I can hear the remaining 99% of the world that doesn't invest financially, but whose lives are often very negatively affected by the financial market, ask the same: "Give me a break".
Like many, I'm tired of being told the economy is broken and we will all have to "sacrifice" something to make it better, when we have no responsibility in a financial crisis.
We are asked to pay for someone else's gambling gone bad, but when their gambling is successful we don't get any of the rewards.
Collectivized risk, individual rewards AKA "Socialism for the rich and Capitalism for the poor". Sounds like a great incentive to keep an economy healthy.
Who are the 99% who don't invest but are regularly very negatively effected?
Everyone seems to dislike big finance, but as far as I can tell, they dislike it because it's big and they don't understand what it does. Not because of anything it's done.
It's like the mysterious "elites" trump railed against: they're numerous enough to decide elections, but no one has ever met one. They include all the city dwellers, but are less than 1% of the population etc.
> Who are the 99% who don't invest but are regularly very negatively effected?
Literally anyone that never interacted with the financial markets voluntarily, with a speculative intent. I include for example, people with IRAs.
> It's like the mysterious "elites"
There's nothing misterious here. It's banks, hedge funds, financial institutions. It's all the actors that caused the 2008 crisis, among the others.
We have names, patterns and everything needed to analyze the issue, but I don't certainly require the average person to have to understand the financial markets in order to be able to be aware that something is deeply wrong in the way our economy is structured.
Hedge funds themselves don't seem to fully grasp how the market works!
The problem is, the is basically no one left who doesn't fit your definition of elite.
Who do you know who's never used a credit card, a car/student loan, a mortgage? Do they also not have a pension or a job at a publicly traded company? Have they never bought insurance or opened a bank account.
What most people don't get is that they rely on financial markets 100 times a day. That's why when markets wobble there is a shit storm. That's why they get bailed out.
I'd like a more equal distribution of wealth. I'd prefer that doctors and teachers got paid more rather than traders. But ultimately there are very good reasons things are the way they are.
You can say Fuck them all, but then we'll have to go back to living like people in the second world.
This is WHY ordinary people need to understand things like finance (or trade or geopolitics). They watch the TV, they see something they don't like, and instead of understanding its a least bad outcome (eg 2008) or that their behaviour in part caused it (eg 2008) they just write it off as a conspiracy.
If they're lucky it ends there. If not, some liar comes along and capitalises on their belief (eg trump) promising to "bring back out jobs" "drain the swamp" "make the elite pay" etc. Since he's a liar only peddling convient but untrue stories, he won't deliver. Which is disappointing but actually better than if he did.
> The problem is, the is basically no one left who doesn't fit your definition of elite.
No, banks, hedge funds, billionaires, financial institutions are all still there.
> What most people don't get is that they rely on financial markets 100 times a day. That's why when markets wobble there is a shit storm. That's why they get bailed out.
I strongly disagree with what you're trying to say.
I can't accept in any way a view of the world that leaves us with no one taking responsiblity. If someone is earning billions on the markets, someone also need to be responsible when the market crashes due to speculation.
Otherwise it's just a broken system where there's no incentive to act responsibly.
> You can say Fuck them all, but then we'll have to go back to living like people in the second world.
I'm not convinced about this in the slightest. Finance has grown way out of its league and has become a god of its own. We can say fuck them all, reorganize our economy and still live in a prosperous country.
If you're that convinced that we don't need these organisations, stop using them. Defer buying a house or a car until you can pay cash, leave your pension and invest in gold, become self employed and refuse any loan or insurance.
That's my point here: the way you and I and 99% of people live day to day relies on billionaires to fund things and speculators to keep markets liquid.
This is the core cause of a lot of our issues and the ultimate reason for things like bailouts. If we didn't need speculative finance to fund house building, we wouldn't have had to bail them out. So all we have to do is start buying houses in cash and that need disappears an we can stop bailing things out.
