Just saw a Daily Show Video (note to self: join Digg and embed the link) explaining that Greece has about half a billion dollars in debt for a little over 11 million people, which works out to 44,000 per person. The US has over 13 billion in debt for about 320 million people, which works out to 45,000 per person. But the Greeks get something out of it -- they retire at 53, with 80% pay. You have to wonder where all our money goes . . .
But even more disturbing is that the Greeks got into this situation because they hired Goldman Sachs to help them hide their true financial state and thereby enable them to get credit from the rest of Europe, and (2) the credit was insured by credit default swaps, held by nobody knows whom (because credit default swaps are unregulated), but probably American banks. Or something like that.
Now I understand the benefits of a market-based financial system, since it helps ensure that people who have innovated and have good business ideas have access to capital to implement those ideas and thereby create jobs, promote competition, and get better products to the public. Adam Smith's whole point was that capitalists acting in their own self-interest would deliver the goods for the rest of us.
But when our "system" can cause whole economies to fail (and the only reason ours hasn't yet failed seems to be that it's still in the interest of the rest of the world to prop up our currency), maybe we need to start rethinking it.
Isn't there an analogy to government? If our government were run by selfless and well-intentioned people, then it would make sense to concentrate all the power in one branch, or even in one person, so those selfless and well-intentioned things could get done. But our founders didn't do that, because they knew for a fact that the people who would rise to the top in our political process would typically be selfish and self-interested. So they created a system of checks and balances that kept the power distributed. As a result, not much gets done, but that's the price we pay for two centuries of democracy.
Recent events have shown that the financial services industry is has accumulated enough power to destroy entire economies, which in effect means it can destroy countries, including our own. It's more powerful than most governments, and it may well own our own. Does it still make sense to permit it to be run by unregulated human beings, who in the end will be governed by their own selfish, short term interests?
But even more disturbing is that the Greeks got into this situation because they hired Goldman Sachs to help them hide their true financial state and thereby enable them to get credit from the rest of Europe, and (2) the credit was insured by credit default swaps, held by nobody knows whom (because credit default swaps are unregulated), but probably American banks. Or something like that.
Now I understand the benefits of a market-based financial system, since it helps ensure that people who have innovated and have good business ideas have access to capital to implement those ideas and thereby create jobs, promote competition, and get better products to the public. Adam Smith's whole point was that capitalists acting in their own self-interest would deliver the goods for the rest of us.
But when our "system" can cause whole economies to fail (and the only reason ours hasn't yet failed seems to be that it's still in the interest of the rest of the world to prop up our currency), maybe we need to start rethinking it.
Isn't there an analogy to government? If our government were run by selfless and well-intentioned people, then it would make sense to concentrate all the power in one branch, or even in one person, so those selfless and well-intentioned things could get done. But our founders didn't do that, because they knew for a fact that the people who would rise to the top in our political process would typically be selfish and self-interested. So they created a system of checks and balances that kept the power distributed. As a result, not much gets done, but that's the price we pay for two centuries of democracy.
Recent events have shown that the financial services industry is has accumulated enough power to destroy entire economies, which in effect means it can destroy countries, including our own. It's more powerful than most governments, and it may well own our own. Does it still make sense to permit it to be run by unregulated human beings, who in the end will be governed by their own selfish, short term interests?
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