Monday, March 17, 2008

Bigger Concerns than Eliot Spitzer’s Personal Failings

I couldn’t agree more with Larry MacDonald’s take on Eliot Spitzer’s troubles (the web page with this article has disappeared since the time of writing).

On a personal level, Spitzer’s choice to make use of a prostitute is a serious matter for him and his family. He deserves some pain for his actions.

However, a much more serious matter for anyone who invests in the US is his effort to clean up the investment industry. The investment industry has legal responsibilities to act in the best interests of investors when handling their money. However, it is fair to say that much of the industry focuses on working around these laws to acquire as much investor money for themselves as possible.

Spitzer was heavily criticized for his attempts to clean up the investment industry, but these criticisms came mainly from those making money by taking it from investors. Chuck Jaffe has an interesting article discussing some of Spitzer’s efforts.

Spitzer’s personal failings are a serious matter for his family, but are trivial compared to the billions of dollars lost by investors each year. Individual investors need more politicians willing to fight against corruption in the investment industry.

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