Wall Street: High-fashion Casino

Mason County did get snow.  When I woke up today everything was white outside.  However, by early afternoon you would never know we had any snow in my area.  It melted away pretty fast.  That is a very good thing because there is an agent who is planning to show one of my listings — a view property up a fairly steep driveway — and it would not be fun to show if there was a lot of snow.

There are several places I go to check on what is happening.  Today when I checked in with The Daily Kos, I was so impressed with one of the posts that I just have to share most of it with you right here.  If you are the least bit progressive, you will love The Daily Kos, by the way.  Here is the portion from the article, “America’s Lost Decade”, that I want to share.  It reflects what I have been thinking, but this person can really write:

While their may once have been a time when Wall Street could have been considered the engine of American finance, it has become in actual practice little but a high-fashion casino. (Perhaps Bernie Madoff made it too explicit,  but in reality his Ponzi scheme functioned for so long, and with so little investigation, precisely because it didoperate much as any of the other high-roller operations that it mimicked.) Credit default swaps (at least, as they were implemented) served exactly one purpose, which was to give uninvolved parties a roundabout way to bet large amounts of money on something that was, due to the inherently untangleable mess of the underlying “assets”, of unknowable value. Like much of the financial inventions of the last decade or two, it did nothing to stimulate any part of the economy other than finance itself. It created no jobs, except the jobs required to push paperwork from one desk to another. It created no new products, and invented no new technologies, and it gave no money to any party interested in doing either. And America boomed because of it.

That is the nature of the new kind of “finance” that continued to represent a larger and larger share of America’s ostensible “prosperity”. We have become a nation incapable of effectively making textiles, cars, steel, electronics or other physical things, because those things only allow for a littleprofit. Instead, we choose to dabble in the strictly theoretical profits of high finance — imaginary profits on imaginary wealth. Finance became more and more speculatory, and less and less encumbered by physical products, or assets, or services.

And the rich have done exceedingly well for themselves, in that new economy. As for the rest of the nation, the middle class found themselves subjectively in a recession for the entirety of the Bush years. Food prices, gas prices, housing prices — on every front, it became harder and harder for the middle and poorer classes simply maintain the status quo, and yet none of this counted as recession or poverty, because we simply kept redefining the terms to exclude such unpleasantness.

What did we gain? Ask yourself — what, exactly, did the nation create during those years? What new projects did America embark on? What betterments did we make to the lives, or health, or happiness of our citizens? What did we do?

The answer is jack-squat. We did nothing. We were attacked, and so we had a war. We suffered recession, and so we were told that to save our economy we should go to the malls and buy more things. We presided over the draining of our own wealth, and did nothing, and under what truly must count as the most dysfunctional American government — legislative, executive and judicial — of many decades, we actually were told we should feel proud over all of it, or at the very least to shut up about it. (by Hunter)

 The above is why I get very frustrated when the focus for how well our economy is doing is on the Stock Market.  We watch the corner of the TV to see if it is going up, or down.  The Stock Market reflects how well the Investor Class is doing, not the country.  Yes, many of us found ourselves invested in the Stock Market because of the way our retirement funds are managed.  It is not so much that people chose to be invested in the Stock Market, but that this is the way retirement funds are managed, and if you want any retirement funds, you have to be invested in the Stock Market.  Now, when my father was working he had a Pension Plan — remember those?  With a Pension Plan you and your employer put actual money aside that was intended to be saved for retirement.  The Pension Plan was a promise made to employees by their employer.  It was managed more like a Social Security Plan.  Upon retirement you got a particular amount of money a month.  You could count on it.  My mother kept receiving this Pension after my father died.  The Stock Market could go up or down, didn’t matter.  The Pension came in every month. 

Somewhere along the line the Investor Class saw an opportunity to increase their own profits by convincing employers to change from Pension Plans to these 401k things.  Now the funds a retiree receives go up or down, depending on the Stock Market, and some people are finding they have nothing to count on.  I think this is a lousy plan.  Imagine if the last administration had gotten its way and Social Security was changed to an Investment Plan.  Our seniors would be wiped out right now. 

When we look at the economy we need to look at real things, like employment and salaries, like real products we are making and selling, like a growing middle class, and of course, like the number of people who can afford to buy houses is going up!

Tags: economy, middle, pension, poorer, progressive, rich, stock market, the daily kos