Robert Stennett <[email protected]> wrote:
> http://www.the-american-interest.com/article-bd.cfm?piece=907
>
> From the January - February 2011 issue: The Inequality That Matters
>
> Tyler Cowen
A good article, apparently well thought-out and reasonably clear, even
to me.
>From the article:
It's as if the major banks have tapped a hole in the social till
and they are drinking from it with a straw. In any given year,
this practice may seem tolerable--didn't the bank earn the money
fair and square by a series of fairly normal looking trades? Yet
over time this situation will corrode productivity, because what
the banks do bears almost no resemblance to a process of getting
capital into the hands of those who can make most efficient use of
it.
That seems to me to sum up the whole problem with finance in general.
Used to be -- say, 300 years ago -- that banks and other lenders &
investors put their money in the hands of people who could do
something useful with it. Inherently risky because the world isn't
predictable: the ship may founder or the new mill explode.
Now, the operation of the financial apparatus is itself defined as
"useful", notwithstanding that it is, in many ways, uncoupled from
doing anything that you or I, a pipe fitter or a chemist, a street
corner dude or a ship's skipper would consider useful.
Whatever happened (or is happening) to the financial transaction tax
idea? I'm not knowledgeable enough to argue either the numbers or
matters of pragmatic enforcement. But from a naive point of view,
penalizing high-speed transactions, very short hold intervals and some
other aspects of financial manipulation involving excessive
transactions would be great for everybody except those whose bonuses
were themselves a sort of financial transaction tax.
Back on the income inequality subject, most academics, politicians and
other elite folks have never spent a day with some kids on Chicago's
South Side or a former auto worker and his family in Detroit. "Poor"
means tacky furniture, a small old TV and ill-fitting clothes from
Walmart. They don't even know about no heat except the kitchen gas
range and nothing to eat today unless you can steal something.
It's not that we begrudge a rich guy his yacht -- after all, I have
friends who build yachts for rich guys -- it's that legislatively and
juridically we're insuring that money increasingly flows uphill so
that "nothing to eat" or "no way to heat the house" or "can't afford a
doctor" is increasingly likely for more people.
- Mike
--
Michael Spencer Nova Scotia, Canada .~.
/V\
[email protected] /( )\
http://home.tallships.ca/mspencer/ ^^-^^
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