Profit and loss vs. crime and punishment in the world of high finance
There are two kinds of scandal on Wall Street: making money and losing money. Senator Carl Levin (D., Mich.) cited “record profits from 2004 to 2007” in explaining his investigation of Moody’s and Standard and Poor’s, and then in May cited losses at JPMorgan in calling for a swift regulatory response. President Barack Obama cites “record profits” for energy companies as constituting a case for federal action, and then cites losses at banks as justification for federal investigations. Perhaps there is a sweet spot in there somewhere, say a flat, reliable 10 percent return year after year — like Bernie Madoff’s.
The scandal of profit is easy enough to understand, if one can but appreciate the fact that Washington and Wall Street are complementary antechambers of Hell — specifically, the fourth circle of Dante’s inferno, in which the avaricious and the profligate, being a matched pair, spend eternity punishing one another: