Enlightened Self Interest and Financial Industry Hypocrisy - Chapter Two of Three

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Enlightened Self Interest and Financial Industry Hypocrisy

Chapter Two of Three

We Eat What We Sow

 

An Old Fashioned Rant By

Cognitive Dissonance

 

 

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Chapter One may be found here.

I've written before about unspoken and unacknowledged collective understandings, where the herd cognitively gathers in agreement as if compelled by a special attractor, but without clear and acknowledged leadership. The dynamics of crowd psychology are not well known to the average Jane and Joe, yet it does have an effect even when the crowd is widely disbursed. Some might call this the collective unconscious, others simply the collective will or the herd mentality.

As infuriating as this concept is to some people because it points a finger squarely back at ourselves, the Federal Reserve is powerless without us agreeing to buy in and dance to the music, however reluctant some of us may be. Ultimately it is our own personal decision to pursue our perceived best interest that imbues the system with its controlling power. Combine this with a deliberately rigged game that relentlessly drives us in that direction and you have a pliable herd composed of many independent entities practicing so called enlightened self interest.

In other words, while the Fed and others might be a central authority, ultimately everyone must decide on their own if they wish to go along. This requires the practice of collective or group unenlightened self interest where nearly the entire population decides it is best for each and every one to go along to get along. Denial helps because we individually declare our actions enlightened self interest to help the bitter medicine go down, no doubt greatly helped along by state propaganda of the glory and solidarity of “We the People”. 

We don’t need to agree with the insanity, just don’t fight the general movement towards the black abyss. These manipulation techniques are the ultimate in divide and conquer practices while also allowing all of us to believe we are exercising free will to pursue our own best interest while still acting for the greater good of the group. This isn't about morality since ultimately the majority determines what is right or wrong, moral or immoral. This is about survival of the group to benefit each individual and vice versa. And when it goes horribly wrong, as it is now, it is all consuming.

This is the control system at its most basic level and insidious nature. It places us all in a situation where we must make our own decision to dance as long as the music is playing, because the alternative, especially at this point, is personal isolation and collective collapse. The worse it becomes, the more likely it will be that we decide to stay within the herd because of its perceived safety, thus producing nature’s perfectly insane positive feedback loop.

So how do we live with ourselves once we decide to dance, even if we are faking it or extremely reluctant? What large or small adjustments do we make to our thinking to cover up the fact that we are enabling the very system we describe as evil?

We all cope with our own subterfuge in various ways and our methods vary endlessly as the situation dictates. But the process itself never changes. First we deny, then we deny we ever denied, and then we forget we were ever in denial. Man is an extremely efficient organic computing machine, so this is just kid’s stuff we learn right out of the crib.

 

The State of Denial

The Great State of Denial

 

More and more these days I am reading articles from respected industry insiders who explain there is serious rot and corruption within the system. While many are still desperately clinging to the idea that it can be reformed from within, a steadily increasing minority of professionals are beginning to declare that a constructive destruction must take place not only to rebuild, but to cut off the stinking head of the rotting fish.

Since both enlightened and unenlightened self interest would appear to preclude a disorganized dismantling and rebuilding (after all, there must be something in it for me and utter collapse serves very few of the masses) let’s move beyond this and look at what is going on under the psychological hood.

Usually in the same article declaring the inevitable destruction of the financial and social systems, these very same people will also proclaim that there is much money to be made within the system before, during and after its destruction. And often they will evoke the concept of Enlightened Self Interest as justification, or simply as an ‘a priori’ explanation for why they will continue to trade within, and profit from, the very same system they denounce.

From what I can discern about many of these authors, they are usually consummate professionals and operate using the highest legal and ethical standards that society has declared desirable, but in general rarely practices. So while mom always warned me not to assume anything, for the sake of the argument I will assume they would not be promoting the destruction of the financial system they have spent most of their adult lives working within unless they felt it was well beyond redemption and must be killed, or allowed to die, in order for you and I, and more to the point, for them to survive.

