Greed and Growth: New Priorities for a Stable Future

Plunging stocks have raised three things: fear of global depression; Democratic election expectations; and a cry for a world wide reassessment of capitalism. Greed, once again has become "the heavy thighed beast slouching toward Bethlehem."

The French President, Sarkozy, is quoted as saying, "Together we need to rebuild a capitalism that is more respectful to man, more respectful to the planet, more respectful to future generations and be finished with a capitalism obsessed by the frantic search for short term profit."

President Bush has called for an economic summit in the tradition of the famous Bretton Woods gathering. Our current president no longer has the personal or geopolitical capital to jump start anything far reaching; that will have to wait for January 20th, although time's a-wasting.

A powerful concept of fiscal modesty is gathering powerful momentum in the face of unfathomable financial meltdown. And by the way, what bad loan exactly was the straw that broke the camel's back? A perfect and sad example of complexity theory in action. But I digress. It is clearly time for deep breathing and broader focusing on our world, our direction, and our values. Back to basics.

Galloping greed and instant gratification get the big blame for our financial straits. Is this simply human nature out of control? Can we recalibrate regulations so the majority will be protected from the corrupt and grasping few? Yes, we can, for a while anyway, until the one with the three cups shuffles that pea around again so fast that no one notices where it went.

The first step will be to prohibit lenders from passing on loans and combining them into alphabet soup. Credit is tight and will stay that way until confidence and common sense regulations return. The second step is to loan and borrow within logical boundaries.

What we need is a new attitude toward world wealth and what constitutes it. Not an easy task. A reevaluation of what economic growth is and what are its limits is hardly a topic on which anyone expects universal agreement, but President Sarkozy is right to bring it up.

On the campaign trail, accusations are hurled by the McCain camp at Obama of "socialism." (Like his advisors Warren Buffet, Robert Rubin, and Paul Volcker are renowned socialists.) Well, George Bush, the Congress, Federal Reserve and Treasury Department have stolen a march right out from under the McCain accusations. The large scale buying into banks and companies, although necessary, is certainly not your standard Ayn Rand capitalism.

Markets, as we witness daily now, are mercurial. Free markets are not always free. The world is intermeshed as never before, and the days of letting huge money institutions collapse are past, because it causes wide spread damage of hurricane force. So capitalism has already morphed into another "ism." We just don't have the right nomenclature yet.

When events as perilous as the current ones erupt around us and threaten all our cherished beliefs in banks, government oversight, and financial institutional stability, our brains as well as our instincts tell us to recalibrate, or indeed, to revise our system.

Few silver linings pop out just now, but we can hope that positive fallout for our earth and environment may be a bright spot. We might just approach extraction from the earth with a kinder, gentler attitude. Conservation and preservation as core values can become trusted and honored again. Good manners toward our earth. A caveat is that falling oil prices may lull us into torpor towards full speed ahead on alternative fuels. For us to prosper in fiscal and climate meltdown, we will need to walk the walk more carefully on our sustenance, earth itself.

A new map for manageable, accountable prosperity is needed. President Sarkozy speaks wisely and perceptively. I hope our new president will also be wise enough to join in a plan for a future that is more equitable, more responsible and therefore brighter for us all.

Comments

[Stephen308]

But it's so much more than greed. It was at it's root, corrupted politicians and would be politicians corrupting our system, demanding that it make these loans to the poor in order to get votes for the politicians. Forcing local banks and Fannie and Freddie to make these loans.

Some of the very people who stand up today and claim they are the answer, were out there pushing these bad loans on our institutions....encouraging, forcing, breaking down our protections.

It was OH SO POLITICALLY CORRECT to force banks to loan money to poor people. To FORCE them to take on such HIGH RISK. And Yes, greed made it worse, Wall Street took a bad situation created by our crooked politicians and made it worse.

You will notice, I did not name names because some of those people who pushed off these bad loans on banks are running for high office!

So maybe it's not yet the death of capitalism but the intervention of corrupt politicians on a system that was working that is the root cause. And of course, these very politicians tell us they are not to blame but some greedy guy on Wall Street instead. Well, there's plenty of blame to go around, plenty indeed. Even some lawyer who worked with Acorn was involved I hear, some fellow now running for president who took large sums from the big boys....my what a cozy relationship they all had when things were going well.

[littleBrit]

The principle of home ownership for lower income groups is a good one. It can be a achieved in a variety of ways, including shared home ownership, for example, in which the government owns a percentage of the home to provide the householder with an affordable level of mortgage repayment. The householder can then assume further equity until 100% is achieved. What went wrong in America was the unscrupulous exploitation of this 'ideal.' I saw it, with my own eyes, in California. I saw people who were not qualified in the financial services industry jump on the bandwagon of working for mortgage providers - the excitement was palpable - next gold rush, here we come! "Screw the home owners, its the commissions, stupid!"

You are entitled to your opinion and your ideology but be aware that you do yourself no favours in using the opportunity to smear Barack Obama. The world is weary of GOP closed minds and cowardly smear tactics.

[Dynamohum]

Exactlly.

[T Pol]

The problem was not that the Community Reinvestment Act "forced" banks to loan to low-income people. Get over that fantasy. One of our local banks doesn't loan to homebuyers AT ALL. It only loans on single-family home purchases to....LANDLORDS. That's right, folks. Every single mortgage on single housing they do is to INVESTORS, many of whom are (drumroll) SLUMLORDS.

So, let's get off this "it's all the CRA's fault, it's all poor folks fault." One MAJOR factor in people not being able to afford their homes any longer wasn't that they bought beyond their means -- it's that subprime lending became predatory. It's that people lost their jobs. Or they had health setbacks with no health insurance. OR they watched their manageable credit debt become UNmanageable as CONGRESS Ok'd the new BANKRUPTCY laws the greedy banks wanted that allowed THIRTY-FIVE PERCENT INTEREST RATES on credit. I know MY cards went up in rate without change in my use or payments.

Let's not forget all the McMANSIONS that went to foreclosure (not bought by poor minorities).

So, let's get off the fantasy that poor people and minorities and the CRA are to blame for our fiscal woes. Naked short selling that small American investors screamed about since 2000 fell on deaf ears until just within the last couple of years. The SEC aided and abetted this crime. The "creative financing" of derivatives and credit swaps. I could go on, but there's not enough room or time.