Comments on: A death panel for Citi Now raising intellectual capital Sun, 08 Nov 2015 08:31:30 +0000 hourly 1 By: David Bernier Thu, 17 Sep 2009 13:08:56 +0000 Casper,

Jeffrey Friedman describes himself as a “minimal statist” . From reading some of what he wrote, I think he believes in some form of “free markets”. I wish to mention ethics positions (or “morals”), because (as an extreme case) what
was rational or “good” for Mother Teresa and what’s rational or “good” for free marketeers are very different. David

By: Casper Thu, 17 Sep 2009 10:47:33 +0000 Now we are talking David, you gave me a fright there, thought it was a new female currency for South Africa, the Rand, (ZAR),

maybe we should just elaborate, i.e. Ayn Rand, Russian defector, author of my favourites: ‘We the Living, Fountain Head, Atlas Shrugged’. Commie turned Cappie went Happie ?

By: David Bernier Wed, 16 Sep 2009 21:34:13 +0000 I’ve read Jeffrey Friedman’s article and the comments from 09/09/three-myths-about-crisis-bonuses.h tml

Quoting from Friedman’s article:
“None of these capitalists were irrational; all were self-interested; yet they had different perceptions of how to pursue their self-interest, based on different perceptions of risk.”

One Anonymous wrote as comment:
“Private gains and public losses are rational for individuals but are they for society?”

It seems to me that Friedman’s article has an
assumption (not explicitly stated) that:
” A person who acts out of self-interest in business and investment decisions is a rational person; sometimes, rational people make mistakes.”

I think that’s a stance in Ethics:
“A corollary to Rand’s endorsement of self-interest is her rejection of the ethical doctrine of altruism […]”
[ Wikipedia on Objectivism] .

After some reflection, I does seem to me that Friedman’s article discounts altruistic motives, which would be consistent with Individualist Ethics.

By: Amateur Wed, 16 Sep 2009 10:59:21 +0000 Right on the spot.
Politicians stress the banks’ guilt, to hide their own:
The biggest culprit of the crisis is too cheap money, produced by politicians, to hold activity up, to help keep the incumbent in power.
Banks are just an instrument; it is like a killer blaming the gun.
Well for Mr. Friedman, but why on earth does Mr. Goldstein, in Reuters, spread the populist propaganda?
“Three Myths about the Crisis: Bonuses, Irrationality, and Capitalism”

By: Casper Wed, 16 Sep 2009 07:26:15 +0000 …make that hyper-inflation that is being reduced by market forces to high inflation.

By: Casper Wed, 16 Sep 2009 07:22:44 +0000 Good points.

The mandated Boards should be punished, not shareholders ? Maybe the shareholding should be analysed first before jumping to conclusions ?

For all of these banks, if the stocks were to be passed/spun off, surely that would dilute the values even further ?

Another point – Jeffrey Friedman, Editor, Critical Review, yesterday highlighted populist ignorance: Three Myths about the Crisis: Bonuses, Irrationality, and Capitalism. I agree with it except an off-the-wall thought, maybe sovereign governments and their advisors have misled voters about real inflation or the calculation thereof. That, to me, would explain almost all the domino effects. Maybe the CPI calculations were manipulated for political reasons. Maybe there is still inflation and not stagflation or deflation ?

By: Amateur Wed, 16 Sep 2009 00:29:52 +0000 Mr Goldstein,
You are right that “a lot of the populist anger over the bailout stems from the view that the banks have gotten away with murder.”
But your article seems to share the populistic ignorance.
Citi has to be sized down for systemic reasons, not for moral ones.
Citi shareholders did not get away with anything, much less murder. Their shares became almost worthless -rightly so- and if the bank has any value now, it belongs mostly to the new shareholders who put fresh money after the collapse. (including the US Government)
Old shareholders were dilluted -again, rightly so- but why should they deserve any additional punishment?
Moral principle was rather well respected. Lets not fall into promoting lynch mobs.