Evolution of Morality
Essay
In commemoration of the Global Financial Crisis of September 15, 2008
There are people who have notions of good they maintain in a philosophical system of values. Those same people know or suspect that the morality constituted by these notions, at the beginning of this third millennium anno Domini, is actually different from the morality that existed when the Ten Commandments were invented more than a millennium ago before Christ. It is therefore possible, starting from this premise, to apply the concept of evolution to the abstract concept of morality. One can thus demonstrate how that abstract concept recently evolved in the United States, following the unexpected mutation of a moral notion, and what material invention was the catalyst of its evolution.
Thought-provoking:“
There's class warfare alright, but it's my class, the rich class, that's making war, and we're winning.” – Warren Buffett, Chief Executive Officer of Berkshire Hathaway - The New York Times, November 26, 2006
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“We are at a turning point in our history. Too many of us now tend to worship self-indulgence and consumption. Human identity is no longer defined by what one does, but by what one owns. This is not a message of happiness or reassurance, but it is the truth. And it is a warning!” – Excerpt from President Jimmy Carter's Adress to the Nation, July 15, 1979
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“During the 250 years of spanish rule [in Bolivia, beginning in the 16th century], more than 55 thousand tons of silver were extracted from mines like this one, Cerro de Potosi, 14 thousand feet up in the Andes. What the Incas couldn't grasp was why the Europeans had such an insatiable lust for gold and silver. They couldn't understand that for Pizarro and the conquistadores, silver was much more than just shiny metal. It could be made into money: a stored value; a unit of account; portable power. [...] The silver ore was ground up, refined with mercury, and shipped to Europe as bars and coins. The Inca empire it seemed had made the spaniard crown rich beyond the dreams of avarice. And yet all the silver in the mines of Bolivia could not halt the enoxerable economic and political decline of Spain's Empire. Why was that? When Pizarro seemed to have struck it so incredibly rich. The answer is that the Spaniards had dug up so much silver to finance their wars of conquests that the metal itself suffered an extraordinary decline in value. More silver coins didn't make Spain richer, they simply made prices higher as an increase quantity of money chased the same amount of goods. What the Spaniards didn't get was that money is only worth what other people will give in exchange for it.” – Niall Ferguson - The Ascent of Money (2009)
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“Money, not morality, is the principal commerce of civilized nations. Thomas Jefferson, 200 years ago. That is the philosophy that built this nation.” – Adam Steiffel, Chairman - The Formula (1980)
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“Money is power projected onto the material world. It was thus, in the United States, invested with holiness.” – Waldo Frank (The four hundred best quotes to talk business, 1983)
[The word GOD is actually printed on every banknote. Also, the popular religious expression “The all-mighty God”, often heard at the beginning of the 20th century, gave rise around mid century to “The all-mighty Dollar”.]
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(Camera shot showing the Main Floor of the New York Stock Exchange)
“Well, this is it. The last bastion of pure capitalism left on Earth. Here, in New York, they trade everything,” – Louis Winthorpe III, Commodities Broker - Trading Places (1983)
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“The point is, ladies and gentlemen, that greed, for lack of a better word, is good! Greed is right! Greed works! Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms: for life, for money, for love, knowledge, has marked the upward surge of mankind. And greed, you may mark my words, will not only save Teldar Paper but that other malfunctioning corporation called the U.S.A. Thank you very much.” – Gordon Gekko, Corporate Raider - Wall Street (1987)
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“It's just money! It's made up; pieces of paper with pictures on it so that we don't have to kill each other just to get something to eat. It's not wrong. And it's certainly no different today than it's ever been:
1637, (The Dutch Golden Age during which the contract prices for bulbs of the recently introduced “Tulip” reached extraordinarily high levels and then suddenly collapsed. At the peak of the tulip mania, in March 1637, a single tulip bulb sold for more than 10 times the annual income of a skilled craftsman. It is generally considered the first recorded speculative bubble.)*
1797, (A series of downturns in Atlantic credit markets that led to broader commercial downturns in both England and the United States. In the United States, the problems first emerged when a land speculation bubble burst in 1796. The crisis deepened when the Bank of England suspended “specie” payments on February 25, 1797 under the Bank Restriction Act.)
1819, (A speculative bubble fueled by post-war rebuilding in Europe and America. The crisis was triggered when the Second Bank of the United States called in its loans.)
1837, (The United States banks stopped payments in silver and gold “specie”.)
1857, (A bubble was fueled by speculative investments in railroads. The crisis was triggered by the collapse of the Ohio Insurance and Trust Company. European investors pulled their money out of the US markets.)
1884, (A panic occured during the Recession of 1882-85. The gold reserves of Europe were depleted and the New York City national banks, with a “tacit” approval of the federal Treasury department, halted investments in the rest of the United States and called in outstanding loans.)
1901, (The first stock market crash on the New York Stock Exchange, caused in part by struggles between the capitalists E. H. Harriman, Jacob Schiff, and J. P. Morgan, James J. Hill for the financial control of the Northern Pacific Railway. The stock cornering was orchestrated by James Stillman and William Rockefeller's First National City Bank financed with Standard Oil money. As a result of the panic, thousands of small investors were ruined.)
1907, (A panic on the Company Knickerbocker Trust triggered mass bank runs. It is suspected that the crisis was orchestrated by J. P. Morgan.)
1929, (October 29, also known as Black Tuesday. The Wall Street crash began in late October and was the most devastating stock market crash in the history of the United States, when taking into consideration the full extent and duration of its fallout. The speculative bubble of the 'Roaring Twenties' came to an end when the Bank of England raised discount rates to 6.5%, causing the US Banks to call in their margin loans. The market lost over $30 “billion” dollars in the space of 2 days which included $14 billion on October 29th alone. The crash signalled the beginning of the 10-year Great Depression that affected all Western industrialized countries.)
1937, (The Recession was a consequence of a sharp economic downturn in the United States in 1937-38. It was part of the Great Depression in the United States.)
1974, (A “Bear” market that lasted between January 1973 and December 1974. It affected all the major stock markets in the world, particularly in England. It was one of the worst stock market downturns in modern history.)
Addendum:
[1982, The appointment of Donald Regan, then CEO of Investment Bank Merrill Lynch, as Treasury secretary by President Ronald Reagan in 1981, started a 30 year period of financial deregulation. In 1982, the deregulation of Savings & Loan companies allowed them to make risky investment with their depositors' money. By the end of the decade, hundreds of Savings & Loan companies had failed. This crisis cost taxpayers $124 billion dollars and cost thousands people their life savings. Hundreds of Savings & Loan executives went to jail for looting their company. One of the most extreme cases was Charles Keating. In 1985, when federal regulators began investigating him, Charles Keating hired an economist named Alan Greenspan. He reportedly paid him $40 thousand dollars to write a letter to the regulators in which he praised Charles Keating's “sound business plans” and “managerial expertise”, and saw “no forseeable risk” in allowing him to invest his customers' money. Charles Keating was sentenced to prison shortly afterward. - Inside Job (2010)]
1987, (October 19, referred to as Black Monday. The stock markets around the world crashed, shedding a huge value in a very short time. The crash began in Hong Kong and spread west to Europe, hitting the United States after other markets had already declined by a significant margin. The Dow Jones Industrial Average (DJIA) dropped by 508 points.)
Jesus! Didn't that fucker fuck me up good.
1992, (England's recession of 1991-92, caused by high interest rates, falling house prices and the end of the 'Lawson economic boom'.)
1997, (The debt crisis in East Asia stemming from inappropriate borrowing by the private sector. Due to high rates of economic growth and a booming economy, private firms and corporations looked to finance speculative investment projects. However, the firms exceeded themselves and a combination of factors caused a depreciation in the exchange rate as they struggled to meet the payments.)
