So - unsurprisingly - the greedy bankers fucked things up. So ridiculously that even our American friends start thinking that the proverbial ‘free market’ may not be the wisest thing there. My gut reaction was to sneer a little. But unfortunately it seems that the people whose uninformed greed caused this problem won’t be the ones paying for this. So there’s really no reason to sneer. They’ll continue to live with cars, cocaine and whores while everybody else has to pay for the mess they created. Well done.
Now of course the question is what will be done about this. How can those huge banks be regulated in a good way when nobody really understands what they are doing and when huge profits in that ‘business’ create a huge incentive for people to not work on solving any structural problems there are but rather looking for ‘opportunities’ to screw the ‘markets’ a little more. With those huge amounts of money being on the move merely putting oneself at the receiving end of a rounding error should be able to ensure a decadent lifestyle to the end of one’s days. Tempting isn’t it?
As an economist friend of mine told me in last year’s banking crisis:
This is the most interesting thing we’ve had for a while. And certainly economists will rejoice because it’s not business as usual and they get an opportunity to test theories or develop new ones. Yet, somehow I am not too optimistic when it comes to them creating new theories that work well (in the sense that they keep the utilitarian aspect of banking running) and - more crucially - getting them implemented.
My inner (inner?) cynic just sees big money wanting (and getting) to have their say in such adjustments as well. And somehow those people saw better ‘opportunities’ for making money in other fields than providing a service to people and local economies. So by the time anything is passed it will be watered down sufficiently to change nothing but the varnish for a few months. And then it’ll start again.
I do wonder how real the proverbial power of the market is here. If it existed, shouldn’t it be an opportunity for oxymoronic institutions like transparent and honest banks to succeed? Or will greed just suffocate any such attempts because the ‘customers’ will just continue treading the old path because it’s more profitable?
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