A refreshing perspective on bankers

The last organisation I worked for was a media company. Among a staff packed with lefties were three libertarians, including myself. Now I work for a bank, with far more staff in the building and I know of three libertarians. So, per head, the bank has fewer libertarians than the media company. I find this surprising.

Why aren’t more bankers drawn into the movement? Surely we are pro-banker? We are pro-market. We distrust most of the worst banker-bashers and to my ears at least we don’t take part ourselves. We even have useful investable economic ideas. Bankers should be paying attention and feeling welcome.

Perhaps this is not true of other bits of the libertarian movement? At Benevolent Laissez Faire our keynote speaker Yaron Brook certainly seemed to think so. He described the “hatred of bankers” as “universal” even in our community. Interesting.

The rest of Yaron’s segment on bankers, below, is refreshing and delightful. Yes bankers play an important role and as professionals engaged all day in difficult choices about confusing measurements of reality – as people engaged constantly in truth discovery – there is nothing more noble that pursuing truth, even and especially for profit. 

If we managed to separate state and banking, then this would be plain to see.

 

7 Comments

  1. Simon,

    Have you thought about putting these talks out as podcasts? It works for Cato and other podcasts I listen to and I don’t have time to sit and watch them.

    And he right about the size of Govt and cronyism, there’s a good reason big business, and by that I include NGOs like Greenpeace, like the EU they only need one lobby office to affect 500m rather than 27.

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  2. I have no problem with a money lender who gets real savings (their own – or the savings of other people) and lends them out for productive investment.

    However, that is not what modern bankers (mostly) do now. Most lending today is not from real savings (contra Keynes credit expansion is not “saving – as real as any other form) and the “money” (credit bubble) lent out does not mostly go on productive investment.

    Bankers wanted to be “more than money lenders” and they have ended being less than money lenders.

    And the governments (and their Central Banks) push the process every step of the way.

    On their own even the most “creative” bankers could only twist things so far before “”boom” turns to “bust” (the “broad money”, the credit bubble, shrinks down back towards the monetary base).

    But with government Central Banks backing the process – the entire capital structure of the economy can be twisted to destruction.

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  3. The problem with banking is that there is no real market in financial services. That is why all the banks are so terrible.

    The consolidation of many different types of entity into a few massive banks has happened in my lifetime and the members of this state protected cartel have worked hard to repeatedly steal money from me in that time.

    But what choice is there apart from playing along.

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  4. What Paul said.

    But in fact, “all the banks” are not so terrible. For example, as its long-time CEO, John Allison managed to make a small community bank into a Big Bank with billions in assets, at the same time nurturing the ethical health of BB&T to the point where it was able to resist most of the get-rich-quick enticements of economic circumstances and also of all but the extortionary governmental lures. For his impressive real-life credentials, see his Wikipedia write-up at

    https://en.wikipedia.org/wiki/John_A._Allison_IV

    For a deeper insight into the circumstances of banking in the early 21st century, people might be interested to watch these two presentations by Mr. Allison. There some overlap, but I found the two complementary, and I recommend both.

    Mr. Allison retired from BB&T “at the end of 2008” (per Wikipedia), so was amongst those held up by Paulson (et al.) to go along with bail-out gag of TARP, even though BB&T — along with several other healthy banks — neither needed nor wanted the TARP funds.

    First, though, a little over 5 minutes from John Allison, in 2014, on how the regulatory system makes small-banking in the old style as a primary lender to small business all but impossible. I note that he implies at least partial agreement with Paul’s point.

    [video src="http://cdn.cato.org/archive-2014/allison-fbn-1-14-14.mp4" /]

    In the partial URL’s below, please type the *https:*//*w*w*w*.*you*tube*.*com into the address bar, omitting the asterisks, and then copy and paste the rest of the URL (from /watch? through the rest).

    Mr. Allison introduces his book The Financial Crisis and the Free Market Cure to a Cato audience in 2012. 36 minutes:

    /watch?v=dGmDSXN9N5Q

    Here, he speaks to the Federalist Society, exploring the parts played by the Federal Reserve, FDIC (Federal Deposit Insurance Corporation), government-backed/enforced subprime mortgage lending, and “Freddie Mac” and “Fannie Mae.” He explains why banks exist in the first place. Also explains the evils of mark-to-market accounting (also reviled by Richard Epstein).

    Very good, rather detailed presentation for a lay audience of law students. An hour and 36 minutes, Feb. 26, 2011.

    /watch?v=-OCzqi3oGmg

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