I suspect they followed a long and agonizing path before coming to this demoralizing conclusion. I whole heartedly agree with them on this specific point and I am sick to my core that there is no other way out of the insanity that people will willingly pursue to change the system we are wed too.

One doesn’t advocate destroying something you have believed in, trained to be a part of, and have earned a living from without great soul searching. Anyone who declares the system must fall should be applauded for his or her guts and self examination. It was probably one of the most difficult conclusions they ever came to and an extremely conflicting decision to go public with. I know it was for me.

 

Deny Denial

Soul Searching

 

What got me really thinking are comments similar to this one by some of the very same people who are advocating the fall. “As long as the music plays and money is to be made, I’m going to attend the dance.” Which in one form or another is pretty common not only among those ‘in the business’, but also among non financial professionals who trade or just invest either for a living….or just to make an extra buck.

And for that matter, in a general sense by average Jane and Joe, who use this concept to explain why they go along to get along. In essence it’s like having your cake and eating it to. I may want the system to collapse (or at least stop torturing me) but I am still going to make money betting on the Titanic as it makes its way down. Or at least continue to work that ‘career’ job, buy that bigger house, take on more student debt or buy those neat boy and girl toys on credit with no money down.

The profit making need/opportunity is a pretty common declaration by those within the financial industry, and in my opinion this is said to justify our continued participation in the very system we denounce. Unfortunately I hear very little about the need to protect their clients by putting them in alternative investments less correlated to the coming fall.

What is rarely spoken of is that oftentimes those alternative investments are not very profitable to the industry professional. Cash, precious metals, investments in local business etc don’t pay the broker’s bills because they can’t be managed, thus the brokerage houses can’t demand an ongoing management fee. Let me stress again that up until very recently I was a part of the system and thus I am throwing stones at my own glass house.

This is the reason why you will find no articles from me in the archives discussing trading strategy. It was one of my ways of dealing with my own hypocrisy. Another was promoting those alternative investments, though admittedly that rarely works out well for the client when the herd is off feeding in another pasture. It takes a strong constitution to be a contrarian cow.

Again, I am speaking only of myself and the industry in general here. But it does sound like ‘We the Financial People’ might be harboring a glaring cognitive dissonance combined with serious denial. And this extends straight back to the general population as well.

Tens, hundreds of thousands of financial salesmen, advisors, traders, analysis, floor specialists and executives who have ever bothered to examine what it is they are doing and who they are doing it with have said something similar to the fictitious comment below.

But of course I trade stocks and bonds. Enlightened self interest is what it’s called. I have to eat, don’t I?

Who could argue with that ethical position when stated by a high caliber individual? Well, I can….at least for the purpose of this article. And while I’ll try to argue both sides I am consistently critical not only of the financial industry, but also of many ordinary people (meaning non financial) who proclaim their own version of Enlightened Self Interest to explain their “go along to get along” policy. So I have an admitted bias here which I have no intention of hiding.

 

Enlightened Self Interest

Enlightened Self Interest

 

Let’s start with some definitions because I’ve found that arguments (even when between me, myself and I) are less likely to lead to blood when common terms and definitions are established in advance. First let’s try “Enlightened Self Interest”, the definition of which was pretty uniform between Wikipedia and three different dictionaries. So here’s the Wiki on it.

Enlightened self-interest is a philosophy in ethics which states that persons who act to further the interests of others (or the interests of the group or groups to which they belong), ultimately serve their own self-interest.

It has often been simply expressed by the belief that an individual, group, or even a commercial entity will "do well by doing good". Enlightened self-interest might be considered to be unrealistically idealistic and altruistic by detractors and practically idealistic and utilitarian by proponents.

And let’s quickly look at ethics as defined by Wiki.

Ethics, also known as moral philosophy is a branch of philosophy that addresses questions about morality—that is, concepts such as good and evil, right and wrong, virtue and vice, justice, etc.

And one more time, only this time it’s the other side of the highway. Sometimes it helps to understand a phrase or concept if you look at its alter ego or mirror image. Let’s look at the definition of Unenlightened Self Interest from the same source.

