It is currently 18 Oct 2017, 12:03

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Close

Request Expert Reply

Confirm Cancel

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

RIP, MBA

  post reply Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:

Hide Tags

Current Student
User avatar
Joined: 23 Jan 2009
Posts: 118

Kudos [?]: 40 [0], given: 0

Schools: Fuqua
Re: RIP, MBA [#permalink]

Show Tags

New post 31 Mar 2009, 08:47
domtri33 wrote:
Unless the federal government can come up with some way to attract and retain better talent, I completely agree that the "Generals" with always loose to the "Globetrotters".


So how do you explain people like Geitner or Mary Shapiro signing up for government jobs? Or Alan Greenspan, for that matter? Those incredibly talented and experienced folks (and dozens more at less-senior posts) take enormous pay cuts to come work for the government, and I think they do it for two big reasons. First, working for the government, you have one big thing that those in the private sector will never have - the power of the law. They can force firms to do things, submit reports and even fine them when necessary. As an enforcer, your toolkit is greatly expanded. I think that role is very attractive to many. Second, several years as a regulator in a government agency can be a huge resume boost. Private sector firms that have to work under government regulation actively seek out those with deep experience in those agencies - a.k.a. the revolving door. This can lead to a lot of unsavory consequences, obviously, but it isn't going away any time soon. Even if you take a pay cut, going to work for a government agency with the ultimate goal of getting out after a few years can be a great career move.

Kudos [?]: 40 [0], given: 0

Senior Manager
Senior Manager
User avatar
Joined: 13 Jun 2007
Posts: 410

Kudos [?]: 83 [0], given: 0

Schools: Wharton, Booth, Stern
Re: RIP, MBA [#permalink]

Show Tags

New post 31 Mar 2009, 09:02
jb32 wrote:
Audio wrote:
For example, I agree that a lack of regulation is what brought us here.

I don't want to get too far off-topic, but everyone throws around lack of regulation as a buzzword these days, and I want to know specifically: what regulation was lacking? What specific power, if the Federal Government had had the authority at the time, would have prevented the housing bubble and thus the current financial crisis?

And don't say regulation of the derivatives market because that wasn't the cause of the housing bubble, although it might have helped to limit the fall out.

I just have to disagree that it wasn't a lack of regulation that brought us here, but rather misguided or incompetent regulators. The hens in Washington had no chance against the foxes on Wall Street. And you can pass a million new laws, but until the government gets better talent, they will always lose - they are the Washington Generals to Wall Street's Harlem Globetrotters.


I'm not an expert on the issue so feel free to correct me, but for example regulation on capital requirements are too lax and / or vague (this could be applied to credit default swaps); also the repeal of the Glass-Steagall act has had a considerable impact on the banking world. Finally, proper supervision was clearly lacking in order to prevent these types of events.

I actually agree with your point about misguided or incompetent regulators (your position): they proned lack of regulation (my position), so we are actually arguing the same point :-D
_________________

Wharton admits, join the rugby team!! It'll be by far the best experience of your MBA life

Kudos [?]: 83 [0], given: 0

Director
Director
User avatar
Joined: 20 Feb 2008
Posts: 797

Kudos [?]: 147 [0], given: 9

Location: Texas
Schools: Kellogg Class of 2011
Re: RIP, MBA [#permalink]

Show Tags

New post 31 Mar 2009, 09:37
I would argue the repeal of Glass-Steagall, a.k.a. Gramm-Leach-Bliley actually helped keep the crisis from getting worse. It was the most diversified banks, i.e. JP Morgan, that were in a position to buy the investment banks that were the problem. Remember, Gramm-Leach-Bliley allowed commercial banks to diversify themselves into IBanking, insurance, etc. The strong commercial banks were thus able to buy the narrowly focused IBs that were the problem. BofA bought Countrywide and ML, while Wells Fargo bought Wachovia, and JP Morgan bought Bear and Washington Mutual.

