David Korten: Beyond the Bubble Economy

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from YES! Magazine:



Beyond the Bubble Economy
We've finally learned that a growing financial sector isn't the same thing as actual economic improvement. So how can we stimulate the real economy?

by David Korten
posted Feb 02, 2012


Public anger at the 2008 Wall Street bailout, concerns about debt, and a deep and pervasive fear that another financial crash is just a matter of time create an important moment of opportunity for a long overdue public conversation about the purpose of financial services and the necessary steps to assure that the financial sector fulfills that purpose.

Much of the recent discussion of financial reform has centered on limiting Wall Street excesses to curb fraud and reduce the risk of another financial crash. This is vitally important, but it does not address the issue raised by Sheila Bair shortly before she stepped down last year as FDIC chair:

“In policy terms, the success of the financial sector is not an end in itself, but a means to an end—which is to support the vitality of the real economy and the livelihood of the American people. What really matters to the life of our nation is enabling entrepreneurs to build new businesses that create more well-paying jobs, and enabling families to put a roof over their heads and educate their children.”

It is very straightforward. The proper purpose of the financial services sector is to serve the real economy on which everyone depends for their daily needs, their quality of life, and their opportunity to be creative, contributing members of their communities.

By this standard of performance, Wall Street does not serve us well. Indeed, Wall Street’s most lavish rewards go not to those who enable others to create wealth, but rather to those most skilled and ruthless in expropriating the wealth of others—behavior condemned as immoral by every major religion. To justify their actions, Wall Street players and their apologists turn reality and logic on their heads by treating growth in the size and profitability of the financial sector as an end in itself, and a measure of increasing sector efficiency. ..............(more)

The complete piece is at: http://www.yesmagazine.org/blogs/david-korten/beyond-the-bubble-economy

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