Thanks. And I agree that wall street incentives are huge problem in the way they are set up. How did we get so many things wrong.
Honestly, I don’t think it was the fault of the public at large. The shareholders of the financial services companies, to whom the managers owed fiduciary duties, allowed these things to happen. The prominent shareholders, such as, for example, CALPERS and TIAA-CREF, to my knowledge did not object to the perverse incentives, precisely because these prominent shareholders trusted the fiduciaries to act in their interest, and believed somehow that the incentives were appropriate. (Perhaps the managers of the prominent shareholders — the large pension and other managed funds — acted as if these incentives were appropriate because these managers’ own incentives were quite similar.) Now those fiduciaries are powerless to stop a massive loss of value (as the market demands), so the shareholders are looking not to their fiduciaries (who can in effect do nothing) but to the taxpayers.