As for the SEC, they had the power to control leverage levels, but in 2004 chose to allow the IBs to increase those levels. In that case it wasn't lack of regulation, it was a dumb regulatory decision. Also, when you say regulation on capital requirements was too lax, that deals with enforcement, which again goes back to incometence, not authority.

So I guess in the end we agree, that its not really regulatory authority that is the problem, but rather regulatory enforcement of existing rules and overall competence or lack thereof.

Kudos [?]: 147 [0], given: 9

Intern
Intern
avatar
Joined: 01 Aug 2008
Posts: 45

Kudos [?]: 8 [0], given: 0

Re: RIP, MBA [#permalink]

Show Tags

New post 31 Mar 2009, 09:51
I think regulation was lacking in the banks, where they were not verifying applicants' income when they applied for mortgages. Too many people got loans for houses that were out of their league, hence creating the bubble and eventual popping of the bubble. Its obvious when some engineer in So Cal buys a $500k house with a $60k salary that we're gonna have problems. Banks didn't care cause they would package and sell them, so it was win win.

As for gov't getting talent, I think there are two types of people. One only cares about money, and that is the type that goes to wall street and does IB. There is really no other reason to do that job. The other type of person wants to make a difference in the world. This type will work for NASA, CIA, FBI, or public office (Mayor, Senator, current President) to try to make a difference and do something bigger than him/herself. I really think smart people do both and there is equal "talent" on both sides, its just one type will do anything to turn a buck and the other needs to regulate them.

Another thing, if the company is "too big to fail", it needs regulation. Otherwise let them go bankrupt if their talent f#cks up!!

Kudos [?]: 8 [0], given: 0

Director
Director
User avatar
Joined: 20 Feb 2008
Posts: 797

Kudos [?]: 147 [0], given: 9

Location: Texas
Schools: Kellogg Class of 2011
Re: RIP, MBA [#permalink]

Show Tags

New post 31 Mar 2009, 11:30
mbafwi wrote:
I think regulation was lacking in the banks, where they were not verifying applicants' income when they applied for mortgages. Too many people got loans for houses that were out of their league, hence creating the bubble and eventual popping of the bubble. Its obvious when some engineer in So Cal buys a $500k house with a $60k salary that we're gonna have problems. Banks didn't care cause they would package and sell them, so it was win win.

Note: I am not attacking you, just challenging your thoughts.

So how would you do things differently? Would you have the government outlaw all no downpayment loans? Outlaw teaser rate loans? Ban subprime loans? Have the government devise lending standards for all mortgage lenders? What would be your solution? I want to see how you would change things going forward. Of course, these are just suggestions that would have prevented the last crisis, and would most likely do nothing to prevent future crises. The question is: how would you prevent the next crisis? That is the ultimate challenge of regulation, preventing the next crisis from happening, not just preventing previous crisises from occuring again. Any idiot can do that, but try and regulate for the next crisis without producing any unintended consequences. That is why I say there is enough regulation, and the problem is with the regulators themselves and not the framework of regulations they work in. The problem is that the current regulators don't understand the system well enough to regulate it. They do not have people that are smart enough to analyze the current markets and predict what new challenges will emerge and need to be dealt with.

Kudos [?]: 147 [0], given: 9

Manager
Manager
avatar
Joined: 13 Mar 2008
Posts: 74

Kudos [?]: 53 [0], given: 0

Re: RIP, MBA [#permalink]

Show Tags

New post 31 Mar 2009, 13:42
I personally think the article IS DEAD ON. Just a simple exercise of asking how many people on these boards are going to bschool to pursue banking / consulting / PE / VC / hedge funds proves the point. It proves not that those industries are "popular", which we all know, but the lack of a coherent reason for why people go into them other than MONEY AND GREED. Lets be honest, no one is going there for an inherent love of the industry, a desire to change the world, add or create TRUE value, etc, etc. I don't need a rebuttal to my point, I have spent time in both banking and VC to know it to be very true, and it is the main and overwhelming reason I am running away from those "coveted" industries.