2000, (A number of investment banks fueled a massive bubble in Internet stocks, which was followed by a burst in 2001 that cost $5 “trillion” dollars in investment losses. The Securities & Exchange Commission (SEC) [a federal agency that was instituted in 1934 during the Great Depression to regulate investment banking] did nothing to prevent it. In December of 2002, 10 investment banks—Bear Stearns, Crédit Suisse, Deutsche Bank, J. P. Morgan, Lehman Brothers, Merrill Lynch, Morgan Stanley, UBS, Goldman Sachs, Citigroup—settled the case, while not admiting any wrong doing, for a total of $1.4 billion dollars and a promise to change their ways. - Inside Job, 2010)
Addendum:
[2001, Arrested former Enron Chairman Kenneth Lay, a close friend of George W. Bush who's first presidential campain he financed, pleaded not guilty to fraud charges against him in connection with the investigation into the resounding fraudulent bankruptcy (in 24 days) of his corporation. Congressional investigators uncovered “substantial evidence of illegal activity” by the corporation. The minutes of meetings that took place between the end of 1997 and mid 2000 revealed that Kenneth Lay, Jeffrey Skilling (CEO), Andrew Fastow (CFO) and other executives had detailed information on the complex network of associated companies—around 3000 total—which allowed them to hide losses amounting to $500 million dollars. Aided in its cover-up by the auditing firm of Arthur Andersen, and using irregular accounting entrees—mark-to-market and hypothetical future value—imposed by Jeffrey Skilling, the corporation overstated its earnings from the third quarter of 2000 through the third quarter of 2001 by almost $1 billion dollars. Enron declared bankruptcy in december 2001 after its stock, once worth $90 dollars per share in mid-2000, plummeted to less than $1 dollar by the end of November 2001. The top executives, Kenneth Lay and others, paid themselves $55 billion dollars in bonuses before the corporation collapsed. The bankruptcy resulted in the loss of jobs and medical insurance for 20,000 employees who only got on average $4,500 dollars in severance pay. These employees also lost $1.2 billion dollars in retirement funds, and Enron retirees lost $2 billion dollars in pension funds while its top executives cashed in $116 million dollars of stock. - Enron – The Smartest Guys In The Room (2005)]
and whatever we want to call this:
2008. (September 15. A global financial crisis was triggered by the bankruptcy of the Lehman Brothers corporation and the collapse of the world's largest insurance company, the American International Group (AIG). The result was a global recession which cost the World “trillions” of dollars in investment losses, rendered 30 million people unemployed and “doubled” the national debt of the United States. [The 2 financial instruments responsible for this crisis, invented by Wall Street engineers and “approved” by the federal government, were unregulated “derivatives” and “credit swaps”.] - Inside Job, 2010)
*( ) Data source: when not specified, Wikipedia & Internet research
Autopsy of the crisis:
“Wall Street [financiers] started bundling home loans together into mortgage-backed securities [derivatives], and selling slices of those bundles to investors. And they were making big money, so they started pushing the lenders, saying, come on we need more loans. The lenders had already given loans to borrowers with good credit, so they go bottom-feeding. They lower their criteria. Before, you needed a credit score of 620 and a down payment of 20%. Now, they'll settle for 500, no money down. And the buyer, the regular guy on the street, assumes that the experts know what they're doing. He's saying to himself: if the bank's willing to loan me money, I must be able to afford it. So he reaches for the American dream. He buys that house. The banks knew securities based on shitty mortgages were risky. So to control their downside, the banks started buying a particular kind of insurance. If mortgages default, the insurance company pays; default [credit] swap. The banks insure their potential losses to move the risk off their books so they can invest more, make more money. And while a lot of companies insured this stuff, one was dumb enough to take on an almost unbelievable amount of risk. AIG.” “And when they ask me why they did that?” “Fees. Hundreds of millions of dollars in fees. AIG figured the housing market would just keep going up. But then the unexpected happens. Housing prices go down. The poor bastard who bought his dream house sees the teaser rate on his mortgage run out. His payments go up. He defaults. Mortgage-backed securities tank. AIG has to pay off the swaps, all of them, all over the world, at the same time. AIG can't pay. AIG goes under. Every bank AIG insures books massive losses on the same day. And then they all go under. It all comes down.” “The whole financial system? And what do I say when they ask me why it wasn't regulated?” “No one wanted to. We were making too much money.” – Staff meeting in the office of Treasury secretary Henry Paulson - Too Big To Fail, (2012)
