We Can't Afford Wall Street.....And We Don't Need It

[marmar]

"Efforts to fix Wall Street miss an important point. It can't be fixed. It is corrupt beyond repair, and we cannot afford it. Moreover, because the essential functions it does perform are served better in less costly ways, we do not need it.

Wall Street's only business purpose is to enrich its own major players, a bunch of buccaneers and privateers who find it more profitable to expropriate the wealth of others than to find honest jobs producing good and services beneficial to their communities. They walk away with their fees, commissions, and bonus packages and leave it to others to pick up the costs of federal bailouts, gyrating economic cycles, collapsing environmental systems, broken families, shattered communities, and the export of jobs along with the manufacturing, technology and research capacities that go with them.

Even more damaging in some ways than the economic costs are the spiritual and psychological costs of a Wall Street culture that celebrates greed, favors the emotionally and morally challenged with outsized compensation packages, and denies the human capacity for cooperation and sharing. Running out of control and de-linked from reality, Wall Street has created an Alice in Wonderland phantom-wealth world in which prospective financial claims and the expectations that go with them exceed the value of all the world's real wealth by orders of magnitude.

We can no longer afford to acquiesce to a system of rule by the those engaged in the pursuit of phantom wealth far beyond any conceivable need - and to no evident end other than to accumulate points in a contest for the top spots on the Forbes list of richest people. ............"

- from Agenda for a New Economy by David Korten

[laughingliberal]

1. K & R nt

[SammyWinstonJack]

2. K & R

[Oceansaway]

3. K&R...n/t

[lunatica]

4. This is very good post

Our modern American Capitalism is bizarre.

[marmar]

5. Thanks.....and I agree !

[BR_Parkway]

6. Wonderfully put

[Echo In Light]

7. K/R

[grantcart]

8. And for only $ 12.95 David will explain how markets are not necessary

For $ 24. you can get access to his thoughts for a full year and only $ 44 for a three year subscrition.

To purchase David's products go here:

http://store.yesmagazine.org/index.php?main_page=product_info&cPath=2&products_id=120&utm_source=DKsite&utm_medium=bookpage&utm_content=DKbk

[marmar]

9. FAIL....and besides, better David Korten than a Bankster.

nt

[grantcart]

10. I met David when he was in AID in BKK and I like him but if you don't see

the irony that he is merchandizing anti market books when he could be giving them away then your eyes are stapled shut.

I too would like to live on Star Trek Enterprise where markets and money are no longer necessary but unfortunately they never filmed the episode on how to get there.

[marmar]

11. Star Trek Enterprise? Umm, okay.....

Sorry, but I lost my taste for "free" market Koolaid.

[Rex]

12. The Star Trek hoopla is old and played out so 90s.

I'd hate to live on the Enterprise or live in their system of government. I think Twain was right on the money about their fabulous lifesytle.

[grantcart]

13. agreed but their economic system seemed perfect although unexplained.

[cliffordu]

15. JUST LIKE OURS YA HOSER.

[William Z. Foster]

17. unrelated

Selling things is not the same as Wall Street. This is the same argument the right wingers use on Michael Moore. It is nonsense.

Markets, selling and trading all existed long before Wall Street, and would exist if there were no stock market.

As for attacking the person selling things - "doesn't that make YOU a capitalist and therefore a hypocrite?" - selling is not capitalism, and in any case within the system we all have to play the game in order to eat.

[JoeyT]

21. If he was really against capitalism

he'd be offering his DVDs for a sack of turnips and his books for a bushel of apples!

:sarcasm:

[eridani]

22. He didn't say that money wasn't necessary, or even markets

He says that Wall Street no longer serves the function of investing in businesses that produce real goods and services.

[grantcart]

33. couldn't agree more

I believe that the OP has hijacked his message and doesn't provide a link (and also has a homily against money in capitalism as a by line.)

His website is here:

http://www.davidkorten.org/

[proteus_lives]

31. It's referenced in their background.

It took WWIII and discovering interstellar travel.

[AnArmyVeteran]

14. Perfect post and absolutely true! Wall Street produces nothing of substance.

If Wall Street was vaporized tomorrow it wouldn't be missed. There would be initial repercussions, but then when things settled down there would be no more centers of corruption. Instead of having 63% of our money going through the hands of Wall Street racketeers it would instead stay closer to home, where it's safer and less likely to be stolen. Wall Street is just one big shell game or the three card monty. It's an orgasmic paradise for con men. But while they are coming you are being screwed...

Here's an example of the Three Card Monty:
http://www.youtube.com/watch?v=o2kO_5cNF5k

There are NO differences between the tricks pulled by Wall Street executives and street hustlers who make a living by stealing other people's money.

[taught_me_patience]

19. Please study some finance

before posting ignorant opinions of why capital markets are not needed in a modern economy.

[William Z. Foster]

23. that cat is chasing its own tail

"Please study organized crime before posting ignorant opinions of why the Mafia is not needed in a modern economy."

So you are saying that a "modern" economy that is dominated by "capital markets" must have "capital markets" in order to be a "modern" economy dominated by "capital markets." Yes, the economy is held hostage by those operating the capital markets, and those operating the capital markets would have us believe that this makes an economy a "modern" economy.

The message from the "capital market" folks to the rest of us - "nice country you have here. It would be a shame if anything were to happen to it, if you get my drift."

I think people are getting tired of the extortion -

The health insurance industry - "give us everything we want, or nobody gets health care!"

