Quote:
Originally Posted by sugarpop
IMO, the purpose of a company is to supply a need, and supply a living to people working there. Yes, it is also their business to make money, but not at the expense of the workers, the shareholders, or anyone else ...
I watched the movie Wall Street earlier, and it is even more relevent today than it was in the 80s. People on Wall Street have gotten greedier and greedier, and the job they do is crap.
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Greed is good only when the greedy forget their purpose: forget to serve the economy. Your response to question three is the rare and accurate one. But Wall Street has not become greedier. We asked them to become greedier. Wall Street et al always needs heavy regulation because of the nature of a finance person is to enrich themselves first. To sell anybody anything as long as they reap a profit. All are greedy. Some less than others.
Derivatives and other such contracts have no business being traded outside of regulated markets. Worse, accounting has no right to consider them hard assets. 'Mark to market' being absolutely essential because finance people are forced to maintain a larger inventory of real collateral to back up those 'short' assets. 'Mark to market' also forces traders to have access to liquidity that day in case assets do what are normal in any market. In short, to have reserves so that today’s financial collapses could never happen.
The best part of 'mark to market' - the greedy finance man gets driven to bankruptcy now before he can cause even further and worse damage. Bankruptcy is especially essential to harm the greedy ones. But today, we even eliminated regulations and oversight. Some so love to destroy Wall Street responsibility as to even oppose 'mark to market' – which is especially brutal on the greediest.
Extremist Republicans got the economy they wanted - where the rich reap income increases sometimes by 60% and 100% annually. Where the middle class saw their incomes drop 2%. Where the most rewarded are finance people – not innovators who actually do productive work. How curious. This income redistribution only happened once previously in American history - just before the 1929 stock market crash.
They did not get greedier. Finance people - including those I went to school with - typically are not the bright ones. They are the greedy ( often conceited) ones who more often promoted themselves. Were chock full of vanity and self-promotion. In some cases, had no interest in knowing how anything worked.
People whose job is about promoting myth - whose wealth can increase if they can lie: over the past ten years we let them do that without oversight.
They did not get any greedier. When did everyone know the foxes controlled the hen house? When the Feds refused to investigate and prosecute Enron. When Harvey Pitts (George Jr's SEC commissioner) refused to take any additional money from Congress to do SEC investigations. They were as greedy as we wanted. Nobody could have ignored Harvey Pitts testimony (and his predecessors) unless they wanted foxes to control the hen house. Any additional greed is directly traceable to Cellar dwellers and other citizens who wanted greed to increase by staying silent and naive.
Why do venture capitalists create so many productive companies? And not Wall Street? The former invest by actually knowing how things work. The latter believe their personal wealth is more important and only know what any salesman would understand. Which ones reap profits by serving America? Which ones reap bonuses by inventing finanical instruments not even based in hard assets? George Jr encouraged the greed that we wanted.