
People Hate Bankers Because People Are Ignorant - dmmalam
http://www.bloombergview.com/articles/2014-07-16/people-hate-bankers-because-people-are-ignorant
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jonnathanson
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
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.

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gumballhead
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
"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
Seriously. People hate bankers because bankers are ignorant to their own
behavior.

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ForHackernews
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
What are the advantages? What are the disadvantages?

~~~
ForHackernews
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.

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

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drewdil
Basically: We shouldn't regulate banks because people will still dislike
bankers.

Likability isn't really what we're going for.

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Eric_WVGG
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
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
Good point. Perhaps a better comparison would be doctors?

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

------
coreymgilmore
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)

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jacknews
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.

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

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quarterwave
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.

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

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dobbsbob
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

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carsongross
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?

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

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gumballhead
That third question is a bunch of shit anyway

