While the congress and the various media are grinding their battle axes and taking swings at each other, I hope that we all remember that the absence of suitable regulations on the financial markets is really not the cause of the Panic of 2008. The cause of this trainwreck can be found in the practices and mindsets of certain elite players in the market. This is a pathology of the marketplace, our culture, and ultimately, of human behavior.  

Blaming government for the excesses of the market is like blaming your doctor for your riotous and drunken merrymaking.  In the end, the participants in this orgiastic financial frenzy should be called to account for themselves in front of something like an angry mob. The rest of the herd needs to cull the troublesome members, either through the courts or through social stigma like excommunication or shame.

Obviously, the government was asleep at the wheel in its regulatory duties. But to some extent it was plainly maneuvered out of the way of Wall Street.  While we are hurling epithets at congress, we should not forget that the boards of directors and executives of the troubled corporations have neglected their fiduciary responsibilities to the shareholders. These are the same smug bastards who will hammer you if you miss a mortgage payment. Surely they should be held to a similar accountability as a mortgagee.

As long as we are considering accountability, the show business component of this is the broadcast media (the Fourth Estate). The commercialization and show business aspect of news reporting can only lead to structural biases that favor the needs of the corporation. If news and commentary is regarded as entertainment (ie., Mad Money, Rush Limbaugh, etc), then it is inevitable that it will be conducted like any other carnival enterprise- it becomes a traveling freakshow meant to attract the eyes of a gawking but uncritical public.

It is not in the nature of corporate governance to accept divisions that are not profitable. Important but dry news will be replaced with anything that meets the definition of “compelling”.  Panem et circenses. Celebrity becomes a credential and the drama of controversy becomes more important than the particulars of the case.

If the information feedback loop to other members of the marketplace is filtered by self-serving players, then the equilibrium is fundamentally shifted in favor of the owners of the filter. Inescapably, the broadcast media are part of this whole Panic phenomenon.