Wednesday, February 16, 2011

Adult Supervision

“Wall Street,” a financial expert once said on National Public Radio, “needs adult supervision.” I have heard of something very similar said by some Wall Street guy or other, in the pages of the book The Big Short, one of several books about the financial crisis that I have yet to read but really should.

Basically, this Wall Street guy said that the financial industry kept doing what it did in-part because it kept expecting the adults to come in and stop it. "Surely the adults won't let us play this dangerously forever," the thinking went. But then the financial industry realized that there aren't any adults anymore. Along very similar lines, note this New York Times' interview with grandmaster Wall Street con artist Bernie Madoff. Madoff claims it likely that the banks had to have caught onto what he was doing, and chose to look the other way.

The need for adult supervision isn't confined to Wall Street. Albany is a city which seems to be almost entirely devoid of adult supervision. Come to that, the oil industry doesn't seem to have many adults either. Nor does the auto industry. To pick but one glaring example, it shouldn't have taken Congress, or the ever-reliable mainstream media, to point out that showing up to ask for money in your own private jet sends entirely the wrong message. That's a child's mistake, not an adult's.

The debt collection industry is another example. A series of articles and documentary films have convinced me that this industry is largely made up of overgrown children, pretending to be pirates. I didn't make that comparison up. It came straight from the mouth of a debt collector quoted in the documentary film Maxed Out. Similarly, the Fall 2010 newsletter of the New York State Collectors' Association termed “ridiculous” a bill introduced in the New York State Legislature that would prevent the collection of debts from the dead. Only someone who doesn't know the debt industry would be surprised by the thought of a collector attempting to collect from the family of a corpse. The Association similarly opposed vociferously a bill that would require debt collectors to be (gasps in horror!) licensed. How dare adults try to spoil our fun!

Adult supervision.

When the British Petroleum oil spill happened in the Gulf of Mexico, I, like Roger Ebert, was struck by the incredible degree to which attempts to get BP to clean up after its own mess were taken by Fox News and the like as an attack on the capitalist system itself. Did this remind anyone else of a chastised child claiming “it's not fair” and then running to a neighbor or a favored uncle? What, I wonder, would the hue and cry have been if regulators had stepped in to try and stop Bernie Madoff?

Are there no more adults? Consider this. It's not like financial regulators did not exist even before recent changes to the system. Madoff had to do filings with them; in the New York Times interview cited above, Madoff expresses surprise that no one caught onto the discrepancies in his filings. It's not like Albany politicians don't have to do filings. Indeed, filings were a menace to Senator Pedro Espada even before the potential extent of his corruption was authoritatively established. And it's not like debt collectors don't already have rules to follow.

Adult supervision exists on Wall Street, and in Albany, and in the debt collection industry. It probably exists in the auto industry and oil industry as well. I wonder if it isn't that there are no adults, but rather that the children have merely figured out ways to hide from them. I read of changes to the financial industry regulatory system, changes which are surely needed. I read of ethics reform proposals in Albany. I read of private lawsuits against debt collectors, and of an New York State Attorney General crackdown on the industry. And then I read that, at the same time that the Attorney General is investigating debt collectors, he's also hiring them.

If I am right, and it isn't that there are no more adults so much as the children are quite adept at evading the adults, then all the additional supervision in the world is simply may not matter.

Not on Wall Street, not when the debt collector is pounding on your door, and surely not in Albany.