This week featured the expose' that Wall Street money manager, Bernard Madoff, had scammed billions of dollars from investors by using a Ponzi scheme. Worse yet, he had not complied with the regulations that are required of money managers and no one had insisted he comply. But this is not the only evidence we have seen of greed and gross corruption. Think of the entire mess that came out of Wall Street this year. This financial center has been admired world wide and now big name companies such as Lehman Brothers, AIG and Bear Stearns have been discovered to be completely incompetent and grossly unethical
Where was the Securities and Exchange Commission while all of this transpired? Why did they miss so many clues? What happened to the high standards we expect of them?
The Madoff scandal is just “the blow that killed Willy”, as my mother would have said. This entire financial meltdown just points out gross incompetence that really shouldn’t have been bailed out. Those companies that were bailed out are still not making loans to assist businesses or ordinary citizens. Instead they are paying dividends to their stockholders with our tax dollars.
More than a financial bailout, this country needs an ethical bailout. It was a huge mistake to eliminate the many regulations that kept the financial markets from abusing the system. Free markets are fine as long as everyone is honest but obviously this is not a perfect world.
But the ordinary citizen is also to blame. Not only have so many borrowed money they knew they could not repay, but most of the country lives on either borrowed money or on credit cards. Note all the Rent to Own companies and Payday Loan companies that are thriving on fleecing the poor. And don’t get me started on credit cards with their huge interest rates. Where is the regulation that keeps the banks from raising the interest rates to unfair heights? No matter which was you look, greed prevails.
The rich feel the rules don't apply to them. And let's face it, they obviously don't.
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2 comments:
If you think about it...all of capitalism is a ponzi scheme.
Wall Street is little more than legalized gambling, especially when you can put money on futures and sell stocks short. Things I learned in International Political Economy when we had to read the Wall Street Journal and place imaginary money on stocks and see how we fared at the end of semester proved to me how ludicrous the whole stock market system is.
The interesting thing is that communism, feudalism, and religious fundamentalism can't compete with capitalism. Its such a corrosive system that no competitive system can compete effectively with it. Thus why Francis Fukuyama boldly claimed "the end of history" when capitalism defeated communism in the early 1990s.
However, capitalists forgot one thing. We live on a planet of limited resources. Unlimited growth forever is simply not possible. So, now we're seeing the early disintegration of capitalism as it comes up against environmental factors and overpopulation. We have to transition to a more eco-friendly economic structure soon if we hope to survive.
As for ponzi schemes...when are people going to learn that money doesn't "trickle down"...it always gets sucked up to the top!
That is so true, Nicholas. Trickle down economics was a joke with Reagan and it's still a joke.
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