Mary, I like your point about the world runs on trust. But there's also an element of distrust built in to the capitalist system too. A recognition of the greed held in the heart that drives us all and laws and mechanisms built-in to handle that aspect. The protestant ethic of "man's fallen nature" has also contributed to the success of the capitalist system.
I agree! My son and I were having this conversation just today. He said > the world runs on money, and I said no, the world runs on trust. The > money's no good if we can't trust that it's worth what we think it is. It > would be hard to do most transactions if you could not trust the other side > to do what they say they will do. We would be reduced to those movie scenes > where the buyer and the drug dealer each slide their packages > simultaneously > across the ground at gunpoint. > > The next point, raised some questions in my mind > After watching recent economic events, it seems pretty clear to me that was > the first domino. The big banks violated the public trust. Ordinary > people > did not break the trust, bankers and traders did. Now I think we are > seeing > the inevitable backlash. The fact that mortgage-backed securities were able to be leveraged to the extent that they were, seems to me to indicate that financial firms were "banking" upon the moral value of individuals AND the overall health of the American economy - past the point of reasonableness. Really, there would have been no economic crisis if the people themselves entering into the contracts had been as moral as they were assumed to be. I only have my own experience to judge others by, but at the back of my mind when entering my contractual agreement was the thought, "what if the bubble bursts and I can't make my payments?" And my corresponding thought was "Well, in that case, I certainly won't be alone in my plight and they can't foreclose on all of us. That'd be ridiculous. They'll be forced to re-negotiate based upon lower home values and in the meantime, I get all this money." And I signed the papers, took the profit from my house, arranged so I wouldn't have any attachable assets when the inevitable collapse came and voila - look around and you see that a lot of other people, if they weren't thinking along these lines were certainly acting along these lines. My armchair analysis of the whole complicated mess was that it was started by the reaction of the Fed to the 9/11 attacks which came at the height of the dot-com bubble-burst. America had been losing it's industrial base for years, justified by the seeming rise of the "information economy" and when this proved to be built upon air, the Fed purposely pumped money into the housing sector which allowed people to keep living beyond their productive means. Refinancing the house in order to pay down their credit cards - thus reinforcing the money for nothin' habits that Americans had been cultivating and postponing the inevitable collapse till a time when non-Texans were in office and had to deal with the problems. Them Bushies.... Like, right at the beginning of the collapse, they rushed through this emergency stimulus money to give everybody a couple extra thousand, and at the same time, Gasoline prices here in California hit $4.20 a gallon. What an interesting coincidence, don't you think? All that money the Fed fed into individual banking accounts went straight into Oil Company profits. And they called Nixon tricky Dick? heh. Y'all ain't seen nothin' yet. > Mortgagees are asking themselves why they should > continue to honor a contract that was essentially an inflated mortgage > based > on an inflated house price. If the banks are too big to fail, that seems > to > have turned out to mean that individuals are too small to succeed. > > "too small to succed" Sweet! I like it. Thing is, we all may be individually small, but our aggregate size is too humongous to ignore. I propose a solution to the mess, one that prevents the moral hazard embodied in the unfairness of the unemployed getting great breaks on their mortgages and doing the bankruptcy erasure of debt, while the backs of the productive are broken by increasingly higher and higher interest rates. We'll all go on strike. Nobody pay their credit cards or mortgages. What are they gonna do? Move China over here? It'd shake their etch-a-sketch screen and we can just start over. Yeah, that's the ticket. John the re-former Moq_Discuss mailing list Listinfo, Unsubscribing etc. http://lists.moqtalk.org/listinfo.cgi/moq_discuss-moqtalk.org Archives: http://lists.moqtalk.org/pipermail/moq_discuss-moqtalk.org/ http://moq.org.uk/pipermail/moq_discuss_archive/
