The Financial Crisis is Your Fault (and Mine)

I posted earlier today about an excellent article on the financial crisis by Michael Lewis.

In the post, I mentioned the “righteous rage” I felt, and I suspect we all feel, the more we learn about what’s happened to our financial system. It’s the helpless anger we feel when bad things happen to good people (like us, of course) and the fiery vitriol that wells up inside us when good things happen to bad people (like the Wall Street CEOs).

But let’s remember a few things.

The market was de-regulated by politicians and policy-makers. They were elected, or appointed by those who were elected, by the collective us. Elections have consequences.

“Bad” decisions were made by CEOs and managers and grunts, all of whom were acting in their own perceived best interest — quarter-over-quarter, year-over-year revenue results, and revenue growth and profitability increases… because, collectively, with our instant-gratification, beat-the-market, retire rich and young obsession, we demanded it.

Those CEOs and managers and grunts were put in an impossible situation by our collective greed and decades-long erosion of the safeguards that previously held them in check. Do what’s “right,” sacrifice results, get canned; or do what’s expedient, get rewarded, and do it again.

We created an environment in which CEOs and employees could be fired for not maximizing profit. In the armed forces, it’s known as dereliction of duty; in the corporate world, fiduciary irresponsibility.

Sure, many of them got rich, and many of us have been and will be screwed — maybe for the rest of our lives.

But we were all complicit. We share the blame. And we deserve a little of that righteous rage, ourselves.