David Korten: Don't Fix Wall Street, Create a New Economy

[marmar]

via AlterNet:



YES! Magazine / By David Korten

Don't Fix Wall Street, Create a New Economy
Congress shouldn't tweak the greed-driven Wall Street machine, it should create a new financial system that answers to communities.

May 6, 2010 |


Financial reform is the Congressional political issue of the month. Democrats say their bill will place essential controls on Wall Street to prevent abuse and a repeat of the financial crash. Republicans say it will encourage further Wall Street risk-taking by giving the big banks a guarantee of a future taxpayer bailout if reckless decisions trigger another financial crash.

Each party would have us believe that its side has the better answer about how to prevent another financial collapse, limit future taxpayer exposure, and protect consumers from financial fraud. These are good objectives, but their focus is fixing Wall Street.

No one in official circles seems to be asking the more fundamental question: “How do we create a financial services sector that directs money where it is needed: toward creating living wage jobs that provide essential goods and services for all Americans in ways consistent with a healthy environment?” Fixing Wall Street, as we presently know it, will do little, if anything, to achieve what should be our real purpose. Since the September 2008 financial collapse, Wall Street has conclusively demonstrated that it is concerned only for its own profits and bonuses.

Thanks to the taxpayer bailout and a constant flow of nearly free credit to the big banks from the Federal Reserve, Wall Street is once again reporting record profits and bonuses. Main Street, which has received far more modest public support, has not been so quick to recover from the effects of the crisis: high unemployment, low wages, consumer debt, bankruptcies, and foreclosures. It is a stunning contrast not lost on the properly outraged American public.

Meanwhile Wall Street power brokers resist even modest financial reforms that might prevent a repeat of the collapse. After all, they have little reason to be concerned—they've rigged the system to assure that no matter how risky their actions, they will still get their bonuses and taxpayers will pick up the bill. This is a destructive system beyond repair. .........(more)

The complete piece is at: http://www.alternet.org/vision/146741/don%27t_fix_wall_street%2C_create_a_new_economy

[enough]

1. I wish I could recommend this more than once.

A little more from the article:

Snip>

Wall Street is a world of pure finance in the business of using money to make money—by whatever means—for people who have money. Any contribution to the production of real goods and services is purely an incidental byproduct.

Wall Street, in its current incarnation, has no interest in providing true financial services, except as instruments of predatory extraction. In the name of financial innovation, its institutions have perfected the arts of financial speculation, inflating asset bubbles, stripping corporate assets, predatory lending (usury), risk shifting, leveraging, and creating debt pyramids—none of which serves any beneficial public purpose. Rather than being fixed or restricted, most of Wall Street should be shut down. The institutions of a new service-oriented financial system could more efficiently and beneficially fulfill the essential financial functions that Wall Street now controls.

snip>

Wall Street thrives and Main Street struggles because Wall Street controls the money flow. If you are a vulture speculator pushing the state of California toward bankruptcy by short selling California state government bonds, the Wall Street banks are there to be sure you have access to enough cheap money to make a big killing. If you are a Main Street entrepreneur serving real needs in your local economy, you’re forced to borrow against your credit card at predatory interest rates. This is the money system that Congress is debating how best to stabilize.

More

[zeemike]

2. K&R I agree with that.

You cannot fix a system that is based on the fundamental principles of greed.
Better to build a new system right along side of the old and let it crumble and fail of it's own accord.

[Demeter]

3. a Thousand Recs, a minute

It is happening, slowly, blindly, as need drives people. It isn't organized... yet.