David Korten: 7 Ways to Stop Wall Street's Con Game

[marmar]

from YES! Magazine:




7 Ways to Stop Wall Street's Con Game
David Korten's suggestions for stopping speculation.

by David Korten
posted May 23, 2011


Wikipedia defines a “confidence trick” as “an attempt to defraud a person or group by gaining their confidence. The victim is known as the mark, the trickster is called a confidence man, con man, confidence trickster, or con artist, and any accomplices are known as shills. Confidence men exploit human characteristics such as greed and dishonesty.”

Ever hear a business reporter on the evening business news say, “Today, investors drive up the price of commodities to create a hundred billion in new value,” or some such? Sounds great, almost implying we should offer thanks to these champions of the public good who are risking their fortunes to expand the pool of wealth to enrich us all. The reporter is manipulating the language to set us up as marks in the Wall Street con.

A more honest report might have said, “Today, hedge fund traders speculating with other people’s money walked away with multimillion dollar commissions for inflating the commodities bubble by a hundred billion dollars.” In a more honest world, the report would clearly distinguish between real investors creating real wealth through real investments and speculators creating phantom wealth with financial games. People who bet on the price of pieces of paper would be called “gamblers.” Those who hold the bets and distribute the winnings would be called “bookies.”

Boil it down to the basics and you see that Wall Street is in the business of operating four sophisticated, large-scale confidence games. ..............(more)

The complete piece is at: http://www.yesmagazine.org/blogs/david-korten/7-ways-to-stop-wall-streets-con-game

[Boojatta]

1. "Real financial reform would render unproductive speculation either illegal or unprofitable."

Isn't part of the article a complaint that people are enticed into making investments that are unprofitable?

Is the author's intention for us to distinguish between unproductive speculation and productive speculation? Alternatively, did the author intend to write something like, "speculation, which is always unproductive"?

[Curmudgeoness]

2. His suggestion 6 is one that could really shut down the speculation

bubbles.

"Assess a 100 percent capital gains surcharge on profit from the sale of assets held less than an hour, 80 percent if held less than a week, and perhaps falling to 50 percent on assets held more than a week but less than six months. This would render most forms of speculation unprofitable, stabilize financial markets, and lengthen the investment horizon without penalizing real investors."


Good article, and something more people should be aware of.