The following is a somewhat lengthy comment I submitted to a post on The Baseline Scenario
The Western World is facing a moral crisis of Biblical proportions.. What were the Ten Commandments if not moral regulations for the people that had lost all sense of human dignity? The sad truth about Humans is that free riding is a deeply set behaviour.. We, for the most part, have a hard time turning away from temptation, taking the easy way to riches and power, especially when the chances of getting caught seem to most casual participants in any given scheme as being remote.
I find it quite ironic that the very behaviour that well-healed interests fear from having a “socialist” or “welfare” state – where the lazy and the opportunitic feed on the bounty created by the educated, cultured and powerful – has been flipped on its head. The welfare bums are in fact those who like to think of themselves the natural leaders of the free world. They took the easy way to power and fortune on the backs of the common man fuelled by the conviction that their beliefs about the Nature of Man were not only Just, but for some participants, God given.
Of the commentators on this blog, how many could have resisted? Perhaps we can differentiate between folks who sort of fell into banking and finance not expecting to become fiat money millionaires from those who have been chasing the bucks from the get go… sitting up late at night fantasizing of mansions, fast cars, and faster women, while putting in their time at MBA boot camp. But the point that seems lost on anti-regulatory zealots is that humans are by nature free riders.. there’s tons of literature on the subject…try starting with the Bible. Simply put, humanity has been struggling with this kind of self-destructive behaviour since the dawn of civilaztion. We suffer from huge collective action problems that only solid, well understood and easy to apply rules can help mitigate.
America’s history of championing rugged individualism is at odds with this. But as the events of the past three years have shown, left to their own devices people cheat – plain and simple. Without regulation you get a race to the bottom, where “everybody does it” becomes the name of the game. America used to be a Nation that prided itself in its respect for the rule of law and Justice. But the law in the U.S. has been so perverted by the tendrils of Mamon that Justice is no longer being served.
So while there might be a lot of “innocent” people who just went along with it due to their lack of moral fortitude, this is no excuse to shield them from the consequences of their actions. For a country that worships God as much as it does and that pays so much lip service to moral rectitude I find it disturbing the extent to which morality (or ethics if you prefer) is so rarely discussed. It’s always about the letter of the law. What ever happend to the Spirit? Moreover, it is clear to my layman’s eyes that much of the deceitful behaviour on Wall Street is out and out fraud which IS punishable by law.
Is it that the cost of prosecuting the guilty and the collateral damage it may cause to many of the firms involved and thus the economy as a whole deemed too risky? Is the systemtic risk of throwing a good part of Wall Street in jail greater than the cost of what could happen if business is allowed to proceed as usual?
I will wager (without resorting to a CDS) that only civil disobediance on a massive scale will bring the necessary changes to put America and by extension the Western World back on a path to some kind of sustainable Future… Figuring out how to mitigate climate change and retool American industry – nay, society! – to be competitive with the rising behemoths of the East will require a newly defined contract with America that trumps fairness over bald faced greed! I don’t see how it can be any other way.