Do you feel bewildered about our financial systems these days? Is much of what you thought to be the case now seem to be murky - at best?
Michael Lewis, a Wall Street author, and David Einhorn, president of a hedge fund, address these issues and more in their New York Times op/Ed "The End of the Financial World as We Know It."
How we got to where we are today is more than an excess in financial markets, more than enormous grand larceny by Bernie Madoff and some others, more than a world-wide bubble in real estate and more than a failure of regulators to do much regulating.
OUR financial catastrophe, like Bernard Madoff’s pyramid scheme, required all sorts of important, plugged-in people to sacrifice our collective long-term interests for short-term gain. The pressure to do this in today’s financial markets is immense. Obviously the greater the market pressure to excel in the short term, the greater the need for pressure from outside the market to consider the longer term. But that’s the problem: there is no longer any serious pressure from outside the market. The tyranny of the short term has extended itself with frightening ease into the entities that were meant to, one way or another, discipline Wall Street, and force it to consider its enlightened self-interest.
When I was a child, I used to ponder at length what my parents and teachers told me about the world. Was I really supposed to tell the truth, work hard, be respectful of others, offer kindness and generosity to those in my life, and the like? Or was this advice and more like it similar to Santa Claus and the Tooth Fairy, pleasant fables that I would learn later were utter fabrications? Was the world really built on honor, effort and integrity? Or did the kingdom really belong to those who skirted the law, cheated a bit and "did what they had to do" to get ahead?
The answer to my long ago childhood curiosity I think is this. At any given time, we may think that we are "above the law" and that the rules no longer apply to ourselves. We may convince ourselves that age old advice from learned philosophers, rabbis, ministers and wise men is too quaint and no longer applies.
Reality, however, tells us differently. Yes, you can cheat for a while and get away with it quite successfully. For some, successful theft can last a lifetime. You can shirk your moral responsibilities and ignore reality.
Ultimately, though, the bill does come due.
Many of us in our nation and others thought that we found a way to ignore sound fundamentals. We were fooling ourselves. Now we must face what remains due to way too many people failing to do what they ought to be doing - despite the efforts of some to foist our mess on unsuspecting others. But, there are no "others" left. The sooner we come to this realisation, return to what the sages knew worked and get down to the dirty business of cleaning up our years of behaving badly, the better we all will be.
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