Question: Does the free market corrode moral character?
Lewis: Well, you know, it’s funny you said that because I don’t think of greed as exactly the problem on Wall Street. I think greed is sort of professional obligation on Wall Street. I mean, not being greedy on Wall Street is like not wanting to be funny for a comedian. If you’re there, you got to want to make money. And the problem is, when the greedy people are wrongly incentivized so that instead of being incentivized to take really smart, long-term risks, they’re incentivized to take huge risks so that if they work out even the short-term, they get paid huge sums of money, and if they don’t work out, it’s not their problem. They can walk away from it. I think, if the system of incentives was right, the greed wouldn’t matter. The greed would be properly channeled. The greed is the fuel and it just needs to be properly channeled. And so I think that the premise, I think, of your question is, if people were just better people. If people were less self-interested, this wouldn’t have happened. That might be true. It’s moot because the kind of people that are [ganging up] on Wall Street are never going to be not self-interested. [It’s not happening]. So, you just got to be very careful about the incentives that control that greed. Having said all that, I don’t want to contradict myself entirely, but it is one of the forces underpinning this debacle is the changing financial expectations of the people who are in Wall Street, it’s a little bit different from greed, but it’s what they consider to be a normal sum of money to make. And if everybody is operating with the assumption that the normal big payday is a million dollars, they do behave one way. If they all operate with the assumption that the normal big payday is a hundred million dollars or even a billion dollars, well, they behave in other way, and the other way they behave is by taking a lot more risks, ‘cause the only you generate those sums of money is by taking huge, huge risks. So, there was this thing that happened in the Wall Street mind over the last 25 years where that just the level of financial expectations is a little different from greed. It’s the sort of like the level of it, what are we supposed to change, and what we’re going through right now is a radical downward readjustment.