Thursday, February 5, 2009

Financial Professionals vs. The Laughable Remainder of Humanity

One of the blogs I follow is Ashes Ashes All Fall Down, a very clever and irate blend of insight, perspective, and vitriol from a guy I've never met named Dan W. The post I've linked here is about one of his many conversations with sundry persons whose allergy to the facts of our shared predicament gives them carte blanche to be, well, semi-polite jerks. These are ladies and gents who consider themselves skeptics when met with any critique of the conventional wisdom, forgetting that the term skeptic means much more if applied only to critics of that conventional wisdom. They strike up conversation; it somehow gets serious; they make a vaguely condescending sidestep and go back to their exquisitely tasteful feng-shui of the deck chairs on the S.S. Big-Ass, pre-iceberg.

You may want to read Dan's original post first, which is, once again, here: Case In Point: Denial.

Here's my comment, pajama-clad & cozy at home in the bosom of my own blog:

What strikes me about your conversation with the Good Guy is that he dismissed your offer of a fresh hypothesis because you are not a professional in the finance business. He believes that grown-ups should only listen to people whose credentials exactly match the discipline at hand. Let's say you work at, oh, I don't know, a medium sized literary small press in a major metropolitan area... or, the library system of an elite liberal arts college in New Hampshire... because of your research and experience you somehow become aware of the rapidly diminishing distance between the fan and the poo. It's 2007. Derivatives are fake. The DOW is a basket of 30 stocks and whatever underperforms gets yanked out of the basket and replaced. The gold price is rigged (GATA, etc.). The Plunge Protection Team is on the scene. China will tire of buying our debt, especially when their own domestic consumer market can afford the goods they produce. Peak Oil. The Long Fricking Emergency. And so on. So you urge your organization to invest in precious metals, since the forces destroying the dollar are far stronger than the forces suppressing the gold price.

At this point they laugh in your face (obviously I'm describing my own experience here, or rather, that of... uh...a friend), because "it would be insane to take financial advice from anyone who was not a licensed financial advisor." Now, some financial advisors must surely be Good Guys, as well. But in general they make a living by collecting commissions for selling stocks to clients whose level of sophistication (and vigilance) is low enough that they'll buy securities that no broker wants to own. The majority of the people who swallowed the housing bubble and felt it burst their bellies open like a Ridley Scott alien were just following the advice of their F.A.'s, who wanted to make money for themselves and their clients by riding the ponzi scheme which wound up riding them instead.

Professionalization, the fetishizing of assessment and credentials over insight and experience -- is a big element in the way denial works, it seems to me. If you've got no PhD -- or a PhD in subject XYZ and a robust & diverse publication record about XYZ, ABC, DEF, and so on, but reality suddenly demands that you get up to speed real quick regarding PDQ -- say, the coming default of US Treasuries -- and you aint got no credential to comment on PDQ, prepare to be pathologized.

If Dick has a credential in finance, and he tells me to jump off a bridge, it isn't my fault when I do so and break my legs: I was following the advice of a trained pro. (That is what grown-ups do; to do otherwise is to be, or be the dupe of, one of various kinds of impostor.)

If Jane says it's a bad idea, but Jane is like me in that neither of us has a finance credential, how can I forgive her for perceiving something I should have been able to perceive? I can't say my blindness was due to my own lack of institutionally documented expertise, since Jane didn't have any more of that than I did --- yet she saw what was coming, whereas I'm the schmuck who listened to Dick and wound up lame on the couch, covered in popcorn watching Bonanza reruns.

Consider inviting your colleague at the library to read HOW THE UNIVERSITY WORKS. Amazing, mind-blowing book.I've only started following your blog a few days ago, and your tone is that of a person who knows a lot of what's really going on, so for all I know you may have already read this book seven times. If not, I urge you -- and Mr. Good Guy -- to check it out. He will never trust administration numbers again. @@@@@ END OF COMMENT.

Well... it occurs to me now, that the financial slime-bomb whose corrosive goo is now all over everybody was on the radar of my pal Mike Ruppert seven years ago: two days before 9/11/01, when -- where I was later Senior Staff Writer from 2003 till closing in 2006 -- published this story:

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