Molly Ivins November 25AUSTIN — The stupidity of bankers is one of the seven wonders of the world. Such shining, luminous stupidity: a beacon in the tides of history — fixed, permanent, stable, forever. Just as France's Georges Clemenceau thought war was too important to be left to the generals, economies are too important to be left to bankers. In a particularly entertaining chapter in the long history of banking stupidity, we now find one Asian economy after another reeling from bad banking decisions. Thailand, Malaysia, Indonesia, Singapore, Hong Kong, South Korea and now Japan are in a mondo of trouble. The International Monetary Fund is scrambling to stop the problem with a bailout of South Korea, lest Japan be towed under. And Japan itself is preparing to implement its so-called Big Bang of financial reforms. According to the experts, these reforms involve "scrapping regulations over the next four years that have fostered cozy ties between banks, brokers and insurance companies." Study that sentence carefully. Does it remind you of anything? Helpful hint: Traveler's Groups insurance company buying Salomon Bros. brokerage? Banks and brokerages merging? Repeal of the Glass-Steagall Act that built a firewall between the financial institutions? Yes, my friends, as one Asian economy after another crashes, American bankers just can't wait to repeat the same follies that have led to these marvelous results. Banking intelligence at its finest. Here are the experts on what is causing Asia's fiscal woes: — "Wildly overextended banks." (The New York Times) — "South Korea is suffering an acute cash crisis because its banks lent billions senselessly — often at government insistence — to projects that are now collapsing left and right.
— "Citicorp, BankAmerica Corp. and Chase Manhattan Corp. are among the big U.S. banks that do a lot of business in Asia." (Bloomberg News) — "American economists see a bit of deja vu in Asia's financial crisis. That's because the noise in the foreign financial markets remind them of home — specifically the three bouts of financial troubles in the '80s and '90s." (The Christian Science Monitor) — "Even Wall Street seems not to fully understand the intricacies of the hyperlinked global economy." (U.S. News & World Report) And my personal favorite: — "The popping sounds heard around the world are not only liquidity bubbles bursting in property, banking and equity markets but the escaping hot air of Asian and American arrogance." (Business Week) My, my, my, bankers have been dumb again. Amaze us. I personally am so wedded to the stupid-banking theory of history that if South Korea goes into meltdown, Japan follows and the United States goes into recession, I fully expect — I actually count on — Alan Greenspan to raise interest rates in response. It's nice to have something you can count on in a changing world. As James Galbraith of the University of Texas at Austin points out, the fundamentals here are not, pace Robert Rubin, "sound." What we have, says Galbraith, is a recovery "based on slow growth, stagnant wages, rising debts, balance-the-budget fetishism and high interest rates." And a government made up of politicians so in hock to the big monied interests that they no more represent the average people in this country than they can fly. As Ralf Dahrendorf writes in the new book "After 1989: Morals, Revolution and Civil Society": "When economic values begin to dominate politics, liberty is often at risk. The new economism of capitalists is no less illiberal than the old one of Marxists." *** Molly Ivins is a columnist for the Fort Worth Star-Telegram. COPYRIGHT 1997 CREATORS SYNDICATE, INC.
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