On of my favorite bloggers is Paul Kedrosky, author of Infectious Greed. Kedrosky suggested a few articles to read recently, including “The Man Who Crashed the World” by Michael Lewis in the August 2009 edition of Vanity Fair. (You might recognize Lewis’ name if you read Liar’s Poker about the 1980’s bond market.)
Here’s the summary of the article in a few words – the entire collapse of the mortgage and financial market last year can be pinned on Joseph Cassano, former CEO of AIG. AIG required the ongoing bailout simply because of a cultural flaw within AIG stemming from Cassano and his “leadership” style. This corporate culture led to an increasing number of trades and more risk-taking by AIG that ultimately caused the whole system to melt down.
While the popular press and politicians like to blame the “greed of Wall Street” for the meltdown, is it really possible that this could have been diverted with better leadership at the top of AIG?
Read Lewis’ article and decide for yourself. It’s time well spent.