It basically worked exactly as everyone expected — when things got bad, the government came to the rescue; but, we didn’t expect it would come at the cost of a new regulator who now has the power to burrow into our business forever.

Former high-ranking Freddie Mac executive as quoted in NY Times on August 5, 2008 about how red flags regarding questionable mortgages were ignored.

The Freddie Mac situation is in sharp contrast to the Pharmaceutical Research and Manufacturers of America, a trade group for drug makers and research companies that recently announced a new ethics code (effective in January 2009) designed to help companies avoid government investigations and prosecutions. 

Some organizations appreciate the benefits of self-restraint and self-regulation.  Others don’t.  Given the above referenced quote and the mindset of management, don’t be surprised at the number of lawsuits, and their severity, as the Freddie Mac situation continues to unravel.

This entry was posted on Wednesday, August 6th, 2008 at 6:08 am and is filed under Business Blind Spots, Costs, Leadership, Quote of the Day. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.