But the dirty truth is that as much as people hate bailouts, they hate paying for things and saving and being responsible far more.
This is why (for instance) Germany, with a high savings rate and minimal consumerism has so few billionaires and didn't need to spent much bailing out banks.
> but as far as I can tell, they dislike it because it's big and they don't understand what it does.
Please step out of your bubble and talk to more people. I have a decent understanding of what the big finance does and I still dislike it for the way it was treated after 2008. "Masters of the Universe" made the bank in the run up to 2008 and when the bill came due, hardly anyone was punished.
Some specific examples of the "rigged game" - USA jails someone for possessing marijuana a few times or gaslights someone all the way to his suicide for downloading and distributing copyrighted articles. But credit rating agencies are let go easily even if they give AAA rating to MBS tranches deserving a junk rating.
Same with investment banks who knew the mortgage bubble was about to collapse but nonetheless sold those securities to their clients. Individuals at such firms made millions from 2003-2007, but when they were caught, not a single one of them went to jail and instead, the companies had to cough up a few billions.
Same with Wall Street getting billions in bailout and trillions in implicit guarantees from Fed ("bazooka", ZIRP, QEs), but Main Street getting measly aid in a weak-sauce 2009 stimulus.
So yes, the game is indeed rigged and Big Finance deserves all the pitchforks coming its way.
That's fine, just let me know when you have an alternative.
We could have stood on principle and refused to bailout banks in 2008. Interest rates would have spiked, investment would have ground to a halt as companies collapsed. House prices would plummet as no one could get a mortgage, leading to people defaulting on their mortgages leading to falling prices etc.
But we'd have don't the right thing. What's 30m unemployed and a decade of economic stagnation?
I'm not saying there is nothing wrong. I agree about rating agencies, they should at least have been killed off.
I'm just saying, 98% of the things people call conspiracies are actually just good practical decisions that they don't like. The bank bailouts are a perfect example of that. Even your own line contains one such glaring misconception:
>Same with investment banks who knew the mortgage bubble was about to collapse but nonetheless sold those securities to their clients.
The clients are hedge funds so whose the bad guy here? Plus if the bank is selling and you're buying, you're not their client, you're their counterparty: they want to sneak as much shit into the portfolio as possible and you have to catch them and refuse the deal. If you don't do your job, you can't complain your opponent didn't do it for you!? And where did all these toxic loans come from? From requirements put in place by people we elected who decided that just because a customer has on income or assets they should still get a 110% mortgage on a house they don't actually need. Banks had to sell that to someone...
My worry here is that we're doomed to repeat these mistakes:
* politicians will deregulate finance because doing so spurs the economy (like it or not)
* finance will do its thing and spur the economy and get nice fat bonus cheques (like it or not)
* some other product will be all the rage
* that product will balloon in size, the assets underlying it will turn to shit as regulators push more of it and customers decline to check the contents before they buy
* the whole thing will crash and people will blame bankers who will say "we're turds, but so is everyone else, we just don't bother acting like we're not a part of the problem.".
> That's fine, just let me know when you have an alternative.
Here are the alternatives: 1. prosecute the bankers and send those to jail who broke law, instead of just fining those banks a few millions.
2. severely curtail risk taking abilities and bonuses if a bank depends on any explicit or implicit govt guarantees. Implicit benefits include access to cheap fed loans (ZIRPs), QEs, counterparty risks (eg. beneficiaries of AIG bailout) etc.
I can hear the remaining 99% of the world that doesn't invest financially, but whose lives are often very negatively affected by the financial market, ask the same: "Give me a break".
Like many, I'm tired of being told the economy is broken and we will all have to "sacrifice" something to make it better, when we have no responsibility in a financial crisis.
We are asked to pay for someone else's gambling gone bad, but when their gambling is successful we don't get any of the rewards.
Collectivized risk, individual rewards AKA "Socialism for the rich and Capitalism for the poor". Sounds like a great incentive to keep an economy healthy.