Thursday, July 12, 2012

Finance: A Shattered Trust

The economy teeters on the edge - Americans ever hopeful; their empowered rulers ever gluttonous. We shall not feign surprise at getting burned, for we have fooled with fire. We bequeathed power on an appealing ruse. With reckless determination to secure enduring prosperity we enthusiastically embraced the lie that through finance we could finally get something for nothing.

Money isn't real. Money represents value. Money is a means for people to manipulate time and resources to create real things, but in and of itself what we call money is worthless. The value of a product (thing) or service (action) is determined by its ability to satisfy a need or fulfill a desire. Money is the creative invention of the human mind made possible by our ability to abstractly accord value to symbols and infer trust to agreements. Ultimately money is a measure of trust, trust in our fellow man, trust in government, and trust in the financial institutions originally conceived to safeguard such a system.

Financial markets have become buffoonery of the most dangerous kind. Speculators overpower investors at every turn. Ingenious institutional scammers fabricate ever more sophisticated means to fleece the public. The financial elite dissuade, confuse and misdirect with forceful rhetoric brazenly invoking treatises on free enterprise and market capitalism, concepts they long ago corrupted.

For all the financial wrangling - the bubbles, the busts, the bailouts - only bonuses prove enduring. The wealth of the masses transfers to the coffers of the elite at an alarming rate. The masses seem helpless to stop the hemorrhaging. Hoping for scraps the people blindly follow the modern day alchemists concocting a witches brew of derivatives, debt obligations, and unconstrained leverage. The people's supposed servants, professional politicians, protect the elite stoking the fires of excess, further sanctioning perverse strategies.

The titans of finance spawn every means of deceit and deception to enrich themselves. While people are cheated on a grand scale in real time, the most egregious sin is perpetrated on the future. Financiers and their political puppets apply all manner of leverage, in the form of real debt ( Trillion so far) and empty promises (0 Trillion and growing), to enslave generations yet unborn. The financial industry and government collude on this point: play now and pay later. They realize, under the guise of this mantra, real wealth changes hands.

The wizards of Wall Street undermine the promise of America: the opportunity to render service, and to collect riches in proportion to the value of that service. The American system denies no one the right to succeed, but it cannot, it does not promise something for nothing. The work of finance produces nothing. By getting without giving, financial titans conspire to overpower the inviolate law of economics and in so doing drive America to its knees.

Succumbing to the Sirens song we fashioned and fed this monster. Now we stand timid, afraid, and unsure. Unwittingly we endure the beast's ravenous appetite while we console ourselves, settling for a crowded space at the nearly empty trough of government pledges. We have misplaced our trust.

Nothing in the human experience is as powerful as trust, and nothing is as destructive as trust broken. The American people have trusted each other, the government and the titans of finance. That trust has been shattered. The ruse must end. America's prosperity lies with the time, the talents, and the ingenuity of its people not the bogus assurance of something for nothing. It is not too late. Americans are strong, our potential is limitless. We can set our course right again. It is time to put finance back in its place.

Copyright (c) 2011 Scott F Paradis

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