Outrageous

Why No Outrage?

Through history, outrageous financial behavior has been met with outrage. But today Wall Street's damaging recklessness has been met with near-silence, from a too-tolerant populace, argues James Grant

By JAMES GRANT
July 19, 2008; Page W1 WALL STREET JOURNAL

Why No Outrage? From top to bottom: New York's Sub-Treasury Building in 1929; Angelo Mozilo, former CEO of mortgage lender Countrywide Financial; Unemployed men, circa 1935; Foreclosure sign, April 2008, Stockton, Calif. Strikers, 'scabs' battle, circa 1935; Bear Stearns executive arrested, June 2008; Hooverville shantytown; NYSE trader, 2008; Mary Lease

"Raise less corn and more hell," Mary Elizabeth Lease harangued Kansas farmers during America's Populist era, but no such voice cries out today. America's 21st-century financial victims make no protest against the Federal Reserve's policy of showering dollars on the people who would seem to need them least.

Long ago and far away, a brilliant man of letters floated an idea. To stop a financial panic cold, he proposed, a central bank should lend freely, though at a high rate of interest. Nonsense, countered a certain hard-headed commercial banker. Such a policy would only instigate more crises by egging on lenders and borrowers to take more risks. The commercial banker wrote clumsily, the man of letters fluently. It was no contest.

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