nancylebov (nancylebov) wrote,

On Naivety

Eisman knew subprime lenders could be scumbags. What he underestimated was the total unabashed complicity of the upper class of American capitalism.


For the first time in their lives, people in the asset-backed-securitization world are actually having to think.

I don't have a funny or clever title for this one. I recommend following the link. It's a fairly detailed description of the moral and intellectual collapse that's led to the financial disaster.

I honestly didn't realize that the people at the top of business could lose all interest in running businesses and just think about how much money they could take out. This is third world stuff. They didn't even know how much damage they were doing because they weren't thinking about anything they were doing.

Note that greed isn't exactly the problem. Eisman and crew who made money off the collapse were greedy. The difference is that they were reality-based, and a lot of other people weren't.

At this point, I get a lot of my political reading from the left because, while it tends to piss me off, it doesn't reduce me to helpless rage the way the authoritarian right does, or bore me as thoroughly as most libertarians. And my mind doesn't run on lolcats.

All that stuff about white men spooked me. It seemed like a way to automatically distrust and despise a large group for arbitrary reasons, and a reliable method of laying up trouble for the future. The truth (as I now understand it) is that the problem isn't white men any more than the problem in a different sphere is Muslims. The problem is a medium-sized group of high-status white men. I'm replacing The Patriarchy with The Conspiracy.

I'm now seeing a reason for preferring a candidate who wasn't a white man. It was the best hope of getting someone who isn't part of The Conspiracy.

What I'm curious about is how a system dominated by white men went from something that more or less worked to the current atrocity. For a long time, I've believed that the big difference isn't so much between corrupt and non-corrupt systems as it is between moderate and extreme corruption. I expect there's a reason business and government went so bad at the same time, aside from them making each other worse. I believe that there are personal and institutional systems that sometimes keep entropy from taking over completely, and those brakes don't fail for no reason.

There's a theory that functioning societies need religion to keep going, but can coast for a while until religious values are forgotten, but religion went bad at about the same time, and became part of the problem. It's almost enough to make a person believe in [1]psychohistory.

For a while, I've envied supergee's ability to distrust business and government equally. I think I'm getting there. Speaking of, "regulation" isn't the answer if you've got the same kind of people in charge of the regulations that you've got wrecking the businesses.

I have a notion that conventional schooling is deadly. It means spending a lot of time in your formative years in simulation land, where what you're graded on (the important thing for your future, you keep getting told) has no real world effect. Some people have a natural orientation towards the real world anyway, and some people pick it up from their parents, but what you're around for 30+ hours a week matters if you don't happen to have a countervailing home or temperament. On the other hand, I get the impression that conventional schooling is in simulation land world wide, and this mess happened in the US.

Another sign of the rot on the educational side: A politician saying it's really important for everyone to get a college education because they'll do better and be less likely to end up dependent on the government. I think this would sound like an absolutely normal thing for an American politician to say. Aside from the practical problems (what would it cost? can everyone manage to learn much in college? won't it just lead to requiring more credentials for everything?), the horrifying void is that there's no hint that people might be learning how to do something useful.

It might just be a bad case of American exceptionalism. If you're smug about how wonderful you are for long enough, you will fuck up.

I'd been meaning to post about "a flaw in my thinking" (parallel to Greenspan's), but one of the sections I couldn't make work was an effort to explain why public ownership of companies has ill effects. The subject is covered on the last page of the linked article. It emphasizes that public ownership (which means selling stock) transfers risk from the owners to the stockholders.

I've been twitchy about stock for a long time. My button business is a very personal thing for me, and the idea of losing something like that (in the unlikely event that it became big enough to be worth selling) while keeping it intact seemed too weird. It seemed like it would get damaged in the process. Now, obviously, companies do survive getting sold, inherited, and/or going public, but I think I was on to something with the idea that what the people at the top care about is crucial, and if you break too much of the connection between the people at the top and them caring about their work, it matters. I'm not sure how much of the current mess is a result of believing that the people at the top couldn't be trusted to pay attention to their businesses, so an apparatus of paying them according to how their company seemed to be doing got set up.

Anecdotally (and I'm interested in evidence on either side), publicly held companies are worse places to work than privately held.

More twitching about stock. Index funds spook me. They're funds that just invest in the whole market and they're cheaper for investors than funds where the managers chose the stocks. Not a bad idea for the investors, but it means that the work of learning about investments and choosing them carefully has been offloaded to other funds-- that one hopes are paying attention.

This post is at least long enough....

[1]Psychohistory is an idea from Asimov's Foundation novels. If you have enough people, you can make predictions about how they'll behave.

Link thanks to supergee.
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