Thursday, November 17, 2011

Political incest: before we destroy it, we must name it!

Am I  the only one thinking about the two new government leaders in Italy and in Greece, from the perspective that:
1) the new Italian leader is an economist
2) the new Greek leader is a banker from the European Central Bank....
Was I sleeping over the last two years, or am I mistaken that it was economists and bankers (and hedge fund managers) who actually got us into this mess?
Why would those countries approve leaders with the qualifications of the "band" that got us into this mess?
Isn't that just like President Obama appointing Timothy Geithner as his Secretary of the Treasury, the same man who, immediately prior to his apointment, was working on Wall Street?
With Bush's Secretary of the Treasury coming from Wall Street, and Obama's coming from Wall Street, does it not harbour ill for high-level support for regulation of the financial services sector of the eonomy? Does the pattern not also demonstrate a kind of incestuous relationship between government and Wall Street? And the pattern could be repeating itself in Europe.
There is an operating principle in govering that change is best in an evolutionary mode whenever and wherever possible. Consequently, what's past is always prologue to the present and to the future. That includes both people and policies. Those who are often considered most "capable" are those with the most experience in the specific sector, culture and professional group, bringing the useful and inevitable "list of contacts" necessary to deploy the instant network of "cronies" (or less cynically, "associates") when once in office.
The financial markets hate (HATE!) surprises and they react to surprises more feverishly than a neurotic Wheaton terrier to an impending thunder storm. And, from the outside, it would appear that the people who control the financial markets are now in control of the potential treatment of the debt/deficit crisis in both Greece and Italy.
However, the appearance of incest between the bankers/economists/fund managers and governments is rife with  the appearance and reality of cronyism, and the root causes of the nearly bottomless tumble of the markets in 2008-9.
However, there are times when those "on the inside" need to be replaced by "outsiders" for the sake of the public interest, and that kind of political courage, to make such a dramatic change effectively, apparently requires more "hutzpa" than we have seen from political leaders in the recent past, in all western countries.
I think it might be time, if not long past due, for those in government to sever their suckling ties to the teats of the financial services sector, through campaign finance reform, through legislation that mandates such a separation, through all measures available to them, in order that "trust," that immeasureable quality so necessary to a healthy functioning economic system, regardless of its text-book name, might be restored.
Or am I totally mistaken once again, thinking out loud that they would put the goal of the attaintment of trust ahead of the priority they assign to their own bulging portfolios and profits and bonuses? How naive must I be to think that!

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