Robert Samuelson notes that the most interesting thing about the charges against Goldman Sachs might not be the case, but rather what it tells us about how Wall Street has changed.
Once upon a time, Wall Street's leaders saw themselves as arbiters of capital, helping allocate society's savings to productive uses. By contrast, Wall Street's major firms now see themselves as captains of "the market," navigating it -- for themselves and sometimes their clients -- for maximum gain. This is a distinction with a difference. . . .
A court will presumably decide the legal issues. But the moral question is more insistent. Goldman abdicates some of Wall Street's role as arbiter of capital, deciding what should be financed and traded. It adopts a strict market standard: If buyers and sellers can be found, we'll create and trade almost anything, no matter how dubious. Precisely this mindset justified the packaging of reckless and fraudulent "subprime" mortgages into securities. Hardly anyone examined the worth of the underlying loans.
Samuelson notes that there were problems with the old way of doing business. But what's most interesting to me is the change he describes. It seems to apply to many other walks of life. The idea of using liberty responsibly, an idea that always central to the argument for a free society, is less present now in the broader culture than it used to be.
Discussions - No Comments Yet
Leave a Comment