We have seen the Future
We have seen the Future

Matt “Vampire Squid” Taibbi gets it in concluding:

Why Isn’t Wall Street in Jail?

They’re attacking the very definition of property — which, after all, depends in part on a legal system that defends everyone’s claims of ownership equally. When that definition becomes tenuous or conditional — when the state simply gives up on the notion of justice — this whole American Dream thing recedes even further from reality.

Not just the American dream, but that of any Western society that expects things to get better” over time. As they have across the Western world since the advent of “capitalism” a couple of hundred years ago. If you have any doubt about the government/regulatory failure contribution to the financial crisis then read some of Matt’s other work:

The Great American Bubble Machine

The first thing you need to know about Goldman Sachs is that it’s everywhere. The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. In fact, the history of the recent financial crisis, which doubles as a history of the rapid decline and fall of the suddenly swindled dry American empire, reads like a Who’s Who of Goldman Sachs graduates.

Governments enabled the creation of the bubble. Government also allowed the financial markets to change. Our financial markets changed from being a component of a system that enriches the masses to the benefit of the many to one which impoverishes them to the benefit of the few. In other words they have turned capitalism on its head, making it somewhat akin to pre-capitalist societies. Pre-capitalist societies were not known for massive wealth creation, with material misery and famine being more their mark. Countries were mercantilist, which was a reasonable attitude in a world marked by relatively constant levels of income per head. If the pie can’t grow much then the way to wealth is to accrue more of the pie for oneself. Sound familiar? Financial services can’t grow the pie much, but they sure can accrue more of it to themselves.

Having enabled the crisis governments promptly stepped in to redistribute the losses. Governments transferred the losses from those who took the risks and often received the gain to taxpayers, government employees, welfare recipients and users of public services. Basically the masses of the West have been made liable for the misdeeds of the often exceedingly wealthy few. The full costs of this are not yet apparent. Accounting and regulatory gimmicks amongst other government actions have hidden them for now. The erosion of the cultural underpinnings of our way of life is perhaps the most pernicious consequence, but its effects are also the hardest to see. Our kids will suffer the consequences.

This transfer of wealth from the masses to the politically connected occurred in our democracies. So much for the fear that the masses will vote themselves other peoples money. Turns out we should have been concerned for the masses money. We should still be concerned. Inflation and currency depreciation are the next step. Overt expropriation can not do it all. The analogy of the boiled frog comes to mind.

As for the GFC revealed losses. They are still there. The government can hide them and shift who incurs them. But it can’t make them go away. Someone has to feel the pain. They can feel it fast or feel it slow. But rest assured it will be felt. In this case a problem deferred is a problem allowed to fester and grow.

There is probably a law of conservation of losses. The government can hide them through accounting tricks and regulatory activity. But they are still there. The government can make some whole. It can insure depositors, cap losses for shareholders and not touch bond holders. It can keep failed financial managers in their jobs. But it can’t stop someone incurring the costs of these benefits. For like all government benefits, they come at a cost. And in this instance the cost almost certainly exceeds the benefit.

Finance never did create much new wealth. It primarily transferred it from one to another. Normally from those not earning their living through financial services, to those that do!

It’s time for our brightest and best to direct their energy and ingenuity to activities that result in more wealth, in a larger pie. We need fewer investment bankers, lawyers and accountants and more entrepreneurs, scientists and engineers. Let’s build a better future, not return to a mercantilist past.



36 Comments
  1. 630445 930556The electronic cigarette makes use of a battery and a small heating aspect the vaporize the e-liquid. This vapor can then be inhaled and exhaled 151175

  2. 59476 247539I likewise believe thus, perfectly pent post! . 639785

  3. 323696 624103Its amazing what supplementing can do for your body and your weight lifting goals! 633181

  4. 209100 670442I extremely delighted to discover this web website on bing, just what I was searching for : D besides saved to bookmarks . 386559

  5. 703670 67971woah i like yur internet site. It genuinely helped me with the information i wus seeking for. Appcriciate it, will bookmark. 289154

  6. Received 0.00508640BTC TXID 6e14fd5a758413aa22498e81385bde89e7448db5ab974b173e4ffa4a691d1adc. Generate Bitcoin online https://bitminer.io/1400451

  7. 915308 996846Youre so cool! I dont suppose Ive read anything in this way before. So nice to locate somebody by original thoughts on this subject. realy thanks for beginning this up. this fabulous website is one thing that is needed on the internet, a person with a bit of originality. beneficial project for bringing a new challenge towards internet! 850360