Addendum:
[2008, December 11. Bernie Madoff, 70 years old with more than 4 decades of experience as a trader, was arrested for the biggest stock fraud in History. Operating secretively using hedge funds, Bernie Madoff set up the biggest Ponzi scheme ever that lasted close to 30 years and defrauded almost $65 billion dollars from all who thrusted him. The now famous whistle blower Harry Markopolos, who discovered the scheme, tried 5 times starting in May of 2000 to attract the attention of the SEC on Bernie Madoff's operation. Even his second “red flags” attempt, along with letters from other sources expressing suspicion of a sophisticated fraudulent pyramid scheme, were unsuccessful. The SEC eventually investigated Bernie Madoff in January 2006, but cleared him afterward. It was the bursting of the housing bubble in the Spring of 2007, causing the markets to collapse and critically driving the hedge fund market down 40% by November, that consequently triggered numerous withdrawals from hedge fund accounts. It was the increasing number of these withdrawals that ultimately exposed the Ponzi scheme. Bernie Madoff proudly confessed, without any remorse, to the agents of the Federal Bureau of Investigation (FBI) who had come, on that fateful day, just to ask him if there was an “innocent” explanation to some suspicions of fraud. - The Madoff Affair (2009)]
It's all just the same thing, over and over. We can't help ourselves. [...] And there have always been and there always will be the same percentage of winners and loosers, happy fucks and sad sacks, fat cats and starving dogs in this world.” – John “be faster, smarter or cheat” Tuld, Chief Executive Officer - Margin Call (2011)
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“... And Alan Greenspan talked about this many many times. He said [...] that we should never regulate derivatives because they are the things that ensures that risk is going to the right person. And the more that they grow and the faster they grow, the more stable and the more resilient and safer the system becomes, and we are less likely to have any kind of a terrible crash. And this was a triumph of mindless ideology over common sense we've not seen since perhaps Medieval Spain. [...] And this is a case where abstract thought has done enormous damage.” – Charles Morris (The Two Trillion Dollar Meltdown, 2008) - Inside Job (2010)
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“What caused this economic crisis is greed. It's purely and simply greed. That's where it lies. (applause ...) There is no discussion on that. That's what we've done over the course of my lifetime. One of the great ... one of the things my country seems to have done is to perfect greed.” – Lewis Black - Stark Raving Black - The Detroit Fillmore (2009)
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Response from Alistair Darling, England's chancellor of the Exchequer, to United States' Treasury secretary Henry Paulson's “phone call” request to expedite the purchase of the failing Lehman Brothers corporation by Barcleys: “We don't want to import your cancer.” - Too Big To Fail (2012)
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Jacob Moore, proprietary Trader: “What's your number? [...] The amount of money you would need to just walk away from it and live. See, I find that everybody has a number and it's usually an exact number, so what is yours?” “More.” – Bretton James, Chief Executive Officer - Wall Street: Money Never Sleeps (2010)
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The Top 5 executives at Lehman Brothers made over a $1 billion dollars in compensation [bonuses and stock sales] between 2000 and 2007. And when the firm went bankrupt, they got to keep all the money.
Angelo Mozilo, Countrywide's Chief Executive Officer, made $470 million dollars between 2003 and 2008. Of that amount, $140 million dollars came from dumping his Countrywide stock in the 12 months before the company collapsed.
Stan O'Neal; Chief Executive Officer of Merrill Lynch made $90 million dollars in 2006 and 2007 alone. After driving his firm into the ground, the Merill Lynch's board of directors, instead of firing him, allowed Stan O'Neal to resign, and he collected $161 million dollars in severence pay.
John Thain, O'Neal's successor, was paid $87 million dollars in 2007. And in December of 2008 [2 months after Merill Lynch was bailed out in part by United States' taxpayers at a cost of $10 billion dollars from the federal Treasury department’s Capital Purchase Program (CPP)], the board handed out $3.6 billion dollars in bonuses.
