I am a portfolio manager for a hedge fund, so I’ve been watching this disaster from the inside. One of the problems President (hopefully) McCain is going to have to deal with is the fact that the CEOs of Wall Street firms really have no idea what their banks actually do on a day-to-day basis. The exotic derivatives and complex strategies are too complicated for the CEOs to understand, because most of them rose to prominence back when American-style options were considered exotic.
“Derivatives and complex strategies are” one more reason why there needs to be firewalls between investment banking and commercial banking.
I think the multiculturalism take is a good one. I also think the exotic derivative arguments is also a good one.
However, I think what trumps both of these is the ENDEMIC CORRUPTION in all phases of American (actually worldwide) society.
Backdating options? Sure no problem.
Failing to report income tax when you’re the house ways and means chairman? What of it?
Paying off your mistress from Federal Campaign funds? Prove it!
Falsely reporting income to increase your stock option pay day? Hey, everybody does it right?
Selling baby food and baby formula with lead and melamine (sp?) in them? Hey the olympics were a rousing success!
This is going on from the highest levels down to the lowest levels. In my state (NC) the governor took a boondoggle trip to Italy to increase tourism to NC (uh-huh) and here recently his wife got a 95% pay raise for her do-nothing job at NC State. And this is just on top of story after story after story of Wake County employees using State credit cards to finance trips to Vegas and buy Jet Ski’s. Think I’m making any of this up? I’m not.
We have many endemic problems including the ones you’ve named but as long as the culture of “Screw you - I’ve got mine” and unabashed corruption that is more typical of Mexico or some other 3rd world country - we’re basically screwed.
My $.02.