In Defense of Bankers

Avatar:
Ben Cohen
Author:
Publish date:
Social count:
0

Noam Chomsky on why bankers aren't completely to blame for the giant economic meltdown:

In fairness, we should concede that they have a valid defense. Their
task is to maximize profit and market share; in fact, that's their legal
obligation. If they don't do it, they'll be replaced by someone who
will. These are institutional facts, as are the inherent market
inefficiencies that require them to ignore systemic risk: the likelihood
that transactions they enter into will harm the economy generally. They
know full well that these policies are likely to tank the economy, but
these externalities, as they are called, are not their business, and
cannot be, not because they are bad people, but for institutional
reasons. It is also unfair to accuse them of "irrational exuberance," to
borrow Alan Greenspan's brief recognition of reality during the
artificial tech boom of the late '90s. Their exuberance and risk taking
was quite rational, in the knowledge that when it all collapses, they
can flee to the shelter of the nanny state, clutching their copies of
Hayek, Friedman and Rand. The government insurance policy is one of many
perverse incentives that magnify the inherent market inefficiencies.