【文章內(nèi)容簡(jiǎn)介】 “From each, according to vulnerability, to each according to his greed.” 37 The Predatory Bank 38 ? This [Banking] House shall be called a House of Preyers。 and we have made it a Den of Thieves Cutthroat Competition 39 “We worshiped in the temple of cutthroat petition, and so some cooked the books, because the treasure is so great.” [Archbishop Tutu] Davos Finds no Answers to Crisis [The World Economic Forum] 40 ? One top money market manager said: If you believe that the world economy will turn the corner at the end of this year, or in [the first quarter] of 2022, I tell you we have not turned the corner, we can39。t see the corner, we don39。t even know where the corner is. ? Another participant summed up the state of the discussion as we don39。t know what to do, only that we need to do something and we need to do it fast. With the old certainties of the free market gone, even free marketeers accept the need for more regulation, quick. Alan Greenspan and Adam Smith I made a mistake, Greenspan said, in presuming that the selfinterests of anizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms.‖ [. “I refute Adam Smith!”] [* Lying to Congress is a felony] ―It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.... ―....He intends only his own gain, and he is in this as in many other cases, led by an invisible hand* to promote an end which was no part of his intention. Nor is it always the worse for society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.‖ [Adam Smith “Wealth of Nations”] US Senate Banking Committee* 41 Actually, Alan Greenspan Missed the Point! Adam Smith Knew Better! Read it again, this time with different emphasis: ―It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.... ―....He intends only his own gain, and he is in this as in many other cases, led by an invisible hand* to promote an end which was no part of his intention. Nor is it always the worse for society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.” [Adam Smith “Wealth of Nations”] 42 Actually, Adam Smith Knew Better! “… as in many other cases… ”: BUT – NOT in ALL of them!. “… Nor is it always the worse for society… ”: BUT – sometimes – it IS! “… he frequently promotes… ”: BUT – sometimes – he does NOT! “… than when he really intends to promote it… ” BUT – not, always, when he really does NOT so intend! [Adam Smith “Wealth of Nations”] 43 The Standard Neoclassical Economic Model “I argue that the first fundamental theorem of welfare economics asserting the efficiency of petitive markets is fundamentally flawed. Quite contrary to that theorem, petitive economies are almost never efficient...” Joseph E. Stiglitz Whither Socialism (2022 Nobel Laureate in Economics) Extracted from: “Adam’s Myth Economics” A Slide Show, by David C. Jones 44 THE CRASH: What Went Wrong Frenzy 45 When the housing market began to tank in 2022, Wall Street ran through the yellow light of caution and created even riskier investments – and Washington had no mechanism for finding out what was going on. [169。 Washington Post: 16 December, 2022] What Went Wrong? 46 ? Economic theory had long explained why unfettered markets were not selfcorrecting, why regulation was needed, why there was an important role for government to play in the economy. But many, especially people working in the financial markets, pushed a type of ―market fundamentalism.‖ ? The misguided policies that resulted – pushed by, among others, some members of US President Barack Obama’s economic team – had earlier inflicted enormous costs on developing countries. ? The moment of enlightenment came only when those policies also began inflicting costs on the US and other advanced industrial countries. [Joseph E. Stiglitz] Regulation of Derivatives (1a) The President39。s Working Group on Financial Markets brought together, in 1998: ? Federal Reserve Chairman Alan Greenspan。 ? Treasury Secretary Robert E. Rubin。 and, ?Securities and Exchange Commission Chairman Arthur Levitt Jr. All were Wall Street legends, all opponents to varying degrees of tighter regulation of the financial system that had earned them wealth and power. Their adversary, was Brooksley E. Born, head of the ―Commodities Futures Trading Commission‖ (CFTC). Greenspan, Rubin and Levitt had reacted with alarm at Born39。s persistent interest in derivatives, so called because they derive their value from something else, such as bonds or currency rates. 47 Regulation of Derivatives (1b) Many newer derivatives weren39。t traded on an exchange, constituting what some traders call the dark markets. There were now millions of such private contracts, involving many of Wall Street39。s top firms. But there was no clearinghouse holding collateral, to settle a deal gone bad, no transparent records of who was trading what. Born wanted to shine a light into the dark.…she now wanted to open a formal discussion about whether to regulate them and if so, how. Greenspan, Rubin and Levitt were determined to derail her effort. At a meeting, in April, 1998, the trio39。s message was clear: ―Back off, Born!‖ 48 Regulation of Derivatives