Goldman beats up girls (or at least girlie-men)
One of the many reasons to hate Goldman is that it is hard to stop thinking about them. Sure a good paradigm is a terrible thing to waste, but at some point enough is enough.
Not yet apparently. Last night it occurred to us what this whole Goldman, Paulson, IKB (the German bank on the losing side of the trade) episode really is: a manifestation of modern gender confusion.
What Goldman did basically was beat up a girl. Even in our depraved modern world boys beating up girls really outrages people. But, in part because of our modern depravities, the government can’t charge Goldman with beating up a girl. Instead it is charging Goldman with fraud, a politically correct offense the government won’t be able to prove.
We understand this in part because we are old enough that one of us, Andy, actually started his education in an all-boys school. Like most boys’ schools it had a very clear mission: turn boys into men.
The boyz-to-men code was fairly straightforward. At bottom, what made you a man was that you protected women and children. At a minimum you gave them your seats on the lifeboat of the Titanic; if opportunity presented itself your chivalry might extend as far as administering the occasional horse whipping to the sort of males who trespassed the code.
Boys’ schools, being short on women to defend, developed a two-step “practice” version of the code:
- Defend or at least do not oppress the weak, i.e. weaker or younger boys at school.
- If you happen to be the weaker, younger boy getting roughed up don’t go crying to mother.
Before Andy graduated the school went co-ed, which complicated the code but did not fundamentally alter it. Beating up on girls was obviously a hanging offense; on the other hand girls were allowed to go crying to mother.
Flash forward forty years to a culture in which it is completely unacceptable to define masculinity as defending women and children, or perhaps even to define masculinity at all. It is, we suppose, still acceptable for men to come to the aid of women in actual physical danger, say from a mugger; but certainly not to give any hint that this is more proper than a woman leaping to the defense of a man, or that a self-respecting man would refuse such help and take his lumps so the woman could get to safety.
For any more humdrum circumstance, like the sort of muggings that might occur on the trading floor, the notion that men should defend the weaker sex has gone the way of, well, the weaker sex. And if you are tempted to think, ‘oh, well at least men still defend children’, consider that perhaps half of American children are effectively fatherless. And contemplate the fate of politicians who even fleetingly suggest that single-mother households are sub-optimal.
What does this have to do with Goldman? Start with the obvious: there was no fraud. All parties to the transaction knew that a synthetic CDO is a pure casino bet, created only to facilitate the trade in question. The notion that an honest, ethical synthetic CDO is one that favors the long bettor over the short, one that references more good mortgage securities than bad is exactly equivalent to the idea that the ethical way to build a roulette wheel is to ensure that black will prevail over red.
Everybody gets the obvious: If Paulson set conditions for CDOs he was willing to bet against, then IKB, the German bankers on the other side of the trade, could and should have set conditions for CDOs they were willing to bet on.
What really enrages people is the mismatch. They are enraged that Goldman didn’t tell the Germans “hey you might want to know that the guy you are betting against is the biggest, baddest, and way smartest dude on the playground and compared to him you guys are just a bunch of girlie-men.”
People are mad at Goldman for the same reason they are all too tolerant of the pathetic German dweebs who got what they deserved.
They are mad at Goldman because gentlemen don’t beat up girls. Goldman’s crime was not in “rigging” the CDO against the Germans, their crime was in throwing a couple of alumna of the all Deutschland synchronized swimming team into the ring with the heavyweight boxing champion of the world.
As for Germans crying to mother, girls are allowed to.
AR&RV
Tags: Andrew Redleaf, Goldman case, IKB, John Paulson, Richard Vigilante
