Click here to show or hide the menubar.

Home >  Archive >  2012 >  June >  8

Previous / Next

Banking reform will be good for business
By Dave Winer on Friday, June 08, 2012 at 8:31 AM.
Just heard a report on NPR about how risk-averse investors are. As someone with a small amount of money to manage, I think I understand what's going on, because the behavior they describe exactly matches the beliefs that are guiding my investment decisions. permalink
Here's what's going on.  permalink
I was paying some amount of attention during the financial meltdown in 2008. Before that I had a vague idea about how banking works. But I listened to NPR, esp the Planet Money explainer, Giant Pool of Money. And then I read a bunch of books about the meltdown, and after a while I began to understand.  permalink
I remembered a conversation I had with a friend, Ponzi Black, who had been working in the mortgage refinance business. She quit, in disgust, at the kinds of deals her company was doing. Her story exactly matched up with what I was reading about. Then it hit me. Enron wasn't an outlier. The entire banking industry is corrupt. Once you realize that, you freeze in fear. What do I do with my savings? The answer I came up with, that so many others did too, is get as close to the safest thing around, the US government. They aren't honest either, but they can't be as bad as the assholes running the banking business. And in my heart I know they are the same people. But what are you going to do. If you can't trust money, how can you invest? permalink
Then I heard on NPR that corporate money-managers from around the world are doing the same damn thing. Effectively hiding the money under the matress and hoping somehow we get our shit together again, so they can go back to investing in things that make money, instead of just preserving value. (I remember when Krugman figured this out, that investors were no longer investing, they were preserving. It was a big moment.) permalink
I don't know why anyone is surprised, in hindsight. If it's legal to steal money, then people are going to steal money. And the people who are good at stealing, will squeeze out the ones who aren't good, or perhaps have an inkling that it's wrong to steal. It's actually even worse. Even if it's illegal, if the stealers think they won't get caught, or if they're caught they won't get punished, the same thing will happen. While I don't know for sure, even so, I'm pretty sure that's what happened here. We learned some big lessons from the banking meltdown of 1929. Put some rules in place. And then in the 80s and 90s we eliminated the rules. And the inevitable happened. And it keeps happening. And it will keep happening until we decide to fix it. And fixing it means more laws, and more enforcement, and people going to jail, and losing everything, because they commited fraud. permalink
If you doubt that the bankers run everything, look at who the Repubs are nominating for President. A banker.  permalink
It's like the Repubs had a VP who was a defense contractor. And what was the result. Not just one war, but two!  permalink
We actually vote for these people. So the blame lies with us. But we don't have to keep voting for them.  permalink
I guess it's time for the bankers to decide what business they're in. They were in the business of fleecing the US economy. But that's almost over. What's next? There aren't any more huge economies to pillage. Maybe they want to really do some business. Or get out of the way, retire to their 20 mansions, fly between them in corporate jets and helicopters. Entertain each other at lavish parties. Talk about how clueless everyone else is. Write books saying how much the rest of us should worship them. And just get out of the way so we can try to reboot the economy. Or failing that, we could find them new accomodations in a Federal prison. You want to call it class war, that's okay with me. :-) permalink
I know if I'm going to start investing again, we're going to have to make some very very big changes. Otherwise why the hell should I? permalink
RSS feed for Scripting News
This site contributes to the community river.

© Copyright 1997-2012 Dave Winer. Last update: Friday, June 08, 2012 at 9:51 AM Eastern. Last build: 6/30/2012; 9:43:42 PM. "It's even worse than it appears."

RSS feed for Scripting News

Previous / Next