CHAPTER 7

The Future of Fraud and Scandals

A boom without crooks is like a dog without fleas… Why do periods of great prosperity always wind up being periods of great scandals? It’s not that it happens occasionally. It happens every time. The railroad boom makes the Internet boom look clean… Is it possible that scandal is somehow an essential ingredient in capitalism? That a healthy free-market economy must tempt a certain number of people to behave corruptly, and that a certain number of these will do so? That the crooks are not a sign that something is rotten but that something is working more or less as it was meant to work?

—Michael Lewis

Manipulation and scandals are well established and, despite the best efforts of standard setters, ...

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