It was shocking to hear former Federal Reserve Bank Alan Greenspan admit he recognized a “flaw” in his logic and reasoning. So, he thought banks wouldn’t be greedy and would rise to the occasion and protect their shareholders and their capital base.
Like everyone else, the CEOs of these banks were enriching themselves at taxpayer expense. When you get paid $100 million a year, or even $25 million a year — and you believe truly that you deserve that kind of remuneration — you lose your ability to recognize that you have a public trust. That hundreds of thousands or even millions of investors are depending on you to make the right decision.
So we are all suffering the consequences of these actions, and probably will be for some time to come.
It was the perfect storm all around. The good news is that after we work our way out of this global depression we’re heading for, we’ll likely never pass this way again in our lifetimes. At least I hope not.
Oct. 24, 2008