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People Hate Bankers Because People Are Ignorant

12 points by dmmalam 12y ago

carsongross 12y ago
Conclusion does not follow. People are certainly ignorant, but even an idiot can see that the TBTF banks are filled with useless douches who'd be out on their ears if it weren't for sugar daddy government papering over their mistakes in the name of systemic stability. But then, what would you expect from someone paid by Bloomberg?
fenomas 12y ago
"Look, the only reason people are suspicious of conmen is that they're not good at telling which of three cards is the Queen."
dobbsbob 12y ago
Samuel Johnson defined bankers in the eighteenth century as "One that trafficks in money". Italian Kings in the fifteenth century had them expelled or executed. Solon of Athens couldn't stand them either. The three major Western religions also forbid the collection of interest on loans, further casting bankers into the depths of hell /s
xherberta 12y ago
Retitle: people are easy targets for bankers because people are ignorant.
drewdil 12y ago
Basically: We shouldn't regulate banks because people will still dislike bankers. Likability isn't really what we're going for.
ForHackernews 12y ago
Distrust of bankers is deep-seated and centuries old. In times past, usury was a sin. Obviously there are important advantages to society from having a modern financial sector, but the public is not entirely wrong to be suspicious of the ill-gotten gains of financial wizards who conjure profits by shuffling numbers around rather than performing more obviously useful work.
- wprl 12y ago
  What are the advantages? What are the disadvantages?
  - ForHackernews 12y ago
    In principle, the main advantage is fast and efficient allocation of capital. The disadvantage is that human beings are greedy, fallible creatures and they're often more interested in enriching themselves.
Eric_WVGG 12y ago
Most people’s understanding of mathematics, astrophysics, chemistry, biology and plumbing is much lower than their understanding of banking. They are, indeed, largely “ignorant” of these topics. But I’m not aware of commonplace hatred of mathematicians or plumbers etc. There’s a big world out there, and the term “renaissance man” exists because it is no longer possible for anyone to have excessive knowledge outside of a few chosen interests; thus the notion of a connection between ignorance of a topic and hatred of its masters is quite ignorant indeed. People hate bankers because they are individuals who have chosen to master a field whose intellectual demands are only barely above-average, but have a very large window for disproportionate rewards.
- vonklaus 12y ago
  While I more or less agree with your conclusion, as one of extreme simplicity I think there is a major flaw in your hypothetical. Most people don't regularly deal with chemistry, biology, and astrophysics. Plumbing is rather commonplace and while I would't expect an average person to understand the intricacies of a complex system, they know enough to simply "get by" by fixing small issues if they choose.
  - Eric_WVGG 12y ago
    Good point. Perhaps a better comparison would be doctors?
retroencabulato 12y ago
"People shouldn't hate bankers because it is their fault they accept misleading information."
jonnathanson 12y ago
Some good points at the beginning, but then I got to this gem: "The 1 percent preys on the 70 percent of U.S. illiterates, not because they are poor but because they don't know enough to make informed decisions." Since when is taking advantage of people's ignorance an ethical defense of one's behavior? This is crass victim-blaming. Sure, one could argue that most profit in most businesses directly results from some sort of information asymmetry, i.e., between the two parties to any given transaction, compounded across all parties in all stages of any given value chain. But this is different. If you're offering predatory financial services and products to underinformed people who are ill-equipped to bear the risk of what you're luring them into, you are acting at best amorally. And amorality is a generous assessment in many of the cases that have come under scrutiny in recent years. One can mount plenty of credible, justifiable arguments for banking and finance. "People are suckers" is a pretty lame one. Yes, more people ought to learn about personal finance, and about the basics of finance in general. This is partially a failure of our education system, which used to teach these things in now-ridiculed subjects like "Home Economics." (Which we ought to dust off, update, add some additional rigor to, and bring back into the standard high school curriculum. But i digress.) No matter the case, this sort of sentiment does its author no favors. It undermines the rest of the piece, which makes legitimate points.
- vixin 12y ago
  Ethical defense? Where do you get that from? Commonsense tells us that the author could not possibly know the moral intentions of that 1% and uses <metaphor> to illustrate a fact known to all of us and relevant to our life in general - that Ignorance can lead one to take the role of prey. Your other little gem is 'Sure (!) one can argue that most profit in businesses ,,.. results from information asymmetry'. Since I myself must now press on with ensuring my customers don't know what I know, I can only think how uncomfortable you must be in the modern world.
coreymgilmore 12y ago
Why do people hate bankers: simple, banking isn't easy and the literature is too complex. While not about normal everyday banking, there has been much research into financial statements of public companies and the readability of these reports [1]. Basically, how can most people understand banking/financials when the general readability of the documents has gotten to a point where even an MBA does not understand parts of them? Now, go into any local bank branch and the documents they have for consumers is just as vague, difficult to understand, and "transparently" informative. As for simple. Banks have gotten better at this with mobile apps. But branches still neglect simple customer demands: stay open beyond normal working hours (9am-5pm), allow easy payments via ACH/Wire, and reduce the complexity of the loan process to name a few. [1] http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1868591 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1868591
jacknews 12y ago
If people really understood what bankers do, they'd hate them even more. For a start, the fractional reserve system is simply parasitic, the very foundation of our financial system has a built-in backdoor through which the banks extract rent.
gumballhead 12y ago
Right. Except bankers don't understand finance either, but they think they do. And when they showed that to the world by breaking the entire financial system, instead of having to pay the price of hubris, these champions of capitalism instead got access to the public treasury because they were too big to fail, and were consolidated into banks that are now too bigger to fail. And now they're paying the media to say that people hate bankers because they're not as smart as them.
- dba7dba 12y ago
  "Except bankers don't understand finance either, but they think they do." Amen to that. Your own analyst tells you half the mortgages in the pile are toxic. But the banker tells the analyst to shut it and make the pile look good so the bank can sell it to 'investors'. Some banker.
  - rismay 12y ago
    Seriously. People hate bankers because bankers are ignorant to their own behavior.
gumballhead 12y ago
That third question is a bunch of shit anyway
quarterwave 12y ago
The 2008 crisis showed that systemic risk in the repackaging business far outweighs the fine print in retail investment products. If people are upset it's not due to their ignorance but because of the feigned ignorance of those experts whose job is to study and understand risk, especially at government regulatory offices. The sporting equivalent would be for a commissioner to wax eloquent about the 'glorious uncertainties of the game' when the reality is a less-than-glorious certainty of match-fixing scandals.
eximius 12y ago
No, people hate bankers because they are leeches, as demonstrated by this article.
joesmo 12y ago
People are stupid about everything, not just finance. That doesn't imply causation of hate.
deleted 12y ago
[deleted]

