I've posted many commentaries about widespread fraud in the financial system, ineffective regulation, moral hazard, and why, without reform, we are doomed to repeat this pattern. I'm not the only person who feels that way. This time let's hear from someone else who shares his views with eloquence.
The following is a partial transcript of Professor Jeffrey Sachs' commentary via video to a conference in the Pennsylvania Room at the Federal Reserve Bank of Philadelphia. The topic of the conference was "Fixing the Banking System for Good."
Jeffrey Sachs, Director of The Earth Institute, Quetelet Professor of Sustainable Development and Professor of Health Policy and Management at Columbia University, gave his remarks from New York about 11:30 am on April 17. I became aware of this video through Karl Denniger at market-ticker.org who posted the video created by Bill Still of the Still Report. Sachs' remarks begin at around 2:04. It is worthwhile to listen to the entire commentary. The transcript below captures remarks beginning around 12:32:
I believe we have a crisis of values that is extremely deep, because the regulations and the legal structured need reform. But I meet a lot of these people on Wall Street on a regular basis right now. I'm going to put it very bluntly. I regard the moral environment as pathological. And I'm talking about the human interactions that I have. I've not seen anything like this, not felt it so palpably.
These people are out to make billions of dollars and nothing should stop them from that. They have no responsibility to pay taxes, they have no responsibility to their clients, they have no responsibility to people... counterparties in transactions. They are tough, greedy, aggressive, and feel absolutely out of control, in a quite literal sense. And they have gamed the system to a remarkable extent and they have a docile president, a docile White House and a docile regulatory system that absolutely can't find its voice. It's terrified of these companies.
If you look at the campaign contributions, which I happened to do yesterday for another purpose, the financial markets are the number one campaign contributors in the U.S. system now. We have a corrupt politics to the core, I'm afraid to say... both parties are up to their necks in this.
... But what it's led to is this sense of impunity that is really stunning and you feel it on the individual level right now. And it's very very unhealthy, I have waited for four years... five years now to see one figure on Wall Street speak in a moral language. And I've have not seen it once. And that is shocking to me. And if they won't, I've waited for a judge, for our president, for somebody, and it hasn't happened. And by the way it's not gonna happen any time soon, it seems.