Every day, somewhere an employee or group of employees is temporarily or permanently laid off, or in that unlovely British phrase, "made redundant." Elsewhere a CEO gets high praise, perhaps a bonus, for "rightsizing" his company, chopping health-care benefits, turning pension obligations over to the taxpayers, or getting around the spirit (and sometimes the letter) of the law that supposedly guarantees workers collective bargaining rights. Little outrages that routinely pop up in local newspapers or, if jaw-dropping enough, the national media.

But there's also the ongoing outrage, du jour in the sense that it happens day after day without surfacing until somebody finally puts the pieces together. Andrew and Leslie Cockburn have done that in their documentary American Casino. It's reviewed by David Denby in the latest issue of The New Yorker:

The movies are still one of the best ways of giving body, flavor, and emotion to the abstractions and puzzlements of an enormous crisis. In the most fascinating scenes in 'American Casino' — a terrific documentary chronicling the subprime-mortgage mess and the financial collapse of the past two years — a former banker for Bear Stearns sits in the dark, his face shadowed and his voice (I believe) slightly altered. We might be watching a retired criminal or spy, a man both proud of his dexterity and ashamed of the disaster that it led to. Out of the shadows, he explains how such bizarre instruments as collateralized debt obligations (C.D.O.s) quieted the normal skepticism of investors. Here’s the drill: when the bank assembled a group of mortgage-backed bonds as an investment product, it submitted them to a ratings agency. But the agency, rather than run its own computer models on the trustworthiness of such bonds, he says, merely handed the job back to the bank, which ran its models. Having received a fee of perhaps a hundred thousand dollars for not doing anything, the agency then signed off on the phony ratings. You can read about a scam like that in a newspaper and be surprised, but when the perpetrator actually explains it to you your reaction falls somewhere between nausea and hilarity. It’s as if the Russian Mafia had paid a Colombian drug cartel to certify its integrity.

Except that the cartel's certification, based on the Russians' prompt and complete payments for goods purchased or services rendered, might actually be more on the up and up.

After a while, one looks for straightforward citizenly virtue, and one finds it in the people who are left cleaning up the mess: the mortgage counsellors in Baltimore who try to help people climb out of trouble; the city official who mournfully boards up houses; the very matter-of-fact guy who controls the mosquito population before the insects spread disease. When the recovery comes, all those people will still be there, without acclaim, helping ruined neighborhoods spring back to life. The movie is a lucid and comprehensive picture of a rotten system, but it’s a relief to know that some people in the midst of disaster were doing their jobs.

Where's the regulatory reform that will prevent (or at least reduce the chances) of something like this or some other version of it happening again? What is being done to deter tomorrow's silk-suited highwaymen? Hark! Is that the sound of legislation being crafted? Or yet another round of the cricket chorus?

= = =

h/t to Chris Whalen at The Big Picture.