Friday, March 20, 2009

The Financial Mess: People Still Don't Get It

I love Jeffrey Feldman and his blog Frameshop. Feldman does a nice job talking about politics and language, a subject that up until a few years ago was the domain of the GOP (until George Lacoff put out his seminal piece Don't Think of an Elephant).

This brings up a continuing problem: most politicians (of all stripes, but the problem is particularly particularly pronounced among the Democrats and those futher to the left socially) don't understand the worlds of business and finance. I'm not talking about a disagreement between capitalism or socialism/communism; that's not even an argument in anyone's mind who lives in the Northern Hemisphere. I'm talking about the functional understanding of how businesses and financial systems work.

As an individual instance, Feldman wades in and tries to create an issue over counterparty payments on credit default swaps in the case of everyone's favorite bailout recipient, AIG. The problem is that he either has no idea what he's talking about, or he's deliberately framing the issue in a way that casts negative light on AIG and other financial firms for strategic/tactical purposes. If it's the latter reason, I understand. I don't think it's appropriate, and it's hypocritical to engage in the same behavior for which he finds moral fault with movement conservatives, but I understand. However, I feel relatively certain that he simply doesn't understand the why behind counterparty payments. Read my response and position in the comments section of Feldman's original post (I'm jrr2ok, natch) or on Disqus under jrr2ok (which, of course, doesn't integrate with Blogger, but that's a different topic).