In contrast to enlightened self-interest is simple greed or the concept of "unenlightened self-interest", in which it is argued that when most or all persons act according to their own myopic selfishness, that the group suffers loss as a result of conflict, decreased efficiency because of lack of cooperation, and the increased expense each individual pays for the protection of their own interests. If a typical individual in such a group is selected at random, it is not likely that this person will profit from such a group ethic.

Some individuals might profit, in a material sense, from a philosophy of greed, but it is believed by proponents of enlightened self-interest that these individuals constitute a small minority and that the large majority of persons can expect to experience a net personal loss from a philosophy of simple unenlightened selfishness. Unenlightened self-interest can result in the tragedy of the commons.

OK, this really is the last time. Let’s move quickly to define tragedy of the commons. Wiki again….

The tragedy of the commons is a dilemma arising from the situation in which multiple individuals, acting independently and rationally consulting their own self-interest, will ultimately deplete a shared limited resource even when it is clear that it is not in anyone's long-term interest for this to happen.

Let me start off by saying that no where does it state that any of these definitions are strictly financial ethical doctrines. More than likely it started as a general social belief and was adopted by financial professions, though I haven’t done any research to determine its genesis and evolution. Of particular interest to me is how difficult it is to measure how well this ethical standard works in the best of times, let alone in a financial world that has turned (some would say always was) corrupt and (self) destructive.

It could be argued that every Too Big To Fail (TBTF) Goldman Sachs, JP Morgan or Bank of America employee was, and is, acting to further the interests of the group to which they belong and are employed, thus they are doing well for themselves by doing good for their group. The same applies to any financial professional (not just those working in a TBTF bank) even those in small firms or working a solo practice. Supporting the financial profession by supporting yourself is essentially working in and for a group.

So how is Enlightened Self Interest (ESI) any different from Unenlightened Self Interest (USI) as long as it serves the group and the group believes they are working towards the greater good? Those bonuses come out of a pool, don’t they? And that bonus pool is designed to benefit the greater good of the group, right?

 

Bonus Pool

Bonus Pool

 

Ethical and moral behavior, it can be argued, is context and situation sensitive. And like the definition of insanity or anti-social behavior, ethical behavior is determined by the majority, be it local community, state, national, global, corporate or institutional in scope. As well, the time/era in which you live determines what is right or wrong; or more to the point, good and evil.

Slavery was considered ethical by the majority (at least by the non slave majority) for centuries, millennium even, as long as you did not abuse the slaves…..too much. After all, some beatings and even murder were considered fair game if the slaves’ transgression(s) warranted it. The slave was your property and you could destroy it as you wished. At least that was the justification.

Of course the judge, jury and (slave) executioner were usually the same person and the property did not have a say in the matter. I remember reading a quote by some southern Congressman from that era, who said that you do not usually consult your cattle about your dinner menu, now do you?  

The ‘moral’ justification for slavery, which in its basic economic form is purely an unequal and unilateral financial arrangement, was manufactured by declaring that we were saving those poor uneducated savages from themselves, a moral argument used by the powerful for eons. So in effect we were improving their lives despite their protestations otherwise, often expressed in their repeated efforts to escape.

Even today this moral argument is frightening similar to what we convince ourselves is the ‘truth’ behind our actions just before we invade a foreign country and kill tens of thousands, even millions, of innocents. We trot it out to explain why we are bombing some near Stone Age people back to the Stone Age. Yup, we’re just exporting the shining light of democracy while liberating some unappreciated and unexploited natural resources. Viewed in this light, those brown, yellow, red and black savages should just be grateful and shut up.

Take your pick of the era you wish to examine because it does not matter. The soon–to-be dispossessed are always considered uneducated savages, or better yet ‘evil’, in the eyes of the master(s) in order to dissipate any moral quandaries on the way to higher profits. So while we may wish to believe we Americans are just victims, or even victimized wage slaves, we are in fact junior masters enabling the supreme masters.

