The Destructive Rise of Big Finance
Economic, financial and regulatory issues should dominate politics and government in the United States for the next two or three years, which is important enough. National discourse may also have a new and deserving bogeyman. Franklin D. Roosevelt had Big Business, Ronald Reagan had Big Labor, and my guess is that the new president inaugurated next January will have Big Finance.
True, finance has been whupped by presidents before. Thomas Jefferson and Andrew Jackson, for example. But that was in the quill-pen era when the financial sector was a pup. Today's financial services sector, by contrast, is a grasping, gargantuan combination of banks, stockbrokers, insurancemen, loan sharks, credit-card issuers, hedge fund speculators, securitization mavens and mortgage operators. Over the last five years, financial services has reached a swollen 20-21% of U.S. GDP -- the largest sector of the private economy.
Manufacturing led financial services by 2:1 back in the 1970s, but by 2006 beaten goods production had shrunk to just 12% of GDP.
Do most Americans understand this? Of course not. Newspaper front pages have shunned any discussion; 60 Minutes has not even spared the transformation sixty seconds, despite its vast implications. This upheaval is probably "the greatest story never told" about the two decades between, say, 1986 and 2006.
Nor was it an economic accident. Computerization was a prequisite, as was the rise of financial mathematics. However, I would say that the two most important underpinnings of financialization lay in the rise of public and private debt as a mainstay of American culture and economics and the perpetual liquidity and bail-out support of the Federal Reserve Board under Alan Greenspan. During Greenspan's 1987-2005 tenure, the sum of public and private debt in the United States quadrupled from just over $10 trillion to $43 trillion. Finance became the industry that was not allowed to fail but was permitted to enlarge and metastasize its behavior almost at will. Regulation was minimal. Favoritism was omnipresent.
The result, alas, has been all over recent headlines. America's biggest ever housing bubble, with 57 varieties of exotic mortgages and home prices now plummeting at rates unseen since the 1930s. The United States turned Credit Card Nation, with a citzenry in thrall to plastic, 20% interest rates and late fees for just about everything. Huge banks like Citigroup feel no shame in paying billion-dollar fines for colluding with Enron's tax and accounting deceits. And since mid-2007, national and world credit markets have been panicked and paralyzed by hitherto obscure instruments -- the stand-outs are collateralized debt obligations (CDOs) -- that not even their designers and packagers can explain.
Adolescent versions of Frankenstein finance became a crash and a disaster for Americans in 1929 when the industry was new and represented only 10-15% of the economic weight of American manufacturing. Now, by contrast, the unraveling of a second financial sector-turned casino involves literally the biggest force in the American economy. Who knows how much of this hubris and malfeasance is going to unwind unpleasantly or how long that will take?
In fact, phony Washington statistics and warped market measurements make it doubly hard to tell. The federal Consumer Price Index is already regarded by many Americans as a con job, and the press periodically quotes investors who state their belief that current U.S. inflation is really 6 to 9 percent a year, not the 2-4 percent the government alleges. I agree. On top of which, because the value of the dollar has dropped so far, the Dow Jones Industrial Average at the end of March was not really 12,200, a number barely up from its 11,700 peak in 2000. If you measure the Dow in Swiss francs or euros, two strong currencies, it has already lost some forty percent of its 2000 value. Too many Americans live in a dream-world of economic misinformation.
I began writing about these matters with a 1990 book entitled The Politics of Rich and Poor, and in several other volumes since then. Today, the economic negligence of Washington and Wall Street, more than two decades in the making, has led to a multi-dimensional crisis in which this country faces an unprecedented convergence of problems: unprecedented debt, tumbling home prices, reckless money supply expansion, growing inflation, insufficient and expensive oil, and an eroding dollar. Sadly, there may no longer be a plausible way out.
Kevin Phillips' new book, Bad Money: Reckless Finance, Failed Politics and the Global Crisis of American Capitalism, is being published in April by Viking.
