Remind me again why we need the big banks?
Yesterday, Jerry Corrigan of Goldman Sachs told the UK parliament that there was “nothing inappropriate” in the way Goldman helped arrange for Greece to hide its debts. This was helpful – it essentially acknowledges that the much vaunted “reputation effects” of issuing securities with a top tier investment bank are worth less than zero. Mr. Corrigan affirmed that it is completely acceptable for Goldman and its peers to mislead investors and deceive the markets.
So you can strike out one more purported reason why we should keep massive global financial institutions. They do not enhance transparency, they do not bring clarity, they do not keep governments accountable. Instead, they are paid a great deal of cash to mislead people. What is the social value of that exactly?
Good question, but let me answer it by asking another:
How can a kleptocracy have "social values"?