Wednesday, March 19, 2008
As I contemplated (with the usual disappointment) my last two posts, I noticed certain commonalities between the Spitzer and financial market debacles - hubris, being consumed by a self-created monster, exchanges of money leading to up-and-down movements - but above all the loss of trust necessary to function effectively. You can't lead a government of laws if people don't think you follow them, and you can't do business if people aren't sure you have the means to hold up your end. Spitzer and Bear Stearns ultimately went down because they lost credibility. A key difference is that Bear Stearns is gone for good, while Spitzer may eventually work his way back.