The mortgage banking industry - "you are lucky that we let any of you have a house. Play ball with us or else you'll all be on the street!"

Wall Street - "bad economy? You ain't seen nothing yet. Give us all your money or we'll really wreck the economy, and then you'll all be sorry."

[eridani]

32. You need capital markets to fund businesses

Wall Street has long since quit doing that to a very large extent.

[Hannah Bell]

39. 40% of all corporate profits.

[AnArmyVeteran]

50. Something can't be considered very 'modern' if it is a complete failure can it?

I'm no expert on the market, but I do know simplicity IS genius. And since Wall Street built in unnecessary, complex systems riddled with corruption it should be considered the opposite of 'genius'. It's a disaster. A 'modern' economy and banking system would work. At first cavemen figured out square stones didn't turn well. Then someone though of smoothing the edges to make things easier. But Wall Street is filled with people who like square stones because they profit off massively, while not producing anything of substance for society. An illegal migrant farm worker produces more for society in one 16 hour day of hard work, than all of Wall Street produces. Try eating a 'derivative' or a 'credit default swap'. After you get their tainted taste in your mouth you will be thinking higher of those who actually produce things to sustain your life. Wall Street doesn't. And money can always be handled through many local systems and be more efficient and safe, unless you believe consolidation is the answer. Then if that were true then all the world banks and markets should be located in one spot, ran by the same people. Consolidation is the problem.

You spent all of one line attacking me, but if you believe in having others aware why didn't you offer one nugget of your wisdom? You could have explained perhaps what you disagree with.

[cali]

16. makes sense to me. Does he tell us HOW to deep six it?

Probably not- because as far as I can see there is no way to get rid of it. The best we can hope for is effective regulation.

[William Z. Foster]

24. lock the doors

End of story.

Most modern progress was, and still is, the result of public investment.

[Hannah Bell]

18. 40% of all us corporate profits go to wall street. it's a parasitical appendage of capital.

at least old-style robber barons actually produced something people wanted.

[taught_me_patience]

20. Completely not true

40% of corporate profits do not "go to wall st". Please source this insane claim.

[William Z. Foster]

25. that is why Wall Street exists

Clearly that is where most of the money - the source of which is the wealth produced by the working people - goes. Actually Wall Street is where the money produced by the working people in the country is siphoned into the pockets of the few, the speculators, the investors, those who control wealth, who control the economy, the country, and all of us. Of course. No one pretends that the game is played any other way, even the most ardent defenders of the market. They will say that this is the way that things should be, and on that I disagree with them, but they would not disagree that most of the money goes to Wall Street. That is what they are hoping for, working for. That is the whole point.

Not sure if yours is a hit and run post or not. If not, it would probably be valuable for everyone if we put the work in and traced the transfer of wealth and documented it. Hannah is excellent at this sort of work, as are a few others here. I will pitch in, as well. I fear though, from what I have seen the last few days, that people making challenges like this are not really interested in any answer, they are just hoping that if they yell "boo!" that everyone will run for cover.

[taught_me_patience]

26. Please link a source stating the 40% of corp profits go to WS.

[William Z. Foster]

28. that's all?

No problem.

To understand the trends in Wall Street pay, it makes sense to look at how the financial sector ballooned in recent decades, before the financial crisis. In the last 40 years, financial profits went from just under 20 percent of corporate profits to around 40 percent before the financial crisis. Financial company stocks became 22 percent of the Standard & Poor’s financial index by 2006, up from 13 percent in 1999. And in New York City, the capital of finance, nearly $1 out of every $4 that companies paid employees in 2007 went to a financial worker.

http://www.nytimes.com/info/wall-street-pay/

That is just a start. Much more on this.

[taught_me_patience]

57. Thank you for posting an article to back up my argument

"Financial companies" does NOT equal wall street. It could be ANY financial company anywhere in the U.S.

[Hannah Bell]

59. "wall street" in common parlance = the financial sector. but that part *is* open

to misinterpretation, & i'll admit it.

unlike you.

[William Z. Foster]

72. that is true

That is a small part of the entire picture. I merely answered the one specific and limited question you asked.

If we do a thorough accounting of the wealth drained from the economy by Wall Street (it should be obvious what we are talking about here when we say Wall Street, but if not I can live with the dumb Wikipedia definition I posted) the picture would be much more grim.

[liberation]

104. You really do think "Wall Street" refers as a zip code range on a specific street of New York?

LOL, because the obvious red herring you were fishing for right there could only be given the benefit of the doubt, as an excuse, if you really did not have that much of a sophisticated knowledge of financial matter.

[William Z. Foster]

29. good article here

The Quiet Coup

By Simon Johnson
The Atlantic

In its depth and suddenness, the U.S. economic and financial crisis is shockingly reminiscent of moments we have recently seen in emerging markets (and only in emerging markets): South Korea (1997), Malaysia (1998), Russia and Argentina (time and again). In each of those cases, global investors, afraid that the country or its financial sector wouldn't be able to pay off mountainous debt, suddenly stopped lending. And in each case, that fear became self-fulfilling, as banks that couldn't roll over their debt did, in fact, become unable to pay. This is precisely what drove Lehman Brothers into bankruptcy on September 15, causing all sources of funding to the U.S. financial sector to dry up overnight. Just as in emerging-market crises, the weakness in the banking system has quickly rippled out into the rest of the economy, causing a severe economic contraction and hardship for millions of people. But there's a deeper and more disturbing similarity: elite business interests - financiers, in the case of the U.S. - played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive. The government seems helpless, or unwilling, to act against them.

