Tuesday, September 6, 2011

Because Naked Capitalism Won't Publish My Comment

I attempted to respond to this post by PeePee.  I submitted my comment once, but it didn't show up.  Tried to resubmit, but I was told that the comment was already made.  The clear implication is that my comments go to moderation these days (I had numerous similar issues last week, but I chalked them upt to being out of town with crappy internet service.)

The comment:

It goes back to how financial institutions make money – primarily, by lending other people money (that has always been and still remains the core of banking profits).

I'm surprised you didn't correct the man, Philip. We all know that money is created by lending it. A decades-old Fed working paper establishes this fact, as Steve Keen has noted on this very site.

Once they figured out the game borrowers just lied about their finances – this is why terms like ‘liar loans’ and ‘NINJAs’ (no assets no jobs or assets) sprung up in the mortgage industry.

If you believe the other Michael Hudson, this narrative is a complete whitewashing of what liar loans were all about. In many documented cases, it was the lender who was lying about the borrower's finances, and without the borrower's knowledge.

It’s silly to think that everybody in finance is ‘evil’ or engaged in fraud (though there are people who assert that). Most people involved are very smart, diligent, hard working and passionate about what they do.

Wow. Nice strawman. Financial fraud that dwarfed the S&L debacle and there has been no criminal convictions outside of the lone wolf, small fry scamsters like Bernie Madoff? Really? The government's view appears to be that there was no crime, apparently because fraud is the new official business model of the FIRE sector. (h/t Janet Tavakoli)

And again you didn't call him on it.

Elites who allow their empathy for their fellow elites to overwhelm their conception of the rule of law cannot be trusted to enforce the law. Satyajit Das is no Bill Black.