When bad actors commit bad acts we frequently hear them accused of “gaming the system.” The fact is, however, that most of the time they were at the core of the system not outside of it. The financial meltdown was precipitated by institutions that failed to take their fiduciary responsibilities to investors and the American people seriously. And they were often run and continue to be run by ‘the smartest folks in the room,’ except of course when it came to figuring out that their devious money-making schemes would have devastating consequences for their industry and world markets.

Still, instead of accepting what most rational observers understand was the inevitable outcome of gargantuan greed, incompetence and poor regulatory mechanisms, the banking sector maintains an arrogant posture of righteous indignation regarding attempts to rein in egregiously irresponsible practices. And it is supported by free-marketers who fear ‘over-regulation’ will inhibit ‘legitimate’ risk-taking by entrepreneurs not to mention challenge politicians who benefit financially in the furtherance of their undistinguished careers. Wasn’t it obvious at the time, even to the untutored mind, that allowing banks to morph into securities operations was a potential land-mine.

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