Top investment bankers and government officials like to lay the blame for the current crisis on the lowering of U.S. interest rates after the dotcom bust or, even better - in a "buck stops somewhere else" sort of way - on the flow of savings out of China. Some on the right like to complain about Fannie Mae or Freddie Mac, or even about longer-standing efforts to promote broader homeownership. And, of course, it is axiomatic to everyone that the regulators responsible for "safety and soundness" were fast asleep at the wheel. But these various policies - lightweight regulation, cheap money, the unwritten Chinese-American economic alliance, the promotion of homeownership - had something in common. Even though some are traditionally associated with Democrats and some with Republicans, they all benefited the financial sector. Policy changes that might have forestalled the crisis but would have limited the financial sector's profits - such as Brooksley Born's now-famous attempts to regulate credit-default swaps at the Commodity Futures Trading Commission, in 1998 - were ignored or swept aside.

The financial industry has not always enjoyed such favored treatment. But for the past 25 years or so, finance has boomed, becoming ever more powerful. The boom began with the Reagan years, and it only gained strength with the deregulatory policies of the Clinton and George W. Bush administrations. Several other factors helped fuel the financial industry's ascent. Paul Volcker's monetary policy in the 1980s, and the increased volatility in interest rates that accompanied it, made bond trading much more lucrative. The invention of securitization, interest-rate swaps, and credit-default swaps greatly increased the volume of transactions that bankers could make money on. And an aging and increasingly wealthy population invested more and more money in securities, helped by the invention of the IRA and the 401(k) plan. Together, these developments vastly increased the profit opportunities in financial services.

Not surprisingly, Wall Street ran with these opportunities. From 1973 to 1985, the financial sector never earned more than 16 percent of domestic corporate profits. In 1986, that figure reached 19 percent. In the 1990s, it oscillated between 21 percent and 30 percent, higher than it had ever been in the postwar period. This decade, it reached 41 percent.

http://www.theatlantic.com/magazine/archive/2009/05/the-quiet-coup/7364/

[taught_me_patience]

53. I'd say 40% of profits are "earned" by wall street

"go to" and "earned" are very different terms in the business world.

But the reason is many fold:

The demise of manufacturing
Rise of corporate deal making
Sophisticated trading using high leverage

All of this allowed by government.

[U4ikLefty]

67. Is shilling for Wall Street a hobby or a profession?

[Hannah Bell]

73. ;>)

[Starry Messenger]

74. rofl

:thumbsup:

[William Z. Foster]

79. I think they teach this stuff in college!

As hard as it is to believe for us old farts, I do think that this stuff is "taught" in graduate school these days.

It causes a lot of blank, confused looks on people's faces when these free market "truths" are countered or questioned in any way. Hell even the "titans of finance" and "experts" look like deer caught in the headlights from the relatively innocuous questions the neutered and tamed "journalists" have been asking them lately. Greenspan is so confused he is talking like a Marxist half the time now.

[taught_me_patience]

88. I don't like many things WS did

however, I will fight insane hyperbole stating that we don't need WS at all. That insane shit is devoid of any understanding of finance.

[liberation]

105. LOL...

I love how you complain about insane hyperbole, only to follow up with insane hyperbole of your own.


I get your nick name now. LOL.

[William Z. Foster]

80. they are?

"Go to" and "earned" are different? "In the business world" you say. Well, I certainly agree with that. Lots of people playing fast and loose with that, no doubt.

So it would have to be unearned before it could "go to" someone?

Now here is a question - just who is it that is defining "earned" in that racket?

Whether it is "going to" being "earned" being "derived" being "leveraged" being "swapped" or being "gained" - it is all being taken from the working people, and nothing is being produced other than what is need to facilitate the heist.

[William Z. Foster]

38. I was right, then

It was a hit and run post. You were quick to challenge people - you called what they posted "insane" within seconds of them posting it. Now you are no longer interested in the discussion, it seems.

[Hannah Bell]

40. yep. they're quick to call people on stuff (usually with a dollop of name-calling), but

they never admit when they're mistaken.

[Egnever]

46. Oy vey you are truly dense

Please explain how wall street takes one dime of profit from any corporation. You cant because they dont. They make a profit based on the services they provide to investors and the profit they make accounts for 40% of all profits made by all corporations in the US.

Re read the article you posted and get back to us when you understand what you read.

[Hannah Bell]

49. i'm not sure what you're babbling about. i said 40% of all corporate profits go to wall street.

they do.

it's you who has the comprehension problem -- or rather, it's you who's attributing meanings to my post that were neither stated nor implied.

i understood perfectly well what i read.

but once again, you prove my contention that your type always has to add a heavy dollop of name-calling & personal attack to every post they make.

is that your function here?

[taught_me_patience]

54. Obviously your writing style needs some clarity

because I interpreted your post the same as the previous poster.

[Hannah Bell]

56. i doubt it, but it does save your face. that's why you showed up now instead of earlier.

[taught_me_patience]

58. nah... it was because I was driving home from work.

then having dinner with my wife.

[William Z. Foster]

65. sorry

I jumped to conclusions. Hope you guys had a nice dinner. So many people throw challenges out there and then disappear.

