Before launching in to this week’s rant, I thought I’d mention something oddly entertaining that happened this morning while I was traveling to Los Angeles.

The flight was late arriving into L.A., the result of bad weather and headwinds. The general mood in the cabin fell somewhere between unpleasant and disagreeable. Naturally, with the flight over an hour late, the passengers with onward connections were particularly agitated.

After touching down, one of the flight crew made an announcement. He asked for those with tight connections in L.A. to please raise their hands, and then asked for all those not worried about onward connections to look around and see who was in a genuine hurry. He then asked for all those passengers not worried about onward connections to please remain in their seats so the time challenged passengers could exit the plane first.

You’ve probably seen this same scenario and likely know what inevitably happens next. Typically, despite the announcement and earnest request, as soon as the plane comes to a stop everyone leaps to their feet in a general hale and hearty one finger salute to those who genuinely need to exit quickly. Connections aren’t made, itineraries are completely screwed, meetings are missed… all because we can’t be bothered stepping aside or keeping our collective butt in the seat so that folks in a rush can get where they’re going.

But not this time. With the rain beating down (it’s a 40-days-and-nights biblical deluge currently in the Los Angeles area) and a planeload of crabby, delayed, mini-pretzel stuffed passengers, the nicest thing happened. The plane came to a stop, ding went the little bell (normally signaling the start of the goat rope as everyone tries to cram into the aisle at the same time) and nobody, except those with tight connections, got up to move.

It was almost a Norman Rockwell moment. Those in a rush seemed surprised over the patience and goodwill of the others on the plane. Actually, the passengers in their seats seemed amazed that they had all acted civilly.

Regardless, the gesture completely changed the mood of the cabin. People started smiling and chatting with each other, folks went out of their way to help each other with bags from the overhead bins (where contents may occasionally shift during flight) and I didn’t hear a single surly comment about the delayed arrival or the crappy weather waiting for us in the City of Angels.

Lest you think I’m getting all sappy and about to share a Family Circus moment with you, I’m not implying that suddenly we’ll all be treating each other with kindness and respect. Not gonna’ happen.

There’s not a point to the observation really. In fact, it is a pointless observation. But it shows that, on occasion, we’re not just a bunch of poo-flinging monkeys. So that’s nice.

Of course, no sooner do I feel all Zen-like about the state of mankind, when I’m reminded of the state of the economy and how our current distress was caused by people acting out of greed, laziness, ignorance, complacency, ego or a combination of all the above. My interest in the economy in part stems from the relationship between national security and the health and well being of the country’s economic condition.

The PWB last visited the topic of the economy back in August of this past year. Remember back then? We had just started tossing about the phrase “subprime crisis”. There was very little transparency at that time regarding the depth of the problem, and certainly little understanding as to its eventual impact on other aspects of the economy.

And now? Five months and over $100 billion in write downs from investment banks later, we still don’t have much transparency and most, including the big brains of Wall Street, haven’t figured out where the bottom is located. Several of those big brains, including former heads of a handful of the major firms involved as well as a few of the senior executives at those firms with responsibility for the trading and management of the products tied to the mortgage industry have been let go. Trust me, don’t weep for them.

If you want to read something that will really frost your butt, check out the article in the New York Times Business Section from Sunday, Jan. 27 that deals with some of these poor, downsized titans of finance. The thrust of the article is that, while they may have been in charge during this massive debacle now known as the “subprime crisis”, they aren’t considered damaged goods on Wall Street. In fact, they’re being courted by numerous banks looking to hire them for senior positions to take advantage of their brilliance, expertise and all around super finance and management skills.

I’ll just repeat that in case the irony didn’t strike you the first time. These folks, despite having overseen losses that run into the billions and billions, are actually considered hot prospects for senior management positions at other investment banks. In no way should this imply that the upper levels of Wall Street could be construed as an incestuous old boy’s network. Not at all. What a load of crap.

Admittedly, to the average Joe like you and me, this development might seem odd. After all, if you or I lost billions of dollars, I’m guessing we’d be hard pressed to be rehired in the same industry for a boatload of jack and excellent bonuses. But on Wall Street, at the top of the food chain, massive screw ups apparently can be overlooked as long as you’ve got the special secret decoder ring and know the club handshake.

In the aforementioned NY Times article it was all explained to us simpletons by the following paraphrased logic. I’m paraphrasing because the PWB research staff is currently on a working holiday in Phoenix, drinking heavily and betting their Christmas bonuses on the upcoming Superbowl. Anyway, in the article, one of the industry experts noted that on Wall Street, the perception among some folks is that it’s not people who lose money, it’s the process or system.

Oh. Using this approach, we can quickly see why the senior executives in charge at the time when the financial institutions were building this house of cards can’t really be held responsible. It wasn’t their fault that all this crap was being repackaged, well rated and pooped out the door, only to reappear as excellent profits for the investment firms. The system was clearly at fault.

