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Kurt Schmoke
Political/Education leader

Kurt Schmoke

A former mayor of Baltimore City, Kurt Schmoke is Dean of Howard University School of Law.

No Downside to Greed

I am skeptical about the ability of individual CEOs to change the culture on Wall Street that led to the recent economic crisis. What would happen to the leader of a public company who announced that he or she was not focused on maximizing profits in the short run, but was concerned about strengthening the company for the long term? Millions of Americans who do not own stock in that company would praise the virtue of that CEO while his or her stockholders would scream bloody murder.

Right now it appears that the pursuit of greed has no downsides, except if you work for a company that has to plead for help from a government official who was formerly chairman of one of your company's competitors. The private-sector pressures on Wall Street business leaders are such that we are unlikely to see significant change in the business culture. Appropriate government intervention will be necessary to alter the conduct that has led to such disastrous economic results in our recent past.

By Kurt Schmoke

 |  September 18, 2009; 6:29 AM ET
Category:  Economic crisis Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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Jama, you left out NO Child Left Behind, which vastly enriched Bush's friends (FOB) and has led to the abandonment of the public schools by the middle class (those that still have any resources) and the dumbing down of public education for everyone else. When the book is writ up Yonder, NCLB will be ONE of the attrocities committed against the American public.

And I agree: put these thieves and con artists IN JAIL.

Posted by: catlady1 | September 22, 2009 6:49 AM
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remind me again what the purpose of Goverment is???

to praphrase Madison we have governments because we know man is greedy

Posted by: JohnAdams1 | September 22, 2009 5:48 AM
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@DAN1138, JFV123, JERKHOFF et al..

There is a time value to money but no time value to Law - the time value must be provided by Regulation.

Greed and Envy are two sides to the same coin if you will excuse the expression, but both are time valued: I do not envy Bernie Madoff as much as I once did.

Here's the deal: I hate Regulation as much as the next guy, but it is the only way to insure that all (human) plaintiffs are not rendered indigent before a finding of fact. It is only recently that Public Defenders in Texas were prohibited from napping during Capital Murder trials, so this Regulation as Social Conscience thing might be a bit hard to swallow. Too bad. Bringing the Law up to the speed of Money, Greed and Envy is the only rational approach.

Posted by: gannon_dick | September 21, 2009 7:34 PM
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The greedy indulgences of the banking community have put us - and continue to put us - at immense risk. And we know who walks off with their pockets stuffed and whose are empty when things go badly. Americans, over 12% unemployed, are still living with the fallout from the last financial cataclysm.
What this country needs is to see the bankers who caused this mess indicted by grand juries and on their way to jail. Forget new task forces , committees, and regulations for now. Go after the thieves who did what already happened. Those people committed economic theft against me and my country.

A teenage kid will do hard time for stealing even a few bucks from one of these banks. But, these bankers steal and gamble away trillions of taxpayer money, with no consequences. Why are we risking our national wealth attempting to bail out those who game the derivatives market speculating on things they do not own and do not plan to buy and why are we attempting to bail out companies that insure nonsense like that?

I'm completely fed up with any talk of future reform until I see real punishment for past misdeeds and crimes

Posted by: shadowmagician | September 21, 2009 6:10 PM
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The greedy indulgences of the banking community have put us - and continue to put us - at immense risk. And we know who walks off with their pockets stuffed and whose are empty when things go badly. Americans, over 12 unemployed, are still living with the fallout from the last financial cataclysm.
What this country needs is to see the bankers who caused this mess indicted by grand juries and on their way to jail. Forget new task forces , committees, and regulations for now. Go after the thieves who did what already happened. Those people committed economic theft against me and my country.

A teenage kid will do hard time for stealing even a few bucks from one of these banks. But, these bankers steal and gamble away trillions of taxpayer money, with no consequences. Why are we risking our national wealth attempting to bail out those who game the derivatives market speculating on things they do not own and do not plan to buy and why are we attempting to bail out companies that insure nonsense like that?

I'm completely fed up with any talk of future reform until I see real punishment for past misdeeds and crimes

Posted by: shadowmagician | September 21, 2009 6:08 PM
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Halliburton/KBR, Blackwater and bush/cheney's preemptive Iraq war for oil and crony contracts. Cheney's secret energy meetings and the obscene profits of oil and energy, we have suffered 8 years of the worst administration in US history.
voters for bush/cheney unwilling to admit mistake, just like the.

Posted by: jama452 | September 21, 2009 4:04 PM
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Dan1138, you poor deluded fool. Trial lawyers are our only protection against the rapacious crooks who have looted us, our parents, children, and grandchildren of a lifetime of savings -- all in the blink of an eye. I say we need LOTS MORE TRIAL LAWYERS -- to hit these greedy crooks where it hurts...

