Outrage

So the news lately is that Wall Streeters are mad about how President Obama criticizing private equity.  Mitt Romney shoots back that Obama is hating on success.  I guess Romney has to come back with something when he's being directly criticized, and of course we've learned to expect him to lie about what's being said- after all he is running the most mendacious campaign of all time.  But I would have hoped that the smart guys on Wall Street would be able to understand what the President is trying to say.

The message is a little nuanced- I thought these smart guys were able to handle nuance! Private Equity is all well and good, but its goal is to make money for investors. Mitt Romney was good at that. Its goal is not to creat jobs, and in fact Bain often made money by cutting jobs. That's not a criticism of Bain or private equity- it's just a fact. Bain should keep on making the economy more efficient- more power to 'em! But if the issue is creating jobs in a large country, a private equity manager just has no relevant experience at all to do so. Saying that isn't disrespecting private equity or banking- it's just pointing out that running a business and stewarding a huge economy is apples and oranges, and we should beware what happens when we mix them.

Mitt Romney does know what government regulation he wants and doesn't want that will unleash the kinds of businesses he knows, and so I don't doubt his administration will be great for Wall Street. But as we saw during the Bush II administration, what's great for Wall Street can be horrible for the rest of us.

How can Wall Streeters deny that their sector caused a disastrous recession? That doesn't make them bad people, unless of course they keep insisting that we should return to the exact same policies that got us there in 2007. I'm not outraged by the finance industry making tons of money without producing much of value for the economy as a whole in the '00s- that's human nature, to take what you can get, and it's capitalism. But I am really outraged by their lack of chagrin in the aftermath.  They're outraged now that the Democrats want to regulate them in order to avoid another banking sector failure leading to another taxpayer-funded bailout.  Surely the Masters of the Universe can see that without any change at all it's just a matter of time before the next bubble and bust happens again, and surely they understand that this means they have an implicit government guarantee against failure that they don't pay for.

 

The lack of insight among this sector of the economy makes me want to throw up.