We are a forgetful people

We are still not out of the woods economically (and lots of other way) speaking.  Alan Blinder reminds us of that and lays down "10 financial commandments".

1. Remember That People Forget

When the good times roll, investors expect them to roll indefinitely. When bubbles burst, they are always surprised. 

2. Do Not Rely on Self-Regulation

We saw what happened when we tried to live by the idea of a self-correcting market.

3. Honor Thy Shareholders

For too long most boards of directors have been sycophants of the CEO.

4. Elevate Risk Management

If you have people responsible for managing risk, listen to them.  

5. Use Less Leverage

Leverage is wonderful up to a point.

6. Keep It Simple, Stupid

How many brokers understood the securities they were selling?

7. Standardize Derivatives and Trade Them on Exchanges

Not all derivatives are bad.  Let's trade them openly.

8. Keep Things on the Balance Sheet

Some CEOs forgot about non-balance sheet items.

9. Fix Perverse Compensation

People should pay for their mistakes, especially major mistakes.

10. Watch Out for Consumers

What we learned in the crisis is that failure to protect unsophisticated consumers from financial predators can undermine the whole economy.    

Simple but sensible.