Comments on the Global Financial Crisis

The current financial crisis is not being resolved. Every leader is looking for solutions that get them short term praise. Or they’re getting misguided, agenda driven advice from those who created the problem in the first place. We’re in a mess, folks.

Capitalism is really nothing more than the lawful exploitation and destruction of resources (labour and capital) for the purpose of maximizing profits.  Extreme capitalism leads to extreme socialism, and vica versa, as proven in theory and in practice by the government buyout of the banks in the US and China’s concentration of wealth in government officialdom.

The reform laws I’ve seen are weak as they do not strike at the essence of the problems in financial services regulation.

The real essence of the whole of the finance sector problem is the misguided Harvard approach contained in the “law economics model” to wealth creation.

This model, developed in the 1980s says that if you align company management interests to those of stock holders, by allowing managers to partake in share bonus schemes linked to the financial and share performance of the company, then company managers will maximise shareholder wealth because it is in their interest to do so.

This of course led to managers all over the western world manipulating and inflating profits and share prices (through clever press releases announcing new company contracts, etc) for their personal benefit.

Human nature easily justifies the means to an end approach – i.e. “Everybody does it” – so you end up with lots of CEO and manager mega payouts before the real proverbial hits the fan and everyone, the unlucky and misinformed shareholders and public at the end of the chain, is none the wiser.

Many financial students, disillusioned by the apathetic baby boomers, strive to follow suit. We’re locked into a system of everyone for themselves at everyone’s peril.

By the time of the GFC crash many of the crooks had cut and run, made their personal profits and have now returned as wise men to advise governments on how to get out of the mess they created over the last 15 years since the last crash – this is why very few Treasury bureacrats were sacked across governments, even though they all knew that the financial crash had to happen one day because there always had to be some limit to lending given the fixed number of potential borrowers across the world.

What’s required is a system of practices that can be monitored, so unreasonable profits are not made at the expense of ethical economic practice.

Stay tuned for my proposal and feel free to suggest your own.

Global Democracy

There is a need for the People of the World to have a greater say and influence in managing and resolving the world’s problems.
The present system of national governments and cross border institutions (such as the UN) has become so stifled by bureaucratic priorities that the world’s problems are not being adequately addressed – and too many People of the World continue to suffer needlessly.
These national governments and cross border institutions still operate according to nineteenth century principles and laws, which are no longer useful in dealing with the world’s problems.
These governments and institutions have, for many years, enjoyed powers and resources which should have been used to improve living standards for all People of the World and not just a select few. These select few have learned to control and manipulate governments and institutions for their own priorities. Now, these governments and institutions, which were established for the good of all, serve mainly the interests of the privileged few.
I will soon launch a website that provides the People of the World with a voice and a vote on global issues affecting their world and their communities.
Stay tuned to my Facebook, twitter or YouTube page for the launch.