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MP Wealth Advisors Blog
Scapegoat - 4/30/2010 PDF Print E-mail
Written by Dan Petrey   
April 30, 2010

Scapegoat

There have been numerous financial companies denigrated for corporate malfeasance related to the recent economic collapse.  Recently Goldman Sachs has been in the news for, (as far as I can tell) allegedly not disclosing information their clients allegedly deserved to know.   I am not an attorney and have no idea of their actual guilt or innocence or the prosecutor's ability to build a case.  What I do find rather interesting is my perception that another corporate scapegoat has been created. 

I have written previously about recent popular sentiment knocking capitalism and Governments perceived need and desire to protect the populace from those evildoers.   Let me make sure everyone understands.  If a company, or anyone acting on behalf of that company, does anything illegal or damaging they definitely deserve to be punished for their actions, including Goldman Sachs.  What makes me take a closer look is when it seems anyone and everyone is looking for a scapegoat. 

People are angry.  People often have a very tough time looking in the mirror and taking blame for their actions which led, or indirectly led, to painful results.  This is particularly so when our emotions are extreme.  Since serious introspection is often not an easy path, people often look elsewhere for the cause of their pain.  I believe this is true of people as it pertains to many parts of their lives. 

Our Government, right or wrong, took action attempting to assist us all by easing the pain many felt as a result of our economic recession.   These actions started under a Republican President and continued under the current Democratic President indicating this is a Government issue, not a problem of one particular party.  Over time it seems our Government has grown and seems determined to become more involved in our affairs, for better or for worse.    I will clarify again.  I do not believe the private sector is the cure for all our problems, (just most of them) and definitely believe the Government has a necessary role to play in society.

The steps our Government has taken have angered certain people even more than they were before, and appears to have led to certain movements such as the Tea Party.  So, anger seems to be running a little stronger than normal.  Many are upset with financial institutions and blame them for part, or all, of their financial pain.  The world, especially ours, appears to be determined to denigrate and regulate corporations.  Capitalism appears to be the current problem Government will attempt to correct or cure and in so doing appeal to those who decided someone else was the cause of their pain. 

Given the backdrop of sentiment out there, is it any wonder some question the timing of the Goldman Sachs case?  When the crowd is swarming in one direction I take notice.  Crowds tend to react and worry about the details later.  In my opinion, the Goldman case will probably be settled as excessive court costs will mount up as time adds up.   As this case ends and the story fades, will we need another Scapegoat? Human nature tells me if the crowd needs or wants a scapegoat, then a scapegoat will appear.   If the Government appears to be providing the scapegoat, I want to know why?

 

Written By:

Daniel Petrey, CFO, MBA

 
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