The money these people were making was completely insane. Literally delirious. Operations like Dreier's silently sponged hundreds of millions of dollars annually out of the economy for a couple of hundred people, basically by doing paperwork. You wonder why they call it "law" or why they call "law" a profession. Dreier law is to a profession what crack is to Riddlin. You use a profession to negate it.
Fr. Frank utters an eloquent call for this kind of return to honesty and decency. Other voices of sober wisdom are reading from the Book of Keynes.
Well it's a much better Scripture than the Book of Greenspan. But like all scriptures it needs to be replaced by a new one. Keynes was born in 1883, was in his 30s during World War I, helped enormously contain the ravages of the 1930s depression by giving mainstream clueless policymakers something way less dumb than what they were using, and died before the Cold War even got started (1946).
The current financial knowledge system is so rotten that we are going to have to work much harder than that to make any headway. The big lesson of the meltdown is that not only the public, not only 401(k) investors, not only economists, not only corporate executive, but professional banking elders like Robert Rubin at Citibank had no idea what the hell they were doing. There are the crooks like Madoff and Dreier, but the deeper point is that the biggest bankers of all couldn't tell true from false accountability if their billions depended on it.
The guys at "L'Esprit Public" were debating the Obama team today, but only one, Denis Olivennes of le Nouvel Observateur, expressed sadness at the "classic" nature of the choices, which he thought would block any meaningful innovation. I think he's right.
This is a sad truth indicated by articles like "Liberals Wonder When Obama’s Team Will Reflect Them." The way to get picked for the liberal top is to a) be superconnected (all Harvard-Yale-Chicago this year) and b) have always stayed inside conventional wisdom. The lesson is that originality and strong positions will sink you now and forever.
This is really too bad. Real solutions come from breaks with orthodoxy. Breaks with orthodoxy require a certain antagonism towards orthodoxy itself, and often involve conflict, critique, unpopular position-taking, and general offensiveness. The failure to find any of this ever in the Obama-nomicists leads to the strong possibility that the moderate Obamans are not actually going to be deal at all with this enormous crisis.
Larry Summers is a case in point. The article reads:
Even some of [Obama's] appointees have evolved in their views. Lawrence H. Summers, the former Treasury secretary chosen to be Mr. Obama’s chief White House economic adviser, talks much more about income inequality, financial industry regulation and other favorite causes of the left. “The Larry Summers of 2008 is not the Larry Summers of 1993 or 1999,” said Katrina vanden Heuvel, editor and publisher of The Nation, a liberal magazine.Of course vanden Heuvel is right. But all this means is that Summers went with the neoliberal deregulatory anti-social flow in 1993 and is going with the flow in 2008, in which every non-reactionary banker on earth has become a Keynsean statist. The future has to come from somewhere else.