This demonstrates for me everything about economists that makes them superior to lawyers. The myopia of the lawyer and the breadth of vision of the economist.
Yes, it is possible for institutions not to follow the law. It is possible for laws to be written to be broken. You might think it would take a poet to realize that; or perhaps a lawyer, that great cross-examiner of witnesses, before an economist. What do technocrats know about the complexities of behavior, about dissembling and treachery?
But in the event it is the economists who present as ten times more humanist than the lawyers and shrewder judges of the soul. And it is the lawyers who present as robotic and shallow in their judgements. But how can this not be the case? The lawyers are invested in the power of the text. And not even a metaphorical text, like priests, but a literal text! They are invested in literalism, shallowness, and superficiality. Without it they have no claim to value and no professional respect.
So they will look at you and say, without the slightest irony, that if you read the text carefully the Fed had the power to bail out Lehman Brothers. As if, as if, as if what the text says has any first order relevance in determining what happens in the world. As between the devotees of the written rules and the devotees of the unwritten rules, I choose the latter.