Friday, January 15, 2010

Corporatism run amok

Once the business of America was business. If you had to pin it down to one company, that company was General Motors. No more. GM is broke. Manufacturing is passé.

The business of America is now the Wall Street shell game, and the exemplar company is Goldman Sachs. Who needs the percentage gains of factory automation when you can have the multipliers of leverage?

The bankers are so determined to profit at our expense that they refuse to admit their preponderant responsibility for the financial crisis that we taxpayers have promised to pay their way out of:

[T]he bankers’ testimony showed a stunning failure, even now, to grasp the nature and extent of the current crisis. And that’s important: It tells us that as Congress and the administration try to reform the financial system, they should ignore advice coming from the supposed wise men of Wall Street, who have no wisdom to offer.
I'd go even further than Krugman in critiquing the organization of our economy: We need to drastically lower the rewards available from Wall Street. The financial titans' role in arbitraging all enterprises to the same level of profitability can be slower and less complex without harming the real economy. That would make it more understandable, more predictable, and safer for the rest of us, whom they unconscionably stick with the exorbitant bill for their never-ending high life. It would also push bright and creative people into fields that actually build real economic growth.

We've lived off our post-WWII assets as long as we can. It wasn't good to fund consumption out of capital, but we did it - with the consequences now all around us.

We need to kill Wall Street as it exists today.

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