Of Bankers and Ship Captains. by Bill Bonner

Will no one rise to the defense of Captain Francesco Schettino? No? Then we will!

The poor man is calumnied as a pusillanimous incompetent. Just because he hit a rock. Heck, anyone with a ship that big could hit a rock. And the rock wasn’t s’posed to be there!

This incompetence charge is completely baseless. He had even tested almost the exact same route under almost the exact same conditions back in August. He sailed through the straits without a scratch. It was perfectly reasonable for him to conclude that the passage was safe. Perhaps someone put the rock there, just to catch him out.

And then comes the charge that he ignored the fact that his ship was taking on water…and abandoned ship before all the passengers were off. Well, yes, but who wouldn’t? As to the first part of that complaint, how could he know the ship was sinking until it actually began to sink? And then, once it was determined that she was going down, what was the point of hanging around? There were perfectly able seamen to assist; and those passengers who had survived the collision and the sinking proved that they were perfectly capable of getting out on their own. Besides, the idea that the captain goes down with the ship is out of date. Now, we are in a new age. Now, failed captains get a bonus…and a retirement package.

In the old days, ship owners – like bank owners – were real capitalists. If the ship went down, the owners could lose everything. So, they required managers – captains – who were fully committed to bringing the vessel home safely. And if the ship sank, they were supposed to sink with it.

The same was true of engineers during the Roman era. If they built a bridge that fell down, the people who paid for it were out a considerable amount of money. So the engineers were required to stand under the bridge when the scaffold was taken away. If the bridge failed, the engineer was toast.

Bankers, too, were expected – until well into the 20th century – to suffer their own mistakes. If a bank failed. A banker was ruined.

But those days are clearly gone. Now, the losses are felt by insurance companies and mutual fund investors…and who gives a damn about them? So, why should the captain go down? He should be treated like a bank manager…or the CEO of a large public company. He shouldn’t go down a hero. He should go up, a zombie.

January 27, 2012

Bill Bonner is the author, with Addison Wiggin, of Financial Reckoning Day: Surviving the Soft Depression of The 21^st Century and The New Empire of Debt: The Rise Of An Epic Financial Crisis and the co-author with Lila Rajiva of Mobs, Messiahs and Markets (Wiley, 2007). His latest book is Dice Have No Memory. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning.