Wednesday, October 15, 2008

flash flood economics

At this very moment there are mothers all over this planet wondering if they are going to be able to feed their child next week. Now that things have turned ugly, trickle down economics has turned into flash flood economics. The paycheck-to-paycheck people are vulnerable, but more heartbreaking are those who will have no paycheck at all because of the economic contraction.

I'm not sure who shares the most blame for the economic crisis currently churning around us. It seems that short-sighted politicians who deregulated banking and high finance to the point where greed was not being monitored and kept in check have a huge part of the blame. Another big chunk of the blame can be assigned to the CEOs of the banking industry who -- blinded by greed and unfettered by regulatory oversight -- allowed their underlings to take irrational risk in order to increase what seems like their already ridiculous overcompensation.

Whomever you are, if you in any way hold responsibility for this, I truly hope you can't sleep at night thinking of all the babies that are going to be going hungry because of your actions. Shame on you.


Jeff in Sylmar said...

You're right. And I think there is a fundamental flaw with modern capitalism.

Adam Smith's "invisible hand" assumes that the major economic players will act in their own self interest. This may have been true in the early days of the republic, when an business owner's economic well-being was directly tied to the success of his business. Modern corporations no longer work that way. The corporate executives are acting in their "personal", short term best-interests... not for the success of the company itself. As long as they make obscene amounts of money in the short term, they care little for the long-term success of the companies they run (or rather, prey upon).

Does anyone really think that paying a CEO 10's of millions of dollars when he/she is fired really benifits the company? It's a giant rip-off where all the corporate executives sit on each other's compensation committees and make sure they can steal as much as they can.

I really wish this current economic melt-down could change the fundamentals, but I'm not seeing it happen.

Susie Leiper said...

I've grown so tired of hearing the word "fundamental" bantered about. So I got interested in the definition. Just enter the following in your Google search box: define:fundamental

I think my favorite is "What I call a surrounding earthiness to the fruit or flavour: a wine with its feet on the ground, not an airy wine." posted by in

We need a revolution to make any fundamental changes to US society. Am reading The Road by Cormac McCarthy. That might be our childrens childrens future or sooner without one.