[Hannah Bell]

69. whatever you say. nice job ya got.

taught_me_patience (1000+ posts) Thu May-13-10 03:59 PM
20. Completely not true. 40% of corporate profits do not "go to wall st". Please source this insane claim.



taught_me_patience (1000+ posts) Thu May-13-10 04:37 PM
7. Oceans are unbelievably huge



taught_me_patience (1000+ posts) Thu May-13-10 05:45 PM
26. Please link a source stating the 40% of corp profits go to WS.



William Z. Foster (459 posts) Thu May-13-10 06:05 PM
28. that's all? No problem.

In the last 40 years, financial profits went from just under 20 percent of corporate profits to around 40 percent before the financial crisis...



taught_me_patience (1000+ posts) Thu May-13-10 08:56 PM
54. Obviously your writing style needs some clarity because I interpreted your post the same as the previous poster.

[Egnever]

84. you are a strange bird

what exactly do you think you proved with that? That he couldn't drive home and have dinner in three hours?

[Hannah Bell]

89. you're a strange bird too. if you don't get it, i'm not obliged to explain to someone whose

initial post to me was a personal attack.

[taught_me_patience]

96. Personal attack? WTF? I just asked for a source for a claim.

[Hannah Bell]

100. are you egnever's sock? because i posted to him, not to you.

[Hannah Bell]

90. dupe

[William Z. Foster]

60. services!!

Thanks for the laugh.

40% of all profits made by corporations are made by the people "providing" these "services."

If we extend Wall Street to include dividends and capital gains, a picture starts to emerge - those producing nothing are taking the lion's share of the wealth being produced in the country - by the working people. That is the point, and it is undeniably true and even worse than in even your best case scenario of "providing services" would suggest.

[Egnever]

85. So if wall street disappeared

you think that 40% of the total of all corporate profits would magically reappear in the pockets of some other corporation? And how do you figure that people working on wall street and in financial institutions aren't working people? Or that the wealth they produce doesn't add to the national wealth any more than wealth produced from raising cows for instance?

Or are you trying to say that the only wealth produced is through manufacturing and all other services are just drains on our society?

There is no question that wall street has destroyed a large chunk of the nations wealth recently however that wealth was all on paper to begin with so has anything really been destroyed?

[William Z. Foster]

109. yes, it would be in someone else's pockets

Yes, if Wall Street disappeared that 40% would appear in the pockets of someone else. Of course. What else could possibly happen to it? What we would all like to see is for it to go back into the pockets of those who produced it, the working people.

Many of the people working on Wall Street are working class people, yes. Secretaries, messengers, etc. I would not claim otherwise.

No wealth is produced on Wall Street. Nothing is added to the national wealth by Wall Street, it is subtracted. That is the point of the game there, of course. No one playing the game successfully would or could see it any other way.

Yes, producing things is the only source of wealth. "You cut my hair and I'll wash your car" is not sufficient, does not generate any wealth.

Yes, real wealth was destroyed. Of course. That is why we have a crisis.

You say "it is all on paper anyway" - such a cavalier dismissal of the blood, sweat, and tears of the working people. If it were "all just on paper" no one would play the game, at least for anything other than amusement. I think Parker Brothers did create a board game for amusement purposes, actually.

[Egnever]

45. Sorry but no

And Hannah isn't good at this sort of thing. She continues on a daily basis to completely misunderstand things she reads.

Her statement you are defending is a complete distortion of an article she read and she is now running around repeating her mistake in thread after thread.

[Hannah Bell]

52. sorry but yes. "40% of all corporate profits went to wall street" means the same thing as

"financial profits went from just under 20 percent of corporate profits to around 40 percent".

"wall street" being shorthand for "financial sector".

the meaning of both sentences is:

Total corporate profits = x
Wall street/finance share = 40%.

Other industries' share = 60%

[Egnever]

83. Which is totaly different from wall street taking profits from corporations.

the meaning of the sentence is

corporate profits made in the us = 100 %
profits made by wall steet corporations = 40%
profits made by all other corporations = 60%

not all corporations in the us had 40% of their profits taken by wall street.

All other corporations kept their profits wall street didnt see a dime of the profits other corporations made.

You are confusing percentage of total profits made in the US by all corporations with wall street dividing up other corporations profits.

Its like saying that because McDonald's profits account for 50% of all fast food busines profit they are taking 50% of burger kings profit. Which of course is complete fantasy.

[Hannah Bell]

93. oh, give it up. i'm not confusing a damn thing, & you know it.

[William Z. Foster]

111. yes

If McDonald's took 50% of the fast food industry profits and produced no food.

[Hannah Bell]

34. nyt, in yellow

http://webcache.googleusercontent.com/search?q=cache:i-Do4zU0CMMJ:www.nytimes.com/info/wall-street-pay/+%2220+percent+of+corporate+profits+to+around+40+percent+before+the+financial+crisis%22&cd=1&hl=en&ct=clnk&gl=us


To understand the trends in Wall Street pay, it makes sense to look at how the financial sector ballooned in recent decades, before the financial crisis. In the last 40 years, financial profits went from just under 20 percent of corporate profits to around 40 percent before the financial crisis. Financial company stocks became 22 percent of the Standard & Poor’s financial index by 2006, up from 13 percent in 1999. And in New York City, the capital of finance, nearly $1 out of every $4 that companies paid employees in 2007 went to a financial worker.

[taught_me_patience]

61. Honestly... your anger should be directed at the U.S. government

for:

1) Allowing investment banks to borrow from the fed, at the fed funds rate, like commerical banks.
2) Allowing investment banks to have up to 40:1 leverage
3) Completely unregulated CDOs
4) Completely unregulated Credit Default Swaps

[William Z. Foster]

63. by that logic...