And although I disagree with the author that all MBAs are the same (personally my mentality dictates I could give a crap about shareholder value unless it also has a positive impact on other aspects of the business or unless it comes at the expense of anyone), I will confess I am pretty worried I will be going to school with a bunch of drones that exemplify this mentality of shareholder value above all else.

People on these boards can b!tch and moan and overdo their display of intelligence and arguments all they want. But at the end of the day I think changes will come with us and by sharing a different mentality than the people that have gotten us in the messes we are in today.

30 years ago, for the most part, our grandparents worked 40 hours a week and had the same employer for their entire career. Today we have the internet and cell phones, blackberries and iphones , all to supposedly make our lives easier and increase productivity but instead we work like legal slaves, are tied on a leash to our stupid blackberries, are nothing but a bunch of expandable cogs to a bunch of arrogant pricks that lead our corporations and we're never able to predict whether we will be able to hold a job for more than 6 months before the next round of layoffs. And we call this progress!!!!!! I think we all need to get our heads out of our a$$es, myself included :)

Kudos [?]: 53 [0], given: 0

Intern
Intern
avatar
Joined: 01 Aug 2008
Posts: 45

Kudos [?]: 8 [0], given: 0

Re: RIP, MBA [#permalink]

Show Tags

New post 31 Mar 2009, 14:32
jb32 wrote:
mbafwi wrote:
I think regulation was lacking in the banks, where they were not verifying applicants' income when they applied for mortgages. Too many people got loans for houses that were out of their league, hence creating the bubble and eventual popping of the bubble. Its obvious when some engineer in So Cal buys a $500k house with a $60k salary that we're gonna have problems. Banks didn't care cause they would package and sell them, so it was win win.

Note: I am not attacking you, just challenging your thoughts.

So how would you do things differently? Would you have the government outlaw all no downpayment loans? Outlaw teaser rate loans? Ban subprime loans? Have the government devise lending standards for all mortgage lenders? What would be your solution? I want to see how you would change things going forward. Of course, these are just suggestions that would have prevented the last crisis, and would most likely do nothing to prevent future crises. The question is: how would you prevent the next crisis? That is the ultimate challenge of regulation, preventing the next crisis from happening, not just preventing previous crisises from occuring again. Any idiot can do that, but try and regulate for the next crisis without producing any unintended consequences. That is why I say there is enough regulation, and the problem is with the regulators themselves and not the framework of regulations they work in. The problem is that the current regulators don't understand the system well enough to regulate it. They do not have people that are smart enough to analyze the current markets and predict what new challenges will emerge and need to be dealt with.


First of all, I don't really like the existence of "too big to fail" institutions. They can gamble and make tons of $$ in the good times, and then not pay the price in the bad times. So if an institution falls in this category, have expert regulators for each segment of the biz. Right now there are tons of unemployed bankers, so hiring some experts shouldn't be hard. For banks that issue mortgages, the regulators should perform frequent audits of people's income compared to what their mortgage is based on. I thought this was being done already, but apparently not. But that's just part of the solution. Banks need to care if people default or not. So instead of promoting home ownership for any and everyone like previous presidents did, set some credit standards. If only people with good credit and a decent down payment could buy a home, it would be very hard for another bubble to come about cause there would always be limited buyers. Or if banks couldn't sell off the mortgages, they'd probably care a lot more about who they loan their limited funds to and make sure the people could pay them back. Basically, just put some common sense into the system, it shouldn't be too hard, and is already being implemented. Key is, even though its hard to get credit now, there always needs to be set standards to get credit in the future, whether in boom times or recessions.

Overall, I agree with Obama that people in financial institutions can't really be trusted. 95% (or more) of them went into the biz to make big money and nothing else. No higher calling, no saving of whales, no doing good for the country, or humanity, or the love of finance, or anything, they just want to get paid WELL. If a whole industry is full of these kinds of people, they need to be watched carefully.

