I was talking to my friend Michael today and he used a term to describe our mutual fear of a populist revolt against wall street and the financial sector: Financial McCarthyism
It got me thinking about the wisdom (or actually the lack of wisdom) in making wall street and the investors and executives that inhabit it the scapegoats of this financial mess we are in.
Yes, a lot of people in the financial industry made a lot of bad bets, were paid excessive sums for making those bad bets, and are at least partly to blame for the mess we are in.
But there's plenty of blame to go around; the politicians who created the political environment for the housing bubble, the regulators who didn't regulate, the borrowers who didn't think about the ramifications of paying too much and borrowing too much, and I could go on and on.
Not all of us are complicit in the making of this mess but certainly a lot of us are.
And the thing that concerns me is we need our financial system to get us out of this mess.
The people who built the house of cards are the ones who know how to take it down without it collapsing. And by turning them into the scapegoats, taxing their bonuses at 90 percent, and by vilifying them in public, we run the risk that they take their knowledge of how to unwind this mess most cost effectively and go home. Many already have.
I think Obama and his financial team are not stepping up to the plate and showing the right amount of leadership on this one. They are allowing the financial industry to take the lion's share of the blame and are not educating the public on why we need wall street's cooperation in getting us out of the mess.
Don't get me wrong, I'm not arguing that we should pay millions of dollars in guaranteed compensation to each and every wall street executive. But I am arguing for a balanced perspective, rationality, and an effort from our leaders to educate and explain instead of just scapegoating.