12 points by dmmalam 12y ago

Conclusion does not follow. People are certainly ignorant, but even an idiot can see that the TBTF banks are filled with useless douches who'd be out on their ears if it weren't for sugar daddy government papering over their mistakes in the name of systemic stability. But then, what would you expect from someone paid by Bloomberg?

fenomas 12y ago

"Look, the only reason people are suspicious of conmen is that they're not good at telling which of three cards is the Queen."

dobbsbob 12y ago

Samuel Johnson defined bankers in the eighteenth century as "One that trafficks in money". Italian Kings in the fifteenth century had them expelled or executed. Solon of Athens couldn't stand them either. The three major Western religions also forbid the collection of interest on loans, further casting bankers into the depths of hell /s

xherberta 12y ago

Retitle: people are easy targets for bankers because people are ignorant.

drewdil 12y ago

Basically: We shouldn't regulate banks because people will still dislike bankers. Likability isn't really what we're going for.

ForHackernews 12y ago

Distrust of bankers is deep-seated and centuries old. In times past, usury was a sin. Obviously there are important advantages to society from having a modern financial sector, but the public is not entirely wrong to be suspicious of the ill-gotten gains of financial wizards who conjure profits by shuffling numbers around rather than performing more obviously useful work.

wprl 12y ago
What are the advantages? What are the disadvantages?
- ForHackernews 12y ago
  In principle, the main advantage is fast and efficient allocation of capital. The disadvantage is that human beings are greedy, fallible creatures and they're often more interested in enriching themselves.

Eric_WVGG 12y ago

Most people’s understanding of mathematics, astrophysics, chemistry, biology and plumbing is much lower than their understanding of banking. They are, indeed, largely “ignorant” of these topics. But I’m not aware of commonplace hatred of mathematicians or plumbers etc. There’s a big world out there, and the term “renaissance man” exists because it is no longer possible for anyone to have excessive knowledge outside of a few chosen interests; thus the notion of a connection between ignorance of a topic and hatred of its masters is quite ignorant indeed. People hate bankers because they are individuals who have chosen to master a field whose intellectual demands are only barely above-average, but have a very large window for disproportionate rewards.

vonklaus 12y ago
While I more or less agree with your conclusion, as one of extreme simplicity I think there is a major flaw in your hypothetical. Most people don't regularly deal with chemistry, biology, and astrophysics. Plumbing is rather commonplace and while I would't expect an average person to understand the intricacies of a complex system, they know enough to simply "get by" by fixing small issues if they choose.
- Eric_WVGG 12y ago
  Good point. Perhaps a better comparison would be doctors?

retroencabulato 12y ago

"People shouldn't hate bankers because it is their fault they accept misleading information."

jonnathanson 12y ago

Some good points at the beginning, but then I got to this gem: "The 1 percent preys on the 70 percent of U.S. illiterates, not because they are poor but because they don't know enough to make informed decisions." Since when is taking advantage of people's ignorance an ethical defense of one's behavior? This is crass victim-blaming. Sure, one could argue that most profit in most businesses directly results from some sort of information asymmetry, i.e., between the two parties to any given transaction, compounded across all parties in all stages of any given value chain. But this is different. If you're offering predatory financial services and products to underinformed people who are ill-equipped to bear the risk of what you're luring them into, you are acting at best amorally. And amorality is a generous assessment in many of the cases that have come under scrutiny in recent years. One can mount plenty of credible, justifiable arguments for banking and finance. "People are suckers" is a pretty lame one. Yes, more people ought to learn about personal finance, and about the basics of finance in general. This is partially a failure of our education system, which used to teach these things in now-ridiculed subjects like "Home Economics." (Which we ought to dust off, update, add some additional rigor to, and bring back into the standard high school curriculum. But i digress.) No matter the case, this sort of sentiment does its author no favors. It undermines the rest of the piece, which makes legitimate points.

vixin 12y ago
Ethical defense? Where do you get that from? Commonsense tells us that the author could not possibly know the moral intentions of that 1% and uses <metaphor> to illustrate a fact known to all of us and relevant to our life in general - that Ignorance can lead one to take the role of prey. Your other little gem is 'Sure (!) one can argue that most profit in businesses ,,.. results from information asymmetry'. Since I myself must now press on with ensuring my customers don't know what I know, I can only think how uncomfortable you must be in the modern world.

coreymgilmore 12y ago

Why do people hate bankers: simple, banking isn't easy and the literature is too complex. While not about normal everyday banking, there has been much research into financial statements of public companies and the readability of these reports [1]. Basically, how can most people understand banking/financials when the general readability of the documents has gotten to a point where even an MBA does not understand parts of them? Now, go into any local bank branch and the documents they have for consumers is just as vague, difficult to understand, and "transparently" informative. As for simple. Banks have gotten better at this with mobile apps. But branches still neglect simple customer demands: stay open beyond normal working hours (9am-5pm), allow easy payments via ACH/Wire, and reduce the complexity of the loan process to name a few. [1] http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1868591 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1868591

jacknews 12y ago

If people really understood what bankers do, they'd hate them even more. For a start, the fractional reserve system is simply parasitic, the very foundation of our financial system has a built-in backdoor through which the banks extract rent.

gumballhead 12y ago

Right. Except bankers don't understand finance either, but they think they do. And when they showed that to the world by breaking the entire financial system, instead of having to pay the price of hubris, these champions of capitalism instead got access to the public treasury because they were too big to fail, and were consolidated into banks that are now too bigger to fail. And now they're paying the media to say that people hate bankers because they're not as smart as them.

dba7dba 12y ago
"Except bankers don't understand finance either, but they think they do." Amen to that. Your own analyst tells you half the mortgages in the pile are toxic. But the banker tells the analyst to shut it and make the pile look good so the bank can sell it to 'investors'. Some banker.
- rismay 12y ago
  Seriously. People hate bankers because bankers are ignorant to their own behavior.

gumballhead 12y ago

That third question is a bunch of shit anyway

quarterwave 12y ago

The 2008 crisis showed that systemic risk in the repackaging business far outweighs the fine print in retail investment products. If people are upset it's not due to their ignorance but because of the feigned ignorance of those experts whose job is to study and understand risk, especially at government regulatory offices. The sporting equivalent would be for a commissioner to wax eloquent about the 'glorious uncertainties of the game' when the reality is a less-than-glorious certainty of match-fixing scandals.

eximius 12y ago

No, people hate bankers because they are leeches, as demonstrated by this article.

joesmo 12y ago

People are stupid about everything, not just finance. That doesn't imply causation of hate.

deleted 12y ago

[deleted]