Monday, February 9, 2009

A-Rod and Citicorp

So Alex Rodriguez, the Yankee’s star-crossed superstar, has admitted that he took steroids earlier in the decade, but not since early 2003, and not since coming to the Yankees. Well, the old biddies of the sports pages will cluck about nothing else for weeks, and whatever it is that swirls around him will continue to swirl around him for much of the season, and the Yankees, and their horrible new stadium (the house that Ruth didn’t build, though, to say something in its favor, unlike the Mets new stadium, it is not named after a major recipient of bailout money from the TARP stadium.)

This, I guess, gets to the point of this post. Who should we be madder at, A-Rod or Citicorp?
And who will we be madder at? (A-Rod, of course.) What the baseball steroid scandals and the Wall Street horrors have in common is a lax regulatory structure that encouraged every participant to think that everyone else was trying to get something over on them. This is the free market; you assume everyone else is a cheat and cutthroat, and that the only way to get ahead is to be as devious as the next fellow. This is why baseball players bulked up on steroids, and our investment houses bulked up on worthless mortgage derivatives. From the schoolyard to the locker room to the trading floor, there is no argument more powerful than—hey, they’re all doing it, why are you picking on me? (And don’t be a snitch.)

I have a lot more sympathy for the roided up ball players than the Wall Street firms. We should recognize that in baseball in the early 21st century it became very difficult for those seeking a competitive edge not to engage in steriodical activities. No one really cares if you play by unwritten rules. In the end, the moral outrage at our ballplayers will be more fervently felt, and longer lasting, than our outrage at our bankers. We are mad at our bankers because they failed, struck out like Mighty Casey, not because they cheated. When, as eventually will happen, the economy will turn around, all, or almost all will be forgotten. Part of this is of course that we understand baseball, and really don’t understand banking. And part of the problem is that we have forgotten how to be angry at capitalists in productive ways.. Melvin Urofsky recommended in the Times the other day that we all re-read Louis Brandeis’s “Other People’s Money,” to regain a sense of moral indignation. I think it is a great idea, and we need to remember how it was possible for a relatively conservative Democratic president (Woody Wilson) to name to the Supreme Court a jurist best known for attacking our financial system.
We can imagine a baseball world without A-Rod, but most of us can’t imagine a financial system without Citicorp or its facsimiles, so we accept it. In any event, when A-Rod gets booed in the New Yankee Stadium, and when the Mets take the field in the grotesquely named CitiField, there will be no joy in Mudville.

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