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Just recently, Adam Smith's "invisible hand" that is supposed to naturally regulate the free market, turned out to be the Federal Reserve Board. As for the other hand, as there is generally a two-handed kind of providence, well, that hand keeps stealing form the average worker either in the form of inflation and taxes or from the consequences of NAFTA.
"Analysts at financial research firm Celent say the U.S. banking industry will lose 200,000 jobs during the next 12 to 18 months."
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The offshoring started some time ago...but most American companies have a trick, these days. They layoff in America, and then quietly hire offshore.
I guess they'd rather take the one-time "layoff" publicity hit than they would the hit from a headline like "Corporation X Moving 100,000 Jobs to India in a Bid to Increase Profits and C-Level Pay".
Let us not forget to thank the good good friends of Sandy Weil of Citibank, Bill Clinton and Mr. Rubin for all of their efforts to give banks and other financial institutions free rein to do what they wanted. This financial crisis is as much a Clinton administration child as it is in the nasty lineage of every republican president who stacked the decks against people while protecting corporations. And thanks to the brilliant congress who made it hard for individuals, living, breathing people without off-shore structures, people who work as many jobs as they can get to make ends meet, to declare bankruptcy; while the tax avoiding monsters who cut jobs and benefits can go belly up and find protection in bankruptcy while the ceos cash big checks for what the rest of us call failure.
What concerns me about BIG FINANCE is BIG BAILOUTS when things go wrong. Congress has already earmarked Bear-Sterns for a bail out. What underlies most of the causes for these crashes is heavy debt in the hands of average Americans.
Here is why I hate bail outs. It is often taxpayer money...co
This way those at the top don't get more "free" money to lend to someone else to buy those mortgages.
For once Congress would be helping someone who actually needs the help.
>". . .why not divvy that up among the families to reduce their mortgage burden. If they don't have to foreclose, Bear Sterns et al, don't go belly up. Job done by helping the root cause rather than helping those who's pockets are already full by tossing them more cash. . ."<
But that would be welfare for regular people. Corporate welfare is much better.
Nothing new about the taxpayers bailing out the corporations. Here we go again. I hope Big Finance is one of the main issues to deal with by the next administration - otherwise this country is out of business and in the toilet.
I have a lot of respect for Kevin Phillips. He used to be a very fiscally conservative republican. That ended with the Bush Administration and Bush's pandering to the religious right. He is now an independent
Ronald Reagan's "Mourning" in America began the crushing of American workers. We had a brief period after WWII when there was widespread agreement that Americans should have decent lives -- a home, steady job, health care, pension, vacations and holidays. Ever since Reagan got into office, all of that has reversed, and people's wages and incomes have been going backwards while the cost of everything goes up.
None of this would be possible if "our" civil servants, the politicians, did what they were supposed to do, which is act in our best interest. But they all are corrupt, they all take bribes to sell us out. That's the first thing that needs to end.
Second, enforce the anti-trust laws. A company like Microsoft should have been busted years ago. Re-instate laws forbidding people (Murdoch) from owning and controlling all the media. Tax the rich and the businesses, and use that money to provide healthcare and education. Break up the financial groups, and make credit cards subject to usury laws, with 10% maximum interest. Increase minimum wage to $15/year, and have free daycare for all children of working parents.
Or leave things the way we are, and we can all write great novels about the new aristocracy, the peasants and serfs, starvation, and what it feels like to be a part of the third world.
I like both of your solutions, but they lack one very important thing; education of the American public. I will be the first to admit that even after a couple of college economics courses, I certainly don't understand all the intricacies of high finance. If I have had the benefit of at least a little economic education, and still don't have a full grasp of our nation's economic workings, then what chance does someone without any of that have? For the voters to make rational, informed decisions on how our economy should work and how it should be regulated, and to what extent, they first need more education about the matter. Maybe our education system needs to take a step backwards, and return to some of the staples of education in days past, such as mandatory civics classes. Add to that mandatory economics classes. My belief is that once a sufficient number of people get that kind of basic education as to how things work, they will be absolutely appalled at what they see happening today, and they will force their representatives to do something about it. Today, depending on our representatives to do anything unless the voters speak up is just plain naive. Heck, even when we do speak up, they seem to feel free to ignore us, as shown so vividly on the Iraq war debate.