By your logic, we should be REALLY angry at the Democrats. The Republicans never pretended to have any interest in chasing down the criminals.

But you have a good point - the arsonists are one thing,m but the people we hired as fire fighters who then did nothing and let the town burned down are quite another. The fire fighters we hired are the Democrats. They said they were fire fighters, anyway. Now it turns out they have been consorting with and compromising with the arsonists.

[Egnever]

43. You keep parroting this, and its completely untrue

It accounts for 40% of us corporate profit it does not take 40% of all corporate profit. That means that wall street companies a bring in 40% of the corporate profit in the US not that it takes it from other corporations. You make yourself look really dumb repeating this idiocy over and over.

How exactly do they take the profits from a corporation? They dont! they make a large profit by investing money in the market for people and the profit they make from doing that accounts for 40% of all the profits made by all the corporations in the US.

[Hannah Bell]

55. you have a reading comprehension problem. "take" = "get," "make," earn, whatever.

nothing i wrote in any way suggests that corporations make a pool of profits & then wall street takes 40% of those.

though the result would be the same, wall street would wind up with 40% of all corporate profits.


40% of all corporate profits made in the US go to wall street. wall street's share of us corporate profits = 40%. 40 out of every 100 dollars in corporate profit belong to wall street. 4/10 of corporate profits are "earned" by wall street. only 60% of corporate profits are earned by companies actually producing something besides stock swaps.

the finance sector is a bloated bag of useless shit-sucking poop.

same difference.

[Prometheus Bound]

81. I can accept "take" or "get", but "earn" is stretching it.

:)

[Egnever]

87. So you just begrudge a company making a profit then.

or is there an amount of profit you would find acceptable for wall street to make?

[Hannah Bell]

91. so you like straw. yum yum

[Egnever]

98. As much as you like spewing BS

[Hannah Bell]

101. not worth it, bit T

[William Z. Foster]

62. ROFL!!

"Accounting" for 40% of all corporate profit does not equal "taking" 40% of all corporate profit?

40% of all corporate profits in the country go to Wall Street. And THAT is just for "services provided." Wall Street is actually "accountable" for a much bigger theft than that.

"Services provided" - I love that one.

"Nice country you have here. Wouldn't want anything to happen to it. Think of this as a 'service provided' by me and the boys."

[Egnever]

86. We must have a communication issue here

you seem to be implying that at the end of each quarter every corporation in america issues a check or something to wall street for 40% of their profit.

Is that really what you are trying to say?

[Hannah Bell]

92. when someone says "you seem to be saying" what follows is typically a misrepresentation

or straw man.

thanks for holding to the statistical norm.

[Egnever]

99. So what are you saying?

Or are you unable to define it without LOL garbage?

[William Z. Foster]

110. that is in your imagination

No, I did not say that, did I? If I had, then you would have a convenient case for making a rebuttal, wouldn't you? That is called a "straw man" argument, a logical fallacy - making up what the other person said in such a way that you can easily knock it down.

[MkapX]

27. reform it

allow every employee to own stock in the said company and not only will be generating more wealth but every employee will have stack on the company thus not allowing workers to be viewed as expenable

[leftstreet]

30. K&R

[eridani]

35. Wall Street is no longer about investing, it is about amoral hacking

http://www.businessinsider.com/what-business-is-wall-street-in-2010-5#ixzz0nZTm05WL

The only people who know what business Wall Street is in are the traders. They know what business Wall Street is in better than everyone else. To traders, whether day traders or high frequency or somewhere in between, Wall Street has nothing to do with creating capital for businesses, its original goal. Wall Street is a platform. It’s a platform to be exploited by every technological and intellectual means possible.

The best analogy for traders? They are hackers. Just as hackers search for and exploit operating system and application shortcomings, traders do the same thing. A hacker wants to jump in front of your shopping cart and grab your credit card and then sell it. A high frequency trader wants to jump in front of your trade and then sell that stock to you. A hacker will tell you that they are serving a purpose by identifying the weak links in your system. A trader will tell you they deserve the pennies they are making on the trade because they provide liquidity to the market.

I recognize that one is illegal, the other is not. That isn’t the important issue.

The important issue is recognizing that Wall Street is no longer what it was designed to be. Wall Street was designed to be a market to which companies provide securities (stocks/bonds), from which they received capital that would help them start/grow/sell businesses. Investors made their money by recognizing value where others did not, or by simply committing to a company and growing with it as a shareholder, receiving dividends or appreciation in their holdings. What percentage of the market is driven by investors these days ?

I started actively trading stocks in 1992. I traded a lot. Over the years I’ve written quite a bit about the market. I have always thought I had a good handle on the market. Until recently.

Over just the past 3 years, the market has changed. It is getting increasingly difficult to just invest in companies you believe in. Discussion in the market place is not about the performance of specific companies and their returns. Discussion is about macro issues that impact all stocks. And those macro issues impact automated trading decisions, which impact any and every stock that is part of any and every index or ETF. Combine that with the leverage of derivatives tracking companies, indexes and other packages or the leveraged ETFs, and individual stocks become pawns in a much bigger game than I feel increasingly less comfortable playing. It is a game fraught with ever increasing risk.

