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View Diary: Morning Feature: Conspiracy Theory 103 - Conspiracies of Convenience (Plus Kossascopes) (178 comments)

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  •  I guess my question is, at what point does (14+ / 0-)

    a conspiracy of convenience evolve into a conspiracy of causation? While I don't believe that the banks set out to destroy the financial system, I do believe that when they recognized that was the consequence of their actions, rather than retrench and try to correct the problem, they doubled-down in an effort to maximize their short-term returns at the expense of long-term stability.

    What began as a conspiracy of convenience became much more dastardly as events unfolded, causing events by which they did benefit.

    "If a free society cannot help the many who are poor, it cannot save the few who are rich." JFK - January 20, 1961

    by rontun on Fri Apr 03, 2009 at 04:37:51 AM PDT

    [ Parent ]

    •  I guess when you can prove causation (10+ / 0-)

      A plausible explanation is not an actual explanation until there's evidence to back it up. I imagine that every lawyer is taught this in law school. In science too.

      Correlation + provable strong linkage = probable causation.

      He who tills his land shall have plenty of bread, but he who chases fantasies is void of understanding. (Proverbs 12:11)

      by kovie on Fri Apr 03, 2009 at 04:48:02 AM PDT

      [ Parent ]

      •  Exactly. (6+ / 0-)

        Merely that someone acts to benefit by an event does not prove they caused that event.  Otherwise in most homicide investigations all you would need is proof that the suspect was the beneficiary of an insurance policy on the victim.  That may suggest motive, but absent some evidence that the suspect actually caused the death of the victim, it's not enough to support a charge of murder.

        Good morning! ::hugggggggggggs::

        •  We see this logic a lot in conspiracy theories (3+ / 0-)
          Recommended by:
          kovie, blueness, NCrissieB

          Investigations proceed based on multiple factors like means, motive opportunity and ultimately evidence.  Conspiracy theorists will sometimes focus on just the motive, even if the means are impossible, or the evidence points elsewhere.

          The common refrain of CUI BONO---"who benefits"---is used as a defense by 9/11 conspiracy theorists even as their MIHOP theory contradicts DNA evidence, seismic evidence, and logistical sanity.  In the end, the mere fact that their favorite demon benefits from the disaster will trump all else.

          Indeed, I have observed that the evidence pyramid is often completely reversed in a conspiracy theory.  Hard physical evidence is trusted the least (for it could be manufactured and planted.)  Yet, JPEGs taken from a video clip with an arrow and the word "squibs" photoshopped on top is considered a smoking gun.

          The grand majority of eyewitnesses are not trusted, yet an individual witness whose story is different is assumed to be right---until that witness says he was quoted out of context, at which point they don't believe him anymore.

          Likewise with information sources:  scientists and experts are trusted the least (they work for companies, and get money from the government); paperbacks and web sites by conspiracy theorists are trusted more; and ultimately the basic argument of CUI BONO generally trumps everything else in the end.  In other words, for a conspiracy theorist the most authoritative source is his own ideological gut feeling.

          •  Yup, evidence, witness and theory shopping (1+ / 0-)
            Recommended by:
            NCrissieB

            If one looks hard enough and is willing to throw out rules of logic and evidence, sooner or later one can come up with whatever theory one likes to explain some event.

            And I bet that most of these people are just desperate for attention.

            He who tills his land shall have plenty of bread, but he who chases fantasies is void of understanding. (Proverbs 12:11)

            by kovie on Fri Apr 03, 2009 at 12:54:12 PM PDT

            [ Parent ]

    •  They have always done this kind of thing (12+ / 0-)

      I do believe that when they recognized that was the consequence of their actions, rather than retrench and try to correct the problem, they doubled-down in an effort to maximize their short-term returns at the expense of long-term stability.

      And I think this is the consequence of the "culture" many of the players share.  I can't explain it any other way.  I think of what most of us would do and I believe that most of us would look at the mistakes we had made and the chaos it had caused and we would feel shame along with a desire to fix things.  

      These guys don't think that way. Instead they view it, as Crissie has described, as just another opportunity to make more money.  And they do this even though they, as individuals, already have so much money they couldn't possibly need more.  For them, money no longer means the same thing as it does to the rest of us.  It doesn't mean the difference between eating and paying the bills or not being able to do so.  For them, dollars in the account are like little points indicating whether they're winning or losing some ridiculous game they all play with one another.

      They are enculturated to attempt to "win" at all costs and so, to the rest of us, their behavior is inexplicable because we don't share that enculturation.  We were taught in kindergarten that sharing is better than stealing, looting, and hoarding.

      So some people attempt to explain what appears inexplicable by coming up with a secret society having overarching goals of world domination.  But in most cases, this isn't what's going on.  What is going on are the natural kneee-jerk reactions of a privileged group who respond to any crisis or opportunity by trying to grab more.

      They don't need to work at a conspiracy.  Most of the money and power are in their hands and they're going to win in any situation until the playing field is leveled to a far greater degree than it is now.

