Sunday, July 29, 2012

Connecting Mayor Bloomberg's endorsement of Scott Brown, his downplaying of the Barclays/LIBOR scandal, and "corporatist privilege" (that connects to "Bankers Gone Wild")

Michael D. D. White has been writing up a storm on his Noticing New York blog about Barclays, the LIBOR scandal, and the possibility of local governmental agencies gaining recompense in a lawsuit.

In his latest, he muses about Mayor Mike Bloomberg's surprising announcement that he supports incumbent Massachusetts Sen. Scott Brown, a Republican, against law professor (and Wall Street critic) Elizabeth Warren, a Democrat:
Come on now! No, it’s pretty clear, Brown’s gun control record is just a contrived cover for Bloomberg’s work to keep the banks unregulated and unaccountable. That probably puts the above point #3 in the lead for the reason that Bloomberg is also so eager to minimize the public’s LIBOR losses.
But maybe it doesn’t make any difference which exactly of those above three reasons explains why Bloomberg is minimizing the possibility of the public’s loses at the hands of Barclays and the other banks, because whether it's "Barclays" (Ratner/Prokhorov) arena boondoggling, Barclays bank president befriending or Barclays Bank LIBOR manipulations, all three of those explanations are probably essentially the same: Bloomberg supports a corporatist privilege for the 1% to manipulate, lie and scheme to scam the 99%.
"Bankers Gone Wild"

In this week's New Yorker, "Financial Page" columnist James Surowiecki wrote Bankers Gone Wild. It's a pretty chilling summary: manipulating LIBOR was easy; banks had much incentive to tell lies; and self-regulation doesn’t work in finance:
The Barclays traders, for instance, sent e-mails casually thanking their colleagues for lying, and sometimes talked with their supervisors about their plans, revealing a culture in which deception was simply part of how things got done. As the behavioral economist Dan Ariely writes in his new book, “The Honest Truth About Dishonesty,” cheating is contagious—when we see others succeed by cheating, it makes us more likely to cheat as well. So when institutions tolerate, and even reward, bad behavior, all that self-regulation gets you is bankers gone wild.

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