Monday, February 28, 2011
Biggest Fish Face Little Risk of Being Caught
This is the title of a NYT article which seeks to explain why no CEO is likely to see jail time for his part (no need for gender-neutral language here) in creating the financial calamity of 2008. This is in marked contrast to the savings-and-loans fiasco of the 1980s. Following that series of unfortunate events, the federal government invested a lot of effort and money in prosecuting wrong-doers. As a result, over 1,000 felons were locked up. This time around, the federal government seems to have neither the resources nor the resolve to launch a similarly grand crusade. And financial operations have become so complicated that telling ingenuous creativity from fraud is all but impossible. Fraud is evident from top to bottom of the financial food chain – from CEOs withholding vital information from gullible investors, to mortgage brokers misleading clients about the terms of their loans and even encouraging them to lie on their applications. Still, the biggest fish have little to fear, and many have emerged from the debacle they engineered with increased net worth and unshaken self-confidence. What lessons should kids and all of us draw from this foreseeable failure to punish the criminal wrongdoings of those numerous vultures (who have not expressed the slightest regret or remorse)? I am not sure, but I guess conservative commentators will continue to blame the obvious erosion of the Protestant ethic on the usual suspects – an assortment of tenured and non-tenured liberal intellectuals, feminists, multiculturalists, gay rights activists, etc. This strikes me as a truly monumental failure to connect the dots by some otherwise intelligent, well-read, and generally nice people.