NABNYC, nogimmicks, Uffdaguy--taken together, you have something so crazy it just might work. My addition---when they bust those monopolies the very first one should be the Main Stream Media that controls all that we see and hear and know of the world and our own country. When General Electric own NBC how fair do you think the news can be? And that's just the tip of the ice berg. It goes hand in hand with your idea regarding education--We are such a stupid and ignorant nation, and it has only taken 28 years ( since Reagan) of neglect to ruin what was once the pride of the world! How much easier we are to control when kept that way, and the Media makes sure of it!
Two good points. However it is worse than it seems.
As far as the anti-trust laws: Microsoft is the least of our problems. Collusion of multiple companies into virtual monopolies is the biggest problem today. That happens in Big Oil, Media, war industry, financial sector, etc. The current legislation does nothing to control and break quietly behind close doors.
Secondly, once the virtual monopolies are formed they become the government and start changing the laws to help themselves.
READ Shock Doctrine -The politicians, the news media, are in the pocket of tne military-industrial complex. They run our goverment!
Ronald Regan, the great communicator was the end of "democracy" as we know it in this country. Before he took office, the american worker earned a decent living wage, was able to raise a family, own a home and send its children to college. Ronald Regan's friends were tired of paying a decent wage to its workers and put him in office to end the thriving middle class. He started by busting the unions. How anyone can revere that man is a mystery to me. It is however, a pattern with the republicans and will continue.
At least when the dems are in office, the middle class seems to do a lot better.
I suppose you could call it "Big Finance".
Or you could call it the grandest shell game of all time...
To truly understand the scope of the problem, I encourage all of you to investigate the term "petrodollar". Wikipedia has a limited entry on it, but several good articles in the external links section to begin with. The hole we are in is unfathomably deep, and we are dangerously close to a tipping point that could see the dollar become worth about as much as the yen in a matter of months, if things continue to play out as they have been.
The rich will be okay: they have seen it coming, and will have plenty of euros to keep themselves wealthy whatever happens. We need to stand up and take notice of the real reasons behind what our government is doing in the Middle-East.
Oil is only half the reason. World reserve currency. That's what we are really fighting for.
This is fascinating.
For other readers, here's a link to one of the references from the aforementioned wikipedia article:
http://www
We need mandated wealth distribution. All the excessive profits and outrageous CEO "bonuses" should be returned to the people from whom they were stolen, and those responsible, either in business, government, or finance, should be arrested and tried for theft, at the very least.
At the top of the list is Big Oil, the "health care" industry, and of course the "defense" industry, where as we all know, about half of our nation's resources go, to continue fueling this sick, destructive stratification of society and militarization of the world.
We won't see this until, like the French Revolution perhaps, people are starving in the streets, and finally take down the entrenched "ruling class".
Cheney's "So?" is the modern equivalent of "let them eat cake", isn't it. The consequences should follow as well.
In fact, these 'bonuses' should be recoverable as fraudulent transfers since corporate money was given where the company knew or should have known that insolvency was just around the corner.
Mr. Phillips, my husband and I have been admiring readers of you ever since The Politics of Rich and Poor, and the latest of your books which we have read was American Theocracy. I believe it was in that book you talked about our "FIRE" economy, a concept I have tried to work into my comments on the blogs because everyone should be aware of it. You are not an easy read, however, at least for me, because of the statistics, but I do hope your ideas can reach a broader public because you are so spot on and truthful. If Senator Obama becomes the next president, as one of his supporters I will write to him and suggest that you be added to his list of economic advisors, and even though you are a Republican, I hope you would not refuse.