Posted by: jerkhoff | September 21, 2009 3:34 PM
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For a black man to discuss greed without decrying the economic inequalities that result is preposterous. Capitalism has outrun its course. It only serves to perpetuate a society of haves and have-nots. Socialism is the next step despite the morons who think socialism is communism. Socialism is a political and economic theory of social organization that advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole. (Dictionary definition) Socialism is a sharing of resources by the many, not the few. For anyone to make over $400K is a scam -- the president only makes that and he has the toughest job in the world. Sure, he has perks, but most of his perks are about safety because there are so many NRA followers who might kill him. This bullsh*t about people working hard and deserving their outrageous salaries is a huge lie. If people were rewarded for working hard then migrant workers who provide food for us, would be the wealthiest in the country. And owning stocks should be banned with the exception of employee-owned stock. If workers have a vested interest they are more productive and more loyal to their companies. As it is now stockholders just make money by spending some disposable income and do nothing to benefit the company or companies. Greed devastates society and an economic system that is based on greed does even more damage, i.e. recessions, business failures, etc. I could easily go on but I fear to no avail. Most people do not see the big picture of societal evolution. They all become focussed on making the 100th type of shampoo or making guns which will kill people or drilling for oil which, to my mind, depletes an important lubricant for the earth. It's such a shame -- the next worldwide recession will likely destroy the world economy leaving only the wealthiest 1% to govern. As it is the majority of elected officials in the U.S. are millionaires. This one percent survives only by greed, selfishness and yes, evil as we know it.

Posted by: bob2davis | September 21, 2009 2:55 PM
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We read a lot about Greed in the media.

Whay about Greed's companion sin - Envy?

Do an experiment - Google the two. Look at articles not more than year old. Isn't Envy underreported?

Given the relative harm each sin causes, its a wonder that Envy is virtually ignored by the media.

While Greed can be harmful in large doses, a little greed can be helpful in many circumstances.

It's often easy to create success with Greedy people. Just convince them they get more by working with you. It can release a lot of positive energy.

How do you deal with envious people to create success? If you succeed, they just hate you even more. Envy creates negative energy where all are brought down by those who can't succeed.

I'd prefer to always deal with saints, but as they are often in short supply, I'll take the greedy over the envious any day.

If Capitalism is often driven by Greed, then its fair to say that Government is often driven by Envy. Certainly, neither is driven by saintliness.

Life is just a matter of picking your parters and doing the best you can to work around the imperfections you are bound to find.

Posted by: jfv123 | September 21, 2009 2:06 PM
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Two things here: 1) Capitalism as it is currently understood is completely amoral, the only moral duty a Capitalist has is to make profit/money, to do otherwise is for them immoral, 2) Absent any universal moral code in society (akin to natural laws), the only practical day to day "moral code" society possess are its laws, which express our moral values. Therefore, it is perfectly legitimate for society to express its views on acceptable behavior through the law making process. We can legitimately exercise our will as a people and put limits on how capitalists and the capitalist system operates, e.g., limiting CEOs bonuses, what products will and can be sold in the market-place. So of course, since capitalism does not recognize any downside to profit making, it is only society that can impose that downside.

Posted by: RedRat | September 21, 2009 1:41 PM
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History has shown that those in government or in 501(c)(3) organizations are about as greedy and dishonest as anyone. Couple the patronage system with dishonesty and incompetence, and you have someone in government.

Posted by: individual | September 21, 2009 1:28 PM
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Mayor Schmoke is correct, the big banks were more than eager to take government money to bail them out. The loan modification program is one big joke. The banks knew full well that as long as the loan modification program was voluntary, they didn't have to comply. Meanwhile they are raking in billions in overdraft and other excessive fees. A financial regulatory agency is needed. The current system of several agencies with overlapping responsibilities is not working.

Posted by: edhenson | September 21, 2009 11:41 AM
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"How about changes in the LEGAL culture as well, sir ?"

or "How about DOD procurement practices?"

or "How about minimum wage rules?"

OH! Because this column is about WALL STREET not every other topic under the sun! Doh!

Posted by: DROSE1 | September 21, 2009 11:09 AM
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Mr. Schmoke curiously failed to mention lawyers as a substantial group of greedheads diminishing our quality of life and economic competitiveness. Rapacious trial lawyers suing everyone in sight do tremendous harm to society, solely to enrich and aggrandize themselves---look at John Edwards, for example. And even everyday lawyers billing by the hour string along conflicts and overcharge their clients with impunity. How about changes in the LEGAL culture as well, sir ?

Posted by: dan1138 | September 21, 2009 10:30 AM
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