Kudos [?]: 8 [0], given: 0

1 KUDOS received
Director
Director
User avatar
Joined: 20 Feb 2008
Posts: 797

Kudos [?]: 147 [1], given: 9

Location: Texas
Schools: Kellogg Class of 2011
Re: RIP, MBA [#permalink]

Show Tags

New post 30 Apr 2009, 14:12
1
This post received
KUDOS
You go to love this little gem today...no wonder America's regulating body is so incompetent that it couldn't stop Bernie Madoff when the evidence was shoved right in their face. They rely on journalists to figure out who the criminals are!!!

http://blogs.reuters.com/summits/2009/04/29/secs-schapiro-says-journalist-job-cuts-worrying/
Quote:
“It’s an absolute worry for me because I think financial journalists have in many cases been the sources of some really important enforcement cases and really important discovery of practices and products that regulators should be profoundly concerned about,” the chairman of the Securities and Exchange Commission told the Reuters Global Financial Regulation Summit in Washington on Tuesday.

“But for journalists having been dogged and determined and really pursuing some of these things, they might not be known to the regulators or they might not be known for a long time,” she said.


Just one question. Shouldn't the journalists be reporting on the crimes the SEC uncovers and not the SEC pursuing the criminals the journalists uncover? I mean do the police find out about murders from the local news? Lord almighty these people are incouragable.

Kudos [?]: 147 [1], given: 9

VP
VP
User avatar
Joined: 28 Feb 2008
Posts: 1323

Kudos [?]: 127 [0], given: 6

Schools: Tuck
Re: RIP, MBA [#permalink]

Show Tags

New post 30 Apr 2009, 14:36
jb32 wrote:
Just one question. Shouldn't the journalists be reporting on the crimes the SEC uncovers and not the SEC pursuing the criminals the journalists uncover? I mean do the police find out about murders from the local news? Lord almighty these people are incouragable.


Wasn't it a couple WSJ reporters who uncovered the Enron scandal?

RF
_________________

GMAT Club Premium Membership - big benefits and savings

Kudos [?]: 127 [0], given: 6

1 KUDOS received
Director
Director
User avatar
Joined: 20 Feb 2008
Posts: 797

Kudos [?]: 147 [1], given: 9

Location: Texas
Schools: Kellogg Class of 2011
Re: RIP, MBA [#permalink]

Show Tags

New post 30 Apr 2009, 16:28
1
This post received
KUDOS
refurb wrote:
jb32 wrote:
Just one question. Shouldn't the journalists be reporting on the crimes the SEC uncovers and not the SEC pursuing the criminals the journalists uncover? I mean do the police find out about murders from the local news? Lord almighty these people are incouragable.


Wasn't it a couple WSJ reporters who uncovered the Enron scandal?

RF

Not sure, but Jerry Pang and Allen Stanford were both uncovered by reporters. Madoff was discovered long before the SEC had a clue. Just sad is what it is. And now we want more regulation? I mean what we have is obviously incompetent if they can't even find the 2 biggest corporate/investor frauds (Enron/Madoff) in the last 10 years.

Kudos [?]: 147 [1], given: 9

Manager
Manager
User avatar
Joined: 01 Apr 2008
Posts: 145

Kudos [?]: 29 [0], given: 6

Schools: Chicago Booth 2011
Re: RIP, MBA [#permalink]

Show Tags

New post 30 Apr 2009, 17:22
jb32,

While I am not for or against more regulation, I do think your logic is a little flawed.

If you are in the camp that additional regulation is required, then you should evidence that all the current regulations were kept, yet the current crisis could not be averted.

If you are in the camp that no additional regulation is needed, then the evidence must be shown that if current regulations were properly enforced, this current of crisis could be averted.

Showing that the SEC is incompetent makes neither of the points above. It justs shows that SEC needs a major overhaul, and that current regulations aren't being properly enforced. In essence, an incompetent SEC essentially makes it almost impossible to determine if additional regulations are needed or not, because you are unable to accurately determine if current regulations are sufficient or not.

