VERY recommended reading. 7 pages of common business sense, and a litany of thing I feel should have been questioned by the American people long since.
This article outlines a largely ignored aspect of the recent financial turmoil. It isn't just greedy rich people being corrupt to make more money. That, in fact, isn't a problem at all. That's just human nature, and you'll have as much luck legislating that as you would, say outlawing lust, or envy. No, the issue is that we have constructed a system in which people are being expected, if not outright legally bound to be corrupt.
From the above: "But if any one of them had set himself up as a whistleblower — had stood up and said “this business is irresponsible and we are not going to participate in it” — he would probably have been fired. Not immediately, perhaps. But a few quarters of earnings that lagged behind those of every other Wall Street firm would invite outrage from subordinates, who would flee for other, less responsible firms, and from shareholders, who would call for his resignation. Eventually he’d be replaced by someone willing to make money from the credit bubble."
Right there in black and white. If you don't play the game, you have no business on Wall Street.
Think of it in Darwinian terms. We've set up an environment that weeds out honesty as a trait not suitable for evolution. "Indeed, one of the great social benefits of the Madoff scandal may be to finally reveal the S.E.C. for what it has become. Created to protect investors from financial predators, the commission has somehow evolved into a mechanism for protecting financial predators with political clout from investors. (The task it has performed most diligently during this crisis has been to question, intimidate and impose rules on short-sellers — the only market players who have a financial incentive to expose fraud and abuse.) "
The only solution to the financial situation is a bottom up approach, not a top down approach. Continually propping up failed institutions and saying it's all fine is just postponing the inevitable.
It wraps up with a series of large boldface common sense recommendations like Banks shouldn't pay the credit ratings institutions for their own credit rating, and "Stop making big regulatory decisions with long-term consequences based on their short-term effect on stock prices."
Very well written.