We have been watching the economy be colonized, neutered, and sold to the the lowest common denominator on the international market for decades. The invasion of Iraq occurred with no long term energy and conservation plan, infrasture plan, or sensible immigration plan. The same syndicates and political filth that have kept us behind the ball since the late 1960's took total control. Now violent sociopaths are preparing to order their fundamentalist generals to bomb Iran. What this reflects is that we have no viable representative government, whatsoever. Washington is top-down traitors and scum. Washington no longer has the intellectual, institutional, and spiritual capacity to adapt and take new directions which puts the world in great danger. Our governors and mayors need to start taking a greater role, with plans to seize their state's assets, provide regional banking, and work together on regional- national planning to employ the people and begin the great enterprises we desparately need. If larger, international syndicates continue to thwart our will and common sense and place our posterity in further danger, then the state's should seize their assets and democratize their filthy businesses using their courts, militias, and National Guard. To tens of millions of us, little of this was unforeseen. What was surprising and painful was that a majority of self-interested, lazy minded white people vote TWICE to keep these criminals in power as they murdered our children, raped our economy and environment while destroying the Constitutional and Bill of Rights.
The big reason this isn't more widely publicised is that the main stream media think that John Q. public is too stupid to understand it. So we get the Rev. Wright, Elliot Spitzer, and other crap stories like that. If we ever got real journalism, we would get headlines like "Creative financiers are Destroying the US economy!!". But we don't. sad.
CREATIVE IS THE MAIN WORD THERE.
WHY CREATE NEW WAY OF FINANCING WHEN YOU HAVE STABLE ONES???
TO SCAM PEOPLE OUT OF DOLLARS.
THERE IS NO MISSING PROFIT POTENTIAL AFTER THE PAPERS ARE SIGNED.
HEDGE FUNDS ARE A SCAM.
It has been going on for some time, and many of ordinary folks saw it but were powerless to stop it !! DEREGULATION across the board was sold as BENEFITTING the ordianry..
The cost of using my telephone is considerably cheaper than it was in 1980. I clearly remember paying 35 to 50 dollars per month for phone service and every minute on the phone was charged message units. I now pay a flat rate of $20 for unlimited domestic long distance and local calls.
This points out the problem with people having an all or nothing approach to the challenges we face. There is no question that people are feeling pinched but we need to put things in perspective. While the last 30 years did not benefit ALL Americans, there were quite a large number of middle class people that built wealth at one of the fastest rates in history. Unfortunately, there were also a good many people left behind.
We need to focus on solutions that provide for greater balance, that reduce the inequities in the economy. Unbridled capitalism is not the answer, nor is an extreme swing towards potentially excessive regulation, all things in moderation. Clearly we need more oversight than we currently have but we must keep in mind the cost of unintended consequences.
But the mainstream public IS too stupid to understand it. If they weren't, they wouldn't fall prey to predatory lending schemes. They would be able to withstand news that wasn't a bunch of slogans, and they could put Jeremiah Wright's comments in context instead of lapping up the 10 seconds that is replayed over and over by Fox News.
Good post and right on the money. This all started back in the days of Ronald Regan (again) where media conglomerates were allowed to buy up radio and television stations, thereby controlling what we were being fed. Remember the good ole days when individuals owned the stations and the news divisions were not meant to make money but deliver the news. It is a disgrace what has happened and I have been around a long time and watched it happening before our eyes.
And these guys want to privatize social security?
They want to privatize the profits only, 'kay? They're okay with government bail outs, too.
Bail outs for the wealthy, that is. It's more of that "trickle on" economics. George H.W. Bush had an economics degree, and in 1980 called Reaganomics "voodoo economics.
First - I know nothing about Finance but whenever I see sweeping comments and generalizations like in this article, I get suspicious.
