John Tamny's logic fails on two counts.
Throwing out low-balled LIBOR rates along with the high rates, to achieve the average reported, misses the fact that the low-balled rates would have been higher if accurately reported, thus aggregating all reported interest rates paid on the low end higher up the ladder, necessarily boosting the level at which the lowest rates were thrown out and skewing the average higher.
Here he says it:
As readers are aware, the banks that participate submit what they estimate to be their cost of credit, and the 4-5 highest and lowest estimates are thrown out. ...
Of course assuming Barclays truly lowballed the number in question, its false estimate wouldn't have factored into the calculation. And if it did, as in if Barclays' estimates actually worked to lower various Libor-informed interest rates, then the borrowers on whom lenders allegedly predate would have been made better off.
No, false low estimates most certainly would have factored into the calculation precisely because their input at their true higher level was missing.
But the real kicker is, so what if they succeeded at cheating! Big deal! At least borrowers got a better deal!
I don't know how much more morally obtuse you can get.
For some people, nothing more than materialism can be imagined, and they're usually either communists or libertarians. For both of them, the end justifies the means.
