With Britain's Libor scandal piling on top of an endless parade of stories of crooked finances—hundreds of billions of dollars in lousy mortgages and securities, entire towns going bankrupt, Wall Street execs saying they need to break the law to be successful, and more—Americans' trust in banks, finance, and big business is falling dangerously low, writes Eduardo Porter in the New York Times. These scandals are hard on the economy, but their "most long-lasting impact may be on Americans’ trust in the institutions that underpin the nation’s liberal market democracy," writes Porter.
Some say that confidence is just down because the economy is bad now, and trust is low these days in American institutions ranging from Congress to churches. But Porter also notes that the United States has fallen from the 16th least corrupt nation to 24th over the past decade, according to Transparency International, and 62% of Americans say corruption is common in the corporate sector. "Capitalism cannot function without trust," warns Porter. Click for his full column, or for a summary of why Libor affects you, check out this graphic. (More Libor stories.)
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