Tuesday, April 21, 2009

Reversing Financial Momentum

There were 20 criminal proceedings announced today against banks, bank officials, and others who received money from the TARP (Toxic Asset Relief Program). These criminal activities included insider trading, bank fraud, mortgage fraud, illegal payouts, and other illegal activities associated with the seven hundred fifty billion dollar bank bailout program. When gigantic sums of money are thrown around some people get greedy and grab whatever they can. Are we surprised by this? I don't think so.

What is funny to me is how critical the financial pundits are of the governments attempts to help us out of the financial mess. They view these criminal actions as evidence of the governments inability to manage any large scale financial program. They have quickly forgotten that what caused these problems was the inability of the financial sector to manage its business profitably from the get-go.

There are debates raging throughout the media today about whether we should blame unfettered capitalism or the lack of government regulation for our financial problems. Are we moving towards socialism? Will we destroy incentive? These arguments are totally meaningless and don't address the real problem. The problem is complex and is a combination of the types of people who gravitate towards positions of power, especially financial power and the cyclical nature of our society. What this means is that as societies progress they continue to overuse and abuse the systems that have enabled them to prosper.

What has enabled the existing system to prosper was the increasing desire for more material possesssions, the creation of complicated investment techniques that produced money without requiring labor, and the increased dependence on credit to finance all of these abuses. The bottom line is that we become addicted to what feels good and do not consider the consequences of escalating this addicition. There are those who did not participate in these out of control activities and were more balanced in their lives. But there are two many of us who bought into the dream and many who were completely out of control both as consumers and as greedy beneficiaries of the results of our addictions.

We can no longer depend on mainstream thinking to bail us out. There are no real bailouts without real change. What has to happen now is a fundamental change in the way we relate to money, materialism, and what we want in our lives. This will require continued significant suffering or a Black Swan event that we cannot imagine. A Black Swan is an event that could not be predicted, that changes the nature of our world, and then is explained afterwards by the experts using logic as to why it should have been predicted.

What I think is needed now is the creation of a movement whose primary goal is to take a break from implementing any new programs or initiatives in the financial arena. All advertising and promoting should be stopped. All purchasing except for necessities should be postponed All talking, debating, and politicking in the media and on the internet should be ended for at least a month or two. Maybe if we quieted our minds and had a little time to work on our personal health and improving our relationships with friends and family without spending much money we would be able to see things more clearly. I am open to other suggestions. We need to do something different, though.

1 comment:

  1. Well spoken! This crazed spending and meaningless assurances can't stop the bleeding. Its like trying to put a band-aid on a femoral wound. Its impossible!

    I Like your blog and look forward to the summer weekends spent under the Jersey sun!

    - Charlie