Not just JDs but almost all soft science and non-science would benefit from advanced math, biology, microbiology, chemistry and, most of all, statistics. These courses should be required for anyone in Congress.
To the point at hand, the problem was not a failure to pass on lessons. With respect to Madoff, that was simply a failure to implement known lessons – if the return is too perfect, you better do more due diligence on the investment. Some people did and avoided the problem.
With respect to the market crash as far as it was caused by MBS instruments, the problem was a change in underlying facts. The MBS instruments were put together assuming mortgages and borrowers were the same as those in the 60′s through 80′s. At those times because of the requirements to get a mortgage and the attitude of borrowers towards default, mortgages were some of the safest investments around. Both the mortgages and the attitudes of borrowers
changed in the 90′s, but MBS assumed they did not. The failure to regularly re-examine those underlying assumptions led to our current problems. (Some would say Congress insisted lenders ignore what any re-examination would have revealed.) Again, some people avoided the problem, but Congress is insisting they share in the liability anyways.
The legal authorities can require people and businesses to act contrary to lessons learned, but only so long before the system breaks. Watch alternative energy – at some point the cost of subsidizing all of it will break the system.
