If you're so smart, why aren't you rich?

That was a common phrase form a Kurt Vonnegut book, I think it was "Cats Cradle". Vonnegut is probably my favorite writer, nobody captures irony and the death of the American Dream better (maybe Hunter S. Thompson, but in a very different way). Beyond the American Dream, however, Vonnegut is probably better than anyone else ever has been at seeing huge faults in humanity, that, in his gloomy view of said species end up wreaking massive pain and suffering.
I love that expression, not because I agree with it, but because I think it summarizes everything I hate about this world. Many people, of all social standards, actually believe that you should be extremely wealthy if you're smart and that if you're not extremely wealthy you're not smart and, the worst of all possible corollaries, that if you're extremely wealthy you must be quite smart. But whatever happened to the good old fashioned American notion that all the wealthiest people are likely absolute crooks in some way or another?
This, more or less, was the subject of a recent column by recent Nobel Prize in Economics winner Paul Krugman http://www.nytimes.com/2008/12/19/opinion/19krugman.html?partner=permalink&exprod=permalink.
This column basically laments how the financial industry has screwed us over by taking peoples money, investing it in high yield, high risk stocks, taking the bonuses and high salaries when things are good and than walking away when the investments all turn sour. --

--from Krugman:

Meanwhile, how much has our nation’s future been damaged by the magnetic pull of quick personal wealth, which for years has drawn many of our best and brightest young people into investment banking, at the expense of science, public service and just about everything else?

Most of all, the vast riches being earned — or maybe that should be “earned” — in our bloated financial industry undermined our sense of reality and degraded our judgment.

Think of the way almost everyone important missed the warning signs of an impending crisis. How was that possible? How, for example, could Alan Greenspan have declared, just a few years ago, that “the financial system as a whole has become more resilient” — thanks to derivatives, no less? The answer, I believe, is that there’s an innate tendency on the part of even the elite to idolize men who are making a lot of money, and assume that they know what they’re doing.

I especially like that part about the lure of money pulling people away form jobs that actually do things, like science. Which brings me to the solution for a "world gone madoff": changing peoples minds and values. Policy will not help us on this one. This is the thing that not many people are free to say, because in essence it amounts to saying that its the peoples fault. The populists won't tell you that because it undermines their entire ideology. The elected officials won't tell you that because they're afraid of losing votes and the elite won't say that because it will call attention to how elitist they are. But I have nothing to lose so I'll say it. Any Rand says never trust the person that asks you to sacrifice. So I won't use that exact word. But instead I'll stick with another expression, "you reap what you sow". If Americans live by the adage, "if you're so smart, why aren't you rich?" they are always going to value money over intelligence, substance or stability. And I'd like to think that those are the elements of a strong economy that can maintain its strength over decades. People made bad decisions that didn't look past the next fiscal quarter and other people made them CEOs. People went into financial services and took jobs knowing that they had no clue what they were doing and took salaries that were knowingly way too high to be reasonable (see the book "Liars Poker" for more on that). And still other People gave the former people the money to do that.

The country's economy is in tatters and nobody knows exactly how bad its going to get before it gets better. But everyone has an opinion on why we are here. Maybe, so far as the recovery is concerned it doesn't matter who's fault it is. But it certainly does matter who's fault it is to prevent it from happening again. And the answer is, every time you did something foolish with your money or made life decisions based on getting rich as quickly as possible and not on actually doing or creating something, its your fault.