Wall Street 'Takes $4 Billion From Taxpayers'

http://www.futureofcapitalism.com/2010/11/wall-street-takes-4-billion-from-taxpayers

Bloomberg News has revised the absurd headline on a story that earlier read "Wall Street Takes $4 Billion From Taxpayers as Swaps Backfire" so that it now reads "Wall Street Collects $4 Billion From Taxpayers as Swaps Backfire."

By the logic of the earlier headline, you could have said "Bloomberg Takes Millions in Terminal Fees From Wall Street." There's a subtle difference between a "take" and a business transaction that two parties enter into willingly. If the swaps had worked out differently, would Bloomberg be writing "Taxpayers Take $4 Billion from Wall Street"?

Though the headline is somewhat improved, the narrative of the story is essentially the same. To me the comical (or maybe not comical but outrageous if you are the target of this sort of journalism) aspect of it is how the narrative of these swaps stories changes depending on who is the reporter or editor's designated demon. Back in December 2009, in the Bloomberg story "Harvard Swaps So Toxic Even Summers Won't Explain," the story made it sound like it was the Harvard administrators such a Lawrence Summers who screwed up by making this bad bet or by exiting it when they did. In the more recent story, with the swap losers not Harvard but state or local governments, the swap investors are robbed of any volition: "For more than a decade, banks and insurance companies convinced governments and nonprofits that financial engineering would lower interest rates on bonds sold for public projects such as roads, bridges and schools." Here it's not the buyer's fault but the sellers, those "banks and insurance companies."

by Ira Stoll  |  Nov 10, 2010 at 10:45 am Related Topics:  Banking, Lawrence Summers, Press receive the latest by email: subscribe to the free futureofcapitalism.com mailing list