We need banks - just not these banks!

3 posts / 0 new

Wed, 2010-11-24 20:11

Doug

A fine article in a somewhat unlikely place.

Since the early nineteen-eighties, by contrast, financial blowups have proliferated and living standards have stagnated. Is this coincidence? For a long time, economists and policymakers have accepted the financial industry’s appraisal of its own worth, ignoring the market failures and other pathologies that plague it. Even after all that has happened, there is a tendency in Congress and the White House to defer to Wall Street because what happens there, befuddling as it may be to outsiders, is essential to the country’s prosperity. Finally, dissidents like Paul Woolley are questioning this narrative. “There was a presumption that financial innovation is socially valuable,” Woolley said to me. “The first thing I discovered was that it wasn’t backed by any empirical evidence. There’s almost none.”

Wed, 2010-11-24 20:30

milo204

very interesting. it's true though, we might be better off financially than at most points in history, but only if you consider financially to mean how many dollars each person is capable of earning. like the environment, there are many things we don't count as wealth that are much more important than money. People, including here are actually much worse off than we were in the past in many ways.

Also, the only reason money means so much is because most live in cities where everything must be bought, whereas years ago we'd get those services from solidarity within a community, trading, or making things ourselves.

Thu, 2010-11-25 00:26

siamdave

Banks create essentially all of our money out of thin air - and charge interest on it, which is a great game if you're allowed to get away with it. I can't see any democracy in which people had a clue about this allowing it to go on. Which is the thing - it seems pretty much nobody understands this, or what it means. Given there is almost no realistic control over how much they create, and they are, of course, "businessmen" whose primary goal is their own profit rather than the well-being of society, they tend to favor business things which agree with their principles, rather than 'people-oriented' businesses which favor the common weal. They also tend to create far too much money for no other purpose than speculation, which is good for them and bad for the little investors who lose lots when speculative bubbles crash. The systemic inflation caused by paying interest on all of our money every year is also bad for the little guy, and pretty irrelevant to those who write their own cheques or have large fortunes.

As the old saying goes - he who controls the money controls everything else (the first modern banker said something like "Give me control of a nation's money and I care not who writes her laws') - so the notion we live in a "democracy" when we do not even control our own money is somewhat risible.

Canada has paid something like two trillion dollars in interest over the last ~30 years on government debt - every penny of which need not have been paid, had they used the Bank of Canada for their borrowing instead of allowing commercial banks to create money and then borrow it from them.

For anyone new to these ideas and ready for a peek outside the rabbit hole we've become trapped in - a somewhat longer explanation here - What Happened? http://www.rudemacedon.ca/what-happened.html