In thinking about the disastrous mess that the financial investment industry has

[T Wolf]

created, I've been wondering why they should not be DRASTICALLY reined in.

It seems that as they get further away from direct investment in actual products and services, the theft and abuse gets worse.

With our economy in such terrible shape, can we really afford to divert so much of our resources away from actually helping people (buy homes) and businesses (grow, hire people, innovate, etc.) to feeding the egos and wallets of the wealthy?

Banks used to lend to directly support persons and businesses - now most of their "products" are gimmicked-up "deals" that benefit only those creating the deal. The financial markets beyond the banks are even worse - EVERYTHING they do is nothing more than a Ponzi scheme benefiting only themselves.

So,........

How about regulations stating that there can be no more than "one-degree-of-separation" between the lender and the end-product? They can even call it the Kevin Bacon Law.';)'

Investments would have to be in actual entities, not "derivative" constructs that contribute nothing of benefit except "paper" profits to be skimmed off the top by the very people who created the scheme.

I am sure the corporatists would not like this because it would greatly limit their ability to add more middle-men that only suck resources and distort the relationship between the origin and object of the monetary support. But how could that be wrong?

Let them get back to their original purpose and away from the game-playing that has fucked up so many of us who do not get to play with other people's money with little or no risk to ourselves.

I may not be explaining this idea well - but in my mind it is clear.

Are there any downsides to this proposal?

[ChairmanAgnostic]

1. only one downside

Our local friendly Democrat has been purchased, bought, bribed, and funded so highly by lobbyists, that the chances of a large democratic majority are nil.

[cdsilv]

2. I forget where I read this ... but there is WAY too much money....

...sloshing around at the top-level (wealth-wise) of our society today. The conventional wisdom is that you can't just let money 'sit there' and that it should 'work for you at making more money'. Hence, the financial industry has had to come up with creative ways for this excess capital to 'grow' (thereby enabling the financial industry to rake off their 'commission' and 'bonuses') for 'growing' this capital.

This all started in the '70s when the gap between the lowest wage-earners and the highest salarymen of US society ... as it grew, those in the middle started wanting to 'get in on the game' of having their capital 'grow by itself', spawning second mortgages, using home equity as a credit card as the most valuable asset the middle class had was their home & land.

Then pensions became IRA's became 401k's so that the middle class could 'get in the game moreso' by betting their future assets on increasingly complex financial instruments.

All the while the large excess of 'big' capital got a look at the cards before the unwashed masses and were able to make 'sure' bets before the rest of the population who had to accept more risk than they could really understand. Oh yeah, the financial industry was still raking in those commissions & bonuses......

And we end up where we are today - Wall street is just a big casino, with the taxpayer picking up the losses and the 'winners' keeping their profits.

Socialized losses, privatized profits.

[damyank913]

3. I believe it began with IRA's...

Corp America began to save billions with the advent of IRA'S. Now the working class had to finance thier own retirement (with a small stipend from management). Net result was less disposable income and higher profits for managers. Could you imagine what would have happened if dumbo Bush would've had his way with Social Security?