>>> Rakesh Bhandari <bhandari at Princeton.EDU> 03/10/00 12:44PM >>>
But Charles that Floyd Norris report did not cite any actual tampering with
the books.
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CB: Do you think you get the whole story from the NYT ? Tip of the iceberg comes to mind as a metaphor
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Conflicts of interest are inevitable given portfolio diversification of the top accts. Big deal. And so what if the profits are being cooked up?
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CB: My guess on the "so what" of this is that it is a small (not complete) glimpse of the concentrated "insider" nature of Wall Street, contra, the "people's capitalism" image promoted by the headlines on increasing percentages of average households in the stock market.
Also, the cooking of profits thing could be contributing to the current major media message of a "booming economy". It is probably booming a bit less than reported, in the sense that some proift cooking of this type is phony. I am not guessing that the whole current boom is cooked. But every little bit helps to put over the final victory of capitalism line.
Also, to an extent, a profit whether cooked or not, is a profit, no ? So this is part of how profits are "made". We should know that.
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The profit illusion only makes it easier for foreign private investors to come to terms with the fact that they have no better place to go and for foreign governments from facing up to their actual powerlessness since the govt of the lone superpower would force them to invest here anyway. So even if there is massive accounting fraud, everyone is going to look the other way.
********* CB: This is the type of thing I am getting at above. I hate to use the term , but there is a "conspriatorial" dimension in combination with a systematic dimension. It is like the hedge fund that collapsed. The superprofits are systematic. The superduper profits have some imaginative accounting dimensions.
The political significance is they can make a certain amount of the-capialist- system-is-the-greatest propaganda out of the headlines that report not only superprofits, but superduper profits. Wow ! See how capitalism really works great.
By the time, the truth comes out, the People have already elected all kinds of pro-market/neo-liberals, and it is too late.
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In whose interest is it to expose and solve the problem? Everyone wants to believe; and hopefully things that are believed to be real may turn out be real in their consequences. To be on the safe side, let's keep social security funds out of the market, though, ok?
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CB: It is not in the interest of too many Insiders to expose it, but there is a strata of investors and participants who are not on the inside, the furture potential suckers, and it is in their interest to know. And I see no bigger role for Left Business Observers, than to systematically and continuously expose these.
This is part of the picture of Wall Street as a Casino with the odds in favor of the House.
CB