Immorality – The Bank Lawyer Version

“Many of us (including yours falsely) in the fat and happy land of milk and honey, have been busily filling our pie holes and demanding a larger share of an economic pie that we expect will grow larger and larger until the sun burns out (or we croak, whichever comes first), and are complicit in fostering attitudes that institutions like Bear Stearns merely reflect. After all, Bear Stearns is nothing more or less than the collection of human beings who own and run it. It’s not as if the legal fiction that is “Bear Stearns” could “strike a pose” or “have an attitude.”

I think the crux of the problem with many aspects of American life is that many of us want, with a libertarian ferocity, absolute freedom of economic action and, simultaneously, an absolute freedom from suffering any adverse economic consequences as the result of those actions. Would Wall Street have idly stood by if Congress, state legislators, and/or federal or state regulators “stifled” their ability to create the subprime mess (“You’re thwarting innovation and depriving the poor of access to credit and the American dream of home ownership.”)? No, they would not, …

As the inevitable excesses unwind, does anyone really expect that the majority of the American public, even those who most heartily wring their hands about “moral hazards,” would be willing to suffer the economic dislocation that would likely occur if the federal government didn’t intervene (especially in a presidential election year) to cushion the blows …It’s great to teach the “big boys” lessons about “moral hazards” as long as I can still afford my Venti Caramel Macchiato and raspberry scone. The federal government is doing precisely what the average Jack and Jill wants them to do: “Make my life painless…”