First answer this: how did we get ourselves in trouble the last time around? Bill Cohan's known for years and has finally now had his theory vindicated. It's pretty simple, really: the people at the top of our nation's financial firms are whack jobs. Nut cases. Loonies. Crazy bitches. Out of their minds. Certifiably in-hold me Angelo R. Mozilo-sane. Next time around, we must be vigilant to only let known lunatics enter industries where they pose less of a risk to society, like medicine or childcare.
It took a relatively obscure former British academic to propagate a theory of the financial crisis that would confirm what many people suspected all along: The “corporate psychopaths” at the helm of our financial institutions are to blame. Clive R. Boddy, most recently a professor at the Nottingham Business School at Nottingham Trent University, says psychopaths are the 1 percent of “people who, perhaps due to physical factors to do with abnormal brain connectivity and chemistry” lack a “conscience, have few emotions and display an inability to have any feelings, sympathy or empathy for other people.”...Until the last third of the 20th century, he writes, companies were mostly stable and slow to change. Lifetime employment was a reasonable expectation and people rose through the ranks. This stable environment meant corporate psychopaths “would be noticeable and identifiable as undesirable managers because of their selfish egotistical personalities and other ethical defects.” For Wall Street -- a rapidly changing and highly dynamic corporate environment if there ever was one, especially when the firms transformed themselves from private partnerships into public companies with quarterly reporting requirements -- the trouble started when these charmers made their way to corner offices of important financial institutions.
Boddy recognizes that the theory is relatively untested and would benefit from “further development and research” into the “personalities and moral reasoning aptitudes of the leaders” of the companies that got into serious trouble in the financial crisis. In an e-mail correspondence with me, he said his article has been warmly received and has been downloaded 9,440 times in the past 90 days. “Apparently this is a lot for an academic article and it is more than the next four most-downloaded papers combined,” he wrote. He also has a prescription for how to prevent psychopaths from getting into positions of power on Wall Street and elsewhere. “Anyone who makes decisions that affect significant numbers of other people, concerning issues of corporate social responsibility or toxic waste, for example, or concerning mass financial markets or mass employment, should be screened to make sure that they are, at the very least, not psychopaths and at most are actually people who care about others,” he wrote. Makes sense to me.
Did Psychopaths Take Over Wall Street? [Bloomberg]