High-functioning sociopaths were my journalistic bread and butter. I guess you could say, white collar crooks have been good to me — sort of like how garbage is good for trash collectors or cancer is good for doctors. I spent almost three decades following these financial termites around and writing about their twisted exploits. And, in all that time, not one of these guys, not Charlie Keating to Michael Milken to Ivan Boesky, thought they’d done a thing wrong. Not one of the hundreds of crooks who, back in the 1980s, looted around a thousand S&L into insolvency, saw themselves as anything than a victim themselves.
To a person, they’d stand there amidst the still smoking wreckage of a — by then "former thrift” - and tell me with a straight face and genuine passion — that the reason — the ONLY reason — things went so badly was because federal regulators had stopped them before their phony-baloney deals could fully mature:
“If they’d just let the (deal/project/loan/bond sales/refi/ loan adjustments — fill in the blank,) go forward, everyone, including the S&L, would have made a bundle.”It was, in the sociopath’s view — the losses were caused by regulators and their intrusiveness that caused their worthy plans to go off track.
Of course, in the dimension most of us live in — the non-sociopath dimension — the truth was exactly the opposite of that. The truth was (and remains) that regulations and regulators had been cut by members of congress on the take and what regulations remained were not aggressively enforced by the regulators that remained. (And you know — when the cat’s away..... )
During the S&L crisis we learned many of the deals that went bad were phony from the get go. But the loses were real. We were “lucky,” as taxpayers, to get out of that mess for only about $165 billion. And where did most of that money go? Into the pockets and off-shore accounts of the most successful of that era’s high-functioning sociopaths. (Even after Mike Milken paid court-ordered restitution of nearly $1 billion, he still had over $900 million left in his personal checking accounts.)
In 1991 I testified before Congress begging them not to repeal the Glass-Steagall Act, the depression era law that banned banks from commingling their operations with Wall Street investment houses. . In conversations with members of the committee later I begged them; “Please, don’t repeal this law until someone can prove to you that the laws of human nature have been repealed first.” They repealed it anyway and, well, we’re all living the consequences now.
Here’s the bottom line: There are two kinds of financial service workers:
- Real ones, who make an honest living making honest investments for honest customers.
- High-functioning sociopaths, who would view the financial services sector exactly the same way the Vikings viewed their 10th-century victims.
Remember that, and hope that congress remembers it too before they make another $23 trillion “mistake.”
Oh, and remember that too as you read the piece below from the Financial Times. Because its about one of the biggest of the latest crop of high-functioning sociopaths.
It makes me weary to know that a quarter century after I started writing about these kind of pin-striped cockroaches they are still singing the same song, and way too many folks are still willing to listen to them. They belong in jail, with their own kind.
Financial Times — April 22, 2010
One person who received a call from the Goldman chief said he was told the regulator’s case against the bank was politically motivated and would ultimately “hurt America”.
Mr Blankfein mounted the campaign to bolster the confidence of its business partners in the wake of the SEC charges that the bank had sold investors a security designed to fail.
In conversations with private equity executives and others, Mr Blankfein left clients with the impression that he was eager to fight the charges in court. The SEC has requested a jury trial.
“He was very aggressive,” said one person called by Mr Blankfein on Wednesday. “He feels that the government is out to kill them, that they are under attack and the whole thing is totally political.”
Mr Blankfein said the SEC action “hurts America”, this person said.
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