What does the financial industry contribute to our country's economic well-being? Answer: not much lately. And what can we do to bring it back in line? I think this commentary in the Economist talking about using public shame to change the culture of Wall Street is right on.
Third, I'm increasingly of the belief that the best thing that might come out of the crisis would be the use of public anger to change the culture of Wall Street. It's hard to see how the world would be a worse place if outlandish bonuses were met with vocal public scorn, or if the brazen pursuit of financial wealth were looked down upon, or if regulatory weakness in the face of Wall Street pressure were greeted with hooting derision. Greed can be good. Markets thrive on it. It has driven people to build better technologies and devise better supply chains and make better movies. On Wall Street, greed has driven firms to move their offices a few miles closer to an exchange so that their online trades can be executed nano-seconds faster than their competitors'. It has generated innovations in the contruction of personal financial products so that fees can be better hidden. Markets work when the pursuit of self-interest generates societal benefits, which is why we generally praise the self-made man or woman. They've done well for themselves while doing well for the rest of the country. Wall Street should be held to the same standard. If financial executives are going to behave as parasites, they should be shamed as parasites. Maybe nothing will change as a result, and they'll comfort themselves by drying their tears with gold leaf. But maybe it will have an effect.