Flutterby™! : The Price of Casino Like Finance

Maxine Udall: The Price of Casino Like Finance Is Higher Than We Think, Elf had some commentary:

It's not just that management came out of business school and has no clue what engineering does, but that the talent management has to work with has been skewed downward by the immense seduction of money pulling talented engineers and scientists into studying financial alchemy rather than biochemistry or architectural engineering.

I think think speaks to some of the frustrations that Meuon expressed when management needlessly inserted itself into a process.

Which brings me back to the original essay:

Don’t get Maxine wrong. She is not making a case for central planning. Maxine remains committed to capitalism: free markets when they function well, regulated markets when they don’t. The above are simply additional arguments for reining in and regulating casino-like behavior and casino-like rewards in any market, not just capital markets.

I wonder what the trade-off is. By pretending that there was government involvement we've legitimized what was formerly a shady business. What used to be the purview of numbers runners, gangsters, and addicts down on their luck is now "being responsible" and "saving for retirement". Smart people look to running the casino as now being a socially acceptable way to make (more than) a living.

Would we be better off had these institutions not been given credibility following the Great Depression? If, culturally, we'd had 70 years of "Wall Street is a bunch o' scam artists, keep your money close" rather than the SEC?

I don't have any answers, and browsing this MeFi entry on the current woes in Iceland just gives me more questions.