Anyway, here's Elizabeth Warren, who was recently passed over for head of the CFPA, demonstrating why she was not up for the top position:
[The CFPB] still has enemies in Washington, D.C. And they have a plan...But this agency needs to have its full powers right now, and that means we need Rich in place as Director. Today, I'm celebrating -- but I'm not taking my eye off those who want to cripple this agency.
Now, every politician has opponents, but to publicly describe them as conniving, crippling enemies highlights a rather naive rhetorical style. While many in politics have ulterior or selfish motives, it's just more effective to give them the benefit of the doubt in public discussions because without superficial pleasantries like 'my good friend on the other side of the aisle,' it is too easy to get to the 'bad Nash equilibrium' where each side correctly assumes bad faith from the other side. Manners are not hypocritical, rather a way for us to become better people because pretending to be nice is often the first step to actually being nice.
I'm still confused by her statement that 'on Thursday, we will have cops on the beat -- making our first contacts with the 111 largest financial institutions in the country so we can monitor their compliance with the law.'
If you read the Dodd-Frank bill, you will see a lot of vague language that overlap other agencies (eg, the FRB, FDIC), so, anything new isn't obvious to anyone. I tend to think they will just like having everyone give them a bunch of reports to make them feel important, and then look for something obvious, but they will find obvious improvements rare because the status quo in our highly regulated financial sector has come about because of trade-offs between powerful interests. For example, will they argue for more mortgage lending to people with low credit scores to achieve diversity targets, or less to achieve safety?
When I was in litigation I was often indignant because I thought I was being unfairly persecuted by a vindictive person. I thought the charges against me were purely a pretext to keep me from starting my own business, which at that time was to start a fund based on going long low-volatility equities worldwide, and as I had consistently argued and applied this objective my entire professional life, preposterously considered off-limits as part of my confidentiality agreement with my old employer. Yet, each time I spoke or wrote to the court or my adversary while indignant I made statements that made my case that much harder for me, leading to the following costly insight: never communicate in anger with an adversary. This is because you aren't being fully rational, and so an opponent without good faith will cherry pick your flawed statements for a tactical advantage, which is why lawyers always tell their clients to shut up irrespective of the big picture.
Now, emotional pleas may generate sympathy and support from the masses, but often you aren't in a situation where people who elicit such sympathy matter. I sense Warren is trying to steamroll her opponents via PR, but the problem is that anything she does will pertain to details that don't matter to the public, such as how to trade off simplicity and some circumscription of liability. Simply casting banks as bad guys only works if your end game is nationalization, which even I doubt the Obama administration wants.
This is because you aren't being fully rational, and so an opponent without good faith will cherry pick your flawed statements for a tactical advantage, which is why lawyers always tell their clients to shut up irrespective of the big picture.ReplyDelete
I'd like to note that this is the first time that you've implied lawyers are anything but conniving, crippling enemies.
"I sense Warren is trying to steamroll her opponents via PR..."ReplyDelete
And I sense stupidity.
You mindread Warren based on your own experiences (that's called "projection" in one of those other behavioral sciences the basic principles of which you would do well to learn), and then lay out a long, trite lecture on human nature, sprinkled with mis-applied principles from game theory.
I was wondering why I had this blog bookmarked when I no longer read it. I remember why I no longer read it now -- when you aren't talking about finance, you're no better than an incoherent hack. The bookmark, though, remains a mystery. Got to do something about that.
Eric, you need to relax and consider your thinking more holistically, because you're making less and less sense and your posts seem to contradict each other more and more.ReplyDelete
When you were in litigation you were steamrolled by adversaries that were richer and savvier. Is it so hard for you then to imagine that many people are being steamrolled by their financial institutions? These guys employ legions of lawyers and PhDs who craft agreements that even you can't possibly fully understand.
Why not think a little bit more laterally and draw a few parallels? For example I invite you to study the role of the EPA in the asbestos case...