  8. 52580 868101But wanna comment on couple of common points, The site style is perfect, the content material material is actually excellent : D. 478665

  9. 141138 54200I actually like forgathering utile information, this post has got me even a lot more information! . 257263

  10. 309108 209211Hello there, just became alert to your blog through Google, and found that its truly informative. Im gonna watch out for brussels. I will appreciate if you continue this in future. A lot of people will be benefited from your writing. Cheers! xrumer 550710

  11. 933665 976727I likewise conceive so , perfectly written post! . 592093

  12. 564089 551143Woh Every person loves you , bookmarked ! My partner and i take concern within your last point. 368699

  13. 204459 557360There some intriguing points more than time here but I dont know if I see them all center to heart. There exists some validity but Let me take hold opinion until I appear into it further. Quite very good post , thanks and now we want far more! Included with FeedBurner at exactly the same time 559066

  14. Good article. I’m facing a few of these issues as well..

  15. A powerful share, I just given this onto a colleague who was doing a little bit evaluation on this. And he in reality bought me breakfast as a result of I found it for him.. smile. So let me reword that: Thnx for the treat! But yeah Thnkx for spending the time to discuss this, I really feel strongly about it and love reading more on this topic. If doable, as you turn out to be expertise, would you mind updating your blog with more particulars? It’s extremely useful for me. Big thumb up for this blog publish!

  16. Excellent goods from you, man. I’ve understand your stuff previous to and you’re just too magnificent. I really like what you have acquired here, really like what you’re saying and the way in which you say it. You make it entertaining and you still care for to keep it smart. I can’t wait to read much more from you. This is actually a great web site.

  17. I have learn some good stuff here. Certainly price bookmarking for revisiting. I surprise how a lot attempt you put to make any such excellent informative site.

  18. Its like you read my mind! You seem to know a lot about this, like you wrote the book in it or something. I think that you could do with some pics to drive the message home a bit, but instead of that, this is excellent blog. A fantastic read. I’ll certainly be back.

  19. Youre so cool! I dont suppose Ive read something like this before. So nice to seek out any person with some unique thoughts on this subject. realy thank you for starting this up. this web site is one thing that’s wanted on the internet, someone with a bit originality. useful job for bringing something new to the internet!

  20. 52088 980304cool thanks for reis posting! btw are there feeds to your weblog? Id really like to add them to my reader 531301

  21. Interesting blog! Is your theme custom made or did you download it from somewhere? A design like yours with a few simple adjustements would really make my blog shine. Please let me know where you got your theme. With thanks

  22. 265769 884521Nie and informative post, your every post worth atleast something. 940252

  23. 965553 516052I was suggested this internet site by my cousin. Im not confident whether this post is written by him as no 1 else know such detailed about my trouble. You are amazing! Thanks! xrumer 632417

  24. 448417 71439Thank you for the auspicious writeup. It in truth used to be a amusement account it. Glance complex to more added agreeable from you! However, how could we be in contact? 318197

  25. 137487 300729This kind of lovely blog youve, glad I discovered it!?? 152859

  26. 355782 489196hi, your internet site is genuinely very good. I truly do appreciate your give very good outcomes 649428

  27. 597114 212903I must spend some time learning much more or understanding more. Thanks for magnificent info I was on the lookout for this info for my mission. 463116

  28. 289883 23792Thank you for your info and respond to you. auto loans westvirginia 303726

  29. 637875 300949Some times its a discomfort inside the ass to read what weblog owners wrote but this web site is actually user pleasant! . 303206

  30. 285858 172677hello admin, your internet site pages pattern is simple and clean and i like it. Your articles are remarkable. Remember to maintain up the very good function. Greets.. 952701

  31. Do you have a spam problem on this website; I also am a blogger, and I was wanting to know your situation; many of us have created some nice practices and we are looking to trade methods with others, be sure to shoot me an email if interested.

  32. 947587 584032replica watches are amazing reproduction of original authentic swiss luxury time pieces. 402241

  33. I’m normally to blogging and i definitely appreciate your content. The post has truly peaks my interest. I am going to bookmark your web-site and preserve checking for new data.

  34. Thank you, I’ve recently been looking for information about this subject for ages and yours is the greatest I’ve discovered till now. But, what about the bottom line? Are you sure about the source?

  35. 872690 748611View the following ideas less than and locate to know how to observe this situation whilst you project your home business today. Earn funds from home 344482

  36. After research just a few of the weblog posts in your web site now, and I really like your approach of blogging. I bookmarked it to my bookmark website checklist and can be checking back soon. Pls try my site as well and let me know what you think.