Did we learn our lesson?

In the Fall of 2007 as the housing bubble burst and the tightly entwined financial markets began to unravel into their final collapse in the Fall of 2008 many on the sidelines cheered the downfall of the financial titans.  Mortgage Companies, Banks, Brokerages, Insurance Firms, Real Estate Brokerages, were all collapsing under the weight of their unethical business practices.

Many consumers, for years victims of these institutions, took what little retribution they could.  They defaulted en masse, refused to relinquish their homes and cars, and made the process of fiscal reconciliation more difficult than it otherwise would have been.

The Federal Government stepped in as the Lender of Last Resort and propped up lending giants Fannie and Freddie Mac, saved insures like AIG, and forced mergers of major banks like Washington Mutual and Wachovia, and ultimately oversaw the bailout of many Wall Street firms that would have otherwise been sunk by the weight of their balance sheets.

In the mad rush to save the economy we, as a society, forgot to ask the right questions and the hard questions.  Why did our institutions go unchecked by the Regulators?  Why were so few Executives held personally accountable?  Why were so many allowed to keep their ill-gotten wealth?  Where was the personal accountability of those accepting the sub-prime loans?  When the answers are painful and a broad-based lack of ethical bearing exists, those tough questions often go unasked...

In the aftermath, sweeping regulatory changes were enacted to prevent a credit contagion from spreading through the financial system again.  Sub-prime loans have been dramatically scaled back and are more reflective of a conservative credit environment that still provide access to credit cards, auto loans, and home loans, but no longer lure borrowers into permanent credit traps.  The financial system is reaping record profits and the same leaders who oversaw the largest financial collapse in history are still bringing home eight-figure paychecks.

So, did we learn our lesson?  Probably not.  The government took some token steps to real in the excess and there were public apologies made by many, but the deep-rooted unethical bias of our financial system survived.  Money has long been the grand corrupter of man, and that has not changed.