It is interesting to see the reaction that Michael Lewis has made with his new book, Flash Boys. 

The furor is in large part over a quotable quote that is attributed to the book's major protagonist, 'the stock market is rigged.'

I am not going to get into the deficiencies of the book's moral argument, and the spin that is being put on this problem. It has finally become 'a problem' because the cheating that was going on started to visibly hurt the wrong people: the rich and well connected. To that extent, it is quite similar to the market manipulation that was known as 'the London Whale' in which trading companies complained that JP Morgan Chase was dislocating the market, and screwing with their profit stream, with the company's antics.

I did that yesterday, 60 Minutes Sanitizes Its Report - What Banks, What Exchanges? 

What is fascinating now is watching the reaction that people are exhibiting to the book and its assertion of market manipulation, with quite easily understood evidence in support of it I might add.

Yesterday there was an argument on one financial television show that literally stopped the Madame Tussauds wax museum-like trading on the floor of the NYSE. The reaction of the apologist for the status quo of systemic skimming, or front running as you prefer, was apoplectic with his reaction to this scheme being unmasked. It called to mind Victor Hugo's observation that 'frightened hypocrisy hastens to defend itself.'

This morning on another financial network, more directly beholden by Wall Street interests, Michael Lewis was interviewed, and it was the turn of the anchorpersons themselves to roll out the indignation on behalf of the industry that cuts their paychecks, and variously attack and parse the offending statement, 'the market is rigged.'

It was funny at times, like the antics of the little boy who has literally been caught taking the cupcakes. 

But the same anchorperson who compared the Wall Street traders to children, who cannot help themselves except to try and break mom's rules, took a different tack this morning. As you may recall I pointed out that absurdity of that comparison by noting that these are not children, but men and women of power and responsibility who are often bound by oaths and certainly the law, and not children who are not mere children with their developmental innocence.

Today this same anchor took the position that Wall Street traders have no moral imperative, no operative sense of right and wrong, that is, their only task is to make money in whatever way that is possible, even if it means cheating, lying, and even creating false opportunities to defraud other people. And it is the fault of the regulators because they are not smart enough and fast enough to stop them.

But the most shocking thing was that Michael Lewis agreed.

The irony of course is that the description was that of functional sociopaths. Rather than just saying the market is rigged, the anchors and even Michael Lewis went on to agree that the market is filled with sociopaths, whose directive is to game the system and defraud the other market participants in the most clever ways that they can. Not by producing anything, not by contributing anything real to society, but by being very successful conmen. And all the parties nodded their heads in agreement.

Whenever you hear this sort of thing, it is often said about Wall Street traders and their special status in finance. But take the same scenarios, the same moral principles, and apply them to some other professions. What if this principle was the basis of the medical profession, or the food industry, or retail stores?

Yes, doctors will always find some way around the regulations in order to falsely charge and do harm to their patients, mostly without killing them outright to their credit, as long as they can make money at it which is their primary objective. And that is the system we have. 

Gas stations will always find some way to cheat their customers by short changing them and faking repairs, because their purpose is to make money any way that they can, and it is our fault for not stopping them.  We need to teach the public to be better judges of mechanical repair issues.  It is not the mechanics. It is just how they are and what they do.   And you can apply that to any number of professions, from plumbers to electricians to zoo keepers.

The moral blindness of those caught up in this culture of deceit is appalling.  The notions they hold would never be tolerated in any other undertaking. But financial crime pays, and the tricks and abuses they perpetrate are less obvious in their effects than a dead child or a woman made blind through quackery.  But they do have effects, and they are killing us.

The purpose of the stock market is to encourage investment and the efficient allocation of capital in productive activities.   But tiers of complexity are added to hide and deceive investors, by cadres of admittedly very smart people who not only perform no useful function, but who in any other industry would be shunned.

This moral blindness is tolerated because there is big money involved.  It involves 'white collar' crimes that engage wide swaths of the most influential voices in our society. 

I wonder if there is a need to have news people, and economists, and politicians to take some basic courses in ethical behavior. They are certainly doing a wonderful job of suppressing their moral sensibilities when it comes to financial fraud, even if the laws do not overtly define and indict these abuses as 'crimes.'   

And when someone points out the hypocrisy and fraud, they first ignore them, and then panic and attack. How dare they undermine the confidence of the system!   For they have become creatures of the system, and that is a big part of the problem in the credibility trap.

They do not get it. They are suffering from a severe case of moral blindness as described by Upton Sinclair when he said, 'It is hard to get a man to see something when his paycheck depends on his not seeing it.'

And the example they give as public figures is rotting the future of our country, down to the bone.