Did Porn Cause the Financial Crisis?

Did Porn Cause the Financial Crisis? April 26, 2010

That is the headline in an article in “The Atlantic”:

The above headline might seem like a joke. It isn’t. Senior staffers at the Securities and Exchange Commission were surfing Internet pornography when they should have been policing the financial system. A deeply disturbing SEC memo to Senator Chuck Grassley R-IA exposing this problem was reported Thursday night by ABC News. Here are some highlights via the Associated Press:

_A senior attorney at the SECs Washington headquarters spent up to eight hours a day looking at and downloading pornography. When he ran out of hard drive space, he burned the files to CDs or DVDs, which he kept in boxes around his office. He agreed to resign, an earlier watchdog report said.

_An accountant was blocked more than 16,000 times in a month from visiting websites classified as “Sex” or “Pornography.” Yet, he still managed to amass a collection of “very graphic” material on his hard drive by using Google images to bypass the SECs internal filter, according to an earlier report from the inspector general. The accountant refused to testify in his defense and received a 14-day suspension.

_Seventeen of the employees were “at a senior level,” earning salaries of up to $222,418.

_The number of cases jumped from two in 2007 to 16 in 2008.

The cracks in the financial system emerged in mid-2007 and spread into full-blown panic by the fall of 2008.On one hand, two cases in 2007 means that either it wasnt that widespread of a problem or it hadnt yet been detected. On the other hand, the fact that this behavior seems to have been so prevalent among senior level employees is particularly troubling. Theyre the ones who should have been closely watching the financial industry and leading the way to help prevent the system from collapsing.

via Did Porn Cause the Financial Crisis? – Business – The Atlantic.

While it is unlikely that porn actually CAUSED the financial crisis–unless maybe everyone in banks, the investment houses, the real estate industry, and other financial players were also spending all their time on porn and so were no longer paying attention to anything else–this is still mind-boggling. Is porn so addictive that it can eat away at the brain? How could any rational person be so foolish as to view and even download pornography on company computers? How could any person with any integrity at all spend 8 hours a day–that is to say, ALL DAY AT WORK–viewing pornography? While earning over $200 K a year? That salary coming from taxpayers? Pornography evidently is not only morally degrading–sexually but also in this case the equivalent of theft–but it makes a person stupid

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What Are Your Thoughts?leave a comment
  • ED

    Fiddling while Rome burned…

  • ED

    Fiddling while Rome burned…

  • Jane

    It seems stupid because he got caught. But, anyone that can spend all day at work NOT doing work and it goes unnoticed for weeks (or months or however long he got away with it) sounds pretty crafty.
    Why does it matter that he was making 200k a year? Wouldn’t it be just as wrong if taxpayers were paying 20k instead?

  • Jane

    It seems stupid because he got caught. But, anyone that can spend all day at work NOT doing work and it goes unnoticed for weeks (or months or however long he got away with it) sounds pretty crafty.
    Why does it matter that he was making 200k a year? Wouldn’t it be just as wrong if taxpayers were paying 20k instead?

  • Winston Smith

    Is porn so addictive that it can eat away at the brain? Heck, yes.

    Many workplaces have software that blocks such sites. My guess is that the employees (whose work can be fairly boring and depressing) tried visiting those types of sites once or twice, and when the sky didn’t fall, they gradually got into the habit.

    That behavior may be reprehensible, but is it possible that Goldman Sachs had a hand in planting this story? The media and the public would rather think about a story involving sex than one involving complicated financial instruments, and thus the focus has shifted to the SEC, and away from Goldman and its ilk who effectively wrecked the economy.

  • Winston Smith

    Is porn so addictive that it can eat away at the brain? Heck, yes.

    Many workplaces have software that blocks such sites. My guess is that the employees (whose work can be fairly boring and depressing) tried visiting those types of sites once or twice, and when the sky didn’t fall, they gradually got into the habit.

    That behavior may be reprehensible, but is it possible that Goldman Sachs had a hand in planting this story? The media and the public would rather think about a story involving sex than one involving complicated financial instruments, and thus the focus has shifted to the SEC, and away from Goldman and its ilk who effectively wrecked the economy.

  • Tom Hering

    To say the economy got into trouble because SEC employees were surfing porn, is to admit that the people they should have been watching are the ones who harmed the economy. Any way you look at it, the story tells us the economy is safeguarded when there’s active regulation.

  • Tom Hering

    To say the economy got into trouble because SEC employees were surfing porn, is to admit that the people they should have been watching are the ones who harmed the economy. Any way you look at it, the story tells us the economy is safeguarded when there’s active regulation.

  • Orianna Laun

    Ask Ted Bundy what it can do.

  • Orianna Laun

    Ask Ted Bundy what it can do.

  • WebMonk

    I don’t think it’s anything special about porn that is doing this. There are all sorts of things that people do on the computer that steal from company time and stuff.

    Online games, Facebook, blogs, commenting on blogs, shopping, etc. Porn is one of many types of addicting distractions.

  • WebMonk

    I don’t think it’s anything special about porn that is doing this. There are all sorts of things that people do on the computer that steal from company time and stuff.

    Online games, Facebook, blogs, commenting on blogs, shopping, etc. Porn is one of many types of addicting distractions.

  • My question is how the guy’s annual review looked after he spent most of his time surfing smut. I have a hunch that it didn’t look that bad, and there’s the real scandal.

  • My question is how the guy’s annual review looked after he spent most of his time surfing smut. I have a hunch that it didn’t look that bad, and there’s the real scandal.

