Five Fatal Flaws of Finance

[Michael]

What exactly is the function of the financial sector in our society? Simply this: Its sole function is supplying capital efficiently to aid the real economy. The financial sector is a tool to help those that make real tools, not an end in itself. But five fatal flaws in the financial sector’s current structure have created a monster that drains the real economy, promotes fraud and corruption, threatens democracy, and causes recurrent, intensifying crises.


Source (http://www.newdeal20.org/?p=5330)

Here are the five fatal flaws listed briefly:

1. The financial sector harms the real economy.

2. The financial sector produces recurrent, intensifying economic crises here and abroad.

3. The financial sector’s predation is so extraordinary that it now drives the upper one percent of our nation’s income distribution and has driven much of the increase in our grotesque income inequality.

4. The financial sector’s predation and its leading role in committing and aiding and abetting accounting control fraud combines to corrupt financial elites and professionals and to spur a rise in Social Darwinism in an attempt to justify the elites’ power and wealth.

5. The CEO’s of the largest financial firms are so powerful that they pose a critical risk to the financial sector, the real economy, and our democracy.

Any thoughts or comments?

[Greendruid]

Source (http://www.newdeal20.org/?p=5330)

Here are the five fatal flaws listed briefly:

1. The financial sector harms the real economy.

2. The financial sector produces recurrent, intensifying economic crises here and abroad.

3. The financial sector’s predation is so extraordinary that it now drives the upper one percent of our nation’s income distribution and has driven much of the increase in our grotesque income inequality.

4. The financial sector’s predation and its leading role in committing and aiding and abetting accounting control fraud combines to corrupt financial elites and professionals and to spur a rise in Social Darwinism in an attempt to justify the elites’ power and wealth.

5. The CEO’s of the largest financial firms are so powerful that they pose a critical risk to the financial sector, the real economy, and our democracy.

Any thoughts or comments?

They missed one - the real economy consists of real things. Building an economy on imaginary things, like money and futures and investments, is subject to toppling like a house of cards.

[The Drunk Guy]

Source (http://www.newdeal20.org/?p=5330)

Here are the five fatal flaws listed briefly:

1. The financial sector harms the real economy.

2. The financial sector produces recurrent, intensifying economic crises here and abroad.

3. The financial sector’s predation is so extraordinary that it now drives the upper one percent of our nation’s income distribution and has driven much of the increase in our grotesque income inequality.

4. The financial sector’s predation and its leading role in committing and aiding and abetting accounting control fraud combines to corrupt financial elites and professionals and to spur a rise in Social Darwinism in an attempt to justify the elites’ power and wealth.

5. The CEO’s of the largest financial firms are so powerful that they pose a critical risk to the financial sector, the real economy, and our democracy.

Any thoughts or comments?
Would I be Carlin's Advocate when I say that these could pretty much be summed up in one flaw: the financial sector has too much unrestricted power?

[Non Sequitur]

Source (http://www.newdeal20.org/?p=5330)

Here are the five fatal flaws listed briefly:

1. The financial sector harms the real economy.

2. The financial sector produces recurrent, intensifying economic crises here and abroad.

3. The financial sector’s predation is so extraordinary that it now drives the upper one percent of our nation’s income distribution and has driven much of the increase in our grotesque income inequality.

4. The financial sector’s predation and its leading role in committing and aiding and abetting accounting control fraud combines to corrupt financial elites and professionals and to spur a rise in Social Darwinism in an attempt to justify the elites’ power and wealth.

5. The CEO’s of the largest financial firms are so powerful that they pose a critical risk to the financial sector, the real economy, and our democracy.

Any thoughts or comments?


wow, where to begin with all my problems...

1. What on earth does the man mean by the "real economy"? I get the feeling that he means anything that provides something tangible (like manufacturing). If this is true (and please correct me if I am wrong) then this person seems to be mistaken about the nature of manufacturing in this country. Where to tech jobs fit into his dichotomy? Plus, the financial sector is real enough for the people who work those jobs in the financial sector.

2. Of course the financial sector has caused panics when it was unregulated, but so does any sector when it is unregulated. The Financial sector is a necessary pillar of the economy for the raising of capital.

3. we exist in a relatively free market. People make decisions about where they work because they want to. What would the author have people do? Not take a well paying job at a bank to support his/her family? Would the author want the government to regulate how many college graduates to into finance? In addition, the Finance sector is large because there is (or was before the floor fell out from beneath it) partly a demand for the service.

4. What is the solution to this apparent problem? I'm not sure what the author wants instead. If he is pointing out problems, he should offer solutions.