That is until our own time in the Stocks and Pillory comes around…..again. And this time it won’t be so narrowly constructed to disenfranchise a race of people, but rather an entire economic class within many nations. Equal opportunity and all that you know. In fact it appears to be happening right now in middle-class America.

 

Stocks and Pillory

Stocks and Pillory

 

The Chicago mob, temporarily transplanted to DC to create a more powerful synergy with Wall Street and the Fed, certainly has its own moral code and set of ethics. Consider Omerta, or the code of silence, which when implemented within the clan most definitely fits the definition of individuals acting to further the interests of the group aka Enlightened Self Interest. And they certainly feel they are doing well for the group by keeping silent…..so what right do outsiders have to question their motives and methods?

In fact I suspect one would need to look long and hard to find individuals or groups involved in illegal and ‘immoral’ activities who don’t feel justified in their actions, and even morally correct. This extends to little ole you and me as well, though admittedly on a much smaller scale….I hope. But remember what mom said, it is the intent that really matters, not necessarily the action alone. And our legal code reflects this view, with varying degrees of guilt and punishment……sorry rehabilitation, based upon intent and remorse for our illegal actions.

Who hasn’t ‘liberated’ office supplies or copy paper and ink from the office supply depot or ‘spent’ a few hours of a day surfing the Internet and shooting the breeze with friends or co-workers. When that cute little number behind the counter (male or female, it doesn’t matter) gives you too much change back do you always promptly return it? Sure…..if it’s an extra quarter or even a few singles. But I’m certain you would be morally and ethically tested if a few twenties were mixed in with the ones or two hundred showed up in your bank account.

Granted, there is all the difference in the world between droning innocent civilians in a wedding party or engineering a false flag attack (9/11 for example) to justify renewed expansion of the financial/military/industrial/pharma complex, and you or I pilfering some plastic pens from the supply closet. But all these actions begin with the desire to pursue self interest and it is simply a matter of scale and degree of psychopathy involved.

Our culture conditions us to believe there is room to fudge in all things ethical. If we give ourselves wiggle room and then exercise that discretion, we are more likely not to point fingers at those who also wish to exploit this character weakness for their benefit. Remember the classic ‘Bank Error in Your Favor’ by way of Parker Brother’s Monopoly, who taught us ethics and morality during make believe game time? The bank error was a capitalism windfall, not a time for self reflection and soul searching.

Not only is capitalism fun and profitable, but ethical lines can be smudged if they fall in our favor. Notice how quickly and eagerly we took the ‘Community Chest’ bank error ‘free’ money. And best of all it was sanctified and codified by the Monopoly rule book. And wasn’t it odd how the Monopoly ‘banker’ almost always won the game? Life lessons writ large and they certainly come in handy when dealing with modern day trading and buying the freaking dip to front run the Fed. 

Or let’s say you are hurting for pocket money when you stumble upon a wallet with four hundred dollars inside. It’s real easy to pull the cash, then contact the owner and say it was empty when you found it. Or better yet, you can sooth the guilty conscience by just trashing the wallet, then hitting the bar to get trashed with the free cash.

Why would you want to look the owner in the eye after keeping the loot? Too damn messy, and totally unnecessary. “Finder keepers, loser weepers” is how we call that dice roll, particularly when it is in our favor. How many times have we seen or read a news story of someone finding several thousand dollars and promptly returning it. It was ‘news’ because it was expected that most people would not do so. So it seems we are nearly all whores of one sort or another and it’s just a matter of the cost for our services.

 

Bank Error

"Free" Money

 

Some difficult questions need to be asked of “We the People”. Is our anger with the Fed, the TBTF banks and other assorted Ponzi Goodfellas really righteous indignation at the injustice? Or deep down in a place we rarely ever acknowledge even exists, is there abject jealousy and we won’t admit it to ourselves or to anyone else? Flash back to grade school when Johnny and Joey were cheating during the big end of semester test. You studied your butt off for days and here these bastards were passing notes and signals to each other on their way to passing the test. That just chapped your ass, didn’t it?

