Interfuidity

"Part of what makes an FDR different from a Mitt Romney is that an FDR understood his power to be derived from more or less arbitrary privilege, while a Mitt Romney imagines himself to have “eaten what he killed” in brutally efficient markets. The neoliberal revolution in finance and economics was not pap invented merely to enslave the plebes. As the value system of the first world grew more “open” and “meritocratic”, it became hard for those who achieved outsize influence in finance both to accurately understand their own roles and to consider themselves good people. Self-regard being more important to all of us than truth, financiers eagerly followed and encouraged an academic movement that described the conflicted institutions which had elevated them as “efficient” and tending inevitably towards “optimality”. They persuaded themselves, long before they persuaded the rest of us, that any games they played for their own enrichment would necessarily lead to social gain over the long term."http://www.interfluidity.com/v2/2742.html

People in the financial industry earned huge sums making loans that shouldn’t have been made, offering “affordability products”, Orwellian slang for means of selling homes at unreasonable prices that buyers could not afford. They failed to perform the core social duty of creditors, which is to make prudent judgments about whether loans are likely to be in the mutual interest of borrower and lender over the full term of the debt.  http://news.mortgagecalculator.org/interview-with-interfluiditys-steve-waldman-the-government-has-chronically-oversubsidized-mortgage-lending-and-homeownership/

"Most bankers don’t understand themselves to be con artists. ...Bankers just think about making money. They work to attract cheap finance via suggestions of clever risk-management and cross guarantees. They try to cover themselves in case it all goes wrong. They persuade themselves in some big-picture way that the “system” in which they are participating in does some good, they rationalize away practices that might seem to be a bit sketchy. Every industry has its sausage factories, right?"

"Bankers’ adversarial view of regulation, their clear delight in treating legal constraint as an obstacle to overcome rather than a standard to aspire to, is perverse. Yes, bankers are in the business of mobilizing capital, but they are also in the business of regulating the allocation of capital. That’s right: bankers themselves are regulators, it is a core part of their job that should be central to their culture. Obviously, one cannot create culture by fiat. The big meanie in me can’t help but point out that what you can do by fiat is dismember organizations with clearly deficient cultures." http://www.interfluidity.com/

"It is with great unhappiness and reluctance that, after devoting years of my life to thinking about finance, I’ve concluded that financial systems are better characterized as large-scale disinformation systems and that disinformation is at the core of how they function, not some tumor that can be excised to restore the patient to good health."  http://www.interfluidity.com/v2/2742.html