Maintenant qu'ils sont fauchés et tous morts
On ne parlera plus jamais à Dieu
“Administration officials Mr. Geithner’s instincts are that government should not dictate compensation issues to businesses. As Treasury secretary, however, Mr. Geithner since has developed executive compensation limits, which Congress in turn toughened.”
On the Economist’s View, I made a comment on this revealing graf that, I think, I will copy here. Readers may wonder why the News from the Zona hasn’t commented, at length, about the AIG scandal. I am finding it most instructive, yet I am waiting to put it all in some bigger picture.
my view. My notion, all along, has been that reality has shifted in the Zona to the “left”, to used that tired and to-be-retired term. Reality, in the seventies, was about the fall in the rate of profit, and the entangled fall in productivity, that scared the shit out of the elites. The Cold War architecture was slipping out of their hands, and they had to get it back with a vengeance. In Argentina, this meant the dirty war, and in the U.S., this meant the moral equivalent of the dirty war – liquidating the power of labor to bargain for higher compensation. When one reads, nowadays, about the horrors that would result from this or that “politicizing” of economics (1), you are reading reports from that distant event: the idea that the economy operates without politics, under its own logic, was one of the spurious principles Reaganomics loosed upon the world. Translated, this means: the elite should be buffered from any political claim, from higher taxes to having to adhere to accounting standards. Aristocrats in the early modern era tried to take regional advantage to fight against the encroachment of the monarch’s power. The financial aristocracy, now, does just the opposite – it is, in a way, always offshore, always a floating island, always a gated community. Its lack of place is its weapon – if the rules of the FDIC are too ‘onerous’, it finds an island, like Trinidad, that doesn’t have those rules.
To return, then, to the final graf of the NYT story on Geithner:
"Administration officials Mr. Geithner’s instincts are that government should not dictate compensation issues to businesses."
The term parapraxis, for misspeaking, applies I suppose to the lack of verb between those administration officials and Mr. Geithner. Already this signals some distress - collective distress no doubt, as the reporter and the editors hammer the article together. I'm going to guess that the verb missing here is not "get a good joke out of the fact that", or "joke that", or "find it highly risible that..." I'm as interested in Mr. Geithner's "instincts". What is funny here is how those instincts are not part of his monkey-being. Certainly we know enough about behavior to know that if instinct is used to describe common human reactions, then his instinct should certainly have rebelled at the sheer gall and unfairness of the AIG payouts. His instincts could have led to physical violence, even. But those aren't the instincts of the economically informed - or those raised in the atmosphere of unimaginable money, privilege, and the devestating culture of Randian selfishness characteristic of Wall Street.
There, instincts seem more finely tuned. For instance, I would imagine Geithner probably approves of the bureaucratic architecture weighing down the ability of labor unions to go on strike. Of course, my instinct is to say that this is government interference with a compensation issue. But then, my instincts don't reach far enough to give me an overall picture of the way things should work according to Geithner like instincts. The latter seem to accord more with a society in which the stratification between the nobiility and the peasants is much clearer. The rule for the nobility is, of course, that the government should interfere with their compensation only to the extent of spending as much money as possible to make sure they are well and bountifully compensated. Imagine the loss to country clubs everywhere if AIG had not been a convenient conduit to smuggle money to Bank of America, Societe General, and -- more than anything else - our dear and beloved Goldman Sachs. Luckily, after a Goldman Sachs alum as Treasury Secretary had a meeting with the Goldman Sachs CEO and AIG about what the Government could do to help AIG pay off Goldman Sachs to the dollar, that compensation issue was handled neatly - with the appointment of another Goldman Sachs alum, Neel Kashkari, to oversee things.
My instincts would be [insert joke about the, weep buckets over the] takeover of the American government by an openly corrupt and unaccountable system that generates people with their own instincts for things - Pavlovian kleptocrats, one might call them. This is corruption on a scale that was never dreamt of before - Grant's foolish son in law, who was drawn into a Gold Ring, and the Teapot Dome figures look like amiable goofs compared to the Bush-Obama era of looting. All of course signed, sealed and propagandized for by economists who have a mother's love for the Great Moderation.
Sad, how instincts can be so debauched.
1. Tyler Cowen’s response to the AIG bonus scandal is a perfect example of non-politicized economics of the far right: “Outrage, outrage, blah, blah, blah, etc. Often I feel that some topics are too obvious to blog.
The real lesson is that this is another reason not to nationalize banks. It means politicizing every decision which ends up in the newspaper.” – Indeed, Cowen is at least smart enough to think ahead of the news cycle. He knows that this scandal implies dire things for the fresh water economics crowd. If you cannot loot a country in peace, then the whole structure of the aristocracy is threatened.
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