William Cohan told Bloomberg Television’s Erik Schatzker and Stephanie Ruhle that he believes people with characteristics that are attributed to ‘psychopaths’ were at the helm of major financial institutions that caused the financial crisis. (hat tip Cate Long)
Video below:
Yesterday, Cohan wrote:
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.”
As a result, Boddy argues in a recent issue of the Journal of Business Ethics, such people are “extraordinarily cold, much more calculating and ruthless towards others than most people are and therefore a menace to the companies they work for and to society.”
How do people with such obvious personality flaws make it to the top of seemingly successful corporations? Boddy says psychopaths take advantage of the “relative chaotic nature of the modern corporation,” including “rapid change, constant renewal” and high turnover of “key personnel.” Such circumstances allow them to ascend through a combination of “charm” and “charisma,” which makes “their behaviour invisible” and “makes them appear normal and even to be ideal leaders.”
Source: Cohan: Did Psychopaths Take Over Wall Street? – Bloomberg
Also see: "James Galbraith: How financial stability creates instability"
P.S. – Of course, I blame government here. Your thoughts?