In the last two years, more article are appearing from Wall Streeters who are questioning the budding financial myths on what caused the Financial Meltdown of 2007-2008. Here is a telling one by a Wall Street analyst, Barry Ritholtz that appeared in the Washington Post and has been picked up by a number of Share websites like Reddit, Stumble On , Tumblr, etc. Barry minces no word in this posting on the Wall Street espoused Big Lie:
One group has been especially vocal about shaping a new narrative of the credit crisis and economic collapse: those whose bad judgment and failed philosophy helped cause the crisis.
Rather than admit the error of their ways — Repent! — these people are engaged in an active campaign to rewrite history. They are not, of course, exonerated in doing so. And beyond that, they damage the process of repairing what was broken. They muddy the waters when it comes to holding guilty parties responsible. They prevent measures from being put into place to prevent another crisis.
Here is the surprising takeaway: They are winning. Thanks to the endless repetition of the Big Lie.
A Big Lie is so colossal that no one would believe that someone could have the impudence to distort the truth so infamously. There are many examples: Claims that Earth is not warming, or that evolution is not the best thesis we have for how humans developed. Those opposed to stimulus spending have gone so far as to claim that the infrastructure of the United States is just fine, Grade A (not D, as the we discussed last month), and needs little repair.
Wall Street has its own version: Its Big Lie is that banks and investment houses are merely victims of the crash. You see, the entire boom and bust was caused by misguided government policies. It was not irresponsible lending or derivative or excess leverage or misguided compensation packages, but rather long-standing housing policies that were at fault.
Indeed, the arguments these folks make fail to withstand even casual scrutiny. But that has not stopped people who should know better from repeating them.
Now The Big Lie really depends on 3 enablers:
1)the policy issue is either complex or subsject to confusion or uncertainty as to what cause and effect applies;
2)the explanation of events is shrouded in critical omissions or plausible falsehoods or smears and hominem attacks discrediting fact checkers;
3)the press coverage on the issue is disjointed or minimal for any number of reasons.
In the case of the Financial Meltdown , The Financial Big Lies has relied on plausible distortions by figures in power along with a Press that has been delinquent – particularly the national TV networks whose coverage has been sporadic at best.
The science magazine New Scientist raises the issue in its in a story on A New View of Human Evolution – On Selfless Behaviour starting on page 28 of the August 6-12 2011 issue.
Our ability to cooperate closely with other group members and to suppress cheats means that selection at the group level rather than the individual level has been an exceptionally strong force during human evolution. It may have played a crucial role in shaping both our genes and our culture…Vigilant egalitarianism probably arose early in human evolution and was a precondition for other attributes that make us so distinct as a species…. Punishing cheats is a key part of maintaining co-operation and keeping groups competitive.
In sum, Wall Streeters like Barry Ritholtz or Nomi Prins are just applying the missing self-discipline and control for a professional group that at its executive top has lost all touch with its own ethical oaths of fiduciary trust: Put client above self gain as one acts in their stead and seeks to do no financial harm of their entrusted assets. This is simply a lost moral commitment at the highest and the currently most prospering levels of Wall Street and the Global Financial Community. Need we say more about a similar disregard for the Congressional Oath of Office.