Wall Street certainly knew that their greed had not been curbed and I can’t believe congress believed that greed had diminished. Had tax evasion by some of our wealthier citizens waned? In the late nineties did we not see what Wall Street did with pumping up stocks its own analysts either did not secretly believe as sound or at least understood they were excessively overvalued? The stock market nose dive in 2001 was evidence of blind greed willing to take down the entire system. What made anyone think that greed would not try to find another vehicle to feed its insatiable hunger? It all shifted over to real estate and related derivatives which nearly destroyed us all.
Wall Street’s function is not to create value with its investments, it is to grow its own wealth and those of its clients. Quite often the way it creates wealth is simply by siphoning it from others. Sometimes from other people playing the market, other times from innocent bystanders. This is an industry that makes money off practices like ‘selling-short’ which is nothing but profiting from leaving someone holding the bag on a bad investment. When capital markets did not pilfer from one another, they would fund expeditions to foreign lands to steal the wealth of native people. Consider their language, they are looking to ‘exploit’ new markets. This still occurs today with natural resources all over the world.
In the end, the American public came to the rescue of those willing to look the other way while their minions fleeced all of us. Congress’s reaction in 2002 with the Sarbanes-Oxley bill was very short sighted. They dealt only with the issue right in front of them and neglected to consider where Wall Street’s greed would overflow next. Our government allowed huge Wall Street sectors to remain completely unregulated.
We know that when there is a great prize to be grabbed, there will always be people that will cheat to get it. Regardless of whom they hurt. Look at Madoff who stole billions from countless charities. Some accused him of being a psychopath, maybe he was. However, we have to accept that in a nation of 300 million people, we will always have a good number of psychopaths willing to do anything to pursue their crazy ambitions. Investors reward Wall Street for being innovative, but innovation often just means a better ways to steal wealth from others.
Our politicians need to be more realistic about what drives markets into ruins. Any market that deals with great sums of cash needs oversight. Wall Street executives also have to admit that they need policing, the lack the will power to stop themselves, they are cash addicts. It’s in their best interest, certainly many more Investment Banks would be around today had they demonstrated self control; they cannot!
Yet, despite all arguments that oversight is good for the long-term health of our economy (it may slow it down – but it will not collapse it) the Republican Party will not have anything to do with it. In November 2009, the House passed a bill restructuring federal financial regulations. It is meant to oversee consumer banking transactions and add oversight into financial markets that have escaped it for many years. The vote was a party-line 223-202. No Republicans voted for the bill; 27 Democrats voted against it.
What did the congressmen that voted against it think? The problem was never going to happen again? Or that it was going to affect either campaign contributions or that high-paying job in Wall Street after they left office? Why the loyalty to Wall Street’s desires versus the American people’s need for stable markets where they can invest their retirement funds?
Well, time to get off my soapbox. I frequently get so frustrated with our politicians and the direction of this country. I believe the United States so often squanders opportunities to become an even better society because of the short-sightedness of our leaders. Again, human nature.
