For the record, I believe that every publicly-reported political scandal has an upside -- so long as it IS publicly reported. Because no matter how sordid or contemptible a scandal may be, the presence of a free press ensures that politicians with something to hide will always live in fear. That is a good thing.
But, if there was ever a year of having too much of a "good thing"...
... that year was 2008.
Here's a partial -- repeat, partial -- list of notable politicians who were either caught, arrested, convicted, uncovered, investigated (etc., etc.) in 2008:
Gov. Rod Blagojevich (D-IL) Former Gov. Eliot Spitzer (D-NY)
Former Rep. Vito Fossella (R-NY) Former Rep. Rick Renzi (R-AZ)
Rep. Charles Rangel (D-NY) Former Rep. Tim Mahoney (D-FL)
Former Rep. John Doolittle (R-CA) Former Mayor Kwame Kilpatrick (D-MI)
Former Sen. Ted Stevens (R-AK) Former Sen. John Edwards (D-NC)
Mind you, this (partial) list has only to do with political scandals. If you want to get literal about raising the stakes, then we can turn to financial scandals: and need I say more than "Bernie Madoff"? At $50 billion, the scale of his swindle makes it equal in scope to the economic crisis which brought his scam to light.
In turn, the Madoff case raises what is arguably the biggest scandal of all, namely the institutional corruption of the Securities and Exchange Commission. I hasten to say that I don't mean "corruption" in the sense of bribery or extortion; what I do mean is that the SEC's conduct has become twisted beyond recognition. Financial writer Michael Lewis put it this way:
"Created to protect investors from financial predators, the [SEC] has somehow evolved into a mechanism for protecting financial predators with political clout from investors. (The task it has performed most diligently during this crisis has been to question, intimidate and impose rules on short-sellers — the only market players who have a financial incentive to expose fraud and abuse.)....The commission’s most recent director of enforcement is the general counsel at JPMorgan Chase; the enforcement chief before him became general counsel at Deutsche Bank; and one of his predecessors became a managing director for Credit Suisse before moving on to Morgan Stanley. A casual observer could be forgiven for thinking that the whole point of landing the job as the S.E.C.’s director of enforcement is to position oneself for the better paying one on Wall Street."
The shock should be in the details and not the story itself. Here's why:
Reports [of scandal] are typical of psychology in transition from an earlier state of happy acceptance and trust. Ultimately, they pave the way for a full fledged bear market psychology of mistrust and avoidance.
That's from Bob Prechter's August 1991 Elliott Wave Theorist -- although he's made comments just like it in the time before and since. It's as true now as it was then.