Kudos [?]: 29 [0], given: 6

VP
VP
User avatar
Joined: 28 Feb 2008
Posts: 1323

Kudos [?]: 127 [0], given: 6

Schools: Tuck
Re: RIP, MBA [#permalink]

Show Tags

New post 30 Apr 2009, 18:19
xenok wrote:
Showing that the SEC is incompetent makes neither of the points above. It justs shows that SEC needs a major overhaul, and that current regulations aren't being properly enforced.


One could always argue that the type of oversight required to make the SEC effective would take such a monumental investment as to be prohibitive.

RF
_________________

GMAT Club Premium Membership - big benefits and savings

Kudos [?]: 127 [0], given: 6

Manager
Manager
User avatar
Joined: 01 Apr 2008
Posts: 145

Kudos [?]: 29 [0], given: 6

Schools: Chicago Booth 2011
Re: RIP, MBA [#permalink]

Show Tags

New post 30 Apr 2009, 18:41
refurb wrote:
xenok wrote:
Showing that the SEC is incompetent makes neither of the points above. It justs shows that SEC needs a major overhaul, and that current regulations aren't being properly enforced.


One could always argue that the type of oversight required to make the SEC effective would take such a monumental investment as to be prohibitive.

RF


Again, this may be true (or it could be that SEC needs to stop hiring former Wall Street bigwigs with vested interests to do the policing, creating an ethical dilemma, which is definitely not the finance industry's strong suit.) This becomes question of how to make the SEC a more effective organization, or if that is even possible.

This does not change the fact that highlighting the SEC's incompetence does nothing to support or disprove the need for additional regulation. It just makes the argument even murkier.

Kudos [?]: 29 [0], given: 6

1 KUDOS received
Director
Director
User avatar
Joined: 20 Feb 2008
Posts: 797

Kudos [?]: 147 [1], given: 9

Location: Texas
Schools: Kellogg Class of 2011
Re: RIP, MBA [#permalink]

Show Tags

New post 30 Apr 2009, 18:50
1
This post received
KUDOS
I'm of the opinion that no matter what regulation is put in place, it won't matter. I'm of the opinion that the regulators will always lose to the Wall Street types no matter what the rules, and although they MIGHT be able to help avert true disaster - they are at such a disadvantage that trying to regulate is almost futile. They can catch the petty criminals, but just aren't smart enough to catch anything above the white collar equivalent of shoplifting. The only way the SEC can win is if the rules are so slanted in their favor that the other team won't even play the game. It's like if Tiger Woods played you in golf. You might be able to win if you changed the rules of golf so ridicuosly that the game barely resembled golf anymore, but then Tiger would just say f*** this I'm going to play someone else, which is the equivalent of investors taking their capital to other countries to invest.

Kudos [?]: 147 [1], given: 9

VP
VP
User avatar
Joined: 09 Dec 2008
Posts: 1221

Kudos [?]: 245 [0], given: 17

Schools: Kellogg Class of 2011
Re: RIP, MBA [#permalink]

Show Tags

New post 01 May 2009, 05:32
I'm not as concerned about the role of journalists as you, jb32 - it was reporters that uncovered the Watergate scandal, and every day police investigate crimes based on information provided by common citizens. In the end, there's no system of law enforcement or regulation that will catch 100% of the crimes before they do any damage. Unfortunately, xenok, I think before any real analysis of the type you suggest - whether current regulations were insufficient or just insufficiently applied - hasn't and won't happen, instead there will just be a knee jerk reaction to add more regulation, same way new laws are added after notable crimes.
_________________

GMAT Club Premium Membership - big benefits and savings

Kudos [?]: 245 [0], given: 17

Director
Director
User avatar
Joined: 20 Feb 2008
Posts: 797

Kudos [?]: 147 [0], given: 9

Location: Texas
Schools: Kellogg Class of 2011
Re: RIP, MBA [#permalink]

Show Tags

New post 01 May 2009, 06:20
Jerz wrote:
I'm not as concerned about the role of journalists as you, jb32 - it was reporters that uncovered the Watergate scandal, and every day police investigate crimes based on information provided by common citizens.

