Robert Kuttner’s Common Sense in regard to the Financial Sector Mirrors My Own View — Why Let Hysterical, Profit-Seeking Crazies Run the World?

© 2012 Peter Free

 

18 June 2012

 

 

When self-interested insanity has taken over, it is difficult to recognize the common sense that might save us all

 

Two related reviews caught my eye these last few hours.  Both point to same thing.  We-the-People’s lunacy in allowing a tiny minority of people to rig the system to profit themselves at our expense.

 

 

Citations — two insights to the rigged financial system that is wrecking the world economy

 

 

60 Minutes, Insiders: The road to the STOCK act, CBS News (17 June 2012)

 

Robert Kuttner, Time to Put Finance Back in Its Cage, Huffington Post (18 June 2012)

 

 

Congress as a deliberately-constructed trough for Swilling Rats and their Fat Cat friends

 

The above 60 Minutes report shows how Congressional members have profited for years from financial trading and real estate buying that was based on non-public information they received in the course of their duties.

 

Instead of doing the people’s business, Congress was (and is) doing almost exclusively its own.

 

 

Robert Kuttner’s parallel comment — about the out-of-control financial sector causing unnecessary economic chaos

 

I have written before about the folly of handing greedy people and institutions the reigns to our national destinies.

 

Today, Robert Kuttner, who often writes about economic issues, attacked the same topic.

 

Writing in regard to Europe’s financial crisis and Greece’s now much devalued bonds, he said:

 

It wasn't the Greek economy, accounting for about 2 percent of European GDP that deepened the crisis. It was the speculative response to the Greek situation.

 

Let's not forget -- this entire crisis was caused because markets mispriced risk. That's a polite, bloodless way of saying that a bunch of overpaid wise guys bet the farm on the premise that housing prices could never fall, and created opaque securities that made a lot of insiders rich and duped the rest of the economy at a cost of several trillion dollars.

 

So if financial markets totally screwed up when they created collateralized debt obligations backed by sketchy mortgages and treated them like triple-A bonds, why do we think that the same financial markets are to be trusted when it comes to accurately pricing Greek or Italian or Spanish bonds?

 

© 2012 Robert Kuttner, Time to Put Finance Back in Its Cage, Huffington Post (18 June 2012)

 

 

Why would we think that being pawns in a casino game (designed to benefit non-productive thieves) is a good idea?

 

That’s what I mean about common sense.

 

If you are setting up a nation state, you don’t give a small band of hysterical and greedy speculators the power to randomly mess with your life and wallet.

 

There is a difference between (a) genuine capitalistic production and reward and (b) the carefully crafted deception that defines much of today’s useless and plundering financial and Congressional sectors.

 

 

So, what to do?

 

Kuttner writes:

 

A good dose of repression of financial speculation is just what we need today, whether through financial transaction taxes, regulations, capital controls, or governments intervening on the opposite side of speculative bets.

 

This crisis occurred because financial markets were allowed to run amok.

 

Now the speculators have turned their fire on sovereign debt. If they are allowed to keep running wild, recession will turn into needless depression.

 

© 2012 Robert Kuttner, Time to Put Finance Back in Its Cage, Huffington Post (18 June 2012) (paragraph split)

 

A simple return to the recently trashed post-Great Depression regulatory mechanisms would be a start.

 

 

The moral? — If there is no common sense contained in our “isms,” they are conceptually useless

 

Our failure to question what we mean by capitalism, and its relationship to humanity’s overall well-being, is a significant part of the reason we have gone so far off the economic rails.

 

Congress, for example, should never have been allowed to get away with setting up a Fat Cat speculation enterprise that trades on information that virtually no one else has access to.

 

Nor should we allow our economy to be stolen by people and institutions that deliberately introduce chaos into it — so as to provide them with volatilely fluctuating values, via which to make unproductively-acquired money.

 

Common sense will save our behinds, if we pause long enough to recognize, and act on, its presence in the forest.