Another big financial house comes crashing down, and a lot of people have lost their jobs. Some are the individuals who made the poor deals that ruined Lehman and were richly rewarded at the time. But most are ordinary workers who in New York having the pain of losing their jobs compounded by walking out of their office with a few personal effects and keepsakes to be met by a large crowd of reporters, photographers and onlookers gawking at them. Some were carrying branded items which were a few weeks ago a piece of tat, have probably like Enron branded paper weights and slinky's become valuable souvenirs considering administrators are unable to pay staff in London one hopes they are.
All in all a capitalist economy should encorage risk taking but there is a difference between taking a calcutated risk and backing the three legged horse to win the Grand National and it shows a failure in current lasez-faire system of reguation, although I am sympathetic to a liberal system of regualtion it has shown not to have worked. The fact is it may not be the last financial institution to fail.
It was on MSNBC a few minutes ago, the paperweights and such are already on eBay...
ReplyDeleteI shall hope that you aren't being affected by that inability to pay their workers!!!
Sadly, we've been through all of this before...it was called "the Savings and Loan" scandal; you can Wiki it if you are interested.
"Those who refuse to learn from history are doomed to repeat it..."
I can't remember who to attribute that quote to, but it's very prophetic!
alan
It's boom and bust. It's always been boom and bust, it's just that the boom went on much longer than usual that many of those who remembered the last bust have retired. For the last ten years I've been watching my younger co-workers buying big cars and stretching their credit... Still, this is nothing compared to 1989. Or 1979. Or 1974. God I feel old.
ReplyDeleteThe Bush administration removed lots of checks and balances from the financial world so that bigger risks could be taken for bigger profits.
ReplyDeleteNo surprise it has come back and bitten them on the arse.
I agree with all said.
ReplyDeleteSo much has gone on since I wrote but its obvious some better regulation is required.