Get the government off our backs but we need more funding for education, more funding for healthcare, we don't like welfare, we're down on welfare but there should be more help for the say, women with dependent children who went on welfare. Well because Ronald Reagan who was an extreme racist managed to demonize welfare.
He told his famous anecdotes about how welfare is a rich black woman driving in her chauffeured limousine to the welfare office to take your money or big black buck who doesn't want to work who goes to the welfare office to be able to buy a steak and so on. I mean, you tell those stories enough with Reagan's nice smile and people end up hating welfare. But they're in favor of what welfare does. That's pretty striking. So when you talk about the population being psychopaths, I don't think that's quite true. I think it's the leadership of the decision makers. The ones who were very carefully making the decisions which are creating the psychopaths of society. You can call them psychopaths if you'd like. I'm not even sure that's right, it's the institutions that are psychopaths.
R.K.: Institutions?
N.C.: Well take, say a corporate executive By law, a corporate executive must work to increase the profitability of the corporation. Disregarding the effects that it has on others. That's actually a legal principle and that's psychopathic. That's one of the reasons, take a really extreme case, that's one of the reasons where we're leading the way in destroying the environment.
Creating a catastrophe which is going to be very extremely damaging for our own children. Why? Because we have to make those in power to make decisions, let's say the CEO of a corporation are compelled to disregard what the economists call externalities, the effect of a decision on others. That's not part of your consideration when you make a decision. And you can just see from that what is going to happen. The institutional structure is designed to lead to species destruction.
That's no small thing. And the same thing happens in the financial institutions. There's a system in the United States that's been designed over the past roughly thirty years which under-prices risk. It makes risk cheaper than it ought to be. The main mechanism for this is a government insurance policy. It's known informally as too big to fail. What that means is that if say Goldman Sachs makes a risky transaction and if they're paying attention they cover the potential damages themselves but they don't consider the externality that is that a failure of their transaction may bring down the whole system.
That's called systemic risk and that's not considered. But it doesn't matter too much to them because if this happens, they can run cap in hand to the nanny state who will bail them out. And it's not just the bail outs that are famous, you know TARP and so on, that's a small part of it. It's all sorts of other things.
It's cheap credit, artificially high credit ratings, other devices which insure that you should take more risk than would be legitimate, sensible in fact under anything remotely like market conditions. That under-prices risk, guarantees further crises. And these sums are not small. The international monetary fund recently did a study in which it concluded that virtually the entire profit of the big banks comes from the government insurance policy.
The business press, Bloomberg News has tried to calculate the numbers they came out with and eighty three billion dollar a year public subsidy. Your taxes to the big banks to maintain the system. Okay those institutions are psychopathic. It really is unfair in a way to blame the individuals. They either take part in the institution or they get out. They don't have any choices within them. I don't have any choices either, my boss just came in and told me I'm finished.
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