High Finance Laid Low

Newsweek, April, 2008 by Robert J. Samuelson

It has a split personality: what is productive most of the time can also lead to destructive spasms of greed and herd behavior.

Except for oil executives, no group of business leaders is now more resented than the titans of finance—the heads of banks, securities dealers, hedge funds. It is these folks who are blamed for causing or aggravating the housing crisis that in turn has plunged global financial markets into turmoil and has brought the U.S. economy to the edge of recession or perhaps beyond. The sweeping indictment may seem overdrawn. It isn’t. Yet it is only half the story of modern finance, whose basic job is to allocate Americans’ nearly $2 trillion of annual savings into the most productive uses for individuals and society.

The paradox of finance is...

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