Comments on: Washington Mutual is seized by the US government. http://www.midasoracle.org/2008/09/26/housing-bubble/ Prediction Markets, etc. Thu, 02 Feb 2012 23:13:18 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Medemi http://www.midasoracle.org/2008/09/26/housing-bubble/#comment-21909 Medemi Sat, 27 Sep 2008 00:08:37 +0000 http://www.midasoracle.org/?p=9894#comment-21909 It’s an interesting task to try and pinpoint exactly how we got into this financial mess. And how we can avoid future debacles. - Some say it’s greed. Hardly. A bit of greed is healthy, perhaps even essential in a competitive environment like Capitalism. After all, it’s a companies’ goal and CEO’s job to create shareholder value. It’s also in our genes. It’s an evolutionarily stable strategy – there for a reason. - A lack of regulation? Depends on how you look at it. We can have too much of it, or too little. What matters is the quality of regulation. And that is usually lacking. But it’s still not what we’re looking for. - Because SEC chairman Christopher Cox (to name one) has an incentive to inform congress of anything he perceives as a threat to the stability of the financial system. It’s his job. But he can write until the birds drop dead on the floor, because he won’t find a living soul who is ready to sacrificy his/her career by meddling with a system which has it’s problems hidden under the surface, and is closely guarded by many powerful people. Even if you can find one such politician, he/she would still have to justify his behaviour/actions to the general public, who haven’t got the faintest idea what is going on. THAT’s where the problem is. The political system. - Even when we (as humans) rid ourselves of greed, and regulate the industry as efficiently as possibe, we’re still left with a structural problem. We need to reform our political system in such a way that there is an incentive for politicans to DO SOMETHING when it’s needed. Perhaps we need to have unity in politics, in stead of division, that will control our lives. Who ever asked for division ? Who ever asked for the lies, cheating and manipulation that is inherent with our current way of exercising politics ? Perhaps there can only be long term prosperity when there is unity in politics, when we have a common goal. Currently, we only have it when the shoe has already dropped, when we have a common enemy which is threatening our way of life. If we’re lucky. It’s an interesting task to try and pinpoint exactly how we got into this financial mess. And how we can avoid future debacles.
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Some say it’s greed. Hardly. A bit of greed is healthy, perhaps even essential in a competitive environment like Capitalism. After all, it’s a companies’ goal and CEO’s job to create shareholder value. It’s also in our genes. It’s an evolutionarily stable strategy – there for a reason.
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A lack of regulation? Depends on how you look at it. We can have too much of it, or too little. What matters is the quality of regulation. And that is usually lacking. But it’s still not what we’re looking for.
-
Because SEC chairman Christopher Cox (to name one) has an incentive to inform congress of anything he perceives as a threat to the stability of the financial system. It’s his job. But he can write until the birds drop dead on the floor, because he won’t find a living soul who is ready to sacrificy his/her career by meddling with a system which has it’s problems hidden under the surface, and is closely guarded by many powerful people. Even if you can find one such politician, he/she would still have to justify his behaviour/actions to the general public, who haven’t got the faintest idea what is going on. THAT’s where the problem is. The political system.
-
Even when we (as humans) rid ourselves of greed, and regulate the industry as efficiently as possibe, we’re still left with a structural problem. We need to reform our political system in such a way that there is an incentive for politicans to DO SOMETHING when it’s needed.
Perhaps we need to have unity in politics, in stead of division, that will control our lives. Who ever asked for division ? Who ever asked for the lies, cheating and manipulation that is inherent with our current way of exercising politics ? Perhaps there can only be long term prosperity when there is unity in politics, when we have a common goal. Currently, we only have it when the shoe has already dropped, when we have a common enemy which is threatening our way of life. If we’re lucky.

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