More on “The Basic Laws of Human Stupidity” – Part IV: The ‘Bandits’

“In a closed society where everybody's guilty, the only crime is getting caught. In a world of thieves, the only final sin is stupidity.”  - Hunter S. Thompson, Fear and Loathing in Las Vegas

It’s that time again to talk more about “The Basic Laws of Human Stupidity”.  Having already discussed the ‘Intelligent’ and the ‘Stupid’ groups at length, let’s dig down and discuss the ‘Bandit’ group and the people that fit in that category.

In the context of these Laws of Human Stupidity, the definition of a Bandit is a person who makes a gain while causing a loss to another.  Though I prefer the description found in Wikipedia, that Bandits are people who pursue their own self-interest even when doing so poses a net detriment to societal welfare.  Yet as I described in previous posts, there is variability in this group and differences in the proportion of how much gain one receives compared to the loss they incur on others.  The ‘Intelligent’ Bandits tend to receive more of a gain than the losses they incur on others, whereas the ‘Stupid’ Bandits tend to receive a gain significantly less than the loss or damage they incur on others.  

Intelligent Bandits

Good examples of an Intelligent Bandit would be the merchant or salesman who overcharges his/her customers through various schemes (advertising a product as something better than it really is for example), or a toy manufacturer who makes additional profit by quietly substituting various components in their product with substandard parts.  In both cases the consumer incurs small, subtle losses while the Bandits tend to receive more direct financial gains for themselves.  Perhaps an even better example of an Intelligent Bandit would be some of the more shrewd politicians out there.  The kind that talks big but tends to do relatively little in office (thus causing less damage), yet manages to enrich themselves through trading stocks on insider knowledge, capitalizing on social and business connections made in office, and influencing legislation in ways that turn a profit for them.  Their ‘cost’ to others is in the form of salary and benefits and in some cases bits of legislation that incurs a small net loss to the country or the people, but they manage to leverage that into gains far more substantial than said salary, benefits, or questionable minor legislation.  Heck one can argue (I certainly will) that many voters ‘vote’ like Intelligent Bandits, voting in politicians promising to direct tax money to whatever government program or industry that personally benefits them, even though it has a small negative impact to the rest of the taxpayers and the country as a whole.  It’s important to note, however, that such voting behavior shifts definitively into the Stupid Bandit column once the effects depart from the modest siphoning of taxpayer money, and instead introduce or promote major instability or fragility into the system.  

Some of those who still buy in to the whole left vs. right, Democrat vs. Republican paradigm may heavily disagree, but I think one of the better, more recent examples of an Intelligent Bandit politician would be Sarah Palin.  She didn't really have much impact as governor one way or the other and her bid as Vice President didn't come to fruition (hence her direct 'take' from the taxpayer and society was small), but she's managed to leverage a short political career into lucrative book deals (I saw her book on sale in a bookstore in Ulaanbaatar, Mongolia of all places), commentator gigs on cable news, and speaking engagements.  Say whatever you like about any more fundamentalist Christian beliefs she may have and/or panders to, but the way she's managed to enrich herself to a greater proportion than the amount she took as governor of Alaska and Mayor of Wasilla demonstrates an Intelligent Bandit leaning.

Stupid Bandits

A Stupid Bandit might be typically described as the garden-variety thief, such as the kind of person who smashes a $250 car window to snatch a $150 car stereo that he’ll sell for $35.  Unfortunately it’s not the typical burglar or thief that creates the most damage to society, even though they usually get the most attention from police and the media.  The truly dangerous Stupid Bandits include such people as corrupt bankers, companies, bureaucrats, and politicians.  Think of the banks who made billions facilitating unethical & risky real estate deals and bundling them up into mortgage-backed securities to sell to investors as AAA safe investments, eventually creating a crisis that has cost into the TRILLIONS in damage to the economy and direct costs to taxpayers for bailouts.  Or the groups of corporations that have essentially formed cartels (most often in collusion with the politicians to whom they give campaign donations) in critical industries like health care, aerospace & defense, banking, and energy sectors, enriching themselves at great expense to the consumer, the taxpayer, and the free market.  Or the shills and stakeholders in the military-industrial complex working the political process to encourage unnecessary and expensive military intervention around the world so billions of taxpayer money will be directed towards military spending (and in the process also throwing away the lives of thousands of Americans and even greater numbers of foreign noncombatants).  Or the politicians on the more sociopathic end of the spectrum, who not only enrich themselves through their office but also bankrupt the country and destroy personal freedoms of ALL their constituents merely to amass more power and wealth for themselves.  And lastly, the people who donate to and vote for the aforementioned sociopaths because of campaign promises to keep the government money rolling in to benefit themselves, whether they get it in the form of direct government assistance, special tax breaks, or government favoritism to certain companies or industries or unions.  All of these people and entities are akin to locusts…. devouring so much in their greed and unbalanced self-interest that they destroy the very environment they depend on.

