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According to the Collins English Dictionary 10th Edition fraud can be defined as: "deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage".[1] In the broadest sense, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation. Defrauding people or entities of money or valuables is a common purpose of fraud, but there have also been fraudulent "discoveries", e.g. in science, to gain prestige rather than immediate monetary gain
*As defined in Wikipedia

Wednesday, May 30, 2012

Goldman Sachs's Psychopathic Behavior

There have been many good arguments put forward about why Goldman Sachs should be split into its at least the two parts of investment bank and commercial bank (with its government guarantees).  A reinstatement of Glass-Steagall would accomplish this goal and provide more economic health to the nation.

Another reason for dividing Goldman into parts has to do with the character of psychopaths whose sole interest is to make money--lots of money by whatever means.  Below is an argument that suggests channeling the lust for money power into an alternative direction that will not harm citizens as they have been harmed in the present financial crisis:
"It is better that a man should tyrannise over his bank balance than over his fellow-citizens." (quoted from Keynes by Wray below)
Randy Wray:  MMT Without the JG?
By L. Randall Wray - Naked Capitalism and New Economic Perspectives

Here’s the problem. Our society does produce a lot of psychopaths, and their behavior can lead to individual success at least on some measures. The rest of us—the 99% or so—have got to protect ourselves from them. However, their relative success makes that difficult not only because they can obtain positions of great power and influence, but also because we emulate them. In Chapter 24 of the General Theory, Keynes remarked that it is better to allow such psychopaths to inflict cruelty over their balance sheets than on their fellow humans. In other words, let them make money, but don’t let them run the show. As we all remember, he advocated policy measures to ensure full employment, to reduce inequality, and to “euthanize” the rentier class:
dangerous human proclivities can be canalised into comparatively harmless channels by the existence of opportunities for money-making and private wealth, which, if they cannot be satisfied in this way, may find their outlet in cruelty, the reckless pursuit of personal power and authority, and other forms of self-aggrandisement. It is better that a man should tyrannise over his bank balance than over his fellow-citizens; and whilst the former is sometimes denounced as being but a means to the latter, sometimes at least it is an alternative”. Of course our 1% psychopaths will oppose these policies, since the psychopaths thrive in the current, unequal, environment.
An editorial in the NYTimes put it this way:
“A recent study found that 10 percent of people who work on Wall Street are “clinical psychopaths,” exhibiting a lack of interest in and empathy for others and an “unparalleled capacity for lying, fabrication, and manipulation.” (The proportion at large is 1 percent.) Another study concluded that the rich are more likely to lie, cheat and break the law…. Accounting fraud, tax evasion, toxic dumping, product safety violations, bid rigging, overbilling, perjury. The Walmart bribery scandal, the News Corp. hacking scandal — just open up the business section on an average day. Shafting your workers, hurting your customers, destroying the land. Leaving the public to pick up the tab. These aren’t anomalies; this is how the system works: you get away with what you can and try to weasel out when you get caught.
Read the whole article here 


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