Fixing the Game

ONE

FIXING A BROKEN GAME

We would accomplish many more things if we did not think of them as impossible.

—Vince Lombardi

When a financial bubble bursts, there’s a run on scapegoats. With hundreds of billions of dollars in wealth wiped away in short order, it’s natural to look for someone to blame. So, after each economy-shaking crash, the U.S. Congress goes after the evildoers with determination and vigor. In 1929, it targeted the brokers who fueled a speculative bubble with easy loans and abundant hype. In 2000, the villains were unscrupulous dot-com CEOs, peddlers of counterfeit value that never existed. And in 2008, it was executives at big investment banks, who created inscrutable derivatives from worthless mortgages.

In each case, Congress ...