      "The time for justice is always right now!" - Samantha Booke, Wiley College debate team, 1935

      by Edgewater on Fri Apr 03, 2009 at 04:52:48 AM PDT

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      •  Yes, often true. (8+ / 0-)

        In some cases the actors have a legal duty to try to benefit by whatever opportunities events present.  To some extent, we all have a duty to try to make the most of the opportunities life offers - even when the opportunities come in the form of tragedy - so long as we're not causing harm by doing so.  For example, I'm among many who have suggested that we should see our current economic crisis as an opportunity to reconsider our values and our economic system, and that we should make the most of that opportunity ... again so long as we don't cause harm by doing so.

        Good morning! ::huggggggggggggs::

        •  G'morning Crissie :) (10+ / 0-)

          This idea:

          I'm among many who have suggested that we should see our current economic crisis as an opportunity to reconsider our values and our economic system

          is one I definitely agree with.  

          I think that, while it is true, that some actors have a legal duty to try to benefit by whatever opportunities events present, that they also have a legal duty to not break laws while they do it.  And, the simple legal duty to try to benefit doesn't dictate the route they take to gaining the benefit.  That is, they aren't obligated to take destructive stupid routes.  And yet, as far as the financial crisis goes, we see that this is what they did.

          They didn't choose to play the game within existing rules, they chose to lobby to change the rules so that they could avoid government regulations.  The duty to try to benefit doesn't, IMO, require that but this is what they did.

          So I don't tend to chalk up the current collapse to the "corporate person" legal duty so much as I chalk it up to wanton disregard on the part of individual players for anything other than their own pursuit of profit regardless of the cost to everyone around them.  Human individuals made these decisions.

          I chalk this up to the corporate "culture" where more is good and excess is even better no matter that even a two year old could see that problems were going to rise from current strategies.

          This is where I hope the investigation of our economic system will have an impact.  I hope it will move us toward a mind-set that acknowledges the existance of this corporate culture and finds it unacceptable.  We can't make it go away - but we should regulate the hell out of it and we should lock those regulations beyond the reach of corporate lobbiests.

          "The time for justice is always right now!" - Samantha Booke, Wiley College debate team, 1935

          by Edgewater on Fri Apr 03, 2009 at 05:28:47 AM PDT

          [ Parent ]

    •  Causation can go forward. (9+ / 0-)

      Conspirators of convenience often act in concert to cause the benefits they seek.  But regardless of the extent to which they act in concert to cause those benefits, that does not prove they caused the prior events.  In your example, one could develop reams of evidence showing that some bankers acted in concert to maximize their benefits from the collapse of the housing market ... but none of that would prove they set out to collapse the housing market so they could transfer speculative paper assets into real cash via government bailouts.  And it's important not to mix that latter charge - unproven and probably false - with the more reasonable conspiracy of convenience.

      Good morning! ::huggggggggggs::

      •  OTOH, the bankers DID cause the crash (2+ / 0-)
        Recommended by:
        k9disc, NCrissieB

        to the extent that they caused a bubble whose inevitable result is known to be a crash.  Attaching authorship to individuals in the case of a systematically flawed system that skews priorities and rewards to the unsustainable is impossible, but that does not mean that no blame can be assigned. Demanding strict, demonstrable causality is much more than courts require, and is rarely available even in the hard sciences.  It is not necessary, for example, to prove that the innovators in AIGFP knew in advance that if they took trillions of dollars of side bets on billions of dollars of assets, that they would collapse their company and emperil the financial system enough to require that the gov't cover the bets for them. It is sufficient to show that they negligently exploited their company's AAA rating to sell insurance policies they knew they could not to pay out.

        •  I was careful in my wording for that reason. (2+ / 0-)
          Recommended by:
          Snarcalita, kktlaw

          Bankers did cause the banking collapse.  No doubt about it.  Whether through incompetence or sheer greed, they practiced banking in a way that all but guaranteed the collapse of the system.

          The causal question I addressed is whether they intentionally collapsed the system in order to transfer speculative paper assets into hard cash via government bailouts.  Some have made that charge, but I've not yet seen any hard evidence to back it up.

          Good morning! ::huggggggggggs::

          •  But that charge is such a reach (3+ / 0-)
            Recommended by:
            elmo, NCrissieB, kktlaw

            as to be a strawman.   They didn't need to cause a crash, they were happy making money while the ponzi scheme was going, knowing that they bore no risk. To claim they intentionally triggered the collapse is extreme, and I have not only not seen evidence of that, I haven't even seen that charge made.
            We have seen evidence that a bear attack on Bear Stearns and then Lehman brought them down intentionally, but even the perps had no idea they could topple their whole house of cards. As for triggering a housing market crash, that is pretty much impossible to do intentionally, other than by following the course the fed and bankers took and their motivation is sufficiently explained by their earnings from the bubble, and doesn't require that they did anything with the hope of causing a crash.

