Speaking of a letter to the President, I would express my disappointment in the status quo policy regarding Wall Street. I understand that real policy changes are difficult considering the lobbying efforts of the financial services industry and its expansive arsenal. Over the past decade, there has been more than $5 billion worth of political contributions made from this "industry." Equally concerning, there are some highly influential, decorated academic economists who don't seem to be bothered by this either. If you haven't seen the documentary Inside Job, I would definitely recommend it, especially given that the events of the 2008 financial crisis are no less relevant now and... Branson's text isn't going to spend much time discussing these issues.
Here's a particularly memorable clip in the film with Glen Hubbard, Dean of the Columbia University Graduate School of Business (the title is great). He also served as chairman of the Council of Economic Advisors from 2001 to 2003, helping to lay the groundwork for some financial deregulation. He surely wasn't alone and maybe he deserves some credit (though I don't think so) for even agreeing to interview for this film, given the long list of economists/bankers who declined to interview including but not limited to, Larry Summers, Tim Geithner, Hank Paulson and Laura Tyson.
Three years after the crisis, no significant legislation surrounding lobbying, derivatives or corporate compensation has been enacted. After watching Inside Job, I would argue that some of the Occupy movement be shifted towards academia and the role that some prominent economists have had in shaping policy, or the absence of policy.
When asked about the economics profession (macroeconomics specifically), Charles Morris, author and former banker, posited "It has no relevance to anything really. Indeed, I think it's an important part of the problem." While I disagree with parts of this statement, it is telling in that it speaks to the dark, twisted incentive conflict between policy and personal interests.
If you don't have time for the documentary, digest the article from The Washington Post at the link below. The second page especially provides the same points that Inside Job gave regarding the complicated causation of the housing crash. The article goes further by claiming that the new problem (all too often the real problem in the US) is a denial of the truth.
ReplyDeletehttp://www.washingtonpost.com/business/what-caused-the-financial-crisis-the-big-lie-goes-viral/2011/10/31/gIQAXlSOqM_story.html?sub=AR