American Elephants

Greedy Bankers, Evil Stockbrokers, and Nasty CEOs. by The Elephant's Child
March 1, 2009, 8:19 pm
Filed under: Domestic Policy, Freedom, Politics, Progressivism | Tags: , ,


“Greed” is a political word.  It is used by politicians to make those to whom they have applied the term seem like bad people, usually because they want to blame them for something.

To visualize “greed” you’re apt to think of a really fat kid at the table, stuffing himself with pastries.  Politicians want you to think of bankers and stockbrokers and CEOs of major corporations, because they want these people blamed instead of themselves for whatever is happening to the economy.

It always pays to remember that people are ordinary human beings, some smarter than others, some more  honest than others, some more efficient than others and some more knowledgeable than others.  The opposite also applies.

Politics is the only venue where we give people jobs based on things completely unrelated to their actual qualifications.  Their appearance, smile, name familiarity and glowing promises rank a lot higher than their ability to speed read efficiently through long pieces of legislation, understand complex economic principles, grasp basic mathematics, and understand the consequences of the laws they pass.  A familiarity with our founding documents and their meaning, and an acquaintance with American history should also be requirements but we’re getting into fantasy land here.

It is easy to accuse bankers, stockbrokers and CEOs of greed.  Their business is creating wealth for other people and for themselves.  If they are successful in creating wealth for their clients, they will probably create quite a bit of wealth for themselves in the process.  We reward those who create wealth generously.

Even the most skilled money manager can make bad bets.  Legendary investor Warren Buffet, who has enriched himself and his clients immeasurably, had a very bad year if it makes you feel any better.

The greedy banker forced by misguided laws to make mortgage loans to clients who do not meet the standard of prudent lending guidelines is to be excoriated.  The applicant who takes advantage of overly lenient lending laws to buy houses to flip in a short time is not?  The applicant who knows that they cannot repay the loan they are offered is not?

My point here is not that all money managers are blameless, nor that all homeowners who face foreclosure are to be blamed.  The point is that your worries about the economy are being manipulated to make you do what  politicians want, and what they want is not always good for you or for the economy.

Your best defense against an unruly world is the knowledge in your own head.

2 Comments so far
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American Elephant said, “It is easy to accuse bankers, stockbrokers and CEOs of greed. Their business is creating wealth for other people and for themselves. If they are successful in creating wealth for their clients, they will probably create quite a bit of wealth for themselves in the process.”

Perfectly said! This is why Adam Smith in Wealth of Nations was so negative about what were in his day called joint stock companies–we call them corporations. He said that when actual owners were replaced by managers and stockholders they’d greedily reward themselves at the expense of all others. So products suffer. Purchasers suffer. Eventually we all suffer from corporate greed.

Along with his dislike of corporations, Smith also said that banks should be watched and regulated. He liked bankers about as much as he liked company men.

Sorry I for not citing pages here. A friend has my copy of Smith right now, but I have the pages marked.

Sad so few read this book, and it’s such a worthy read.

By the way, isn’t greed primarily a moral word? It I remember correctly, it’s a Christian deadly sin.

Oh well.



Comment by uncommonscolds

My dictionary defines greed as “a rapacious desire for more than one needs or deserves, as of food, wealth, or power; avarice.”

Of course it is a moral term, but because it is, politicians want to use the term to accuse, sneer, shift blame, and generally reorder society to make it more “fair.”

In most cases wealth is created by hard work and study. In a few cases it arrives through nefarious activities like trying to break the Bank of England.

Today’s question might be — is throwing a party for your best customers and prospective customers to help get their business “greed” or sound business practice? No wonder Northern Trust wants to give the money forced on them back.


Comment by The Elephant's Child

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