The problem here really goes like this:
Most politicians are really pretty simple-minded people. They’re not the sharpest tools in the shed.
And the closer you get to the local level, the more you find people who have NO idea of the intricate nature of modern finance.
So you get what we have here: A bunch of people who are familiar with modern financial products pitching high-risk products to people who still think that the banking system works the way it did in the 1930’s. The local pols see the immediate pot of money they get by selling a swap (or dabbling in some other instrument) and that’s where their attention span ends. They literally cannot foresee the net:net effects of “what happens if...?” They have the attention span of less than one term in office and this is where things bite them.
As such, political sovereigns should not be allowed to “invest” in such instruments - at all. The whole issue should simply be removed from the local level and legislated away.
fair enough, perhaps. But JPM shouldn't be sued for selling the same product they sell to every corporation out there.
And the closer you get to the local level, the more you find people who have NO idea of the intricate nature of modern finance.
But many of them do understand how to exploit their position and collect big money.
The corruption in rural Alabama counties is remarkable. Virtually everything is for sale -- dog track licenses, waste disposal areas, manufacturing sites, etc.
One school district built an elaborate new school...which was almost immediately labelled unusable due to construction flaws. The school board got rich, though.
Another town couldn't pay their light bill...because the mayor had spent the money on a new driveway for his palatial home.
I can't say that Jefferson County suffered from dumb politicians or corrupt politicians. My best guess, though, would be "both".
Oh please. I just watched Senator Dick Durbin ask Exxon why it was charging old women and cripples so much for gasoline.
Durbin, Patty Murray, and Barbara Boxer couldn't understand why round pegs won't go into the square holes of children's toys.