People Hate Bankers Because People Are Ignorant

http://www.bloombergview.com/articles/2014-07-16/people-hate-bankers-because-people-are-ignorant

by dmmalam • 12 years ago

12 23 12 years ago

bloombergview.com

xherberta• 12 years ago

Retitle: people are easy targets for bankers because people are ignorant.

drewdil• 12 years ago

Basically: We shouldn't regulate banks because people will still dislike bankers.

Likability isn't really what we're going for.

ForHackernews2• 12 years ago

Distrust of bankers is deep-seated and centuries old. In times past, usury was a sin.

Obviously there are important advantages to society from having a modern financial sector, but the public is not entirely wrong to be suspicious of the ill-gotten gains of financial wizards who conjure profits by shuffling numbers around rather than performing more obviously useful work.

wprl• 12 years ago

What are the advantages? What are the disadvantages?

ForHackernews2• 12 years ago

In principle, the main advantage is fast and efficient allocation of capital.

The disadvantage is that human beings are greedy, fallible creatures and they're often more interested in enriching themselves.

Eric_WVGG2• 12 years ago

Most people’s understanding of mathematics, astrophysics, chemistry, biology and plumbing is much lower than their understanding of banking. They are, indeed, largely “ignorant” of these topics. But I’m not aware of commonplace hatred of mathematicians or plumbers etc.

There’s a big world out there, and the term “renaissance man” exists because it is no longer possible for anyone to have excessive knowledge outside of a few chosen interests; thus the notion of a connection between ignorance of a topic and hatred of its masters is quite ignorant indeed.

People hate bankers because they are individuals who have chosen to master a field whose intellectual demands are only barely above-average, but have a very large window for disproportionate rewards.

vonklaus• 12 years ago

While I more or less agree with your conclusion, as one of extreme simplicity I think there is a major flaw in your hypothetical. Most people don't regularly deal with chemistry, biology, and astrophysics. Plumbing is rather commonplace and while I would't expect an average person to understand the intricacies of a complex system, they know enough to simply "get by" by fixing small issues if they choose.

Eric_WVGG2• 12 years ago

Good point. Perhaps a better comparison would be doctors?

retroencabulato• 12 years ago

"People shouldn't hate bankers because it is their fault they accept misleading information."

jonnathanson• 12 years ago

Some good points at the beginning, but then I got to this gem:

"The 1 percent preys on the 70 percent of U.S. illiterates, not because they are poor but because they don't know enough to make informed decisions."

Since when is taking advantage of people's ignorance an ethical defense of one's behavior? This is crass victim-blaming. Sure, one could argue that most profit in most businesses directly results from some sort of information asymmetry, i.e., between the two parties to any given transaction, compounded across all parties in all stages of any given value chain. But this is different. If you're offering predatory financial services and products to underinformed people who are ill-equipped to bear the risk of what you're luring them into, you are acting at best amorally. And amorality is a generous assessment in many of the cases that have come under scrutiny in recent years.

One can mount plenty of credible, justifiable arguments for banking and finance. "People are suckers" is a pretty lame one. Yes, more people ought to learn about personal finance, and about the basics of finance in general. This is partially a failure of our education system, which used to teach these things in now-ridiculed subjects like "Home Economics." (Which we ought to dust off, update, add some additional rigor to, and bring back into the standard high school curriculum. But i digress.)

No matter the case, this sort of sentiment does its author no favors. It undermines the rest of the piece, which makes legitimate points.

vixin• 12 years ago

Ethical defense? Where do you get that from? Commonsense tells us that the author could not possibly know the moral intentions of that 1% and uses <metaphor> to illustrate a fact known to all of us and relevant to our life in general - that Ignorance can lead one to take the role of prey.

Your other little gem is 'Sure (!) one can argue that most profit in businesses ,,.. results from information asymmetry'. Since I myself must now press on with ensuring my customers don't know what I know, I can only think how uncomfortable you must be in the modern world.

dobbsbob• 12 years ago

Samuel Johnson defined bankers in the eighteenth century as "One that trafficks in money". Italian Kings in the fifteenth century had them expelled or executed. Solon of Athens couldn't stand them either. The three major Western religions also forbid the collection of interest on loans, further casting bankers into the depths of hell /s

carsongross• 12 years ago

Conclusion does not follow. People are certainly ignorant, but even an idiot can see that the TBTF banks are filled with useless douches who'd be out on their ears if it weren't for sugar daddy government papering over their mistakes in the name of systemic stability.

But then, what would you expect from someone paid by Bloomberg?

fenomas• 12 years ago

"Look, the only reason people are suspicious of conmen is that they're not good at telling which of three cards is the Queen."

coreymgilmore• 12 years ago

Why do people hate bankers: simple, banking isn't easy and the literature is too complex.

While not about normal everyday banking, there has been much research into financial statements of public companies and the readability of these reports [1]. Basically, how can most people understand banking/financials when the general readability of the documents has gotten to a point where even an MBA does not understand parts of them? Now, go into any local bank branch and the documents they have for consumers is just as vague, difficult to understand, and "transparently" informative.

As for simple. Banks have gotten better at this with mobile apps. But branches still neglect simple customer demands: stay open beyond normal working hours (9am-5pm), allow easy payments via ACH/Wire, and reduce the complexity of the loan process to name a few.

[1] http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1868591

jacknews• 12 years ago

If people really understood what bankers do, they'd hate them even more.

For a start, the fractional reserve system is simply parasitic, the very foundation of our financial system has a built-in backdoor through which the banks extract rent.

gumballhead2• 12 years ago

Right. Except bankers don't understand finance either, but they think they do.

And when they showed that to the world by breaking the entire financial system, instead of having to pay the price of hubris, these champions of capitalism instead got access to the public treasury because they were too big to fail, and were consolidated into banks that are now too bigger to fail.

And now they're paying the media to say that people hate bankers because they're not as smart as them.

dba7dba• 12 years ago

"Except bankers don't understand finance either, but they think they do."

Amen to that.

Your own analyst tells you half the mortgages in the pile are toxic. But the banker tells the analyst to shut it and make the pile look good so the bank can sell it to 'investors'. Some banker.

rismay• 12 years ago

Seriously. People hate bankers because bankers are ignorant to their own behavior.

gumballhead2• 12 years ago

That third question is a bunch of shit anyway

quarterwave• 12 years ago

The 2008 crisis showed that systemic risk in the repackaging business far outweighs the fine print in retail investment products. If people are upset it's not due to their ignorance but because of the feigned ignorance of those experts whose job is to study and understand risk, especially at government regulatory offices. The sporting equivalent would be for a commissioner to wax eloquent about the 'glorious uncertainties of the game' when the reality is a less-than-glorious certainty of match-fixing scandals.

eximius• 12 years ago

No, people hate bankers because they are leeches, as demonstrated by this article.

joesmo• 12 years ago

People are stupid about everything, not just finance. That doesn't imply causation of hate.

People Hate Bankers Because People Are Ignorant

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