Greater Lawlessness Causes Great Recessions

Some economic food for thought…


Popular Economics Weekly

We know Greg Smith’s unveiling of Goldman Sachs’ ‘culture’ of GS profits ahead of clients’ interests was nothing new. And that real laws were broken—from conflicts of interest to outright fraud. The 2010 congressional hearings unveiled much of the double dealing that was rationalized by Goldman Sachs’ buyer-beware code—its clients should be sophisticated enough to know that Goldman would try to maximize its own profits, before its clients’ profits.

But other laws were broken; as well as economic rules that govern sound business practices in the runup to the Great Recession. Pundits have traced the decline of Wall Street ethics from the morphing of partnership-owned investment banks to corporations, as well as the enormous growth of financial markets that bred outright greed.

But there is little mention of how it caused our economic decline into the Great Recession. What was behind this culture of greed and unethical…

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