I spend a lot of time working with gang kids.
One of the amusing things, is to see some of these kids strutting
feeling like a million bucks, because they are so smart. In
actuality, they have IQs in the 90-100 range. But the rest of
their crew is down in the 70-80 range. Such is the life of a
Tonight I watched the PBS Frontline special,
Warning. It’s about the warning that href="http://en.wikipedia.org/wiki/Brooksley_Born">Brooksley Born
gave the the US government about the hazards posed by the
under-the-counter derivatives market. Born tried to institute
regulation, as the chairperson of the Commodity Futures
Trading Commission during the Clinton administration. She
was totally shut down and pushed out, not only by the Administration,
but by Congress as well.
The program featured everyone’s favorite homies: Alan Greenspan, Robert
Rubin, Larry Summers, Timothy Geithner, and the majestic Phil
Gramm. Among others. Many others.
In the show, it was mentioned that Greenspan believed that they was no
reason to prosecute financial fraud. His notion was that the
market would take care of that. He, and the rest of the crew,
also thought there was no need for transparency in the market.
This leaves us all wondering, exactly how the market is supposed to
take care of something that is a complete secret. To his credit,
Greenspan later href="http://www.calculatedriskblog.com/2008/10/greenspan-and-simpsons.html">recanted.
Sort of. href="http://www.housingwire.com/2009/07/10/geithner-blames-lack-of-transparency-for-otc-derivatives-hit-on-market/">As
did Geithner. Sort of.
What’s most striking to me, watching the show, is the similarity
between the mentality of the financial wizards, and that of gang
members. It’s all there: the grandiosity, the arrogance, the
entitlement, and the breathtaking lack of empathy. The lack of
insight is rather prominent, too, as is the preoccupation with one’s
status in a rather primitive hierarchy.
An article on the subject, in Stanford Magazine (Born’s alma
mater) described the struggle between Born and the power elite as “a
classic Washington turf war.” There were suggestions of a gender
issue. That wasn’t it. Born didn’t href="http://en.wiktionary.org/wiki/throw_signs">throw the right signs.
Nature repeats these patterns, with fractal-like precision, heedless of