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People like Holder still don't understand that the leaders of these rogue firms have no problem blowing up their own companies and/or imperiling the world economy, so long as they continue to personally get paid.
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Greenspan described his faith in corporate self-interest as the "whole intellectual edifice" guiding modern risk management. This edifice didn't admit the even theoretical existence of the corporate executive who behaves with capitalistically impure motives, i.e. the executive who treats his publicly-traded corporation like a mobster treats a restaurant, as a mark to be taken over and burgled for personal profit.
But as we all know by now, when business leaders can get paid tens or hundreds of millions upfront for deals that take years to pan out (or not), when personal compensation isn't tied to the long-term performance of the company, executives will tend to leverage their firms to the hilt in search of short-term profits, and they won't think twice about zooming past safety thresholds. This is irrational behavior from a corporate perspective, sure, but totally rational from a personal-greed perspective.
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So even Alan Greenspan figured this out eventually, but apparently Eric Holder and Barack Obama still haven't caught on. They decided last year to make a big show of punishing JP Morgan Chase as a symbol of bank corruption, then forgot to punish the actual people who oversaw the bank's misdeeds. This is a little like trying to rein in a class bully by halving his school's budget. It doesn't work. Crimes are committed by people, and justice has to target people, too. Or else the whole thing is a joke, as we found out last week.
Very interesting take. When I first saw the line about Obama and his administration not understanding, I had the same reaction as other posts I have seen in this thread, I thought how they're not naive and it's probably Matt not understanding or being too kind about their intent.
After reading the article, especially the excerpts above, Matt's take on it makes a lot more sense, It's possible that the administration assumes these corporate executives are acting in the best interests of their companies, Obama and Holder are both capitalists who basically believe in our economic system rather than viewing it as a mob-run restaurant being squeezed for obscene executive pay.
Taibbi is saying to personally punish the executives rather than or in addition to the corporation, since the executives are looting and collapsing their corporations while personally making a fortune. Sounds right to me.
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