Doing Ethics

In my first blog on hard choices I noted President Obama's assertion that the economic crisis wasn't simply the result of "greed and irresponsibility on the part of some," but a consequence of "our collective failure to make hard choices and prepare the nation for a new age."

Hans Morsbach, my brother-in-law and a successful businessman, responded with this comment: "Greed is a big part of the problem. The system allowed financial expert to collect commission on services of no value. Experts bundled mortgages of which they should have known that they were of less value than their label suggested. They did not care and just collected the service fee. When the bubble burst, they had their money and the taxpayers had to bail them out."

"Much of the blame rests with the SEC and Bush's failure to regulate. He preferred to think that no regulation was necessary as the free market would do it. He was wrong. Financial executives made millions (which are not recoverable) and the taxpayers pay the unearned income of the financial experts and also the shortfall of the value of mortgages mislabeled. The 'system' worked as the investment houses made money all along. It is like the Ponzi scheme which works smoothly until the market forces expose the problem."

I agree with Hans. Our economic system will not be responsible and just without effective regulation by the federal government. Ethics requires enforceable rules as well as encouragement and recognition of good conduct.

With hope...Bob

Labels: economics