In my last post The Armageddon of the Financial Arms Race, I featured Andrew Haldane and one of his speeches, highly critical of the banking sector. I thought it odd that a top official in banking, the British version of Ben Bernanke, would be so forthright about the malfeasance and recklessness of the sector that he is a part of. Isn’t he supposed to be propagandizing for the banks and subservient to their interests like our own Ben Bernanke and his predecessor Greenspan? I looked a little deeper and found that those same thoughts have come to other Americans. Here is Justin Fox, editorial director of the Harvard Business Review Group and author of The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street:
…Several times over the past couple years he has called into question the industry’s most basic philosophical and financial underpinnings. Which is an interesting thing for the executive director of financial stability at the Bank of England to be doing.
…Why isn’t anybody in the U.S. writing stuff like this? I don’t know of any official at the Fed or the bank regulatory agencies doing the kind of searching examination of how the world works that Haldane has become known for (maybe Ben Bernanke’s upcoming lecture series will be a start, but I doubt it) — and I don’t know of any non-government economists or journalists here doing it in quite the sweeping, convincing way he has, either (if I’m just missing out, let me know in the comments). I think part of it is politics. In the UK the notion that something was flawed about the way financial markets and big banks were organized seems to be universally shared, allowing Haldane to take that as a starting point and then leap into his investigations. In the U.S. there’s still a substantial minority (even among economists) that attributes all our problems to Fannie and Freddie, the Federal Reserve, or some other malign Washington force. Which makes it much harder to move forward with the discussion…
(3-14-2012)The Regulator Who Explained the World – Justin Fox