Reason to be afraid #6:

Systemic corruption and a fundamental conflict of interest are driving us toward the precipice of new economic crises.

In the early spring of 2010, my phone rang, and the caller ID read “Unknown.” On the other end of the line was an AIG whistleblower. Until the 2008 financial crisis, AIG was a rogue elephant in the zoo of the US financial world, unknown to most Americans. After that, though, everyone who read a newspaper knew what AIG was. AIG Financial Products Division (AIG-FP), the London-based unit that took on the risk for the Wall Street banks, became a familiar villain in the developing story of fraud and corruption underlying the Great Recession of 2008-2009.

My caller spoke tentatively at first, without specifics, as cautious whistleblowers do, but she was concerned about the way in which the AIG compliance office at corporate headquarters worked. This was the office responsible for ensuring that the huge insurer did not break the law in any one of the 145 or so countries where it operated.

According to the caller that morning, the mainstay of AIG’s compliance program was “a joke,” and it had been for a long time. For years the program consisted […]