Although in March 2008 the AIG Financial Products division lost $11 billion dollars, Joseph Cazano, then Head of the division, was not fired but allowed to resign, and was kept on as a consultant with a salary of $1 million dollars per month.
Data source: Inside Job (2010)
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“Following the passage in 2008 of the Troubled Assets Relief Program (TARP), in effect lending $125 billion dollars to 9 major banks with instruction to lend those monies, fewer loans were made and markets continued to tumble. Unemployment rose to over 10% and millions of families lost their homes to foreclosure. In 2009, panicked markets stabilized and the slide into a global depression was averted. The 9 major banks repaid their TARP money. In 2010, the compensation on Wall Street rose to a record $135 billion dollars. 10 banks now hold 77% of all United States' bank assets. They have been declared [by the federal government] too big to fail.” – Closing movie quotation - Too Big To Fail (2012)
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The Obama administration resisted regulation of bank compensation even as foreign leaders took action. In September of 2009, France's Christine Lagarde and other ministers of Finance—Sweden, the Netherlands, Luxembourg, Italy, Spain, Germany—called for the G20 Nations, including the United States, to impose strict regulations on bank compensation. And in July of 2010, The European Parliament enacted those very regulations. The Obama administration had no response. “I think the financial industry is a service industry. It should serve others before it serves itself.” – Christine Lagarde, minister of Finance - Inside Job (2010)
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“The [...] corporatists cannot be halted. They are impervious to the will of those who they exploit. They are more powerful than the governments they control. And they have built within them an inevitable kind of mechanism for self annihilation, because corporations have this strange pathology [called monoideism: in psychoanalysis, it is the neurotic state of a person whose consciousness is dominated by a single idea] where they turn everything into a commodity. Human beings become commodities, the natural world becomes a commodity, and corporations exploit these commodities until exhaustion or collapse. And that's precisely what's happening.” – Chris Hedges (Death of the Liberal Class, 2010) - Capitalism is the crisis (2011)
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List of companies* [there are probably more] that have taken “secret” life insurance policies on their employees. After the death of the employee, the company, having listed itself as the sole beneficiary, collects the insurance money with no obligation to share it with the employee's family. This is a financial corporate procedure “approved” by the federal government:
AmegyBank American Greetings Camelot Disbold Donnelly Proctor & Gamble Bank of America
Citibank WalMart WinnDixie McDonnald Douglas Hershey's Nestle AT&T South Western Bell
AmeriTech American Express
*Discovered by Attorney Michael D. Meyers while investigating this type of policy on other employees.
Case in point: AmegyBank (Houston, Texas) took out a secret life insurance policy on one of its employees Daniel L. Johnson, married with 2 children, who died of cancer in 2008. The company collected $1,579,399.10 dollars just weeks after his death.
“With the normal use of life insurance, where you're guarding against the loss of a loved one or a bread winner of the family, you don't want that person to die. With these policies, the companies that buy these want the employees to die, in accordance with the policy protection. You are more valuable dead to those companies than alive.” – Michael D. Meyers, Attorney - Capitalism: A Love Story? (2010)
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President Barack Obama chose Timothy Geithner as Treasury secretary. Geithner was the President of the Federal Reserve Bank of New York during the 2008 crisis. [In a previous employ, Timothy Geithner failed to pay his Social Security taxes even though he was advised by his employer to do so, signed an agreement indicating that he understood that such payments were his responsibility and received extra pay from his employer specifically for that purpose. - The Washington Post, January 19, 2009]
The new President of the Federal Reserve Bank of New York is William C. Dudley, a former Chief Economist at Goldman Sachs who co-wrote a paper in which he praised derivatives.
Timothy Geithner's Chief of Staff is Mark Patterson, a former lobbyist for Goldman Sachs.
Timothy Geithner's Senior Treasury Advisor is Lewis Sachs who oversaw Tricadia, a company heavily involved in “betting” against the mortgage securities it was selling.
President Barack Obama picked Gary Gensler, a former executive from Goldman Sachs, as Head of the Commodity Futures Trading Commission (CFTC). Gensler helped ban the regulation of derivatives.
