Clearly there are enough lessons from History, Sociology and Social Psychology to convince us that more often than not group norms trump individual ethics. In the current “wannabe” debate between the pros and cons (interesting abbreviations as they apply to Wall Street) of new regulations for the financial “industry” ( a misnomer?) we seem to be neglecting those lessons. If you intend to join and remain a member of a group, either you accept their normative behavior, try to modify it closer to your own sense of ethics, or you leave (or are forced out) when their norm is resistant to your modifications. Only external circumstances that offer threats or opportunities generate changes in group normative conduct. Looking for individual “villains” is a deliberate, if unconscious distraction designed to avoid systemic change.
The administration seems to understand these realities. They accept that Wall Street will resist new regulations which is why their “outrage” is modified. Any individual or group under attack will defend itself. And sometimes, as each of know from our personal experience, being held responsible for damage done feels like an attack. The adolescent in us springs into action.
But the administration represents the larger group to whom damage has been done by the risky behavior encouraged by the Wall Street system of individual rewards. That reward system became so twisted that it devoured the providers of those rewards and now governments are required, as protectors of the common good, to insist on new regulations intended to change the group norms. In essence the administration is saying to Wall Street, “I still love you, and I understand that you and your friends were only doing what you all always do when you accidently wrecked the car. Nevertheless, you need to share in the cost of repairs, and there will be new rules about when, and where, and with whom you may drive.”