Here’s what happened in 2008: Imagine you’re the person and you go to the first window and they say, “It’s going to be five dollars.” And you’ll say, “Fine, where’s my Big Mac?” And they say, “It’s 10 yards.” And you say, “I don’t trust those 10 yards because I heard what happened to Lehman. People lost money on this. I’m not going to give you my money unless you give me my hamburger.” And they say, “I’m sorry the system is built on the assumption that you will trust that.” So what happens? You go away hungry even though you can pay for it and at the next window, they throw away the food even though they have it.
Units of measure for today’s philosopher, i.e. force in the dollars and distance in yards. It is great to hear from a philosopher on this issue.
“What hasn’t yet evolved enough is the replacement in our minds as to what actually is the engine for economic growth. The transition from banks being viewed as serving the economy to banks being viewed as a standalone, occurred in a bigger context where somehow “finance” became the next level of cataclysm.”
So banks went from being a node in the service industry and having a large potential (standalone), to an edge (cataclysm) without any potential. In other words, the bankers are standing at the edge of a road and trying to manage traffic (kinetic energy) before crossing the edge, whereas before they simply had to maintain the potential (potential energy) of the bank.
So I think it is safe to say that the banks today are mostly kinetic energy, where they were once mostly potential energy. The bankers are now trying to control what they used to have command of, the traffic in the financial markets called financials.
Spoken like a true philosopher.
It may be time to take away the economy from the bankers, but you also need to understand that today’s bankers are likely using a different set of skills than the ones that came before them.
So the question might be: who are you going to give those skill-sets to–the traffic cop (regulators) or the traffic (markets)? show less