The finance people at AIG were awarded millions in bonuses because their contracts were based on the completed transactions, not the consequences of these transactions. A 32-year-old mortgage broker quoted, "I knew my job was to get the transaction done. Whatever came after the transaction, that was him, not me." A long list of corporate executives have reaped rich rewards even if they break the world economy, destroyed billions of dollars in value, and disfigured millions of lives.
Most experts now blame a lack of regulation and supervision for this madness. Or they point to the wrong incentive programs associated with the push for shareholder value that executive remuneration linked to parts of a firm price. These factors are certainly important, but they ignore the terrifying human breakdown in the heart of this crisis.
