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The collapse of the financial services industry may have been just the catharsis that this country needed after gorging on tax cuts and an unrestrained free enterprise system. Like Warren Buffett says, "When the tide goes out, you see who's not wearing a bathing suit."

My "Man of the Year" award goes to Kenneth Feinberg, the government-appointed pay czar. He has capped annual pay at $500,000 for senior officials at all the banks that received our tax money, and now he is working on what the maximum salaries will be for the next level down.

The predicted mass exodus of all those "really bright people" just hasn't happened. It turns out that 82 percent of bank senior managers are still on board. Where did we think those people were going to go?

The idea that large public companies can be run effectively by top managers making "just" $500,000 will hopefully seep into America's corporate culture leading to higher profits and rising values of stocks. It would help us compete more effectively with foreign countries - countries whose large companies are led by executives making a fraction of what we pay our corporate heads.

In the same vein, it's now apparent that Lehman Brothers, along with its CPA enabler, Ernst and Young, moved liabilities off its books temporarily at the end of each quarter to make it look like it was strong enough to support the 30-to-1 leverage it had been using. I have been surprised at the number of economic pundits, like Paul Krugman and Ben Stein, who claimed that it was a huge mistake to have let Lehman Brothers fail. In 2004, companies like Lehman Brothers, Bear Stearns and Merrill Lynch jumped at the opportunity, thanks to more deregulation, to borrow $30 for every dollar of their own money. What happened to them was as simple as buying a house for 3 percent down and losing all your equity when real estate values dropped by just 3 percent.

Saving these firms would have been an insult to our intelligence regardless of what it has ultimately cost. Further reassuring is that we're not through with them yet. Re-regulation, more taxes and years of lawsuits will claw back more than we taxpayers paid out. Those people forgot who they were dealing with.

Meanwhile, Ernst and Young, against the advice of its own whistle blower (whom they promptly fired) was giving Lehman Brothers a seal of approval on a transaction identical to those that brought Enron and Arthur Anderson to their respective knees. By the time this all plays out in court, it's reasonable to expect that yet another major accounting firm will be gone, and the American investing public will be better off as a result.

Human nature can explain why a big accounting firm can lose its moral compass. A manager generating millions is highly motivated to tell the client what the latter wants to hear. Years ago, the "Big Eight" accounting firms were partnerships, and all partners were personally liable for mistakes the firm might make. This could mean losing your home because the other guy blew it. Now larger CPA firms are corporations or limited liability companies, so all they have to sell today is the perception that they are presenting an objective assessment of a firm's financial picture.

Once that confidence has eroded, corporations needing public acceptance of their CPA's reporting have to move to an untainted firm. Any service firm's downward spiral picks up speed as long term leases on empty offices begin to sink the ship.

It should have been an industry wake-up call when 80,000 Arthur Anderson employees lost their jobs because of Enron. But no "... Too much money sloshing around brings out the worst in people. Going forward, it's reassuring to see that adult supervision is making a comeback. We've accomplished a lot since the bottom of the market about a year ago, and I'm optimistic about where we will go from here.