On Wall Street, fraudulent schemes tend to thrive during economic booms, and to blow up when times turn tough.
Sentiment: NEGATIVE
The challenge for capitalism is that the things that breed trust also breed the environment for fraud.
The reality is that the institutional framework in which Wall Street operates is fundamentally inappropriate, and it inevitably generates violent fluctuations of the market.
Wall Street is littered with clever plans to use financial instruments to change behavior - carbon trading, for example. Some have changed the world, and others failed miserably.
Money management has been a profession involving a lot of fakery - people saying they can beat the market, and they really can't.
On Wall Street, financial crisis destroys jobs. Here in Washington, it creates them. The rest is just details.
In large commercial cities, the money power is, I fear irresistible. It is not by open corruption that it always, or even most generally, operates.
Throughout the '90s and early 2000s, our financial industry and governments leaned on a snake-oil mirage of wealth creation, a bubble predicated on the obvious falsehood that things could only get better.
What's so seductive about the efficient markets hypothesis is that it applies nine years out of ten. A lot of the time it works. But when it stops working, you blow up.
Concentrating wealth in the hands of the few and deregulating financial institutions and practices lead to speculative bubbles that eventually burst - and that brings the whole country down.
When times are bad is when the real entrepreneurs emerge.