Listening this week to the Senate go after Goldman Sachs on the financial meltdown was disheartening, but not surprising.  CEO Lloyd Blankfein and his cronies were adamant they had done nothing wrong and felt no remorse.  Senators were hypocritically apoplectic. (Say that five times fast…)

For most of us, our ethics are not the same as the laws that govern us.  Granted, for the most part people find illegal things to be unethical.  But most of us also have many things our ethics prevent us from doing that don’t get us in trouble with the police.  What the executives demonstrated was that they have no such distinction.  If it’s legal, it’s ethical.  They will feel no shame or remorse unless and until they are in jail.

The senators haven’t made such public assertions about their lack of shame, but their role in deregulation also places some responsibility on them.  While they are willing to appear on TV looking like they are gonna pop a vein or two while excoriating the banks, I haven’t seen any mea culpas from them either.  To President Clinton’s credit, he did recently step up and claim his role in deregulation was a bad decision and he regretted it.  But in fairness, he’s retired now, and has less to lose.  Nonetheless, I though it was admirable that he took some responsibility.

I admit that it’s unrealistic to expect Congress or the banking execs to admit any fault here.  And in the end, I don’t care.  We’re here.  Let’s focus on how to get out.  But the lessons from the Senate hearings this past week could not be more clear.

Capitalism in general and businesses in specific have yet again demonstrated they will push whatever envelope contains them.  Perhaps a particular CEO or two might be constrained by personal ethics, but their lunch will quickly be eaten by some other company whose leader has no such compunction.  If ever there was a poster child for why strong regulation is required it is Lloyd Blankfein.  He basically said that left to his own devices Goldman Sachs will repeat the shady financial practices that are pretty universally agreed to have caused the financial meltdown.  Since they’re not illegal, they must be okay.

We have the power to fix that.  And shame on us if we don’t, because there certainly won’t be any shame on him.