Are We Blinded by Capitalism?
March 4, 2016
This seems like an odd question coming from someone who has an MBA from Berkeley and a long career in the business world and has clearly benefited from capitalism.
As you are probably aware, one of the movies nominated for the Best Picture Oscar was The Big Short based on the novel by Michael Lewis. The Big Short is the story of a small group of people who saw the 2007-2009 financial crisis coming and made a ton of money by essentially betting against the subprime mortgage market. A few friends of mine said the movie was great and also very educational. Recently, I walked past the book return pile for the library here and saw a copy of the book sitting there and I just finished reading it. I thought I had a pretty good understanding of how the subprime mortgage market nearly collapsed the entire global financial system but I really didn’t understand the details. And OH MY GOD! I mean I figured that most Wall Street traders were amoral and were only interested in making money regardless of the consequences but the details of what happened and how clueless everyone was are truly unbelievable. Everyone should read this book. It will probably make you angry but it is important to understand how truly rigged the system is against everyone who is not part of the elite power structure and especially against the poor and those without a basic understanding of finance. It also changed how I view politics and helped me to understand why certain candidates are doing far better than expected.
There is no doubt in my mind now that unfettered and lightly regulated capitalism does not result in the common good. It results in incentives that drive some very bad behavior. This is also true when it comes to the very real issue of climate change. Not long ago I read This Changes Everything (Climate vs. Capitalism) by Naomi Klein. I was very depressed after reading it because the current global economic system is virtually guaranteed to cause irreversible damage to our planet. I know that is a strong statement to make but capitalism as it is currently structured does not penalize business activity that destroys the environment. The book is very well researched and very compelling. Sadly, it is not particularly well written or structured so I can’t recommend it. But the message is clear.
So I am not recommending any political candidates but I certainly can understand why there is a backlash against the “establishment.” There is nothing stopping Wall Street coming up with some new financial instrument that will reek havoc on the economy and destroy the wealth of the middle class (again). And I haven’t even started on how the criminal justice system is rigged against the poor! I will save that for a future post.
So sorry to be so depressing but since I have time to read, I thought I would share my thoughts!
I hope we elect leaders who are brave and are willing to make hard choices!
David
David,
As you know, I am social liberal and a conservative economist. I was really horrified when I realized how badly the whole subprime debacle could have toppled, not only our economy, but that of the world. Additionally, I don’t think anyone realizes how badly we are in dept for the $840 billion used to rescue the economy. It had to be done, but wow.
I think I was completely fedup when a friend said her son, a Walls Street Trader, was still getting his HUGE bonus – right after the bail-out. Even though he worked for one of the big firms that had been bailed-out, his mother saw nothing wrong with it. It was so aggregious, I didn’t say anything. I just couldn’t image anything that could make an impact on that kind of thinking.
I have an all new insight into Anthony’s plans. I’ll share them with you soon. It is an uphill battle.
Love, Anne