Friday, January 2, 2009
At first, what I need to do is explain what I mean by 'levels'. It is simply this; in the understanding of issues, complex or simple, there are levels of understanding and insight that must be considered. Most of us, all of us, may not possess the necessary fount of knowledge to understand some of the complex financial instruments that are wreaking havoc to the American way of life. Most of us may not possess the necessary expertise to run a hedge fund or manage a huge bank with billions of dollars of assets. Most of us cannot perform delicate brain surgery in the correction of a ruptured intracranial aneurysm. Most of us cannot hit a golf ball 320 yards or play sub-par golf under the rigors of a professional golf tournament. But most of us do know the difference between right and wrong. Bankers lending money to people when they know that those people cannot possibly meet the required payments have violated the basics of right and wrong. Traders selling bundled mortgages to others knowing full well that they are passing on a risky instrument that they themselves don't want to hold are simply wrong at the basic level of honesty/dishonesty. A brain surgeon who does know how to repair a ruptured aneurysm also knows that time is the essence in doing so and is wrong at the most basic level when he decides not to interrupt his weekend by delaying such a surgical procedure. A golf pro who constantly acts like an [expletive] surely realizes at the basic level that his actions are wrong and no amount of denial or rationalization is going to change that fundamental reality. These are but a few examples of a sickness that has spread like a plague throughout America. The majority of people are good and do recognize the difference between right and wrong. However, move one step away from this basic level and most people become forgetful. Rather than incorporate their own considerable personal morality into their conduct at a professional or business level, some mechanism kicks in to result in a 'me first' approach with all of the attendant negative results. In my previous life as a trial lawyer, I once hired a physician to testify in a large series of birth defect cases. Thousands of children were born with missing or defective limbs after their mothers had taken a specific prescription drug during the critical period of limb development during their respective pregnancies. This particular physician was known worldwide for discoveries that saved the lives of untold numbers of children. He was knighted by the queen of England for his work. At our initial meeting, he explained carefully to me that his basic philosophy could be summed up in one phrase; What's in it for me? This physician was ultimately exposed as a fraud for conducting sham scientific studies that were fabricated to bolster his opinions to the ultimate detriment of the thousands of children that I represented. I was shocked at the time, but since then on an informal basis, I have noticed that this characteristic seems to be the basic philosophy of many high achievers. Winning, according to this precept, carries a tag line that implies that winning at all costs, or any cost, is proper. Forget what is right or wrong, seize the moment, is how it goes. Our current economic crisis is the net result of a series of seize the moment ruinous decisions that abandoned the basic level of which I write. Exhibit number one; a man named Madoff. I rest my case.