Saturday, July 07, 2012
As most of you know, I listen to the Marketplace podcast each morning.
After LIBOR scandal, London fears losing financial crown
"And London had been doing so well. The city had leapt ahead of New York as the leading financial center. Wall Street was hamstrung with regulations, like Sarbanes-Oxley and Dodd-Frank. London was free and easy.
But Ed Miliband says that's how we got into this mess. He's the leader of the Opposition Labour Party. He's the leader of the Opposition Labour Party.
Ed Miliband: “There's been a tendency in this country towards deregulation, light-touch regulation. It was wrong. It was wrong. And it's got to change for the future.”
Tighter regulation could now be on its way from the European Union. Economist Andrew Hilton says Britain's European partners have been trying to rein in London for years."
There’s a lesson in there about comparisons. Wall Street is “hamstrung” in comparison to London because of regulations. Bah! What it really means is that London’s financial industry is out of control. That’s the story. Their privateers have rigged the game. Just as Wall Street rigged it’s game -- and still does. (Side track: I haven’t mentioned student loans? I mentioned them somewhere. We’re giving 18-21 year olds $100,000 unsecured loans to go to college? Would you lend $100,000 to any 18 year old you know? Tell me that isn’t a scam just like “liar loans” in the mortgage industry.)
(Back on track) You’re seeing these same cockeyed comparisons in a number of areas. “Federal workers are overpaid”. No they’re not. A few short years ago they were underpaid (in formulated comparisons). Their salaries haven’t gone up dramatically. Private salaries have gone down dramatically. And Republicans want to use that fact to cut workers salaries. With the Supreme Court’s crazy Citizens United ruling, companies “and unions” are free to spend their money on political speech. You hear it all the time “and unions”, like there is some kind of equivalence there. There isn’t.
"The broadest classification of political donors separates them into business, labor, or ideological interests. Whatever slice you look at, business interests dominate, with an overall advantage over organized labor of about 15-to-1."
And that advantage grows every year as labor is beaten down. The point is that all these things are being used to sell a bankrupt and immoral narrative. And it’s no different than it was 79 years ago.
"Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men. True they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence.
They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish. The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit."
Do you see how true those words ring for our time?
"Practices of the unscrupulous money changers stand indicted in the court of public opinion..."
"Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence."
Krugman: The Confidence Fairy Has Taken a Leave of Absence
”They know only the rules of a generation of self-seekers.”
And finally, there is guidance on where our future should lie.
"The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit."
To translate it into modern-day terms, here’s a place you can start.
Human Development Index
”These were devised and launched by Pakistani economist Mahbub ul Haq in 1990 and had the explicit purpose "to shift the focus of development economics from national income accounting to people centered policies".”
Yes, I have been here before.
July 7, 2012