Were you really that pissed because they were ‘just’ cheating? Or maybe it was really about them getting away with it, thus they would profit from their unfair and ‘illegal’ activity with little to no effort involved? And here you were struggling just to keep your head above water. Worse, their stolen grades might push you lower in the standings.

And the bastards were so smug as well. Boy, didn’t that just burn your butt? And you knew that if you turned them in they would pound the living daylights out of you. So even if justice was served, you would suffer far more than they would. Nope, none of this is the reason why you and I are so angry with the Ponzi.

We’ seem to be expressing a lot of anger when we see people living mortgage payment free for a year or two. So much anger in fact that we tend to support the Ponzi’s efforts to evict them even if some of them were defrauded on several levels when they ‘bought’ their loan and home. Do we feel those squatters are cheating when you and I are not and so they should be punished?

Maybe we’re just angry at ourselves because, for whatever reason, we won’t do the same thing. Perhaps we don’t wish to ruin our credit rating or we have actual equity in our house because we followed the old school rules and were responsible and played ‘fair’. Sum-bitches are getting away with murder and a free ride while we are slaving away on our exercise wheel.

Wait a minute; I thought we wanted the system to collapse? Won’t non performing loans and underwater banks help bring the evil empire closer to the brink? If that’s our stated goal, then why aren’t we cheering on anyone or anything that brings eventual justice to the equation? Oh, that’s right; no one else can profit from the demise of the evil empire….except me and my trading because I know I’m (mostly) pure in thought and deed. That hypocrisy just stinks when it’s been left out to thaw for too long.

 

The Cognitive Fog of (Personal) Corruption

The Cognitive Fog of (Personal) Corruption

 

So does this mean we would rather bloody our fellow slaves because they are enjoying better gruel than us? Are the squatters displaying Enlightened or Unenlightened Self Interest here? Even if they weren’t defrauded, why can’t the junior master slaves treat life as nothing more than a business decision just like the big boys? I know, I know, it’s not as simple as that……but maybe it is. Divide and conquer is the favored tactic of the supreme masters and we seem to have taken the bait in the pursuit of our own Unenlightened Self Interest.

Before the reader’s righteous indignation becomes inflamed by the prior paragraphs, consider that for decades after World War Two Americans (and the citizens of many other so-called first world nations for that matter) have had a sort of laissez-faire attitude regarding government corruption as well as individual and corporate profiteering. As long as the skim from the scam was kept down to reasonable levels and every deserving (read productive) citizen received a taste, or a piece of the action, our eyes were blind and turned away. I remember trickledown economics as just one of many examples. Sounds like a collective bribe by any other name to me.

This is exactly how a crime family works, with all productive workers (i.e. citizens) getting just enough of a taste of the profits (subsidized employee health insurance, tax deductible mortgage interest, 401(K) profit sharing, deferred compensation, Social Security and Medicare etc, cheap and easily accessible money etc) to be mostly sated, but not so much as to become complacent.

Show me the significant difference between The Godfather and the government or the Godfather’s ‘soldiers’ and ‘We the People’. Contrary to popular belief, only the mob bosses lived the high life. The workers and soldiers, while living better than the average standard of living wage slave, did not live extremely well. 

What’s that you say? ‘We the People’ are doing ‘good’ and the Goodfellas are doing ‘bad’? That we have no control over the economic situation and that it is the bad guys who are to blame? That might be so to a limited extent now that the vampires have completely taken over. But ‘We the People’ are not the innocent victims we desperately wish to paint ourselves as. The simple fact is, now that it has become inconvenient for the masters to continue to share the profits, we are being cut out of the deal and told tough stuff.

The masters have unilaterally changed the rules of the game and we aren’t happy. What are we going to do about it? Theoretically, this is where we the workers conspire among ourselves to take back what is ours, meaning a piece of the action just like the good old days. Unfortunately, after five or six generations of fattening before the slaughter, the American workers have become literally and figuratively obese dependent zombies.

 

04-16-2014

Cognitive Dissonance

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