Reflections on the FCIC Report

The Financial Crisis Inquiry Commission issued its report on the financial crisis of 2008 this past week. The biggest controversy arising from the release of the report is whether the financial crisis could have been avoided. In what I believe is a fairly balanced and well-argued article in today's New York Times, Joe Nocera argues that it could not have been avoided - not so much because it was a phenomenon beyond the control of mere mortals - but more along the lines of "it has ever been thus." Nocera suggests that it is probably impossible to pinpoint the blame on a single person, agency, group, or circumstance. Rather, it was all of these - plus misbegotten human intentionality and human foibles. He notes that we need a psychologist more than an investigator to help us understand all that went on in creating this crisis. He ends by noting that the question about the financial crisis is not whether it will happen again, but when it will happen.

I pretty much agree with Nocera. At the same time, as an ethicist I think it is important to recognize that the ethical problem with the financial crisis was the number of people in the financial sector who jumped at the chance they saw to reap huge profits from the new laws. Even the part about encouraging people with scant financial resources to take out mortgages beyond their means didn't give them pause. This is a serious moral problem. It is for this reason that undergraduate and graduate business programs must not only teach business ethics but also need to teach virtue. This of course opens up the whole debate about whether such things can be taught. I think, though, that we are beyond this debate. Virtue must be taught. Surely there are enough ethics centers at universities in the country to take up the creative task of teaching our young some moral integrity.