Short Cuts and Shredded Wheat

I’m a practicing lawyer, and by all accounts, I am in one of the shadiest and most despised professions on earth… until this week, when Wall Street hedge fund managers and investment bankers shoved me and my disliked brethren into a relative breath of fresh air. What’s going on here? What’s the bigger picture?

When it comes right down to it, our country seems to be divided into those who work to make this a better country for us all, and those who work this country to make a better living for a relative few. It’s not about what’s right or makes sense – it’s about finding the loophole that will make a few folks rich, about creating the loopholes to benefit the special interests that really are running this country.

Think about it. Do oil companies swimming in cash really need the tax breaks that give them huge benefits? We call that the “oil depletion allowance” that lets big oil avoid big taxes. Did we really need to leave a huge gaping hole in our regulatory schema to let hedge funds tell savings and loans, banks and real estate brokers that they had the “numbers-defying secret” to blend high risk mortgages from unqualified borrowers destroy their lives by purchasing overvalued real estate without any hope of paying the monthly nut?

Lie on those income statements! Take on mortgages with interest rates sure to skyrocket. Those fund managers actually told everyone that if you blend enough bad mortgages into one huge pile, sell units in that pile (derivatives), they can’t all be bad! The blended power of the masses would correct for the default of the expected few. They couldn’t possibly default in numbers that could tank the economy! But they did. These folks’ actions represent one of the greatest massive ethical lapses in American history.

We trust people to do the right thing, even when everyone knows “this cannot last.” Leave them alone; the market will make it right. Well, folks do not seem to do the right thing… and if enough people do the clearly wrong thing, it becomes accepted practice. Would factories really stop belching smoke into the air because it’s bad for the environment… even their competitors could make cheaper products because they didn’t have to pay for pollution controls? Special interests hire lobbyists and create massive fund-raising moments for aspiring politicians. What chance does an ordinary taxpayer have?

Why does it take a total meltdown for our voices to be heard? Where were our Congressmen and women, our President and cabinet, before this obvious problem occurred? Where were the regulations that should have prevented this debacle? Why did our Congress and the executive branch accept the words of the oil industry, the finance industry and ignore what simple addition, subtraction, division and multiplication could have told an average tenth grader presented with the same numbers? Why is there a problem that needs such a massive fix in the first place? And why do I feel like a bowl of shredded wheat without the comfort of milk, cream or even a spoonful of sugar?!

I’m Peter Dekom, and I approve this message.