Category Archives: Social values

Why Does Reputation Count for So Little on Wall Street?

There is a very peculiar article by Steven Davidoff up at the New York Times: “As Wall St. Firms Grow, Their Reputations Are Dying.” It asks a good question: why does reputation now matter for so little in the big end of the banking game? As we noted on the blog yesterday, a documentary team was struggling to find anyone who would go on camera and say positive things about Goldman, yet widespread public ire does not seem to have hurt its business an iota.

Some of Davidoff’s observation are useful, but his article goes wide of the mark on much of its analysis of why Wall Street has become an open cesspool of looting and chicanery (as opposed to keeping the true nature of the predatory aspects of the business under wraps as much as possible).

Bill Black: Fiat Justitia Ruat Caelum (Let Justice be Done, Though the Heavens Fall)

Yves here. This post by Bill Black is important because it presents and dissects an ugly example of failure of morality and common sense within what passes for the elite in the US.

Earlier this week, Matthew Yglesias defended the Administration’s distaste for pursuing fraud investigations against financial players:

….the Obama administration felt it was important to restabilize the global financial system. That meant, at the margin, shying away from anxiety-producing fraud prosecutions. And faced with a logistically difficult task, that kind of pressure at the margin seems to have made a huge difference. There simply was no appetite for the kind of intensive work that would have been necessary.

I’m not as persuaded as, say, Jamie Galbraith is that the failure to do this is a key causal element in our economic problems. Indeed, I’d say that if you look at the situation literally, Tim Geithner’s judgment was probably correct.

This line of thinking is a favorite of authoritarians. Democracy, justice, and capitalism are messy affairs. All sort of repressive measures can be justified in the name of stability and safety. And the irony here is that the firms directly responsible for the most disruptive economic event of the last eighty years are to be shielded from the long arm of the law….in the name of stability, the one output they have clearly failed to provide.

William Hogeland: Created Equal? Founding Era Tensions on Economic Fairness

Whiskey Rebellion and a collection of essays, Inventing American History who blogs at http://www.williamhogeland.com. Cross posted from New Deal 2.0

In 1776, rowdy Democrats fought for equality. But their notions didn’t suit early elites.

“All men are created equal,” the Continental Congress famously announced in the document that came to be known as the Declaration of Independence. These are powerful words — and reflecting on America’s founding struggles over money and finance can give the familiar phrase new resonance. For even as Thomas Jefferson was drafting the Declaration in a small, hot room in Philadelphia in the summer of 1776, the democratic popular finance movement was blooming in America. Throughout the country, ordinary people placed all hopes on America declaring independence from England. Equality was indeed their goal. And by this, they meant economic fairness: A newly level playing field where they could compete for prosperity.

Near the room where Jefferson wrote, the most successful of those democratic movements was coming to fruition in Philadelphia’s Carpenter’s Hall. To the artisans, laborers, mechanics, and militia privates gathered there, declaring independence from England offered an amazing chance for creating a new kind of government, fostering fairness for the less propertied, even the unpropertied; obstructing traditional high-finance privilege; and giving the ordinary people access to representation and economic opportunity. Right down the street from the Pennsylvania State House where the Congress met, supporters of this democratic movement were seizing the moment of crisis with England to bring about an economic revolution in America. And their 1776 Pennsylvania constitution made economic equality into law for the first meaningful time anywhere.