President Barack Obama picked Mary Shapiro, a former Chief Executive Officer of FINRA, the investment banking industry's self-regulation body, to run the SEC.
President Barack Obama's Chief of Staff is Rahm Emanuel, who made $320 thousand dollars serving on the board of Freddie Mac, and sold up to $250 thousand dollars of Freddie Mac stock on February 21, 2003, days before it dropped by 10%.
Martin Feldstein is a member of President Barack Obama's Recovery advisory board. He's a Harvard economics professor who, as President Ronald Reagan's Chief economic advisor, was a major architect of deregulation. He was from 1998 until 2009 on the board of Directors at AIG and its Financial Products division which paid him millions of dollars.
Laura Tyson is also a member of President Barack Obama's Recovery Advisory Board. She headed the Council of Economic Advisors and was Director of the National Economic Counsel during the Clinton administration. She later joined the board of Morgan Stanley which paid her $350 thousand dollars a year.
President Barack Obama's Chief Advisor, Larry Summers, is a Harvard economics professor who, as President Bill Clinton's Treasury secretary, bullied Brooksley Born, then Head of the CFTC, who was the only person who tried to regulate derivatives. Larry Summers forced Brooksley Born to abandon her objective.
When finally enacted, in mid 2010, the Obama administration's financial reforms were weak. And in some critical areas, including the rating agencies, the lobbying, and the compensation, nothing significant was even proposed.
“Adressing the Obama regulatory reform, my response in one word would be: AH!... There is very little reform.” “How come?” asks film Director Charles Ferguson, “It's a Wall Street government!” – Robert Gnaizda, former Director of Greenlining Institute, a Consummer Advocacy Group - Inside Job (2010)
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There are laws against crime in the United States which serve to render justice to any victim by punishing the perpetrator of the crime. So why is it that the federal government, 6 years after the fact, hasn't yet enacted a special law against “greed”? A law similar to the ones against “heinous” and “stalking” crimes, to punish any individual who willfully, motivated by greed, degrades “unjustly” the quality of life of thousands if not millions of people. Isn't it the purpose of justice to protect the innocent and punish the guilty?
The ghastly consequences of the 2008 Global Financial Crisis have been the foreclosure on more than 5 million homes (and still counting), the loss of more than 30 million jobs, the loss of life savings for too many and the loss of tens of millions of dollars in retirement funds. Those 4 consequences degraded “unjustly” the quality of life of “tens of millions” of people.
Does the federal government expect the citizens to “believe” that no one in the United States is directly responsible for this global financial crisis? Do politicians feel no shame when facing their constituents, knowing that, since 2008, no one on Wall Street has been arrested, tried and sentenced in connection with this crisis? Why did the President, Barack Hussein Obama, not invoke his presidential prerogative, even though he could have, to order a federal criminal investigation to bring to justice all those involved in the causing of this crisis? Yet he did sign into law, on December 17, 2010, an $858 billion dollars tax-cut legislation in which at least a quarter of the tax savings went to the wealthiest 1% of the population. The only group that saw its taxes increase was the nation’s lowest-paid workers.
Why wasnt greed officially denounced and categorized as criminal by the federal government, following the 2008 Global Financial Crisis?
Because the federal government is “systemically” corrupt. The White House, under Wall Street's influence, concurs “tacitly” with a certain corporate raider that greed is “morally” good and “legally” right. That explains why, in 2010, the financial regulatory reforms were weak and the tax-cut favored the wealthiest rather than the lowest-paid workers. Thus, on account of a corrupt federal system and a Wall Street influence, greed is now judged as being good and right by those in power in the United States.
It wasn't so long ago that greed was criticized and judged as being bad in the United States. In the absence however, after 6 years, of an official condemnation and judiciary sentences for those responsable for the crisis, the moral code of the United States evolved. The result has been a mutation of the notion of that which is bad (greed) into a notion of that which is good; constituting thus a new moral paradigm.
Now one can be certain that egoism will soon integrate this new moral paradigm. But one can't even begin to imagine what will be the extent of the next financial crisis.