Steroids In Baseball Vs. Current Financial Crisis

Lastly on the Manny/Steroids thing for right now, sitting in a meeting today about investments, I couldn't help but think that steroids in baseball has a tremendous parallel in the current financial crisis (and I forgot to include that picture on the last post from the backpage of the Boston Herald so wanted to include it here). And it's not just the fact that the financial crisis has led to less people going to baseball games or that the financial downturn has led to the price of the free agent market lessening or that Bernie Madoff and Fred Wilpon were good buddies and the New York Mets team is now suffering because of it. No, there's a lot of other scary parallels in the two situations:

-Deep-seeded problems - obviously, both steroids and these bad investments in the financial world didn't just show up overnight

-Lack of regulation - baseball and the financial world was lax at best and close to criminally negligent

-Turning a blind eye to semi-illegal activity due to high profits - the owners and commissioner knew steroids existed in baseball in the 90s and turned a blind eye because they were making money. Companies turned a blind eye to irregularities in mortgage backed securities and eschewed reasonable lending principles with subprime mortgages all because they were profitable

-Celebration and large payments to those who may have done stuff wrong but were helping organization - Mark McGwire and Sammy Sosa were celebrated and A-Rod and Manny were paid generously even though they weren't playing by the rules. CEOs and other bigwigs at Lehman, Bear Stearns and other financial institutions had fame and money despite making very poor decisions for their company and for their clients. 

-Cracks in the armor begin to show - housing crisis and BALCO situation 

-Giants starting to fall - Lehman/AIG/Countrywide/WaMu/Bear Stearns vs. Bonds/Giambi/Sheffield/Palmeiro/etc.

-"Solutions" requested by leaders were formed by people with a severe conflict of interest - George Mitchell investigated baseball on Bud Selig's request and penned the Mitchell Report...while he was still employed by the Boston Red Sox. Many Red Sox, no Yankees were named. And Paul Byrd's name was the only name leaked before the report came out and was leaked on eve of him pitching Game 7 of 2007 ALCS against the Red Sox...hmmm. Henry Paulson was requested by George Bush to fix the financial crisis and came up with inconsistent policies...while one look at his past relationships (in this great diagram) show that he treated those who he had a past relationship with (Goldman Sachs, Morgan Stanley, Merrill Lynch) much better than those who he did not (Countrywide, Lehman, IndyMac). The latter group all were allowed to fail while the former group all got government help...hmmm.

-Fallout of "solutions" created other titans to fall - Roger Clemens had a hearing before a Congressional committee and now has his image tainted and Miguel Tejada pled guilty. Financial crisis solutions were not enough to stem Citi and AIG, titans in their respective industries, from being affected. Both were public and embarrassing.

-Public Outrage From Media/Government After the Fact - How many journalists could have stopped the financial crisis or stemmed the steroids problem in baseball if they would have been more vociferous in their objection to what was going on before it got out of control? How many politicians could have passed regulation from preventing drug use in sports or regulating financial institutions to a greater degree before there was an enormous problem?

-Investigations proved other problems existed - Investigation into steroids in baseball proved that the union was tipping players as to when they were going to be tested and other unrelated things such as skimming of Latin American bonuses and A-Rod's pitch tipping allegation. The financial crisis' investigations showed extremely poor job done by rating agencies and led to a huge breakdown in the hedge fund market as Ponzi schemes were uncovered left and right starting with Bernie Madoff.

-Cheating takes on new levels - cheaters will always find new ways to cheat. The financial world will always find loopholes and new ways to cheat the regulators and the baseball world will always find new ways to cheat the drug tests.

-Public Trust is Ruined - As I've said before, you may never be able to tell if someone is clean or not in baseball. Likewise, you may not be able to trust handing your money to someone or investing in the financial world after all that has happened.