Are Lapses Of Best And Brightest Prelude To Our Decline And Fall?

IBD Editorials ^ | February 12, 2009 | Victor Davis Hanson

[Kaslin]

Most historians agree that earthquakes, droughts or barbarians did not unravel classical Athens or imperial Rome.

More likely the social contract between the elite and the more ordinary citizens finally began breaking apart — and with it the trust necessary for a society's collective investment and the payment of taxes. Then civilization itself begins to unwind.

Something like that has been occurring lately because of the actions on Wall Street and in Washington, D.C. The former "masters of the universe" who ran Wall Street took enormous risks to get multimillion-dollar bonuses, even as they piled up billions in debt for their soon-to-be-bankrupt companies.

Financial wizards like Robert Rubin at Citicorp, Richard Fuld at Lehman Bros. and Franklin Raines at Fannie Mae — all of whom made millions as they left behind imploding corporations — had degrees from America's top universities.

They had sophisticated understanding of hedge funds, derivatives and subprime mortgages — everything, it seems, but moral responsibility for the investments of millions of their ordinary clients.

The result of such speculation by thousands of Wall Street gamblers was that millions of Americans who played by the rules, and put money each month away in their 401(k) plans and elsewhere, lost much of their retirement savings. Many likely will have to keep working well into their 60s or 70s, and delay passing on their jobs to a new generation awaiting employment.

Yet most disgraced Wall Street elites will retain their mega-bonuses and will not go to jail. Their legacy is having destroyed the financial confidence of a society that depends on putting capital safely away to be directed for investment by responsible overseers.

[r9etb]

Not really.. What happened was/is when America became too cowardly to use the 2nd amendment to revolt..

Nope. Unless you're in some African or central American sh*thole, revolt is just the end result of a prior decay. It is never something to be desired for its own sake.

The only reason "revolt" would be an option, would be if the moral foundations of the nation had already crumbled. Hansen suggests we may be reaching that point -- it's not a happy thought.

[TCats]

“Why do you say they are incompetent?”

You really think these people would have done these things if they had really known where it all ended? Certainly a few, very greedy and competent, knew about it and took the money and ran. Most just thought it was good business and went along. These were already compensated well and if they were as smart as they thought they were would have scaled it back to avoid what evolved.

As for legalities, I guess the deficiencies in our legal code provide the basis for the distinction between ‘illegal’ and ‘wrong’. i.e., if it was not illegal it should have been. What these people engaged in is embodied in the term ‘constructive fraud’, incompetence so egregious as to be fraudulent not withstanding the intent.