Steven Mintz Writes a Perfect Paragraph

Steven Mintz Writes a Perfect Paragraph

The paragraph at the bottom of the page is from The Ethics Sage‘s latest post called – Bespoke Tranche Opportunity: It’s déjà vu all over again

The Ethics Sage
The Ethics Sage

I call it a perfect paragraph and in terms of business ethics, it is. The lessons of the 2007 financial crisis that would have made an intelligent man cautious about financial innovation have not been learned. The one lesson that has sunk in, is that if your institution is big enough and influential enough not only will the government prevent its failure, you will keep your job and with a little luck your bonus.

The Ethic Sage’s analysis is correct. There is going to have to be more government regulation. If not, we risk another global catastrophe.

The financial crisis and its aftermath created a hole in the moral ozone that is supposed serve as a check on excessive, risky behavior by investment bankers. It is a breach that, in my opinion, is irreparable absent any dramatic steps to better control the risk appetite of some in the financial services industry. This saddens me because the last thing we need is more government regulation. Unfortunately, it may be necessary because the very ethical standards that are supposed to protect the public under capitalism have broken down. Adam Smith in his iconic The Wealth of Nations stated that: By pursuing his own interest he [the capitalist] frequently promotes that of the society more effectually than when he really intends to promote it. His theory no longer describes the way our free market economy works and its breakdown explains, in part, the economic gap in our society.

As always, I recommend you to go to The Ethic Sage’s blog and read the entire post. Further, you should favorite the site and read it regularly. I do.

James Pilant

Will the Government Ever Attempt to Enforce the Law Against the Bank of America?

Bank of America is teetering on the edge of collapse. It has received enormous aid from the federal government in bailouts, loans and preferential treatment to the tune of trillions of dollars of government guarantees. To add further injury to the insults already suffered, the federal government, that is, the Obama Justice Department has okayed a settlement protecting Bank of America from lawsuits for its practice of filing false affidavits and inventing ownership of property in American Courts. Yet even with this help, the bank is run so badly that it is still failing.

How long does this go on?

Is the government going to bailout this bank one more time?

What crimes do they have to commit? What incompetence do they have to display? What greed in the form of enormous executive bonuses do they have to display? – before enough is enough and they are allowed to perish?

James Pilant

Bank of America: Too Crooked to Fail | Politics News | Rolling Stone

In a pure capitalist system, an institution as moronic and corrupt as Bank of America would be swiftly punished by the market – the executives would get to loot their own firms once, then they’d be looking for jobs again. But with the limitless government support of Too Big to Fail, these failing financial giants get to stay undead forever, continually looting the taxpayer, their depositors, their shareholders and anyone else they can get their hands on. The threat posed by Bank of America isn’t just financial – it’s a full-blown assault on the American dream. Where’s the incentive to play fair and do well, when what we see rewarded at the highest levels of society is failure, stupidity, incompetence and meanness? If this is what winning in our system looks like, who doesn’t want to be a loser? Throughout history, it’s precisely this kind of corrupt perversion that has given birth to countercultural revolutions. If failure can’t fail, the rest of us can never succeed.

Bank of America: Too Crooked to Fail | Politics News | Rolling Stone



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