The fact is the vast majority of institutions, Enron notwithstanding, are run with general honesty and rigor and provide employment, in fact to keep unemployment rates very low for the last 15 years. Yes, there have been bubbles but the gloom and doom predictions seem to always fall flat.
Yes, the dollar is low but I understand that foreign companies are setting up shop in the U.S. in record numbers from manufacturing plants to technology shops to take advantage of the low dollar.
And, in the last 3 decades, virtually all new echnology innovation happened in the U.S. perhaps because of the availablity of easy money. Take, Microsoft, Intel, Cisco, Oracle, Google, Apple, Applied Materials, AMD, Amazon, Amgen, Genentech just to name a few. These companies are so far ahead, rest of the world have little or no chance to catch up in new technology innovation any time in the near of even not-so-near future.
The article I see here reminds me of articles written in the 60's that warned of population growth, greed of rich countries and massive food shortages in 25 years. These articles were celebrated by the extreme liberal crusaders you find in this post. They have been totally wrong!! In fact hunger has been conquered in more places than ever before and there is no global food shortage!!
If you would trouble yourself, please back up your assertions with facts. And do try to present them honestly in a way that actually addresses the arguments offered by the author of the post. Otherwise we just get the usual Republican drivel.
Those who warned of over population have not been wrong... note the prices of food, energy, global warming and pollution.
In your own household you cant continually live off your credit card w/o sevre consequences. The U.S. now for the second time after Repugs who one trippled the national debt and took us from trade surpluses to trade deficits; from the largest Creditor nation to the largest debtor nation in the world, to our current president who has lost inspite of a dollor devalued more than 50%, 3.5 million MFG Jobs while accumulationg more debt than all other Presidents combined. . Anemic low wage job creation inspite of a "WAR" time economy.
WE went from creating Consummer Goods and Products to a society creating paper transactions and massive debt. Negative savings for the past 3 years... not seen since the Great Depresssion.
We are selling off our infrastructure to Foreign governements inorder to repatriot Dollars to prevent its total collapse and because we cant afford to rebuild the roads and bridges ( blew that money in IRaq).. no tax increase, just new Toll booths forever.
Our major export to China is SCRAP. Only 10 percent of our Exports are not to Canada, Mexico and Europe.
73 million BabyBoomers retiring in the worlds most expensive healthcare system by 300%.
If you can offshore MFG,High tech, financial services are very easy to offshore and thats being done now!
Thanks for bringing up overpopulation. Two groups want unlimited growth from unlimited population. One, is the economically driven short-sighted corporate whores who want Ponzi schemes; Two, is the church groups looking for new converts to "tithe."
These two groups are overlapping. In China, there was an attempt to limit the number of children. This seemed rational to me. Thomas Malthus predicted that men would breed like rats. He was a both theologian and an economist.
Too many people are not bad for the planet, which cab survive, but bad for the human race. Wait until food and water riots progress to the walled off security communities with the SUV in front with their SIV investments propping up their privileged existence in their false realities. This is why lemmings periodically jump off cliffs - to trim the overpopulation. Tactical nukes will disrupt food and water supplies, according to my 82 year-old Ph.D friend from General Atomic. He had bet on Avian Flu but now sees the other scenario as disrupting the food chain as more plausible.
There are systemic problems with the global financial system
Your assertion that; "the vast majority of institutio
I have read every on of Mr. Phillips books. It has been the beginning of my education. I look forward to his new book. Every one of his predictions has come true.
I am woefully ignorant about big finance, but I know that when a community gets overrun with title pawn and payday advance businesses, that community is sick. Here in the Bible Belt, those businesses thrive.
As for the general honesty of businesses, phooey. Look how much the top executives are paid, sometimes just to get them to leave after they run the businesses in the ground.
I know Winn-Dixie paid an executive $7M to leave, and then filed bankruptcy and laid off thousands of employees. The stock became virtually worthless, so retirees suffered because they owned stock in the company. Winn-Dixie couldn't decide whether to compete with Wal-Mart or Publix and so lost customers to both competitiors.
