by Libby Rey Schunn CPW News Service
There is nothing blithe about the 2007-2009 U.S. financial meltdown blamed on the economic engineering that MIT economist Paul Samuelson called “fiendish, Frankenstein monsters of financial engineering.”
While Robert Merton tried to convince the world that the voo-doo metrics was a benign overreach, Blythe Masters like Captain Blythe trying to convince the Bounty's sailors that his policies were good for them as he sought to remain the master of his little universe, the SEC and FBI narrowed in on Blythe's energy investment unit at JP Morgan Chase which had stepped in to fill the void of computerized energy rip-offs engineered and perfected by Enron.
Larry Summers was Bill Clinton's Deputy Treasury Secretary in 1999, the year that the Glass-Steagall Act forbidding bank/investment speculation was repealed. Summers was also president of Harvard where the endowment funds' investment in risky derivatives was pointed out by Iris Mack by email and letter. In keeping with the necessity for corporate amnesia, Mack was promptly fired. In the last year of Bill Clinton’s administration the legislated wisdom gleaned from the 1929 stock market crash, Glass-Steagall, went up in smoke opening the draw-bridge to the horde. This reintroduced the snug sheet-splitting of banks and investment firms like un-chaperoned adolescents at summer camp. The same thing happened with Arthur Anderson when its time-honored and respected accounting principles were compromised by its wholesale embrace of an investment counseling function for Enron. Restricted from copulation for fear that Wall Street would turn into a unprincipled orgy with multiple unwanted pregnancies without Glass-Steagall, it became , in fact, an unprincipled orgy and a house filled with countless unwanted orphans some of which looked like Rosemary's Baby. Blythe Masters is in some ways a convenient scape goat for Wall Street and obviously one woman who does not share Iris Mack's concerns, or if she does she has not articulated them, yet. She is the Beauty, but behind her are the hidden Beasts of America’s growing blood-sucker-class. Sadly, the real names seem stripped from the story line, hidden from the drama and rarely seen for who and what they are. Oddly, the Koch Brother may have seen it coming when in the late 80's they offered to fund an ethics department within the Harvard Business School. Their gift was denied, but denied perhaps for reasons that served the Mertonian metrics magicians. The Kochs were far too close to other prominent Harvard Business School alumni and with their German Bund connections through Koch Industries and John Birch society founder Fred Koch, would have brought much heat on the Mertonians' emerging metrics-mission.
In fact, the sociologists and economists initially argue that only they understand their own theories, then when those theories are widely accepted anyone can drive the car.... until it careens off the road and crashes for lack of a guard rail. By then the metrics wizard has gotten out at the last stop, but when confronted by investigators claims ignorance of what has happened and why.