Both Hands Are Filthy

Thursday, March 31, 2011

Bethany McLean of Slate relates a story about the government's role in the fiscal crisis that she likens to "the left hand not knowing what the right hand is doing." It will not, however, surprise anyone who, as I do, views government regulation of the economy as both immoral and impractical.

On March 16 the Federal Deposit Insurance Corporation, or FDIC, sued three former top executives of Washington Mutual, or WaMu, for taking "extreme and historically unprecedented risks," thereby causing the bank to lose "billions of dollars." That same day, the New York Times reported that the Securities and Exchange Commission had sent so-called Wells notices—often a sign that civil charges are imminent -- to a handful of former executives at mortgage-securitization giants Fannie Mae and Freddie Mac.

... The FDIC is seeking to recover $900 million from the three bankers. Fannie and Freddie were taken over by the government in the fall of 2008. So far, they have cost taxpayers about $130 billion.

Perhaps you're thinking: If only the government had known at the time what these scoundrels were up to, we could all have been spared a great deal of pain. The trouble with that line of reasoning is that, um, the government did know what was going on. The Office of Thrift Supervision, which regulated WaMu, and the Office of Housing Enterprise Oversight, which regulated Fannie and Freddie, were supervising the very behavior that their sister agencies are now suing over. The government's lawsuits call to mind a cynical boast by Burt Lancaster, playing tabloid power broker J.J. Hunsecker, in the 1957 noir classic Sweet Smell of Success: "My right hand hasn't seen my left hand in 30 years." [format edits, emphasis added]
Absent the full context of the government's systemic role in causing the financial crisis, this story merely lends false credibility to the notion that our government was merely inefficient or inept. A good place to start really understanding the significance of this particular instance of bad government would be to ask: When the government encourages and facilitates lying, cheating, and stealing economy-wide, what will more efficiency on its part actually do for us?

-- CAV

----- In Other News -----

Huh! LB's daughter has synesthesia. I personally know three synesthetes. One of them has a form of time-space synesthesia.

According to Wal-Mart's CEO, sharp inflation is around the corner.

If my own blog-following habits are any indication, most people who follow this blog do so through feed readers. If this describes you, and you're curious about my take on an issue, you won't necessarily know that I accept questions through Formspring. Visit this blog any time or go here, where there is a submission slot and a list of links to all my past answers. You get extra points for prefacing your question with, "Dear Uncle Gus," and signing off with something clever.

I finally got around to upgrading to Ubuntu 10.04. (I think support for 9.x ends after April.) If you want your window minimize-maximize-close thingies to appear on the upper right (the old default) rather than the upper left (the new default), How-to Geek has you covered.


: Added hypertext anchor.


Mike said...

The note about synaesthesia reminds me of a story I told you some time ago. The Russian composer Alexander Scriabin (1872-1915) was an odd duck, influenced by Theosophy and the like. In particular, he had a system associating colors and musical keys (not individual notes) that has led some people to believe he was a synaesthete; this is a useful essay on his system that concludes he probably wasn't. (In fact, the site that essay is from includes a collection of papers on synaesthesia, especially in the arts; it's a site by the Prometheus Institute of Kazan' (Russia), which scientifically investigates esthetics and, I gather, has hosted a stable of artists since 1962 in order to apply their findings. Safe to say I've bookmarked it; there's some interesting stuff there.)

Anyway, Scriabin was a classmate of Rachmaninoff's at the Moscow Conservatory. Wiki has the first part of the story:

In his autobiographical Recollections, Sergei Rachmaninoff recorded a conversation he had had with Scriabin and Nikolai Rimsky-Korsakov about Scriabin's association of colour and music. Rachmaninoff was surprised to find that Rimsky-Korsakov agreed with Scriabin on associations of musical keys with colors; himself skeptical, Rachmaninoff made the obvious objection that the two composers did not always agree on the colours involved. Both maintained that the key of D major was golden-brown; but Scriabin linked E-flat major with red-purple, while Rimsky-Korsakov favored blue. However, Rimsky-Korsakov protested that a passage in Rachmaninoff's opera The Miserly Knight accorded with their claim: the scene in which the Old Baron opens treasure chests to reveal gold and jewels glittering in torchlight is written in D major. Scriabin told Rachmaninoff that "your intuition has unconsciously followed the laws whose very existence you have tried to deny."

The account in his Recollections continues that at first Rachmaninoff was taken aback and thought perhaps they were right, then after some thought said that it wasn't that at all; the music in that scene was an allusion to the scene in bright D major with the goldfish in Rimsky-Korsakoff's opera Sadko, but because he took so long with his retort they refused to credit it.

I might add that like all of Rimsky-Korsakoff's fairy tale operas Sadko is a delight. There's an old Soviet film version (1952) up on YouTube that keeps much of Rimsky-Korsakoff's music. The music started out as a tone poem that's been a concert favorite for well over a century, and the opera also includes another long-standing stand-alone favorite, the "Song of India".

Gus Van Horn said...


Thanks for taking the time to re-tell that interesting story (and provide links to further material!)