Wall Street Heal Thyself

According to Robert M. Morgenthau, district attorney for Manhattan, N.Y., in today's WSJ (Too Much Money Is Beyond Legal Reach, September 30, 2008, Opinion, WSJ) trillions (that is, $3.4 trillion to be exact) sits in secrecy jurisdictions such as the Cayman Islands. It seems that the financial industry could help itself out if it was just willing to fund its failures with its financial successes. Here is what Morgenthau says,
A major factor in the current financial crisis is the lack of transparency in the activities of the principal players in the financial markets. This opaqueness is compounded by vast sums of money that lie outside the jurisdiction of U.S. regulators and other supervisory authorities.
The $700 billion in Treasury Secretary Henry Paulson's current proposed rescue plan pales in comparison to the volume of dollars that now escape the watchful eye, not only of U.S. regulators, but from the media and the general public as well.
...
If Congress and Treasury fail to bring under U.S. supervisory authority the financial institutions and transactions in secrecy jurisdictions, there will be no transparency with the inevitable consequences of the lack of transparency--namely, a repeat of the unbridled greed and recklessness that we now face.

To have Wall Street now point a finger of blame for the 700 pt drop in the market proceeding the failure of the bailout in Congress is both incomprehensible and infantile. Though it certainly hurts us all, it should serve as a lesson in greed for Wall Street, don't you think??

Jerry Large in his Monday, September 29, 2008 column in the Seattle Times quotes David Korten, Bainbridge Island author and lecturer (When Corporations Rule the World), "It is an illusion that if you are making money you are creating wealth. Real wealth is created by investing in the human capital of productive people, the social capital of caring relationships and the natural capital of healthy ecosystems." According to Large, What he rails about is not the bank on the corner, but the guy in a penthouse in New York buying and selling paper. His criticisms are shared by far more people now. Hardly anyone with a functioning brain still thinks the current system is fundamentally sound.
Large goes on to paraphrase Koren, Main Street is where people produce, distribute and consume real goods and services. It's where real wealth is created and where business activity, at its best, is rooted in community. But today, where Wall Street and Main Street interact, Wall Street is a predator...It buys businesses to break them up and consume their assets, and it turns home loans into fodder for speculators.
Finally, he concludes that we must be "willing to retool our institutions and our culture to produce a healthy economic system that works for all of us" if we want to learn a lesson from the current mess.

'Nuff said.