I'm hard-pressed to find the best recent example of a Stupid Bandit politician in the US, since there are so many to choose from.  But given the events of the past few days, I'd say said example includes every douchebag who voted yes to approve the Cromnibus bill that will put the taxpayers potentially (though I'd say almost definitely) on the hook for over $300 TRILLION in derivatives bets held by the big financial institutions.  I say to these people enjoy your 30 pieces of silver while you can, because whatever compensation you received will be absolutely dwarfed by the scale of damage done when the big financial institutions decide to take even more risks which will lead to this derivative bomb being even more destructive than if it should blow up now.  It is stunts like this that lead to violent revolutions and civil unrest.

The Trend Towards Banditry

It would be simple to think that a proportional increase of the Stupid group would be contributing to America’s decline, but it’s my opinion that the increase in Bandit-like behaviors and the growing acceptance of these behaviors is far more to blame (I also think Helpless behaviors are also heavily contributing, but that’s a topic for a later post).  And to be honest, it’s not really a surprise to see the Bandit group growing in number.  After all, consider the examples from big business and government that we are given:

- Unethical corporate bankers make billions in crooked deals in the real estate market last decade which led to an epic bust and economic crisis, yet are fined a small proportion of the profits they made on said dealing and NONE of the big fish responsible went to jail (see Matt Taibi's piece in Rolling Stone for more).

- The extremely politically well-connected former NJ Governor Jon Corzine led his company MF Global in an epic campaign of speculative trades and misuse of segregated customer funds, which led to the bankruptcy of the company and customers losing millions of dollars (the last of whom finally got paid back only this year).  No jail time for him or anyone at the company, and not even a bloody FINE for Corzine.  Hopefully the civil lawsuits against him gain traction, but given how much responsibility he's been able to avoid thus far, I wouldn't bet money on the lawsuits winning.

- Certain police & sheriff’s departments as well as the federal government routinely engage in the form of legalized theft innocently referred to as ‘civil forfeiture’, where they can confiscate money and assets on the mere suspicion (no proof needed) that said money or assets are involved in a crime. Said departments most often deliberately target people that don’t have the resources, time, or ability to mount a legal defense (immigrants, out-of-towners, people on the fringes of the economy, etc.).  A percentage of said confiscated funds go the police department in question, creating a perverse incentive to engage in the practice.

- Elected officials in Congress until very recently were legally allowed to indulge in insider trading, a practice which would land the rest of us in jail, and many were getting extremely wealthy from it.  And while it’s technically against the rules now, imagine the total lack of surprise when Congress AND the ‘transparency president’ Obama quietly undid much of it, making the risks of elected officials getting caught much lower.

- Huge corporations give bribes… er, campaign money…. to politicians to influence the political process and regulatory agencies so they can form de-facto cartels, reduce competition, and cripple the free market to benefit themselves.

So what are people inclined to do when they see people in positions of power and/or authority getting away with Bandit behaviors?  Well most people tend to be followers rather than either leaders or independent spirits, so most people will tend to follow the example they're given.  Is it right?  No…. in the long term it's not even smart, as any society can only support so many Bandits and an overabundance of them will lead to that society's decline.  But the growing acceptance of it means more people will take the easy road regardless.  When the system one operates in is corrupt, it is only natural that this influences the behavior of those in that system.  We see this in spades in the American political system.... surely at least some of the politicians were not so jaded and corrupt when they got elected or appointed, but the time spent in that system tends to compromise their ethics and values for the sake of 'going along to get along'.  American society is seeing that to a more subtle extent, and while it is not as obvious it is still no less pervasive.  So I challenge everybody to examine the actions and decisions you make as well as that of those around you.... many of us are Bandits, and some even Stupid Bandits like our Congress, and not even aware of it.