February 20, 2012


There’s a new book out which analyzes the amount of fraud going on in the investment world. It’s “Tangle Webs: How False Statements Are Undermining America” by James B. Stewart, reviewed by Jennifer Szalai in the February 2012 edition of “Harpers.” Stewart’s thesis isn’t profound:

          “Lying seems to be an inherent part of human nature.”  (Harper’s. pg 74)

(courtesy: about.com)

In fact, Stewart’s complaint is as old as the dawn of man and the review wouldn’t be worth reading to the end if Szalai hadn’t taken issue with the obvious. Her contention is that lying isn’t nearly as problematic in today’s world as the banality of truth hidden in plain sight.   

According to her, the monetary foxes of the financial hen house are too clever to engage in outright lying. Rather, they brought the fiscal system to the brink of disaster with “financial abstractions” that ended up confusing them and regulators as well. (Szalai, pg 74) The tangled web they created would almost be funny if the perpetrators hadn’t ensnared the economy of the country, too. The evil of these transactions, Szalai argues, exists not in lies but in the fine print: pages and pages of footnotes intended to glaze the eyes and so make truth invisible.

Of course, Wall Street and the bankers aren’t the sole perpetrators of this sin.  According to her, government is equally adept at the art. It’s no wonder the regulators failed to catch what the money changers were up to. They were too busy spinning equivocations of their own. To make her point, Szalai quotes another author, David Foster Wallace:

          “The IRS was one of the very first government agencies to learn that such qualities {the fine print} help insulate them against public protest and political opposition, and that abstruse dullness is actually a much more effective shield than is secrecy.” (Szalai, pg 76 quoting “The Pale King” by David Foster Wallace)

Her point is well taken and at this time of year, when taxes loom, we know exactly what she and Wallace mean.