DoggerDan said:
I believe there is responsible wealth creation and irresponsible wealth creation, and that a lot of what wall street is about is creating wealth any way possible, regardless of the costs to others or to society as a whole. In that sense, I think some changes in order. Good luck getting them. Wall street's campaign contributions are huge.
Agreed. Finance was meant to be the lubricant of the system of production, but has become predatory. There was always an element of this - read the history of Goldman Sachs - but due to a lack of suitable regulation, has become spectacularly uncontrolled.
DoggerDan said:
The number one problem I see here in the U.S. is both people and our government living well beyond their means. Had I lived like most of those with whom I worked over the years, I never would have been able to retire when I did.
Agreed again. The problem is that being financially prudent leaves you feeling that you are likely to be the one now helping with the bailing out. Your savings earn next to nothing, and you are just waiting for governments to inflate away that debt any time soon.
People talk about leftist "levelling the playing fields", but there is the right's version too. Neoliberals like Thatcher made a virtue of home ownership, adjusting policy settings to increase it. Everyone should enjoy this "right". And so the lax lending and housing speculation took off, ending up in subprime.
Of course it is a more complex story. The smart growth policies adopted by many local authorities - voted for by baby boomers who already had their houses and now wanted to protect their neighbourhoods - created constraints on land supply, driving house prices to unsustainable multiples of annual income.
But left or right, the modern story is of a basic unreality when it comes to economics. Neither side wants to make the voter-unfriendly suggestion that the planet might need to live within its means.
So as I say, level playing fields are always a good principle, but are not really the issue here. The playing fields, so far as access to playing the neoliberal game, is indeed pretty level.
But that game has indeed changed in the lifetime of some of us. I share the old-fashioned ethic of work hard, be productive, get rewarded. And I really disliked the more recent game plan of "borrow large, invest speculatively, make out like a bandit (so long as you cash out before the bubble bursts".
This is predatory finance. The game was democratised so even the average joe could clamber aboard and get a McMansion on a ninja loan. On the face of it, a triumph of the neoliberal dream. But really, it was just getting a lot of suckers to take on ludicrous debt (disguised as an appreciating asset). Then selling this liability on to other suckers (Icelandic banks, pension funds, etc). And when it all goes phut, well the suckers get left with the hurt, to the extent they can't transfer it to the general public in terms of cut-backs, bail-outs, debt forgiveness. The Goldman Sachs get to walk away with the loot.
So yes, it is good to see scruffy, angry mobs camping on the front lawns of the institutions. They may be baffled as to what actually happened, and how things might be changed, but at least they are clear something wrong did happen.
Justice would seem to demand that the financially prudent (you and me!) should be properly rewarded, that our children should not have their futures already taken away from them (they may be whiney and entitled, but this neoliberal mess-up happened on our watch), and that the Goldman Sachs of this world feel some real pain (even though what they did of course was "completely legal" due to the wildly irresponsible lack of regulation).