these subsidies owe a large debt to the supervisory and justice systems’ overbearing tolerance for self-serving financial-industry bullsh*t.[1] In the press and in history books, policymakers and industry-captured economists and accountants consistently misframe regulatory and supervisory incentive problems and the strength of potential justice-system remedies."
Oh so elegantly well said!
This is even more elegant than the cat, (I should say rabbit) skinning itself for the benefit of the hunter that want to serve itself some rabbit stew! Not as straightforward simple because it is all financial. The financial domain is one where those that benefit most are extremely clever of skinning the cat with other people's money.
Set the cat up with one punch (overwhelming fear) then deliver the other punch (Bo!) in this case Panic Attack and watch the cat jump into the pot shorn of skin (big bucks).
The hunter has its stew and eats it too!
The hunting is illegal but nobody is going to apprehend a hunter that had nothing directly to do with the crime such as holding a bloody knife that did the skinning.
It is like the warning we were given in Vietnam. When there is an explosion outside do not run out into the street to see what happened.
It was a set up.
Such a simple business model.
The perfect crime has no perp.
Footnote 1 at the link:
"[1] According to Frankfurt (2005), bullshit differs from lying in that the bullshitter ignores the truth instead of acknowledging and then subverting it. Among my childhood friends, that was our definition of horseshit, to which the bullshitter adds an intention for his horseshit to be taken seriously. For example, Rep. Blaine Luetremeyer (Missouri) –who tops the list of House recipients of bank support in the more-recent election cycle—repeatedly asserts that small banks “were not part of the problem” that caused the Great Financial Crisis and that rolling back the Dodd-Frank Act would greatly improve customer access to credit and lower its cost (Kline, 2018)."
https://www.ineteconomics.org/research/experts/ejkane
Professor Kane knows finance!
If he was in the business world instead of academics he would be a multi billionaire but he obviously has one problem: Honesty, maybe two problems: Integrity.
Professor Kane's concluding statement:
"The essence of a crisis is a scrambly effort by those contractually responsible for bank losses to find ways to shift their loss exposures onto other parties. In this process, the amount and character of explicit creditor, manager, and stockholder bailouts feature prominently. Ideally, crisis managers should seek to get back to the manageable state quickly, work hard afterwards to hold individual bankers accountable for acts of reckless behavior, and try to drive p as low as they can. Taxpayers need to ask themselves what it is about the politics of crisis management that makes this impossible."
Thanks Professor Kane. Truly elegant analysis and explanation. Only a hunter that hunts and kills to induce its prey to skin itself would truly appreciate your thesis. That same hunter, of course has the greatest fear that their hunting model will be revealed to those that are ultimately skinned.
Perhaps those that are ultimately skinned will adopt the same model as a counter measure defense.
Practitioners of the Double Whammy be very afraid!
In the course of all the things I write about here this blog entry was most satisfying recognition of brilliance.
Yves says at the end of the link she posted at Naked Capitalism:
"Due to the fact that WordPress was already choking on this post due to its length, I had to omit the terrific supporting material that Kane provided at then end, such as “DESPITE THE BULLSH*T ADOPTION OF NO-BAILOUT POLICIES BY THE EU, DEUTSCHE BANK AG HAS REMAINED A ZOMBIE, EVIDENCING SAFETY-NET SUBSIDIES MOST OF THE TIME.” I hope you’ll visit the post and scroll to the end to look at the information."
Thank you Yves!
https://www.bloomberg.com/view/articles/2018-09-14/ten-misconceptions-about-financial-crisis-on-10-year-anniversary
Crises is a money making business model: What is old is new again..or has new application opportunities:
https://www.project-syndicate.org/commentary/financial-crisis-in-2020-worse-than-2008-by-nouriel-roubini-and-brunello-rosa-2018-09
I would guess that Michael Hudson probably knows professor Kane.
https://michael-hudson.com/2018/09/wiping-the-debt-slate-clean/
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