Celebrate the Heroes

A recipe for change:

First, because we know about all the villains of Wall Street, it's time to celebrate and empower the heroes. Find those leaders on Wall Street who have acted responsibly and support them to speak out and act. For too long many members of the financial community have been playing a game of chicken in which no firm wanted to be the only one with lower profits. And so they kept on giving loans to people who couldn't afford them and packaging mortgages into bundles that multiplied the risk. But not all. Bring out those who have had the courage to buck these trends and help them to change the game.

Second, even Adam Smith believed that mutual trust and confidence are needed for free markets to operate. He saw the need for sympathy for one's fellow man as a control in the marketplace. But it is hard to create mutual trust and sympathy when different groups are blaming one another and not looking at their own culpability.

Yes, Wall Street entered an ever-accelerating cycle of greater risk and return and did what they do best: make lots of money. But the government stopped regulating this activity and investors wanted those high returns. Academics were mostly silent, and consumers kept buying what they couldn't afford. We all contributed to the bubble, and perhaps change will come when we all take a closer look at the consequences of our own actions. Perhaps we all need to take a walk down the streets filled with foreclosed homes with broken windows and broken dreams. Then perhaps we will be motivated to move ahead on the road to reform.

This is the recipe for change. Let's hope someone's in the mood to cook.

By Deborah Ancona

 |  September 17, 2009; 7:02 AM ET
Category:  Economic crisis
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