Dear Mr. Geithner,
I have been on jury duty recently. Nevertheless, I have been observing your first few weeks in office. I figured you could use a little help.
I, personally, don’t have the expertise, so I thought I’d lean on a few acquaintances who have weathered several economic storms.
What’s that? You say you have your own friends? Well no disrespect, but I think your mentor Mr. Rubin may be sitting next to Milton Friedman in the “Economists Whose Ideas Have Expired” benefits line.
“The moral is: don’t ever take the joy of death away from the public.”
I’m talking about a group of financiers who spent years toiling in an economic sector where the government played no productive role — other than to impede progress with regulation and arbitrary use of the law. Not only did these successful entrepreneurs make beaucoup dollars in this climate, but they developed ways to actually make the government work to their own advantage. Indeed, they operated in one of the world’s only true “free markets.”
What’s that? You have also had experience working in a free market? You too have been fighting the state? Again, no disrespect, but my financiers didn’t run to the Treasury when the going got tough — unlike the so-called “captains of industry” whom you listen to.
Mr. Secretary, let’s face it: you need real experts, those who have felt the consequences associated with moral hazards, those who have found out that mistakes in markets mean no skin in the game (or no skin at all, for that matter).
If you wish, you can learn more about these consiglieres by looking at some of their earlier commentaries. “The Thugs” were kind enough to watch Season Five of The Wire with me, offering their feedback on the David Simon‘s depictions of inner city Baltimore. Full disclosure: they had once been players in the underground economy, but they are now retired and spend most of their time in church.
However, they have agreed to return to the couch and channel their wisdom for the benefit of the country. By the way, you should know that they are big fans of your work at the New York Fed. Most of them fared nicely in the late 1990′s by catering to the growing white-collar workforce who demanded cocaine, escorts, sexual services, etc. Of course, since the most of these customers worked in the financial services industry, my boys feel like they owe you a solid.
They plan to get together weekly to discuss various aspects of the financial crisis, and of course your rescue plan. But I know you are in a wee bit of a rush, so I leave you with a little early advice.
The unanimous opinion among The Thugz was that you must base your work around a time-tested law of ghetto capitalism: losers must die in full view. What? This doesn’t make sense. O.K., well, let me explain. Your first mistake (more accurately, your predecessor’s error) was to mix the bad apples (banks) with the good (banks). By doing so, you forgot what makes capitalism so much fun: winners win at the losers’ expense, and everyone gets to watch and laugh. Sort of like public hangings, except reported on the financial pages. Otherwise, why read The Wall Street Journal?
The moral is: don’t ever take the joy of death away from the public. Because if you don’t see losers in pain, you begin to think the game is rigged. And we all know the game is fair, open, and transparent … yes?
I’ll let you mull on this while The Thugz get ready to take on the first issue: executive compensation. (C’mon, you didn’t think they were dumb enough to let that one pass, did you?)