They Write Letters

Quite a collection of letter writers to the Times Mag this fine weekend, responding to this article (which, among other things, I covered here). I'd say the Columbia Business School prof comes closest to the heart of the matter here, even going so far as to accurately limn the signature sociopathy inherent in these people.

The question was never whether their risk-management formulas "worked", or what the confidence levels were, blah blah blah. Anyone who works with numbers knows that you can manipulate them sufficiently to say what you want them to say; you don't have to be a stats geek to understand that.

Everybody knows that this is a specifically human (investment banker, anyway) based problem, rather than faulty mathematical models. I think we all get that already. The question is what we are doing with all the reptiles who caused all these problems. Instead of being punished -- or hell, even just keeping them away from money in the future -- they are being put back in play with other people's money. Awesome. How can this brilliant plan not work?

The problem is that it is just universally accepted, contra the most basic stated principles of capitalism, that the risk penalty -- that is, the cost of guessing wrong or an overreliance on arcane equations rather than actual value -- gets dumped on people who had nothing to do with any of it. And the people who profited from their corrupt decision-making process not only aren't guillotined or strung up from the nearest lamppost, but are rewarded for their actions with continued solvency.

Say what you want about how China does things, but over there these animals would have been lined up against a wall several months ago, and their families sent a bill for the bullets, just as a friendly reminder. This is not an ideological nor a philosophical nor an economic dilemma -- it's simply a crime in progress. It's not that complicated. Perhaps sawed-off shotguns and ski masks and sacks with dollar signs embroidered on the side would clarify this.

Rather than another coddling pencil-pusher at the Fed and the SEC, we need some Vic Mackey types.