Atrios nails it:
And then we get to a bad equilibrium, one where it always pays to cheat, one where all transactions – personal, commercial, whatever – have an extra friction due to heightened “ripping me off” probability.
The Law and Economics Chicago crowd told us that companies were supposed to break the law if it benefited shareholders. Congrats, guys, we’re living in the world you created.
Villago Delenda Est
Yup.
These assclowns never think these things all the way through.
If allowed to, they will plant the seeds of their own destruction, and cheerfully sell the rope that will be used to hang them with.
beltane
Altruistic people have more gray matter in their brains http://www.sciencedaily.com/releases/2012/07/120711123005.htm which means that Galtians have less gray matter in their brains. Why am I not surprised by this.
Hoodie
Glibertarian and Chicago school types fetishize contracts, but only certain types of contracts and, actually, the least efficient types of contracts. Trust reduces transaction costs. That’s one thing that’s bad about a president that seeks to maximize his own tax avoidance. Who the fuck would want to negotiate with him?
Delia
The banksters said it was only wrong if the little people did it, but not many fell for that line.
Somebody a long time ago said that the situation we’re approaching is the war of all against all, and that life in it is poor, nasty, brutish and short. We formed a social contract to get out of it, but I guess we got too clever for that.
Or at least the overlords did. And here we are, back again.
GoodGuyGreg
A thousand internet points to the first person linking to someone at NRO or RedState saying this ranking proves Obama’s administration is one of the most corrupt in history.
EconWatcher
Yeah, I remember from law school the argument that insider trading is actually a good thing, and should be legalized, because it starts moving the stock price earlier in the right direction, to reflect the information that has not yet been disclosed to the market as a whole. Completely misses the whole point that this involves corruption, and means that managers would have even more incentive to further their own interests over shareholders. The “law and economics” school just assumes away pretty much all of reality.
PeakVT
@Hoodie: Trust reduces transaction costs.
He’s probably not a crowd favorite around here, but Fukuyama wrote a whole book on trust that I think is worth reading.
The Moar You Know
I’ve been saying it for years, but the best end-game scenario for the path the U.S. is traveling down is that we end up like Mexico.
Worst case, Haiti.
I’m thinking it’s going to be more a “worst case” than “best case” outcome.
Comrade Dread
And yet you will never hear a conservative condemn this culture of corruption in business or talk about how the rampant selfishness and greed demonstrate the moral decline of America away from Judeo-Christian values.
Well, unless it involves two businessmen boffing anyway.
The Moar You Know
Moderation? For what?
Comrade Dread
Don’t know, but I ended up there too and I wasn’t nearly as offensive as I could have been. :)
Villago Delenda Est
@The Moar You Know:
Misspelling “U” as “You”.
Marc McKenzie
A strong, passionate post, but sadly, we also helped–we allowed these jerks to come to power and set the agenda. How? Well, we stopped caring about how politics affects us and we stopped caring about voting and some wrapped themselves in the “both parties suck and they’re all the same” blanket.
Honestly, the roots of this go back to 1980 with Reagan’s election, but we had a chance in 2000 to stop it. We failed, and now we’re stuck cleaning up Bush’s mess, which was really Reaganomics x10.
Sorry if this seems too harsh and cynical, but I cannot shake the feeling that we ignored these jerks at our own risk, and now we’re paying the price for that. I really hope that I’m wrong and that Americans will come to their senses in November.
El Cid
If it gets in the way of profit, it’s not a legitimate law.
Arclite
We lose out to Barbados, Chile, and Qatar. OUCH.
This ranking fits nicely with this story I posted last night.
Title:
Many Wall Street executives say wrongdoing is necessary: survey
Maude
Jump!
Violet
I saw something on the news today about kids at some upscale NYC school cheating by taking photos of tests with their phones. Then they went on about other kids doing similar stuff and how the kids had to be punished because they need to learn that cheating doesn’t pay.
I thought while watching that, “yes, it does. Just look at Wall St. and banks.” And here’s this nice thread. Why wouldn’t people cheat when they learn every day that it pays and pays and pays.
burnspbesq
That’s a ridiculous, cartoonish mis-statement of the theory of economic breach. Duncan surely knows that, and so should you.
SteveinSC
The American public’s ass is bleeding raw and they still have not turned on the culpable. The average I.Q., I believe is supposedly set at 100. I can’t believe ours is higher than about 80. A society that stupid should not have access to nuclear weapons.
Maude
@burnspbesq:
I didn’t go to the link. I just have an automatic reaction.
burnspbesq
@Maude:
Try this link instead.
http://en.wikipedia.org/wiki/Efficient_breach
Maude
@burnspbesq:
I bookmarked it and will read it. I thank you.
Jamie Dimon is having a conference call tomorrow. On Bloomberg radio, one of the guests said that investors are not happy with him and he needs to explain what went on.
Maude
I read it and it makes sense. In the Criticism section, the guy said A promised B. No, the example was written in first person. I was to deliver to A and then delivered to B.
burnspbesq
@Maude:
JPMC should charge admission. It could cover part of the loss that way. Heck, I’d pay eleven bucks to listen in; it’ll be more entertaining than the typical summer movie.
Heliopause
And they manage to reconcile this with Jesusiness. Takes a certain talent to be a movement conservative.
Cluttered Mind
The things that stood out to me the most on the recent list were the positions of Iraq and Afghanistan at pretty much the very bottom. Yeah, we’ve done so much good for those people over the past 10 years, haven’t we?
jim filyaw
the writer lists the reasons he thinks we don’t do bad things. its a short list, i.e., getting jailed, getting thought badly of. i think he overlooks a very important one. it was described best in a movie, ‘quiz show’ where one of the characters tells of an uncle who fessed up to having an affair and causing quite a family stir. he says, “you’ve gotta understand. the affair had been over for years. so, i told my uncle, ‘why’d you tell–you got away with it.’ he told me, ‘it was the getting away with it that i couldn’t handle.'”
j
This is nothing new. There is a scene in the 1983 movie where one guy is going to take his company public and he tells his friend that a large corporation is going to buy him out. “It could be worth millions”. He just did some inside trading info.
A group of economic professors polled students from most of the MBA programs and asked “Is what he did ethical?” MOST (a majority) of the students said “No, because he helped out his friend”.
The professors said that colleges needed to mandate ethics classes as a requirement for an MBA. Most colleges were too into that “Greed is good”, “you’ll be a millionaire before you’re 30” Reagan era mantra, and in fact cut most ethics departments.
And now, 30 years later we get to the point where just this week CEO and MBA big shots are trying to justify cheating because “it’s necessary to get ahead”.
We’re doomed.
Oregon Guy
America is going to become Brazil with nukes. We’re well on our way.
Raven on the Hill
@Oregon Guy: and drones.
Nemesis
Over time, Ive developed a theory that lying became acceptable in the 1980’s. If you lie in order to get ahead, that is, to make more money, all is good. That has seeped into our media, since they cant be bothered to do any leg work to go beyond the superficial aspects of a story.
When CEO’s lie, when corporations fabricate essential information, when politicians overtly lie with zero consequences, when mortgage companies lie about lending practices, when ratings agencies lie about bond risks, when media lies and their watchdogs lie about what they are watching, then we as a country will have an extremely hard time with truth.
There seems no abject truth left to agree on.