  • Lisa

    @7

    Maybe he’s a really good multi-tasker and was able to complete his work while viewing porn.

  • Lisa

    @7

    Maybe he’s a really good multi-tasker and was able to complete his work while viewing porn.

  • R. Hall

    “Is porn so addictive that it can eat away at the brain?”

    Actually, that dovetails with the thesis of William M. Struthers’s recent book “Wired for Intimacy: How pornography hijacks the male brain.”

    I’ve not read it, but Challies quotes the book as saying that men who are porn addicts “have unknowingly created a neurological circuit that imprisons their ability to see women rightly as created in God’s image. Repeated exposure to pornography creates a one-way neurological superhighway where a man’s mental life is over-sexualized and narrowed. It is hemmed in on either side by high containment walls making escape nearly impossible.”

    Not that it is only a brain problem, of course.

  • R. Hall

    “Is porn so addictive that it can eat away at the brain?”

    Actually, that dovetails with the thesis of William M. Struthers’s recent book “Wired for Intimacy: How pornography hijacks the male brain.”

    I’ve not read it, but Challies quotes the book as saying that men who are porn addicts “have unknowingly created a neurological circuit that imprisons their ability to see women rightly as created in God’s image. Repeated exposure to pornography creates a one-way neurological superhighway where a man’s mental life is over-sexualized and narrowed. It is hemmed in on either side by high containment walls making escape nearly impossible.”

    Not that it is only a brain problem, of course.

  • Regarding whether SEC smut-watching caused the crisis; no, what caused the crisis was abyssmally illogical incentives given to all areas of finance, incentives that would only be worsened if Obama’s plan to overhaul financial regulations were enacted.

    In a nutshell; due to Fannie Mae, Freddie Mac, and a slew of other regulations, big bankers know that when they screw things up royally, they will not suffer loss. Hence, they took, and still take, risks that bankers would not take if they knew they would be left holding the bag.

  • Regarding whether SEC smut-watching caused the crisis; no, what caused the crisis was abyssmally illogical incentives given to all areas of finance, incentives that would only be worsened if Obama’s plan to overhaul financial regulations were enacted.

    In a nutshell; due to Fannie Mae, Freddie Mac, and a slew of other regulations, big bankers know that when they screw things up royally, they will not suffer loss. Hence, they took, and still take, risks that bankers would not take if they knew they would be left holding the bag.

  • DCrunnergal

    Not sure how he could have been making 200k off of taxpayer money. The highest level in government is a GS-15 Step 10 and they max out at 155k in the DC locality. Maybe the reporter rounded up. A lot.

  • DCrunnergal

    Not sure how he could have been making 200k off of taxpayer money. The highest level in government is a GS-15 Step 10 and they max out at 155k in the DC locality. Maybe the reporter rounded up. A lot.

  • DCgal, your numbers are out of date.

    http://sweetness-light.com/archive/20-of-federal-workers-get-over-100k

    USA Today clearly reported on a bunch of DOD civilians getting well over $170k per year. I would also assume that to get top people in finance, $155k is just not going to do it when they can easily get 2-3 times that in the private sector.

  • DCgal, your numbers are out of date.

    http://sweetness-light.com/archive/20-of-federal-workers-get-over-100k

    USA Today clearly reported on a bunch of DOD civilians getting well over $170k per year. I would also assume that to get top people in finance, $155k is just not going to do it when they can easily get 2-3 times that in the private sector.

  • Bubba (@12), honestly, a USA Today article? I thought conservatives didn’t trust the mainstream media, anyhow. And throwing in a baseless assumption on top of that really doesn’t strengthen your argument.

    It’s not like it’s hard to find the 2010 salary tables from the Office of Personnel Management. What is hard — at least for me — is figuring out where a “senior level” SEC employee fits in all that data. I have no idea.

    That said, DCRunnerGal’s numbers are not, in fact, “out of date”. You can look up the GS-15/step 10 for DC[1] and find that the base salary is, in fact, $155,500. What’s not clear to me is whether that table applies in this case, or if there is additional money added on top of that salary. No idea. But if you’re going to prove her wrong, you might want to start there.

    [1]opm.gov/oca/10tables/html/dcb.asp

  • Bubba (@12), honestly, a USA Today article? I thought conservatives didn’t trust the mainstream media, anyhow. And throwing in a baseless assumption on top of that really doesn’t strengthen your argument.

    It’s not like it’s hard to find the 2010 salary tables from the Office of Personnel Management. What is hard — at least for me — is figuring out where a “senior level” SEC employee fits in all that data. I have no idea.

    That said, DCRunnerGal’s numbers are not, in fact, “out of date”. You can look up the GS-15/step 10 for DC[1] and find that the base salary is, in fact, $155,500. What’s not clear to me is whether that table applies in this case, or if there is additional money added on top of that salary. No idea. But if you’re going to prove her wrong, you might want to start there.

    [1]opm.gov/oca/10tables/html/dcb.asp

  • DCrunnergal

    Bubba,

    I’m a federal employee, so I know the system! GS-15 step 10 is the highest level in federal government and there is locality pay. I work in DC, so I just happen to know the locality pay!

    Here is where you can confirm the salaries yourself:
    http://www.opm.gov/oca/10tables/html/dcb.asp

  • DCrunnergal

    Bubba,

    I’m a federal employee, so I know the system! GS-15 step 10 is the highest level in federal government and there is locality pay. I work in DC, so I just happen to know the locality pay!

    Here is where you can confirm the salaries yourself:
    http://www.opm.gov/oca/10tables/html/dcb.asp