21–30 of 77 posts
I hate to ask, but might there be a tl:dr; summary? That's a lot of text. I'm interested, but I don't really want to spend that much time on storytelling.
'Wall Street does X' and 'the Mafia does X' does not in any way imply that Wall Street learned X from the Mafia - and there's no evidence in the article, either. Typical Tabibi bombast. I suspect bid-rigging, while unethical, is pretty common behavior given this type of auction mechanic - all the buyers are knowledgeable and known to each other, while the seller is relatively ignorant and only participates in the mar…
Where this becomes classic Taibbi is in his implication that this is business as usual on Wall Street (it's the only place in America I know of where someone's word is worth billions of dollars, with the paperwork coming after a verbal agreement much of the time).
So municipalities tried to game the system by instituting closed auctions instead of the open ones, and then got mad, when it turned out that some parties are willing to pay to peek into the sealed bids? An open auction system would not have created the peeking problem in the first place. Both parties tried to institute unreasonable complexity to get an upper hand.
Can you explain further? What do you mean by "closed" and "open" auction? AFAIK, they outsourced the auction process to a third-party company specializing in conducting auctions. That company and the bidders colluded to defraud municipalities. Corrupt auctioneers also paid bribes to politicians to get hired as as auctioneers. Do you really not see anything wrong with this picture? Edit: Removed paragraph with analogy…
Earlier quoted context omitted.
They're sealed bid auctions. You can see what the others bid on eBay. If you choose to bid just a penny over the highest bid (as opposed to bidding up by a larger amount), you're unlikely to be prosecuted.
And the problem was that they became UN sealed auctions due to corruption. After reading the article, are you saying that the auctioneer conducted a proper sealed auction? AFAIK, it is the norm worldwide in private as well as public sectors for contracts to be given out via sealed bid auctions, as opposed to ebay-style open auctions. The ebay-style process works for ebay because there are large number of potential bu…
Switch to open auctions would remove incentives for corruption.
So municipalities tried to game the system by instituting closed auctions instead of the open ones, and then got mad, when it turned out that some parties are willing to pay to peek into the sealed bids? An open auction system would not have created the peeking problem in the first place. Both parties tried to institute unreasonable complexity to get an upper hand.
Problem is that there are only a couple of large banks who control a large portion of money. If there were more banks, one bank will eventually break the collusion and offer a competitive bids, and other banks will follow.
Perhaps most amazing is many people's apparent assumption that banks would never engage in this kind of behavior. It seems the most cynical predictions and explanations of large bank behavior are likely to be the ones closest to the truth.
Are there roads in your town? Do you think they were paved by the honest lowest bidder?
I hate to ask, but might there be a tl:dr; summary? That's a lot of text. I'm interested, but I don't really want to spend that much time on storytelling.
So municipalities tried to game the system by instituting closed auctions instead of the open ones, and then got mad, when it turned out that some parties are willing to pay to peek into the sealed bids? An open auction system would not have created the peeking problem in the first place. Both parties tried to institute unreasonable complexity to get an upper hand.
"The supermarket is trying to sell 20-oz sodas for $1.50 a pop, and now they get mad when I steal them instead? A policy of giving sodas away for free would not have created the stealing problem in the first place."
Earlier quoted context omitted.
And the problem was that they became UN sealed auctions due to corruption. After reading the article, are you saying that the auctioneer conducted a proper sealed auction? AFAIK, it is the norm worldwide in private as well as public sectors for contracts to be given out via sealed bid auctions, as opposed to ebay-style open auctions. The ebay-style process works for ebay because there are large number of potential bu…
Sealed auctions introduce inefficiencies in capital allocation. The parties writing the laws benefit from these inefficiencies, hence market's move to transparency is written up as collusion. Switch to open auctions would remove incentives for corruption.
Giving me all your money would remove the incentive to rob you.
Also, are you seriously appealing to anarchist idealism as a justification for bid-rigging? How many of these intellectuals who are using their brainpower to rip off local governments could keep their small fortunes for more than a month in a state of anarchy? They're precisely the kind of people who benefit the most from the existence of a state, so cry me a river at the injustice of them having to play by the state's rules.
'Wall Street does X' and 'the Mafia does X' does not in any way imply that Wall Street learned X from the Mafia - and there's no evidence in the article, either. Typical Tabibi bombast. I suspect bid-rigging, while unethical, is pretty common behavior given this type of auction mechanic - all the buyers are knowledgeable and known to each other, while the seller is relatively ignorant and only participates in the mar…
You are missing the point; titling the article "The Scam Wall Street Learned From the Mafia" is a rhetorical device used by the author to illustrate the criminal nature of what went on and draw parallels to activity that is commonly understood by the average person to be unethical. The author isn't trying to suggest that these banks literally learned this from the mafia. "the crimes the defendants and their co-conspi…