Jerz, I think journalists are absolutely necessary as a check on the government. All in all they do a fabulous job. Although on the downside they do can go overboard and scare the populace. For an example see the coverage of the non-story Swine Flu. 1 death in this country where regular flu kills 34,000 a year??? Not to be insensitive to the one death or take this thread off topic, but c'mon.

Kudos [?]: 147 [0], given: 9

Current Student
User avatar
Joined: 23 Jan 2009
Posts: 118

Kudos [?]: 40 [0], given: 0

Schools: Fuqua
Re: RIP, MBA [#permalink]

Show Tags

New post 02 May 2009, 10:36
Jerz wrote:
Unfortunately, xenok, I think before any real analysis of the type you suggest - whether current regulations were insufficient or just insufficiently applied - hasn't and won't happen, instead there will just be a knee jerk reaction to add more regulation, same way new laws are added after notable crimes.


Isn't it likely that it's really both insufficient regulation AND insufficiently applied existing regulation? Look - it's been pretty well established that the Bush administration gutted the SEC. Between major cutbacks in staff and a reallocation of resources towards other priorities, the last administration created a very friendly environment for investment banks to operate in without much interference from the government. That had consequences.

I don't understand your sense of futility in regards to government regulation, JB. I think the SEC will always have two major advantages that the banks it regulates never will - first, the power of the law. The SEC has enforcement mechanisms at its disposal that banks simply MUST comply with if they're to do business in the U.S. Obviously those resources should be deployed prudently, but they should be used with the health of the economy at large in mind. Second - while I'm sure there are a lot of folks out there willing to do anything, including break the law or engage in unethical activities, to turn a buck, I think most want to do the right thing. That's why a number of people tried to raise the alarm about Madoff and Stanford before this thing blew up - but, again, the SEC was asleep at the wheel.

Kudos [?]: 40 [0], given: 0

Director
Director
User avatar
Joined: 20 Feb 2008
Posts: 797

Kudos [?]: 147 [0], given: 9

Location: Texas
Schools: Kellogg Class of 2011
Re: RIP, MBA [#permalink]

Show Tags

New post 02 May 2009, 15:46
Toubab wrote:
Between major cutbacks in staff and a reallocation of resources towards other priorities, the last administration created a very friendly environment for investment banks to operate in without much interference from the government.

Not really sure about that. I'd like to see an article or two that backs up your assumption. While they did show absolute incompetence when they raised leverage ratios for IBs, that's to be expected. I mean its government, when do they ever show competence? They are always f***ing something up...Bush, Obama, what's the difference? The SEC soldiers are still the same and still incompetent...

Kudos [?]: 147 [0], given: 9

Director
Director
User avatar
Joined: 20 Feb 2008
Posts: 797

Kudos [?]: 147 [0], given: 9

Location: Texas
Schools: Kellogg Class of 2011
Re: RIP, MBA [#permalink]

Show Tags

New post 07 May 2009, 09:35
Your government regulators at work, folks: http://tpmmuckraker.talkingpointsmemo.com/2009/05/scenes_from_the_saddest_regulatory_agency_in_ameri.php
- In another situation, it took 2 1/2 months to prepare a paragraph requesting permission to send a Wells notice; in another case, staff prepared multiple drafts of a Wells memo over 3 years before finally closing the case because it was so old.
- Finally, one investigative attorney told us that a company under investigation offered to pay whatever penalty amount Enforcement asked; 5 months later, the matter still remained open, with an action memorandum in its tenth draft.
- Several attorneys said that another significant shortcoming is that the investigative staff does not have access to real-time trading information...
- Another attorney told us that a company agreed to a settlement, announced it publicly, and escrowed money for the payment, but the matter took a year to win Commission approval.
- Once all those internal memos are completed, they have almost no value internally because the system is run on a proprietary case tracking system called CATS that is incompatible with all their other computer systems (which are all incompatible with one another) and which no one bothers to update or fix when it's broken, both because their old information technology contractors no longer work there and because it is, in the staffers' own words, "severely limited and virtually unusable."

