Do congressmen know anything about anything?
Perhaps that’s an unfair question. These guys demonstrate a whole heckuva lot of savvy when it comes to logrolling, porkbarrelling, taxing, spending. Oh, and sniping, grandstanding and griping, and of failing to read bills they pass. I apologize if I implied any deficiency of proficiency in such areas.
I just wonder whether they know anything about real life outside the ways and byways of Capitol Hill.
For example, on the question of whether altering investment strategy in response to changing economic news constitutes “fraud.” If risk management equals fraud, lots of firms should close down tomorrow to protect themselves from congressional subcommittees eager to pretend that government policies have played no major part in screwing up the economy.
Power Line blogger John Hinderaker, after wading through transcripts of the senatorial interrogation of officers from Goldman Sachs, concludes that the senators, “seemingly without exception, are embarrassingly ignorant of modern risk management techniques. . . . [of] how and why firms like Goldman Sachs hedge their exposure to various economic trends . . . [They seem] to think that there was something ‘evil’ about taking a short position — that all investors were somehow required to try to keep the housing bubble going.”
Hinderaker’s observations are more detailed than I can recapitulate here. But the bottom line — that those who would run our lives don’t understand the bottom lines of those who actually work and trade for a living — is nothing new.
This is Common Sense. I’m Paul Jacob.