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The Punditry of Conley

by on April 28th, 2010

As preface, for this article to carry any sort of relevance, it is bestowed upon you to read an opinion piece written by Midwest Communications Operations Director Chris Conley. Don’t worry, it’s not too long. However, I cannot guarantee your head will not hurt at the conclusion of the reading, not because the writing is through-provoking, mind-shattering, or particularly insightful, but because you will feel as if you’ve been slapped in the face afterward.

Now, assuming you have survived that unfortunate ordeal, let me tell you what is inherently wrong with this thing. Conley is committing a massive sin of journalism, which is that he’s oversimplified the current conflict between Goldman Sachs, Paulson & Co., and the United States Securities and Exchange Commission. He’s comparing the situation to betting on a hazard, and is arguing that “prudent investing” sometimes involves betting on something you know will fail. He’s correct in that assertion. But it also helps, as the investor, to know going in that you are receiving the short end of the stick – that you are betting on the underdog, if you will. He makes another very lovely craps table analogy, which works if, again, the person playing at that given table realizes the investment he’s making is one that will turn fruitful based on the failure of the shooter. That’s all fine and well.

Except that’s not what is going on here, and that’s not what has the SEC and members of Congress fed up. Goldman Sachs created a security in which they sold to investors, and Paulson & Co. decided to essentially bet on the short end, eager to see such a security fail so they could reap the benefits. However, Goldman allegedly received a pay-off from Paulson to allow Paulson executives to get their hands dirty with the security they were betting on, helping it along by drowning it with contents that would be for Paulson’s own self-interest, not those of the investors. And Goldman said nothing. Everyone gets paid and no one gets hurt. Except the investors who were lied to. That would seemingly sound like a problem to most. Apparently Conley, and his free-market-at-all-costs brethren, see this as a basic business deal, and that it’s just too bad for those now-broke investors. Be smarter next time!

If we’re in the business of making quippy case-and-point examples, allow me to join the game. Better yet, it can be summed up in two words and with a simple video clip — “false advertising”. Enjoy.

It does not take an economics expert to see the wrong-doings of these investment bankers, it just takes an eye that won’t turn blind. What they have done (while certainly unethical) may not be fraudulent or in violation of any definitive law, though there ought to be one. James Cox, a securities-law expert from Duke University, says there might already be enough to shut the door on this case. As reported by the Wall Street Journal: “Cox’s reading of the complaint is that Goldman knew Paulson’s participation was relevant and it needed an outside firm to give the deal credibility. ‘That strikes me as plain and simple laundering of the deal,’ says Cox. ‘To me, it goes directly to the materiality of the omission.’” Reports state that ABN Amro lost over $840 million on their investment. Still equating this to sports cars, Mr. Conley?

This has to be curtailed for the betterment of the American economy. Corruption and disingenuousness are the kinds of behavior that those like Conley will allow to be the reputation of American business, as long as the cash continues to roll in. And rather than bring a Senate Wall Street reform bill to the floor for debate (an obstruction they cried out against when it came to healthcare just a few months ago), the GOP has chosen the path of apathy over empathy. Conley argues that Goldman didn’t cause the economic meltdown, it was “loose regulation”. Yet now that Congress holds hearings in an attempt to punish Goldman with what regulating power they do have, while at the same time legislate reform, he’s against it. He seems to be struggling with the difference between theory and practice.

Chris Conley has the responsibility, as all respected media people do, to maintain objectivity and a standard level of comprehensiveness. While this piece is labeled as opinion, it is also preceded by the words “news blog”, suggesting this is a reflection of an impartial news report. Instead what follows is yellow journalism and an interjection of inaccurate impotence. I have no problem with Conley putting together his thoughts on an issue if they are on the opposite end of the political spectrum; but I do expect, especially from someone with his job title, to at least include the set of widely-accepted facts. Pressure from those in charge trickles down to those who report, as is particularly evident with executives like Rupert Murdoch. Conley is a carrier of this torch. That is made clear by the mid-afternoon programming choices at WSAU, along with an observation that the overwhelming majority of citizens who call in on Sunday mornings agree handily with Pat Snyder — not Tom King.

Oversimplification and the proliferation of broad generalizations about significant issues like the Goldman Sachs hearings, help absolutely no one. When doing the research (or lack thereof) in preparation for his opinion piece, did Conley simply misinterpret the situation facing Goldman? Or, did he merely look at the circumstances through red-colored glasses, pick out the paragraphs he felt progressed his agenda, and trust the useless rhetoric of the political pundits that run rampant on WSAU? Sincerely, for his sake, I hope it was the former, because right now he’s playing the part of the husband – he’s married to the cowards.

Take it away, Mr. Levin.

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