April 03, 2017

It would seem our bank regulators should be subjected to a full psychiatric evaluation before allowed to regulate.

Sir, I refer to Anjana Ahuja’s brief message on Robert Hare’s 1993 “Without Conscience: The Disturbing World of the Psychopaths Among Us,” “Text messages: nine business books to help you through turbulent times” April 3.

Ahuja harrowingly writes: “Uncertainty is unsettling and certainty is alluring. Beware anyone who offers the latter with charisma, especially at this jittery juncture. Arm yourself against the charlatans by revisiting the work of the psychologist who pioneered the study of psychopathy. Hare’s short classic covered not only criminal psychopaths but the white-collar kind — who overstate their abilities, denigrate subordinates, have a tenuous grip on truth and seek greater power with shrinking oversight.”

I have often referred to our current bank regulators as dumb, ignorant, inept, stupid, even dangerous, but never ever as psychopaths, and so this really scares me.

But the truth is that white-collared technocrats, overstating with much hubris their abilities, have been able to exploit the “Uncertainty is unsettling and certainty is alluring”, in order to cajole so many, or even most in the world, into firmly believing that their risk weighted capital requirements for banks, based on ex ante perceived risks, with certainty combats, at no cost, that uncertainty that can cause banking crises.

Sir, I immediately ordered a copy of Robert Hare’s book, but really Anjana Ahuja’s brief message should suffice to understand the benefits of subjecting bank regulators to a full psychiatric evaluation before they are allowed to regulate. Airplane pilots must go through many psychological tests before they are allowed to pilot planes, and that even though they would cause so much less hurt and pain than what some misfit bank regulators could cause… or have caused.

PS. Oops I just discovered that I recently did recommend you a psychological assessment. I assure you that had nothing to do with psychopaths.