Healthsouth cooked the books to look like a gold mine, and when the truth was revealed, it's stock dropped to penny stock. It is surviving now and it's former CEO, after being acquitted in criminal court for the massive stock fraud he was found civilly liable for, is in prison for the Gov. Siegelman bribery.
Honesty, phooey. That's for suckers like me.
If you know-nothing about finance, your own admission, how can you make the statements you are making.
If you think we are ahead you are a fool... we are way behind in technology.
Miss your contributions at TPM, but am pleased to see you here.
I often point to the product of perceived wealth disparity---lack of hope in ever joining the upper ranks of society, except through crime. It is precisely the comparison between people that matters, socially, not absolute measures like whether one's family has a roof.
It is clear to most people that financial success begins with wealth, instead of ending there. The lower ranks of society have close to zero chance of ever knowing what is going on at Bear Stearns, etc. Only the connected, that have the wherewithal to attend high-rank college, and make the right connections, stand a chance. It is funny, but not outlandish, that the wealthy agonize over getting their children into the right pre-schools for future connectedness.
The cure for wealth disparity and financialization is a return to high tax rates on unearned income. When a steady, if modest, income is the measure of success for a company or individual, we will be producing instead of speculating.
You probably do not know that only 2% of the millionaires in this country inherited their wealth!! Others have acquired it through hard work and many compromises they made.
The cure for wealth disparity is to build a culture so that many poor people actually work hard to take advantage of what is offered to them just like immigrants in this country do!! It is not wealth redistribution!! That is socialism and has proven to fail aorund the world.
Now if you are about fighting the removal of inheritance tax, I am with you because that does confer an unfair advatnge to people who have not earned it. However, it is a feel good measure because most of the wealth in this country is still earned not inherited!
Where is the data you cite? How do you know this?
The number one way to wealth is still inheritance. A Millionare is not what it use to be . Today a millionare is like a person in the late 60s who was worth 125K. Welcome to dollar devaluation and inflation
Try to retire on just one million in assets and how much of that is tied up in ones house...
The taxes and insurance on it even when paid off, are greater than the payments plus insurance and taxes just 18 years ago.
The jobs the poor use to have to work their way up were in factories.
I worked my way through college on Min Wage ($1.25) which if adjusted to real constant dollars would have to be over $10 bucks per hour today and its not!.
Hell, Bartendering and waitressing have now become career choices in America! And back in the 60's finding something not made in America was rare... today finding something made in America is rare.
Our economic Stimuls plan is based on borrowing money from Communist China who will recive 65% of the stimulus benefit of Americans "Buying".
Regards
Socialism is not working... really?. 90 percent of the worlds oil is Government owned. To do business in Communist China or Dubai as examples, you basically create a subsidary that is 50% owned by the government
All of the rest of the world has pretty much gone to a Single payer, non employee based healthcare system. They spend 6 % of their GDP and cover everyone and we have increased 300% as a precent of GDP in 205 years to 18% of GDP on its way to 20% of GDP. And Repugs are always calling Medicare and single payer... Socialism (they are not)! .
Our defense industry is cetainly soiclaism ( cost plus is not free enterpise) and about the only thing we still BUILD! And our financial systems after the latest bailouts , certainly are only free market until they are not, when they screw up.
Not For Soicalism.
The largest free market Capitilist Country in the world is the largest debtor country in the world and is borrowing from Communist countries with trade surpluses!
Regards
I could just as easily claim that 98% of American millionaires inherited their wealth.
I would have no source, just as you have none.
