How did big finance gain that much credibility?

[RadioRaheem84]

Coming from a good school I was hooked into the whole work as an analyst for an investment banking firm thing during the summer. It was there that I started to notice that most of the stuff they push is fraudulent.

How did the industry gain so much credibility by making up the most inane stuff to trade in the marketplace?

Ever heard of a credit default swap or any other of these "exotic financial products"? A bet on a bet that's rated by some phony rating company as a "sure thing". The fancy models that they use to see if the bet can be rated an A turned out to be nonsense.

Anyone remember Enron? The phony company was propped up by major bank analysts to swindle investors. Every major bank swore under a Congressional oath that Enron was a sure thing. It took a feisty little reporter from Texas Monthly, I believe, to shed light on the scam.

Yet these banks are treated as the cream of the crop of prestige. The summa of everything elite, yet time and time again prove to be complicit in fraud! The Savings and Loan Crisis, the Dot Com bubble, speculating on currencies, Enron, sub-prime mortgage, etc. It's unbelievable!

Do they just have a massive PR campaign? Do they buy off people politicians and people in the media? Is it the fact that they make so much money, regardless of their practices, that they're regarded so highly? HOw do they do it?

[Axle]

Do they just have a massive PR campaign? Do they buy off people politicians and people in the media?

In a word: Yes.

Its no secret that big finance has money in Washington...and lots of it. Just like with anything else in DC, if enough money goes into the right pockets, you can pretty well conduct your business however you see fit...think about how often the financial regulation has been fought. Those kind of oversights would force those financial companies to legitimize their operations.

And I would say the media serves as a big part of big finance's PR campaign. The only time the media turns on them is if something they screwed up makes for a great story.

The financial sector in America has become so lucrative that America was willing to dismantle other entire sectors (remember American manufacturing?) to make more room for it.

[New Tet]

Coming from a good school I was hooked into the whole work as an analyst for an investment banking firm thing during the summer. It was there that I started to notice that most of the stuff they push is fraudulent.

How did the industry gain so much credibility by making up the most inane stuff to trade in the marketplace?

Ever heard of a credit default swap or any other of these "exotic financial products"? A bet on a bet that's rated by some phony rating company as a "sure thing". The fancy models that they use to see if the bet can be rated an A turned out to be nonsense.

Anyone remember Enron? The phony company was propped up by major bank analysts to swindle investors. Every major bank swore under a Congressional oath that Enron was a sure thing. It took a feisty little reporter from Texas Monthly, I believe, to shed light on the scam.

Yet these banks are treated as the cream of the crop of prestige. The summa of everything elite, yet time and time again prove to be complicit in fraud! The Savings and Loan Crisis, the Dot Com bubble, speculating on currencies, Enron, sub-prime mortgage, etc. It's unbelievable!

Do they just have a massive PR campaign? Do they buy off people politicians and people in the media? Is it the fact that they make so much money, regardless of their practices, that they're regarded so highly? HOw do they do it?

At the risk of sounding reductionist here, I think that the basic, most fundamental and immediate cause of all that you illuminate above is the system of profit and wages. In some form or another, I suppose, a fraud has always been committed ever since the first man enslaved the first woman, etc.

But suppose you already know this. Great commentary!

[RadioRaheem84]

I guess I just figured that the media and people would easily wise up to these institutions and call for their legitimizing. But they've managed to totally win over the politicians and the media. Even the economists that insisted support be given to these institutions in times of crisis. I thought that at least as time went on people would succumb to their senses and realize that these giant banks operate on ponzi schemes and their fall from grace would follow. These banks are still revered by higher circles and seen as legitimate institutions that provide not only the backbone of American capitalism but also command political sway in the public sphere.

I saw a BBC segment that a lot of socialist and social democratic parties are regretting their flirtation with neo-liberalism in the 90s and are trying to swing back to old politics but is this genuine? How can people trust New Labour types that went full swing into continuing the de-regulation of the economy?

[Psy]

I guess I just figured that the media and people would easily wise up to these institutions and call for their legitimizing. But they've managed to totally win over the politicians and the media. Even the economists that insisted support be given to these institutions in times of crisis. I thought that at least as time went on people would succumb to their senses and realize that these giant banks operate on ponzi schemes and their fall from grace would follow. These banks are still revered by higher circles and seen as legitimate institutions that provide not only the backbone of American capitalism but also command political sway in the public sphere.

I saw a BBC segment that a lot of socialist and social democratic parties are regretting their flirtation with neo-liberalism in the 90s and are trying to swing back to old politics but is this genuine? How can people trust New Labour types that went full swing into continuing the de-regulation of the economy?

Why would other capitalists want to rock the boat? The corruption of the finical sector has on paper solved the problem of the falling rate of profit, just get rid of the productive phase of the production cycle and profits are theoretically only bound by the imagination of the capitalist class as the capitalist class can theoretically simply declare the value of all this fictitious capital. Of course we Marxists know that value is grounded to productive labor but capitalists think the theories of Marx are dead and their "frictionless economy" is proof since they have created shared delusions of value without the proletariat, only problem is when the shared delusion ends.

[RadioRaheem84]

Why would other capitalists want to rock the boat? The corruption of the finical sector has on paper solved the problem of the falling rate of profit, just get rid of the productive phase of the production cycle and profits are theoretically only bound by the imagination of the capitalist class as the capitalist class can theoretically simply declare the value of all this fictitious capital. Of course we Marxists know that value is grounded to productive labor but capitalists think the theories of Marx are dead and their "frictionless economy" is proof since they have created shared delusions of value without the proletariat, only problem is when the shared delusion ends.

I highly recommend the book by John Bellamy Foster called the Great Financial Crisis. It totally goes into that. They argue though that once the productive economy was shipped overseas the speculative one was the only thing holding it all up. Monetary policy coming from the Fed secured that these bubbles and bursts could go on.

But do you guys think this is the end of the game or is this going to continue and come back full force?

[New Tet]

I highly recommend the book by John Bellamy Foster called the Great Financial Crisis. It totally goes into that. They argue though that once the productive economy was shipped overseas the speculative one was the only thing holding it all up. Monetary policy coming from the Fed secured that these bubbles and bursts could go on.

But do you guys think this is the end of the game or is this going to continue and come back full force?

If capitalism collapses faster than the working class can awaken to organize to take, hold and operate the industries, all may be lost, if not forever, at least for a long time to come.