Give Me That Old-Time Religion

The Wall Street Journal ^ | SEPTEMBER 25, 2008 | DANIEL HENNINGER

[presidio9]

The canyons of Wall Street are ringing with Democratic politicians and liberal pundits crying out for the renewal of ancient values and a return to basics. The political right wants market failures to be punished with Old Testament ruin. The financial crisis has brought calls for a return of ethics, standards and rules -- and not just on Wall Street. Dan Henninger tells Kelsey Hubbard how these themes are affecting the campaign trail. (Sept. 25) So we're all agreed: Standards of behavior matter. All that remains is to see if this week's left-right consensus on standards can be extended to any corner of American life beyond "CEO pay" and other sitting ducks. Once we're done imposing Spartan discipline on the dining rooms of Wall Street, how about some of the same for the halls and classrooms of the average inner-city high school? A nation in panic at the sight of banks imploding has yawned for years while the public-school system melted down. A handful of Supreme Court decisions going back 40 years relaxed standards of oversight for dress codes, comportment, speech and expulsion, and the average school principal or teacher threw in the towel on daily discipline. Not my job.

AP Sen. John McCain, Pastor Rick Warren and Sen. Barack Obama, Aug. 16, 2008. Many school administrators can relate to the frontline mortgage-lending officers, some of them old-school bankers who used to help young borrowers understand the difference between the real world and probable ruin. That's what high-school

[oldbill]

Henninger seems not to understand that it is the amoral, corrupt behavior at the top (CEOs, politicians, media) that sets the example for those down to food chain to ignore some basic decisions of right and wrong, license and accountability, sharing versus greed.

Fix your own house and that of the ones in the corporate/Senate dining rooms before you lecture us.

[Frapster]

i think he’s spot on - we used to be a great nation because we were a good nation. we now wink at so much that would never have passed muster in the past... maybe we need a little of that old-time-religion.

[Wonder Warthog]

"The financial crisis has brought calls for a return of ethics, standards and rules -- and not just on Wall Street."

Certainly the career called "journalism" could stand to examine their need for "ethics". As it stands, there is no evidence of any extant "ethics" except "if it supports Obama, then it's good".

As a scientist, when I do research, I have to "go with the data", and not what I would "prefer" the experiment to do. Once upon a time, "journalists" had a similar code of conduct. Unfortunately, recent events prove that such is no longer the case.

[presidio9]

As someone who spent almost 20 years working on Wall Street (including some trading mortgage backed securities) with Freddie and Fannie, and some regulating that practice for the NASD, I can assure you:

The broad condemnation of all of Wall Street and all CEOs is a dumb oversimplification. The CEOs are so far above the traders that the have literally no idea what they are doing, other than the periodic P&L reports. The managers have only a small clue what the traders are up to, because the traders are all specialists in complex esoteric products. The traders themselves have very little understanding about the nature or the overall credit quality of the underlying loans of MBS, because they have pooled into bundles of several hundred loans by FNMA or Freddie. The traders at FNMA and FHLMC are given the loans as they request them, and they, too, don't send a lot of time examining the individual loans. The guys who issue the loans may be at fault, but they don't make a hell of a lot of money to begin with. I am thinking about writing a detailed essay about this, but I can tell you this: Most of these guys DESERVED the high payout when they were making money when it worked. A lot of people with math degrees from MIT went down to work there. The problem is that when it spun out of control, it was too big and too complex for any one person to get his mind around.

[oldbill]

Your reply makes no sense. Looks like you are trying to protect your own profession, the one that got us in this fix.

If a “lot of people with math degrees from MIT went down to work there (Wall Street)”, they would have known that a Ponzi scheme based at its lowest layers of the pyramid on mortgages that in no way could have been paid is mathematically unsound. It was the managers’ responsibility to check and verify the “overall credit quality of the underlying loans” if they were selling products based on them. No, they knew, but greed was more important. They hoped to take the money and run before anyone found out. For a lot of them (and you??) it worked. That’s why the rest of us will have to pay for their (your?) excesses and greed.

In any other business these people would be in court (civil and/or criminal) for this behavior. Not worrying about “the overall credit quality of the underlying loans” is no different than not worrying about the undelying quality of the collapsed Minneapolis bridge’s gusset plates, or the undelying quality of the Challenger’s solid rocket seals, or the underlying quality of the US intelligence prior to the Iraq war.

Nice try. Your former co-workers should be in jail, not their mansions in the Hamptons.

[Lee N. Field]

Democratic politicians and liberal pundits crying out for the renewal of ancient values

Baal, Asherah and Moloch?