            •  I've read it here on DKos. (2+ / 0-)
              Recommended by:
              winterbanyan, kktlaw

              I don't remember whether it was in a diary or a comment, but the specific charge was that bankers engineered the failure of the financial system in order to transfer their speculative paper assets into hard cash via the inevitable government bailouts.  It was first proposed back in the autumn during the TARP mess, and I have seen it again since.

              And yes, it's a reach.  To get there you need more than "they favored deregulation; deregulation allowed huge piles of speculative assets; the banking system began to collapse; those speculative assets will now be bought out by government."  The sequence of events did happen, but its mere happening doesn't prove they intended it to happen that way.

              •  I think that's a possibility. (2+ / 0-)
                Recommended by:
                Skex, NCrissieB

                Although not to make money, but to protect and increase marketshare.

                Although, I've not stated it as fact, I have made a similar argument.

                The thing is that there is a flip side of 'conspiracy of convenience' and that is the incompetence argument.

                They just made mistakes.

                Well, why do the mistakes always wind up hurting everyone but those who cause them?

                "But it does hurt them! Bill Gates lost ten billion dollars!"

                Sure he lost money, but he gained marketshare.

                I realized that economic collapse was a given about 1998, and I'm just a silly little dog trainer.

                You can bet that people with tons of money that were driving the market saw that too.

                And yet what happened? Did we pull back from the brink? Nope, we threw gas on the fire and crafted all kinds of legislation to insulate the mega rich from harm in a collapse. We also crafted legislation that gave creditors the title to anything that people have that is valuable - homes (credit card bill).

                So what harm to the uber wealthy was there in breaking the system? What benefits could they reap?

                I don't think it's at all out of line to think that there could have been a conspiracy to bring down the economy quickly in order to capture marketshare.

                Given the freetrade movement's disdain of national sovereignty, some choice quotes from the Rockefeller's of the world historically, the naked short selling last September and the current path to redemption, it looks even more compelling.

                Is it the truth, I'm not going to say that. Is it the only answer? I'm not going to say that.

                Is it a possibility? Absolutely.

                Is it a better explanation than, "it was just a mistake?" I think so, but that's just me.

                Lose money gain marketshare is how I see it.

                Democracy - 1 person 1 vote. Free Markets - More dollars more power.

                by k9disc on Fri Apr 03, 2009 at 07:22:33 AM PDT

                [ Parent ]

              •  hard cash (1+ / 0-)
                Recommended by:
                NCrissieB

                What is that, exactly? The government has had to borrow to bail out these financial institutions. In an economic sense, aren't you just replacing one kind of debt with another?

                •  One was purely theoretical money (1+ / 0-)
                  Recommended by:
                  NCrissieB

                  The appreciated assets in these speculative markets only existed in theory. They don't represent hard asset in the real world. You know like land and food and work hours.

                  The financial economy is for the most part fantasy football overlayed upon the real economy where goods and services and produced and traded.

                  Those assets were long ago detatched from the real economy after the innitial offering was placed save for the rare case of dividend paying stocks.

                  These assets have as much real absolute value as that top payout listed on a slot machine in Vegas until triples 7s come up it doesn't really exist.

                  This is what people are saying when they say that the bailout is turning these fictional assets into hard assets because the revenue that the government is borrowing to make good on those bets will come from tax revenue on real actually goods and services rather than the financial economy which gets preferential tax treatment already. don't you wish you only had to pay taxes on your gains after expenses?

    •  Or a conspiracy to maximise the windfall (1+ / 0-)
      Recommended by:
      NCrissieB

      at the expense of others? Grab while the grabbing is good or you will be left behind mindset and then arrange things sp you and your buddies will be in an even better position to grab more than you would normally... all legal and tidy... mostly... and Amoral as hell... Nobody or anything to hold you back or make you voluntarily say "When" when it would help minimize harm...

      Later there will be tax deductible donations to ease your conscience and maybe you can even set up a foundation with your name on it to give a bit here and there and make people realize what a great person you are....

      Pogo & Murphy's Law, every time. Also "Trust but verify" - St. Ronnie

      by IreGyre on Fri Apr 03, 2009 at 07:19:47 AM PDT

      [ Parent ]

    •  human nature (1+ / 0-)
      Recommended by:
      NCrissieB

      Remember the old fable of the ant and the grasshopper? The grasshopper goofed off and played, rather than planning for the future.

      Many people, from home buyers right on up to the highest levels of these financial institutions, acted like the grasshopper. The lure of the present was powerful. If they considered the possibility of future problems at all, they assumed they could deal with it then, somehow.

      The homeowner who thought "hey, I can just refinance if my adjustable rate mortgage resets!" The investment banker who thought "hey, we'll just restructure the deal again." Were they so different?

      •  But in this tale (1+ / 0-)
        Recommended by:
        NCrissieB

        only the lowly home buying grasshoppers end up freezing in the cold.  The rich fat grasshoppers get to stay in their mansions enjoying the spoils.

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