We liberals keep trying "to build a culture," as you say, so that poor people can lift themselves out of poverty. We liberals would like to see more of our tax dollars go to things that would make that possible, and helping people to overcome poverty would create more jobs and more wealth and thereby provide more tax money so that the burden is lessened for all of us. BUT we liberals get fought tooth and nail by the right-wing who would rather see MY tax money go to providing tax breaks or perqs for the already wealthy. The poor and the middle class in this country experience wealth redistribution every single day in the form of their hard-earned tax dollars being given to the rich. Here's a prime example: billions of dollars per month of our taxes going to exorbitant pay for mercenaries like Blackwater and Halliburton, friends of our current administration, while most of our soldiers are still being paid near slave wages. I'm sure if we could start a thread on HuffPo to list all the other ways that the rich get richer on the backs of us taxpayers, we could come up with hundreds of examples.
You do have a point about socialism and redistribution of wealth, only you've got it backward: In this country, we take from the poor to give to the rich. Sounds like socialism and redistribution of wealth to me.
Just becasue the Media does NOT Report it does not mean AmericaNs have not been watching this disaster unfold for decades.
Ex- late '70's - Oil crisis & Hostage Crisis, Higjackings, terrorist murders for Public Display. Took the Big 3 until mid -80's (Once japan was kicking their ass in Sales) to give US smaller mor efuel Efficient Cars- less Oil less Dependency on a Region Far too dangerous to Deal with so Intimately.
Then came th e'90's and Yippee lets star Sellin gas Guzzling Lead Sleds again to the Public- Like Drug Pushers preying on Recovering Crack addicts,get em Hooked Again (and only offer them the Crack, not the Pot- not addicctive Enoug) give them basically USELESS bobbles to distract them (DVD's, GPS and Leather seats) and they won't think obout theGas In fact TELL THEM THIS IS WHAT THEY NEED-Soccor moms, top Execs.... Who forgot th eME was still a Region to detach ourselves from th eINC"s who dealing not only increaed their Profit margin & Shres- but Put US in even More Danger then we had been in during the'70's. Don't judge th ePublics intellegence by the Medias Whorish ways
Don't be fooled by the idea that it's some sort of sad coincidence that oil-producing regions are also politically unstable and dangerous. The ME and South America don't just happen to be at odds with us. There is cause and effect at work. It's because they control a needed commodity that we lust after control of what they do and thus they become unstable.
I once read in early the early 90's that there was a concerted effort in the late 80's to "free" up people's savings accounts from banks so the Stock market could experience an influx of new money ( to steal I suppose ).
The rise of mutual funds was tied to that market.. i'm sure alot of people made money but for most I would have to say the last 28 years in the stock market was a wild ride. Hardly the stable conservative weaslth building experience it should have been.
How many of you can remeber the pitch " if you invest in this mutual fund, and it pays a compunded interest rate of 10% , in 30 years you can turn your 10 K into $$$$$ . Yes they used that 10% compounding as bait, and it worked., savings accounts were shunned and private holdings were liquidated.
There is nothing that needs to be regulated more then the Banking and financial markets. I hope the US retail investor finally understands that and gets out of the game till the rules are inplace that protects them.
It's not communism , its how a mature , sensible and respectful country treats its citizens.
Agreed. Since the very beginning, large private financial interests have held undue influence over the US government. That is undemocratic, hence Un-American. The 'socialism' and 'communism' epithets are red herrings.
True - try the term fascism, it is a much better fit. Check out the definition for fascism in Wikipedia. Under the subheading entitled economic planning it states that "Profit is private and individual. Loss is public and social." Apply that to what you know of the Bear Sterns bail out.
Exactly, and before Reagan (sorry if I have been spelling his name wrong), companies offered their employees definied pension plans wherein when you retired you were guranteeed a pension for all your hard work. That money was contributed by your employer. After Raygun, the companies decided to hell with that, let the bastards invest their own money and we will tell them how good an idea that is that you can invest your money anyway you want. Well now look at what is happening to the markets and our 401Ks and IRAs. No longer can we count on the money we invested to take care of us.
This is why this country is headed for the toilet.
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