“But that’s the problem: there is no longer any serious pressure from outside the market. The tyranny of the short term has extended itself with frightening ease into the entities that were meant to, one way or another, discipline Wall Street, and force it to consider its enlightened self-interest.”
– Michael Lewis & David Einhorn, “The End of the Financial World as We Know It,” The New York Times, January 3, 2009
Michael Lewis (of Liar’s Poker and Moneyball fame) and David Einhorn published in The New York Times this weekend a devastating critique of nearly every actor in the current financial crisis and – correctly, by my figuring – gets to the essence of what is wrong on Wall Street and in Washington: an unbelievable convergence of ignorance and avarice.
What makes Lewis’ and Einhorn’s essay such depressing reading is the depth of the causes at work in getting us into this mess. There is no single bullet that knocked off the financial system – it was a hail of gunfire. Wall Street financial firms, the Securities & Exchange Commission, the ratings agencies, the Department of Treasury, the Federal Reserve, and the congressional committees and subcommittees charged with oversight of financial companies all had their fingers on the trigger.
The essay tells us relatively little that is new, but its perspective and ability to fit disparate parts into an understandable narrative is helpful. Definitely check it out. Very interesting reading.
You might check out, as well, my essay from mid-October, “The free-market straw man,” which makes many of the same points.
No comments:
Post a Comment