More housecleaning: Matt Taibbi On American Banking

I've always loved this Taibbi boiling-down of the financial crisis of the last few years, but it's been so long that I've forgotten the reason why I saved it in a text file in the first place:

There is no way to make high short-term profits when there are no easy investment opportunities. But when you can take some homeless person, give him a mansion, then sell his debt to a pension fund for real money, there’s a profit for you! Not a real profit, mind you, but a real bonus comes out of it.

I get that there weren’t many obvious high-returning investment opportunities suitable for all that money. But there were some that panned out, and there were probably a lot more that were never discovered because too much energy was expended simply trying to steal the crumbs still lying around. What if all of that money had gone into alternative energy companies? Into education? Border security? Aerospace research? Biomed? We might be sitting on a pile of cancer cures and solar generators instead of worthless IOUs. 9/11 might not have happened. We might not be at war. Who knows?

This story was always about the changed priorities of the investor class. Instead of taking chances on the industry and imagination of the American people, they decided to just steal the stuff those Americans already have. That’s the difference between bubbles and forward-thinking economics. Hell, that’s why we supposedly pay bankers so much — it’s their jobs to take money and use it to create new businesses that haven’t even been developed yet. To let them off the hook because there was nothing to invest in but savings accounts… to met that’s more an reflection of their general incompetence to do their jobs correctly.