[Synicus Maximus]

36. What do you mean by 'WALL STREET"?

[William Z. Foster]

42. Wall Street

Wall Street is a street in Lower Manhattan, New York City, New York, USA. It runs east from Broadway to South Street on the East River, through the historical center of the Financial District. It is the first permanent home of the New York Stock Exchange; over time Wall Street became the name of the surrounding geographic neighborhood. Wall Street is also shorthand (or a metonym) for the "influential financial interests" of the American financial industry, which is centered in the New York City area.

Several major U.S. stock and other exchanges remain headquartered on Wall Street and in the Financial District, including the NYSE, NASDAQ, AMEX, NYMEX, and NYBOT.

http://en.wikipedia.org/wiki/Wall_Street

[unkachuck]

37. and my greatest fear....

....is that wall street, global markets and corporations will not permit the people of the world to manage their planets' dwindling resources with fair and reasoned socialism....

....the historic capitalist response to ecological resource stress has always been war....if we don't put the capitalist demons back into the bottle, billions will die; untimely deaths will await us all....

[Egnever]

41. This guy clearly does not understand what the markets do.

And neither apparently do many on this thread.

[William Z. Foster]

44. well, we are all ears

Tell us - what do markets do?

[Egnever]

48. They provide operating capital for businesses that go public

by allowing people to buy into those businesses through publicly offered shares of the company. And judging by your defense of hannah i seriously doubt you are all ears.

[William Z. Foster]

64. ok

And where does that capital come from?

[Hannah Bell]

71. 40%

[Hannah Bell]

76. did you learn that in your econ 101 class?

gad.

[William Z. Foster]

78. times have changed

We didn't spend a lot of time on Friedman and the "Austrian school" when I studied economics. There is nothing there to study. Apparently it is the Bible today.

You have read the story about how the National Association of Manufacturers created all of this nonsense out of thin air, and inserted it into academia, yes? It has been paid hacks right from the beginning peddling this stuff. I feel sorry for college graduates who are spouting the lines today - they are so obviously sales and marketing slogans they are mindlessly parroting. It must be confusing to have a college education and be that...well, confused.

I think I read somewhere that Ivy League schools are teaching this crap as gospel in their MBA or whatever programs. Good grief.

[Douglas Carpenter]

106. obviously under any plausible modern system financial markets are necessary

Even Iran has a stock market. Even a mixed economy Democratic Socialist system would certainly have financial markets. Unless one is advocating the complete and total overthrow of the existing order and the abolition of the profit system - financial markets will remain necessary.

But surely we must now be at a point in time where all but the most sheltered must acknowledge that the whole thing has gotten completely out of hand. The days of the frugal successful systematically investing in stock or bonds or properties with the goal of gradually developing their nest egg has been largely replaced by the Gordon Gecko model of high rolling, fast moving speculating and speculating on speculating and speculating on speculative speculating.

This is not sustainable and it is certainly not conducive to the kind of economic growth that promotes stable, long term employment and the kind of economy where ordinary people share equitably while maintaining a stable social order. It is the kind of growth that drives uneven distribution of wealth to third world levels.

We are now at a point where reviving the economy in the short term requires convincing the public to engage in or return to irresponsible borrowing and investors to engage in or return to irresponsible speculating - backed by less than stable debt - thus making a long term and stable economy in which the vast majority benefit all the less attainable.

It is one thing to have an economy where money is invested in enterprises that produce goods or services while creating jobs. It is quite another thing to have an economy where money plays a largely nonproductive and largely speculative role where money buys up established businesses and simply wagers on their success or failure - a market behaving more like a casino than a financial market while simultaneously racing to the bottom for the cheapest possible sources of labor.

I agree that financial markets of some sort are necessary. But the system is so broke, it may very well be time to question whether or not the existing model is even fixable.

[William Z. Foster]

112. creating jobs

Wall Street does not create jobs. Trickle down is a lie. Investment succeeds when jobs are destroyed. When jobs disappear stocks go up, not down. It is inevitable that Wall Street become a casino.

Money is never invested "in enterprises that produce goods or services while creating jobs" for any purpose other than to extract wealth from those productive activities as ruthlessly and as quickly as possible. That makes it inevitable that sooner or later we reach the point where the investment class "simply wagers on their success or failure - a market behaving more like a casino than a financial market while simultaneously racing to the bottom for the cheapest possible sources of labor." Actually, that is what they were always doing. Anything else was mere illusion.

[Douglas Carpenter]

115. there has never in the entire history of the world been one single case in the entire history of the

world in which a reasonably prosperous and relatively equitable and socially just society with relative democracy and human rights - without a well regulated yet strong healthy private sector which included financial markets. There is not one single success story of a sustainable just, prosperous and relatively free society that was achieved by a totally socialist economy, not one.

Neither unrestrained speculative capitalism or absolute socialism works. Financial markets are in every case without any exceptions part of the component in every workable system as well as strong unions, a large and extensive social welfare state and a well regulated economy.

Mixed economy social democracy works and it works better than any other system ever devised. The other models simply do not work.

[Hannah Bell]

116. social democracy works : if it works so well, why is it being cut back across the globe as we speak?

BECAUSE IT DOESN'T WORK FOR THE BANKSTERS.

Social democracy = brief interlude following WW2.

it doesn't work, it cannot "work," because of the insane logic of capitalism.

