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Financial Crisis Survivors

Andrew Ross Sorkin offers some unsettling insight into the psychology of the finance CEOs left standing:

The one thing I would say is, to the extent that some of these companies have come out the other side and exist today, many of the executives now consider themselves survivors. That's the word they often use. Like a cancer survivor. Maybe that's deserved for some, but I'm not sure they all appreciate that their survival was in large part paid for by taxpayers. My worry is that, longer-term, some of those who feel like survivors will be emboldened to take on additional risk in the future.

It's easy to mistake surviving for winning, and thinking it a reflection on your skill rather than the product of the trillions of dollars the federal government pumped into the system. The folks at Goldman Sachs are presumably feeling pretty good about themselves. But there was a time when the folks at Lehman and Bear Stearns were feeling pretty good, too.

By Ezra Klein  |  October 6, 2009; 9:56 AM ET
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It seems just as likely to me that the people who lived through the crisis are going to be more risk-averse in the future.

Posted by: Drew_Miller_Hates_IDs_That_Dont_Allow_Spaces | October 6, 2009 10:46 AM | Report abuse

i'm sorry but they'll never be risk averse. its not in their nature. Everything in their nature says do whatever you have to do to get ahead. As they were going through this financial meltdown they're busy perfecting "high frequency trading". HFT is just another example that regulators are always not two steps behind the financial markets but two MILES behind them.

oh and as far as not having to go through that again if the Fed doesn't get its paws off interest rates and let the market set them then we'll just be back in the same mess years from now. The point is the regulators are not regulating where they should and are regulating when they shouldn't. Typical government MESS.

Posted by: visionbrkr | October 6, 2009 11:13 AM | Report abuse

I doubt that they have forgotten that their firms were bailed our and propped up by taxpayers. That memory would reassure them that they could boldly take on further risk in the future, and live to survive another day if things go sideways again.

Posted by: bdballard | October 6, 2009 12:28 PM | Report abuse

Of course they're risk-averse. So they'll make sure that their personal cash-out policies are even better protected than they were last time. None of this silly stuff about accepting compensation in shares of their own companies that don't fully vest for years.

Posted by: paul314 | October 7, 2009 1:02 PM | Report abuse

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