By Richard Smith, a London-based capital markets IT specialist
Hmm, I wonder if Yves’s resolution authority post will become the econoblogosphere’s equivalent to Clochemerle’s shattered urinal and its entourage of rioters. Surely not; yet it’s impressive how often such modest, utilitarian objects – a pissoir, a blog post about a financial reform proposal – can unexpectedly become the focus of great public ire.
It’s clear that regulators need the legislative authority to wind down a financial firm – that’s been unfinished business since Glass-Steagall was abolished, which left FDIC flapping in the breeze, and bit the hapless Fed and Treasury very heavily in the backside once they finally noticed there was something of a financial crisis on; 12 September 2008, according to Hank Paulson’s memoirs. Better late than never, I suppose.
It’s clear that regulators need to monitor the exposures of large complex financial institutions. It’s clear that no-one has a clue how to wind down a large complex financial institution that has chunky derivatives exposures and large overseas deposits, otherwise there wouldn’t be this continuing low-key faff about Citigroup. It’s also clear that this administration doesn’t exactly have a glittering track record of grabbing the financial reform agenda by the throat, and that its flustered-looking second round initiatives, the Volcker rule and the resolution authority, are, for the moment at the very least, light on detail and short on plausibility.
So you might think a Naked Capitalism post politely (well, relatively politely, this is Yves, but anyhow, not at all angrily, see for yourself ) questioning The Epicurean Dealmaker’s attempted defence of the resolution authority idea would be a useful addition to this great debate we’re all having.
TED doesn’t think so. His counterblast comes in three pieces – first, a pointless ad hominem preamble in which he simply tells us all that Yves is tired and should go on holiday (this seems to be a wild overinterpretation of Yves’ latest doomed resolution to sort out her sleep schedule), second, a central piece actually about the pretext for the post in which he misses some of Yves’ points, and connects with others (since it will make him look better than he deserves, I will skip the rejoinders he gets right); third, a piece about the unfairness of describing folk working in the banking industry as banksters, with a little homily on anger attached.
But but but…like the thought or not, pretty much everyone working in the banking industry, even lowly little guys like me, and certainly including such grand figures as TED and Yves, is a beneficiary of the rapacity (in the good times) and bailouts (in the less good times). That’s the most illuminating part of the post, that glimpse of how TED sees the world and his place in it; somehow decoupled from inflated asset values and inflated fees, and not at all ashamed.
Yet we banksters certainly should be trying very hard to fix what’s broken, and feeling embarrassed rather than defiant and angry and a bit whiny; and, at least in the less exalted banking circles that I adorn, that’s exactly what’s happening. And some of us, at our different paces, constrained by our variously acute and conflicting requirements for food, shelter, capacity to look after our loved ones, and a sense of integrity, are looking for something altogether different to do. And that’s fair enough too, I should think.
TED’s final point seems to be for Yves to discover how tired, bitter, humorless, full of hate, angry, strident and self-righteous she is, and to understand the awful danger of being like that. At least, I think that’s the gist of his concluding and very egregious sermonet; he isn’t quite this direct about it, but I’m damned if I can work out who else the subject of all those epithets is meant to be. Get this scorcher:
Anger has a personal cost, too. Unless it is leavened with reason, and moderated by the acknowledgement that no-one is perfect, hate and anger can be highly corrosive. Justifiable anger is a wonderful source of energy, and a marvelous spur to action. But nurtured, coddled, and sustained overlong, anger can constrict the vision, dull perceptiveness, and calcify the brain. It can blind you to the good in others, to the alternatives available to you, and, in the end, to the truth. If left untreated too long, eventually others tire of your stridency and self-righteousness, and you sink back into justified and bitter obscurity, another valued voice in the debated stifled by irrelevance.
Is this crazy bombast actually serious? Unless it’s a wry piece of self-referential irony – TED’s capable of that sometimes, unlike many IB types. A moment of deliberate self-deflation, or just more ad hominem, with extra pomposity? The reader must decide for himself, because I just can’t tell, this time.