Arnold Kling  

Self-Promotion

PRINT
Survival Investing... How Rude...

The New York Times hosts me and two other participants discussing the social value, or lack thereof, of financial innovation. I like what I wrote, although it was hard to fit what I wanted to say within the suggested length.

I didn't watch the hearing today on the Goldman deal. Megan McArdle writes,


Claire McCaskill's rant was particularly irrelevant to the actual question at hand, but all of them are mostly trying to express outrage, not make any coherent assessment of the strengths of the SEC's case.

Basically, the McCarthy era never ended. The objective of every Congressperson at every hearing is to get on the evening news by bullying a witness. The only question I have is whether McCarthy is the one who started it, or whether he happened to be the one guy who got called out on it.

Too bad somebody at Goldman could not have called out a Senator. It must have been tempting to say, "Look. You can't make a market by bending over backwards giving buyers every reason not to buy and sellers every reason not to sell. Sophisticated investors understand how we operate. Just like everybody who goes to play blackjack understands that some of the cards are dealt face down. You can complain that you think all the cards should be face up, but that would totally change the game. Do you hold to such high standards in your election campaigns? Do you think your disclosure of the consequences of your votes is honest? Do you disclose how lobbyists told you to vote? Do you go out of the way in your campaigns to give people all the possible reasons not to vote for you? You want to tell me about my responsibility to my clients? How would you like to hear my opinion about your responsibility to your constituents?"

Blame deflection. That is what this whole financial "reform" theater is all about.

Here, I argue for auditing the Fed to determine whether taxpayers gained or lost from its speculative purchases. Of course, until you either sell them or have a reliable mark-to-market price, it is hard to know. It could very well be that an audit would make them look good, by the way.

Here, From Poverty to Prosperity gets mentioned in a London Times column. Nice to know we made it across the pond.

Richard Cooper writes a review for Foreign Affairs. This won't juice our Amazon sales as much as David Brooks' column, but in the long run it may be more gratifying to me. Assuming that this is the Richard Cooper, whose writings were assigned back when I was a student.



COMMENTS (8 to date)
Adam writes:

The hearings are clearly for political show, scoring talking points, and intimidating Goldman. Result: the news this morning is that Goldman supports the Dems financial control legislation. Great example on the workings of political intimidation.

marcus nunes writes:

Yes, it is THE Richard N Cooper of your graduate reading assignments

Steve writes:

Your dream of a rant in the hearing sounds like the lobbyist's speech in "Thank You for Smoking."

One complaint, however: when I go to the casino, all the blackjack cards are dealt face up.

David R. Henderson writes:

Certainly, Parnell Thomas predates McCarthy.

SydB writes:

McCarthy destroyed the lives and careers of individuals. He used the power of the state to tear apart individual lives who did nothing more than--well, in a lot of cases, nothing.

And what have we seen with Goldman? A few very wealthy men were harassed for a short time. That's it. And the outcome will be that financial firms will consider more precisely what they are doing. Run tighter ships. Not that bad.

Mr Kling's comparison is extremely weak. But that's what we get when he's in "studies" mode.

blighter writes:

Arnold asks: "The only question I have is whether McCarthy is the one who started it, or whether he happened to be the one guy who got called out on it."

The movie "The Aviator" has a scene in which Howard Hughes is dragged before a show-hearing much like those we know & love today to grill him about the spending on the Spruce Goose. That hearing was back in the 40's, I believe, which was before Sen. McCarthy began practicing the artform.

Tom writes:

In the 1930's, there was the Nye Committee, which ultimately concluded that the U.S. participated in World War I to save the big banks who'd foolishly lent money to Britain and France. Plus ca change, apparently.

Patrick R. Sullivan writes:
McCarthy destroyed the lives and careers of individuals. He used the power of the state to tear apart individual lives who did nothing more than--well, in a lot of cases, nothing.

Name one innocent person persecuted by McCarthy.

From Buckley and Bozell's McCarthy and HIs Enemies to Stan Evans' Blacklisted by History the facts are clear; McCarthy was on solid ground and his critics are almost completely ignorant of the facts of Communist penetration of the Federal govt.

Comments for this entry have been closed
Return to top