[Douglas Carpenter]

121. well visit Europe and you will see that social democracy is still far, far from dead

While the Marxist model died a couple decades ago. And when Marxism was still alive it never once produced a system that won the confidence of the vast majority of working class people that it claimed to represent. In every single case without one single exception, it produced an utterly corrupt and dictatorial society with far less political freedom and a far, far lower standards of living than its capitalist neighbors to the West.

Although, I do agree that global capitalism is now running rampant and is way out of control and certainly does threaten some of the advances made by social democracy and pretty much prevents any significant extension of social democracy of even New Deal capitalism for the for the foreseeable future. In fact, I will have to agree that it threatens much more than that in its current form. I don't know a way around the power of capital at this point and time in history. Some problems don't have answers - at least for the time being. But the Marxist model is dead and buried. No one believes it anymore - even in the third world. Largely because, unlike social democracy, it never once produced one single sustainable and workable model of a relatively free, socially just and prosperous order - not one.


"Whenever I see an American intellectual with a glow in their eyes talking about workers and peasants uniting - something deep inside my heart tells me to watch out - There is a new brand of Irish Catholicism on the rise." - Eugene O'Neill


.

[Hannah Bell]

128. I LIVED IN EUROPE FOR 1 YEAR. You might catch up on the news,

because most of eastern europe is already under austerity budgets, & western europe is following hard on their footsteps.

The european welfare state is being cut back -- in case you hadn't noticed. It's been ongoing for years, in fact, but this is a harder cutback than the previous ones.

and in fact, there is poverty in europe -- more than i ever saw in japan, & that was in the 70s, when times were better.

[William Z. Foster]

117. that has been the rule

"A reasonably prosperous and relatively equitable and socially just society with relative democracy and human rights" has been the rule throughout the existence of humankind. The entire human race is the "success story" in that regard. Most of the human race was mostly successful through all time, and certainly never saw the horrors we are now seeing since capitalism arose. This crazy idea that we are now seeing the best of all possible worlds seem so self-evidently false that it is difficult to know how to refute it.

No "models work," since they only exist in your imagination. The lines you are parroting here have no connection to any objective reality an are merely propaganda talking points used to beat back any challenges to the status quo, any questioning of the social arrangements and conventions.

We don't have a "system" that was "devised." we have a chaotic free-for-all of greed and anti-social behavior that is the result of the absence of any social agreement or system.

[Douglas Carpenter]

122. if you think most of human history

is one of relative democracy and human rights - well that is just so untrue I don't even know what to say. Take a real look at these idyllic pre-capitalist societies. The simplicity of living might very well have some very endearing elements. Relative prosperity and human rights is one thing you will not find. Human history has been a history of hierarchical and authoritarian order and utter brutality where the strong crush weak under whatever system, pre-capitalist or post capitalist with some degree of respite as a result of post Word War II social advances. That is reality however bitter it may be.

Even Marxism teaches that capitalism was a progressive stage over past systems in the course of human social/economic development.

[William Z. Foster]

124. really?

That is interesting. Of course "democracy" and "human rights" are used as buzz words, used to justify the most horrendous things. I do not completely trust the way those words are being used, especially when that is combined with apologies for capitalism and imperialism and colonialism and when the people using those words stand to gain from or are dependent upon capitalism and imperialism and colonialism.

I think from a Eurocentric viewpoint, more specifically from a WASP male viewpoint, what you say may be true. The notion that until the noble northern European white man came around - with his guns and whips and chains and plans for dislocation of peoples and exploitation of resources and destruction of all that gets in the way, with his imposition of a murderous and genocidal approach to the world - that presumably ignorant and primitive people had no good things like democracy and human rights, is simply unsupportable and defies all observation. Many societies had no need for concepts of human rights because they went without saying, because there was not such a threat to them as there is among us.

Odd thing - people here defending the system with talk about "democracy" and "human rights" while people are being detained, tortured, bombed murdered and maimed around the world by the very people supposedly spreading this "democracy" and these "human rights"...

Must we accept capitalism and imperialism and colonialism in order to get this precious "democracy" and these "human rights?" That seems to be the case. That is a bad bargain.

If we are to see all people other than us and before us as being deficient in these good things we bring - "democracy" and "human rights" - and if we are to call any contrary opinion to that "batshit CRAZY," does that not support the idea that in fact these notions of "democracy" and "human rights" are really part of an illusion, a cover up, a distraction, used by a people who consider themselves to be superior and therefore justified in imposing their will on the rest of the world?

[Douglas Carpenter]

126. most of European history has been just as brutal and just as savage - if not more so

especially when carrying out their imperial ambitions. This has nothing to do a Euro-centric or WASP perspective. It has to do with having a reality-based perspective.

[William Z. Foster]

127. not open to that then?

I was thinking out loud about your question.

What makes one perspective "reality based" and another not? My thoughts reflect reality as much or more than yours do.

You can see no possibility that our view could be biased on this?

[taught_me_patience]

94. Please educate - they play a major role in economic growth

http://faculty.fuqua.duke.edu/~charvey/Research/Chapters/C6_The_role_of.pdf

[William Z. Foster]

119. as I said

They teach this shit in colleges now. Unbelievable.

Yes, the gospel according to the Catalyst Institute.

I think this newly emerging "liberal" and "progressive" strain of apologists for Wall Street are some of the most bizarre and dangerous ever. Since they are recommending investing in "green" and "sustainable" and "enlightened" stuff, they can promote all of the failed ideas of Reaganomics and no one can challenge us on them.

[Hannah Bell]

70. 40% of all corporate profits.

