AlterNet: Nothing’s Really Been Fixed — 5 Ways the Financial Insanity Will Continue

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Posted by LesLeopold at 11:09 am
May 15, 2010


Nothing’s Really Been Fixed — 5 Ways the Financial Insanity Will Continue


Now that the bank lobbyists are nearly finished neutering the financial reform bill, it’s time to face reality: our financial world will continue to be run by the very financiers who crashed the system two years ago. The bankers’ arguments ricocheting through the halls of Congress make it seem as if our financial system is basically rational and sound — that only a few flaws need fixing. That’s lunacy. Our bright bankers may be rational as individuals, but collectively they perpetuate a fractured system gone utterly mad… and getting madder every day.

So the financial insanity will continue, with such psychotic outcomes as these:

1.Our pensions and 401ks will continue on their roller coaster ride, driven by market chaos and high-speed computer cacophony. Last week, the automatic trading programs our financial geniuses invented sent the Dow into a one-hour, 1,000-point freefall. Thank goodness it was only one hour. Two would have set off a global panic. No one is sure what happened or why. But don’t worry, we’re told. The glitches will be fixed and all will be well. (Just as a little technological tinkering is sure to prevent another offshore oil disaster too–not a problem!) In a saner world we would be asking the obvious: Does that high-speed trading serve the needs of our people, or is it just another high-risk strategy to enrich the largest and most connected investors?

2. Big financial institutions, now fully assured that they are indeed too big to fail, will continue to dominate both finance and politics. Anyone in their right mind knows that allowing five or six banks to control our entire financial system is a recipe for disaster and a major threat to democracy. What’s the excuse for this form of madness? Well, we’re told, during the Great Depression 4,000 banks failed (including lots of little ones), which proves that size doesn’t matter. Please help me with this logic: Many banks failed and caused the Great Depression. A few big banks failed and caused our recent Great Recession…Therefore big banks are better? (Somebody flunked their Logic 101 class.) Here’s what our experience tells us. Banks, both big and small, when left to play out in the street unsupervised, often end up at the casino tables– gambling with our money. Big banks are an even bigger risk, because they have the power to gamble with our democracy as well. ..........(more)

The complete piece is at: http://blogs.alternet.org/speakeasy/2010/05/15/help-whats-the-cure-for-financial-insanity/

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