Greed or Stupidity: David Brooks answers the question....
David Brooks' recent op-ed piece in the NY Times takes a look at what happened to the global economy. Why has all hell broken loose? Was it greed or stupidity?
In that he is a conservative Republican, Brooks does not agree with the "greed narrative" being used to answer the question, most notably defined in "The Quiet Coup" by Simon Johnson. In this narrative, greedy oligarchs usurped our democracy and took over our government.
Instead, Brooks finds comfort in the "stupidity" narrative, in which "overconfident bankers didn't know what they were doing."
Brooks see logic in the idea that the steady stream of Ivy League MBAs that populated Wall Street were too stupid to understand what was going on under their noses in their businesses.
Too stupid to realize that they had no capital supporting their loan policies.
Too stupid to understand that the insurance devices they were selling were insufficient to cover the potential losses.
Too stupid to understand that selling $500K houses to people who make $40K is a bad idea.
Too stupid to understand how business works.
Brooks has a simple explanation for how we clogged up the pipes in such a catastrophic manner:
What's working for Brooks isn't working for me.
When you are paid tens of millions of dollars in compensation, you've opted out of the "stupidity" defense. Your company has made an enormous investment in your intelligence - in your ability to be a savvy and profitable businessman - your very intelligence is why you get paid those big bucks. You earn your astronomical salary, the theory goes, by using your incredible intelligence to foster success, not to glom onto the latest trend in finance. Frankly, the herd mentality should never be rewarded with such enormous salaries.
And let's face it - the "best and brightest" are never too stupid when money is to be made. And they made plenty as they contributed to the downfall of our economy.
In that he is a conservative Republican, Brooks does not agree with the "greed narrative" being used to answer the question, most notably defined in "The Quiet Coup" by Simon Johnson. In this narrative, greedy oligarchs usurped our democracy and took over our government.
Instead, Brooks finds comfort in the "stupidity" narrative, in which "overconfident bankers didn't know what they were doing."
Brooks see logic in the idea that the steady stream of Ivy League MBAs that populated Wall Street were too stupid to understand what was going on under their noses in their businesses.
Too stupid to realize that they had no capital supporting their loan policies.
Too stupid to understand that the insurance devices they were selling were insufficient to cover the potential losses.
Too stupid to understand that selling $500K houses to people who make $40K is a bad idea.
Too stupid to understand how business works.
Brooks has a simple explanation for how we clogged up the pipes in such a catastrophic manner:
"To my mind, we didn’t get into this crisis because inbred oligarchs grabbed power. We got into it because arrogant traders around the world were playing a high-stakes game they didn’t understand."
What's working for Brooks isn't working for me.
When you are paid tens of millions of dollars in compensation, you've opted out of the "stupidity" defense. Your company has made an enormous investment in your intelligence - in your ability to be a savvy and profitable businessman - your very intelligence is why you get paid those big bucks. You earn your astronomical salary, the theory goes, by using your incredible intelligence to foster success, not to glom onto the latest trend in finance. Frankly, the herd mentality should never be rewarded with such enormous salaries.
And let's face it - the "best and brightest" are never too stupid when money is to be made. And they made plenty as they contributed to the downfall of our economy.
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