This of course is good news for any schlump who has to go to work every day and answer for their quarterly performance. I suggest that from now on you simply use the Wall Street approach in explaining any unfortunate deficiencies. If your sales numbers aren’t where they need to be, hey, blame the system. Not meeting your targets? No problem. Wall Street says it’s not you, it’s the damn process. This of course could be applied to most aspects of life, including homework, personal responsibility and getting your chores done around the house. Feel free to utilize the Wall Street Philosophy of Life in everything you do.

Thank God these titans of high finance won’t be punished. It would be a shame if their reputations were tarnished just because they were at the controls when the train jumped the tracks. Let’s not be petty and suggest that perhaps another massively compensated position somewhere on Park Avenue might not be the appropriate reward for what those of us in less elevated positions call mismanagement, incompetence or even gross neglect.

Now you could argue that I don’t have the sharpest financial mind. I’m not a business school graduate, haven’t worked in high finance and really find any math beyond addition and subtraction to be a bit complex. I don’t pretend to understand the ins and outs of the subprime crisis… there are others, including the excellent Ben Stein, who can illuminate the tricky parts.

However, as a public service, having spent several years in the private sector building intelligence, security and risk management firms, I will throw in my two cents. Not altogether unreasonable since that’s about the current value of my stock portfolio as a result of the actions of all the numbnuts involved in this mortgage hijinx.

Let us first set aside the group of borrowers who genuinely were misled, strong armed or otherwise shanghaied into signing up to mortgages that they couldn’t afford. I am sure that this group does exist, although I have always been a strong believer in the saddle your own bronc concept of personal responsibility. Never mind, let’s agree that such a group of borrowers is out there… blameless because they were hoodwinked.

Also, let’s set aside those that fall on hard times after signing a mortgage… we all know this group exists and always has. You work hard, do your best, buy a home… only to get downsized, suffer a serious illness or get hit with some other unforeseen calamity.

After removing the above groups from the equation on the borrower’s side, we’re left with a third group. Here we have all those persons who knew what the hell they were doing when they signed up to purchase a home they couldn’t reasonably afford. Included in this stellar bunch are the folks who falsified applications, took advantage of the “liars loans” where paperwork wasn’t required, assumed house values would always go up and generally tried to beat the system.

Of course, they couldn’t have bought those homes without support from the lending side. I don’t know about you, but when I buy a home, I expect to fill out lots of paperwork and provide crate loads of documents verifying that I have the income, assets and general wherewithal to pay my debt.

I also expect that the lender will carry out the due diligence necessary to ensure that I’m not blowing smoke up his or her bottom. My experience is that these are not unreasonable expectations. Unfortunately, while you and I were playing by the rules, a completely different game was being played by brokers, lenders, investment banks and ratings agencies.

Ignore all the high finance crap that’s being thrown about right now in an effort to confuse the average citizen and ensure that we don’t get to peak behind the Wall Street curtain. This subprime crisis is a direct result of people not doing their jobs. It’s as freakin’ simple as that.

Some didn’t do their jobs because they were lazy, some were greedy, some were ethically challenged and some were imperious leaders of respected institutions who just don’t give a crap as long as profit expectations are met and the bills are paid on the Hamptons summer home.

Lenders at the street level couldn’t be bothered enforcing basic due diligence standards when considering applications. Ratings firms couldn’t be bothered doing the necessary digging to understand what the hell they were rating. Investment banks didn’t bother to seriously weigh the risks involved because they were too busy rolling naked in cash generated from the wonderful world of subprime instruments.

I’m simplifying a lot of this because I’m a simple guy. But I know a lot about the due diligence process and believe me, it ain’t rocket science. If people had been doing their jobs… simply doing what they were paid and expected to do, we wouldn’t be in this mess. Homes are in foreclosure, thousands of low level and mid level jobs in the finance, mortgage, construction and other industries will be lost and the economy is battling to maintain its footing and confidence because people failed to do the right thing.

What do you think? Let me know how you feel about the economy, where you think it’s going and what impact the current situation is having on your lifestyle and activities. Send your comments and concerns to peoplesweeklybrief@hotmail.com

Till next week, stay safe.

Respond to the Writer.

Mike Baker served for more than 15 years as a covert field operations officer for the Central Intelligence Agency, specializing in counterterrorism, counternarcotics and counterinsurgency operations around the globe. Since leaving government service, he has been a principal in building and running several companies in the private intelligence, security and risk management sector, including most recently Prescience LLC, a global intelligence and strategy firm. He appears frequently in the media as an expert on such issues. Baker is also a partner in Classified Trash, a film and television production company. Baker serves as a script consultant and technical adviser within the entertainment industry, lending his expertise to such programs as the BBC's popular spy series "Spooks" as well as major motion pictures. In addition, Baker is a writer for a BBC drama to begin production in July 2007.