In America

We have a trickle down system of corruption.  Other former colonies, from what I've seen, tend to be corrupt from the bottom up, or at all levels equally.  In the US, we are outraged if we have to bride the cop or the building inspector, but somehow we accept as inevitable the fact that the President lies us into a fake war or that laws are written by the companies who sponsor them.  Basically, most Americans like to play by the rules, they like to trust one another, and they like to deal fairly with people (and be dealt with fairly) even when there's probably no explicit enforcement mechanism and it would be easy to get away with being corrupt at an individual level.  We might relate this to our Protestant heritage, and the way it creates a culture of social trust that is not based on the family, as it so often is in more Catholic countries. 

This little personal reverie is meant as introduction to a very interesting post over at The Big Picture.  Barry's got a former SEC attorney explaining how the bureaucracy of the SEC works and in what sense the Goldman case is "political".  The case, of course, IS political, but only in the sense that normally, politics would have squashed it from the top down by now. 

... it's up to the lower-level enforcement attorneys to decide when to bring the case to the Commissioners. It is possible that these attorneys saw that it was politically convenient to bring their action now — actually, 8 months ago when they got approval for the Wells notice — but their motivation was not political: It helps their careers (and mental well being) to get their cases approved.

Attorneys are unwilling to put a case up for a commission vote if they didn't think it was strong enough. These attorneys are judged on the success of the actions they bring and wouldn't jeopardize that to appease the politicians that are currently serving on the Commission. The senior people who make promotion decisions will see Commissioners and Presidents come and go but senior staff outlasts them all.

The Commissioners power is wielded not to instigate investigations but to kill them by not approving them — this was rampant during the Bush administration.

This is one instance, but you can see the same thing in lots of places (eg. Gillian Tett's discussion of the rating agency emails).  In my opinion, this is the American way.  The lower level guys are just doing their jobs and trying to get ahead.  They take the rules as given, and play the game they see in front of them without really trying to change it.  Not that they are especially moral, mind you.  When the boss says kill some towel-heads or rate some AAA, you don't fuck around with the obvious idiocy of these requests, you just look at your co-worker, cite some Dilbert, and git'er'done.  But it's not like they would have come up with this crap on their own.  It's not like the individual guys at the rating agency thought they could get Goldman to pony up a little extra for a phat rating, or the individual attorneys at the SEC had politics in mind. 

For all its rugged individualism and entrepreneurialism, the corruption in the US starts at the top and trickles down.  Which is why it's hardly a surprise that our great financial meltdown occurred on the watch of our most corrupt president.