"The Big Short" provides a great deal of context to the behavior of financial services firms, and Lessig's arguments seem to completely align.
The problem with financial services companies being public is that the investors aren't leveraging their own money when they make risky bets. If a bet goes sour, the stockholders are ultimately responsible for absorbing the loss.
Goldman and its ilk are scrutinized for good reason. It's strange that you should compliment them for exiting the CDO market. Shouldn't they instead be condemned for entering it in the first place?
What about the SEC investigation into Goldman knowingly selling junk securities to customers [1]? The fact that they were only fined $550m suggests that - as Lessig argues - we are under-regulated. This shouldn't be allowed to happen in the first place.
The problem you describe infects all public corporations, not just in the finance industry. It is why management of big public companies tend to pillage, not produce.
The problem with financial services companies being public is that the investors aren't leveraging their own money when they make risky bets. If a bet goes sour, the stockholders are ultimately responsible for absorbing the loss.
Goldman and its ilk are scrutinized for good reason. It's strange that you should compliment them for exiting the CDO market. Shouldn't they instead be condemned for entering it in the first place?
What about the SEC investigation into Goldman knowingly selling junk securities to customers [1]? The fact that they were only fined $550m suggests that - as Lessig argues - we are under-regulated. This shouldn't be allowed to happen in the first place.
1: http://www.sec.gov/news/press/2010/2010-123.htm