Kudos [?]: 147 [0], given: 9

3 KUDOS received
MBA Admissions Consultant
avatar
Joined: 26 Dec 2008
Posts: 2453

Kudos [?]: 567 [3], given: 0

Location: Los Angeles, CA
Re: RIP, MBA [#permalink]

Show Tags

New post 08 May 2009, 00:27
3
This post received
KUDOS
jb32,

Just because the regulatory body has shown incompetence doesn't mean that regulation is unnecessary. The problem is in the execution, and not in the fundamental principle that there needs to be some rules in the financial industry.

Yes, gov't screws things up, but that doesn't mean gov't is unnecessary - unless you're an anarchist.

You see, jb32, in your world since the justice system is screwed up, we shouldn't bother having any laws against murder, theft, assault, etc. because hey, the criminals rarely get the proper sentencing, or even worse that the justice system is rigged. Forget jails. Who needs laws or courts to interpret the laws and settle cases? Let the mob mentality rule. We don't need standards at all, because every single human being has the same standard when it comes to behavior. One guy believes that being with a 16 year old isn't pedophilia. Another guy feels it should be 18. We'll let good old Darwin decide.

To use your perspective -- because the justice system is rigged, we don't need laws at all. Screw contract law, because lawyers always foul it up. If we had a free-for-all where murder, rape, assault, theft, wasn't outlawed, everything would be just as peachy as it is today. In fact, it's the justice system that gets in the way.

Police? We don't need the police if they are corrupt (i.e. in your view, rather than "fix the police" you just want to get rid of the police altogether because you feel that citizens can enforce the laws themselves).

Now, you may think that it's apples and oranges.

It isn't.

Laws and regulations by definition exist to manage behavior in a civil society - whether that arena is social or economic. We need rules - to manage and influence behavior, whether they are violent or non-violent (the only difference between corporate malfeasance or grand theft are the perpetrators - the behavior fundamentally is the same).

To take a fatalistic view, throw your hands up and say, "it's all futile, gov't sucks so therefore there shouldn't be any" is a cop out. It's the kind of cynical attitude that has the potential to lead someone to justify bad behavior (not saying you'd actually go out and rip people off or to abuse your power...). To be blunt, it's cynical "gov't is for losers" viewpoints like yours that many people on Wall Street share (where I used to work) that makes it much easier to justify bad behavior. If you don't fundamentally believe in having rules or you believe that you can regulate your own behavior, you will find it easier to justify irresponsible behavior (or even illegal and unethical behavior). It's slow descent into nihilism. Wall Street and the financial industry needs stronger regulation, and it needs stronger enforcement of such regulation. To continue to let the inmates run the asylum isn't a solution - it's a cop out and excuse for doing nothing. Giving bankers more candy won't encourage responsible behavior - you need rules and regulations to *discourage* irresponsible behavior.

Yes, the SEC needs reform. Government needs reform. And it will never, ever be perfect. Nor will it ever be truly competent. But its very existence in enforcing laws and regulations, however imperfectly or perversely, is a far more civil world than the alternative that you are suggesting - which is anarchy.

Again, if you're an anarchist, fine - I'm sure then you don't believe we should have any court system, any laws, any law enforcement, or any legal apparatus whatsoever.
_________________

Alex Chu
alex@mbaapply.com
http://www.mbaapply.com

Kudos [?]: 567 [3], given: 0

Re: RIP, MBA   [#permalink] 08 May 2009, 00:27

Go to page   Previous    1   2   3   4    Next  [ 65 posts ] 

Display posts from previous: Sort by

RIP, MBA

  post reply Question banks Downloads My Bookmarks Reviews Important topics  

Moderators: OasisGC, aeropower, bb10



GMAT Club MBA Forum Home| About| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.