[William Z. Foster]

75. yeah, but

Look at the "services provided!!"

1. They provide operating capital for businesses that go public

2. They allow people to buy into those businesses through publicly offered shares of the company.

They do all of that for only a 40% share of corporate profits. God, they are some sort of humanitarians. Then there is the money they pay themselves. Then there is the money they pay out to people (including themselves) in dividends and capital gains. Then there is the money they extort from the public treasury.

Strange that people so not read those two points - "provide operating capital" and "allow people to buy" - which are a strong defense of Wall Street, and immediately think "hey wait a minute, what sort of hustle is this?"

[Hannah Bell]

77. god, how could i not have understood. it is to weep, how misguided i've been.

jeez, for all that, they deserve 60%, at least.

(speaking of weak sentence construction...)

[varelse]

47. Someone had to say it

K&R

[Starry Messenger]

51. Evidently they are afraid we will figure this out, too.

The backlash against suggesting it is intense.

[azul]

66. When pathological gamblers win big, watch out:

Recent studies have found that when we anticipate financial gains - whether at the gaming tables or on the stock market - an area of our brain known as the ventral striatum becomes activated and flooded with dopamine, a brain chemical linked to pleasurable sensations. The release of this chemical also occurs during physically rewarding activities such as eating, sex and taking drugs, and is a key factor behind our desire to repeat these activities.

When we start to consider the possibility of losing money, however, the same brain areas become less active. In fact, most people's brains show more negative sensitivity to losses than positive sensitivity to gains - neural evidence of our tendency toward risk aversion. In one study, researchers could predict how tolerant individuals were to risk by analyzing how their brains responded to potential gains versus potential losses. Those whose brains were less turned off by the possibility of increasing their losses tended to be more eager gamblers

http://1877mylimit.org/problemgamblingandthebrain.asp

(This from 2007 studies.)

Young males are developed into gambling addicts to power this Wall St pleasure factory. What a rewarding career.

[William Z. Foster]

68. k and r

There is some ferocious resistance to this topic even being considered, let alone discussed.

[deacon_sephiroth]

82. agreed k/r -N/T-

[HiFructosePronSyrup]

95. If you don't like Wall Street, fine, then just don't complain about employment figures.

Can't have your cake and eat it too.

[pundaint]

97. Wall Street is about cheap labor. Wall Street closes a plant employing Americans and making an 8%

profit and sends the equipment, intellectual capital, and raw goods out of the country to cheap labor markets. Corporations are a construct of We the People. They were created to serve the public good. Congressmen have allowed the erosion of that purpose in exchange for money. Something really big needs to be done about it, and since those who must do it are paid off, we must vote in new congressmen who have not yet sold out and hope they will act before they too are corrupted.

[Hannah Bell]

103. +1000. it can't be pointed out too often. not only do they screw you every ten

years or so, when one of their scams goes bust & they want you to pay for it, they screw you regularly, daily, with the routine screwing you just mentioned, getting value for the "investor".

except 80% of the "investors" = them.

besides which, they want you to kowtow to them for the great "services" they perform for the economy, & laud them as "philanthropists" for their tax-scam foundations, which are actually just tax-free investment & stock manipulation arms.

the dirtiest, creepiest, most arrogant bunch of crooks on the planet.

[William Z. Foster]

113. so obviously false

When jobs disappear, or wages go down, stocks go up.

[HiFructosePronSyrup]

120. LOL.

What happened to employment in Fall of 2008 when the markets crashed?

Think about your answer for a moment.

[William Z. Foster]

123. millions were laid off...

..and then the stock market did what?

Think about your answer for a moment.

I did not say that stocks going down increased jobs, did I? I said getting rid of workers caused stocks to go up. When stocks collapsed anyway, of course more workers then were let go. That supports, rather than refutes what I said, and quite powerfully and decisively.

Think about your answer to that for a moment, as well.

[William Z. Foster]

129. still thinking, I guess

You must still be thinking about your answer.

[HiFructosePronSyrup]

130. Not really. It was so ridiculous, I thought it was rhetorical.

When the stock market started coming back, the job market started coming back.

[harmonicon]

102. It's not often said, but I think it's true. I think "the market" should be done away with (nt)

[Enthusiast]

107. How about we do real reform.

Like restore Glass-Steagal and regulate derivatives.

[William Z. Foster]

114. too much human misery

The price we pay in human misery in order to prop back up the investment game for the benefit of the few is too high.

[Turbineguy]

108. If you look at straight investments

that is, money that goes from an investor to a company or person producing something (Wall Street's real purpose for being) and compare that to the profits and pay packages, Wall street may not even pay its way. The money tied up in exotic engineered financial instruments does nothing for the overall economy. It's Monopoly money. But backed by real money. And the purveyors are paid in real money.

So, other people have to lose their jobs and homes in order to support this. One guy gets a Ferrari, a bunch of others get a cardboard sign to stand on the freeway off-ramp with.

[Rex]

118. What we NEED is tighter REGULATION and actual JAILTIME for financial

crime that causes grievous harm to entire families and in some cases a cities population!

NANCY SAYS - JUST SAY NO TO CORPORATE WELFARE AND YES TO TERM LIMITS!

When they punish the owners or partners of corporations like they do people arrested on crack, let me know. Until then it is all just bribes against the general welfare.

[jxnmsdemguy65]

125. Excellent!!!! nt

[earth mom]

131. Wall Street has raped the workers of America for decades. Enough is enough!

:grr: