Capitalism and Greed
Capitalism is in crisis again. The media frenzy Announce Financial Apocalypse now, revived the old thesis of the terminal crisis of capitalism, this left many thinkers have predicted for generations, the International Monetary Fund, Soros, economists from all over the world come on to suggest that this would be one of the worst crisis he has faced capitalism.
Whether this is important to understand, as far as possible, the dimensions, causes and real consequences of such events that shook the entire planet. But perhaps we should build it before re-conceptualizing capitalist system, what is its essence and ultimate reason: the alpha and omega of such systemic issues. Many understand it as private enterprise or private property, exploitation of man or the right-wing government, the theories of Adam Smith or Milton Friedman, the law of supply and demand or the "invisible hand." Nevertheless, and to go much further core, but in all these characterizations have been part of the truth, the capitalist system is essentially a political, social and economic context is based on the pursuit of profit for all capital you can get a profitability. That is, get a higher benefit over investment and hence, to hoard profits on earnings. That is, the values \u200b\u200bthat drive the capitalist world are nothing short of that old, discredited sins like greed, inordinate desire to possess and acquire wealth to hoard, or greed, excessive desire for wealth. The world order is sustained, today more than at any other time, on this type of behavior from not just the set of human virtues, ever so little, but rather its antithesis.
may be discredited thesis of Smith or Friedman and may disappear private property, market economy and government from the right, but if you continue to profit as the reason for human society, will capitalism prevail and find the appropriate institutions for their implementation. Profit is final, and in simple words, the real reason for the current crisis. So deeply understands what the President Bachelet who was allowed to say this to the nations of the world. Good for her, but it could also say that the AFP Chilean economic groups in Chile pillage the environment and exploit workers because of their insatiable greed. Better or for worse, Chile is the paradigm of unbridled capitalism and the land of greed and greed rampant at will, and the animals thrived in the beginning of time. But nobody is prophet in his land and if the president do so, runs the risk of getting long in the polls of La Tercera and El Mercurio and from there, the Coalition could lose the election.
For those who do are more than just economists, we are not allowed to speak so lightly about such complex and so intertwined phenomena. There would be serious and it would be a huge lack of professional thoroughness. Hence we have, necessarily, the task of making greater efforts to understand and explain such situations. Otherwise necessary, since there is much that is said and written about it, but there is little that can be understood. Come by
. Today-and macro-economic terms The capital has two major areas for profit: the real economy and / or financial economics. That is, can invest in a dairy plant, a copper mine, in a carrier, or any other activity that means something that has consistency produce physical or intangible, for example, a service operator or a company accounts that do not give anything material, but we do provide a profit, serve. The rate of maturation of these investments depends on the type of activity, but obviously is not immediate. If we invest in planting tomatoes, we expect the harvest time that will never be less than six months. The alternative is the world of finance. Today, in this world almost virtual, tomatoes are harvested from the overnight and the trees grow in a split second. Nothing wrong no? the brave new world, the goose that lays the golden eggs, the lamp of Aladdin, the cave of the Forty Thieves, the kingdom of Midas and all those childhood fantasies to dream about a life easier and without the troubles of the biblical statement " earn their bread by the sweat of your brow. " Today, thanks to the characteristics of the global financial system, it is possible to earn much more, and shorter time-real activities and we will see why.
However, if greed as the supreme value of humanity Capitalism add the current financial market characteristics, we understand the causes of the current crisis: Why you will win 100 if you win 500? Why are you going to produce milk if you can buy financial instruments that rent more? The first problem is that financial instruments do not eat tomatoes and yes, listed shares do not contain the nutrients that milk that children worldwide need for food, the second problem is that when money is invested in shares or financial instruments, you stop investing in the production of milk and wheat and, consequently, less economic activity, less employment, less milk and more hunger, more unemployment and more poverty. According to Lynn Walsh, editor of Socialism Today, during the period 1980/90, the capitalists increase their profits through increased exploitation of workers, but the capital investment has fallen to historic lows. That is, there has been a surplus of profits not invested in the creation of capital goods for real output and the surplus has been a major source of money that has been introduced in the financial sector.
This is precisely what has happened in recent decades. There are few specialists who say that today the capitalist economy as a whole is nothing a huge casino where the rich of the world will be played on savings and wealth in the world: some will lose, but others will gain a lot. Meanwhile, the savings of workers who put their pension funds in the AFP and that they in turn risk in financial markets, it is distributing step by step: one for the profits of the AFP, another to pay the commissions financial traders who traded stocks or financial instruments that the AFP purchase, and a not insignificant portion to support operating costs, electricity, water, rent, meals, travel, luxury office materials, etc.-and salaries executives of banks and investment funds that trade these financial instruments. All this with a highly risky promise to increase your pension fund, ie a high probability that it is not true. If it materializes, either the worker, for financial operators, banks and the AFP, if not bad only for the worker, as the AFP and cut his hand, bank executives have already received their wages, costs operation have already been paid and the commissions already paid. All this with the funds they require workers to provide for their future pensions. Just as the workers who put their retirement funds in a pension fund, there are other people who put their savings into stock markets and investment funds who face the same fate.
shocking data that substantiate these arguments, the financial sector has been the fastest growing in the global economy. In the early eighties, the total financial assets (stocks, bonds, loans, mortgages) was approximately equal to the global Gross Domestic Product (GDP), ie, equal to all the planet's wealth. At the end of 2005 was equivalent to 3.7 times the global GDP, or nearly four times the global wealth, which means that there are not enough planes, tomatoes, shoes, wheat and milk in the world, to realize the value of all financial assets. A few businessmen have in their hands the wealth of planet that is produced today and that will occur in the next 4 years. At that same time period, the nominal value of financial derivatives, which are instruments or contracts whose value derives from having financial assets, represented three times the value of total financial assets and 10 times world GDP (Lynn Walsh) .
What we see clearly in recent years is that the owners of capital have not only accumulated more and more wealth, have also sought higher returns through financial speculation and less on actual production. This is because somehow, the business cycle in the non-financial economy has been shrinking and choking, among other things, the growing concentration of wealth that limits the expansion of demand and declining productivity of natural ecosystems to be subjected to over exploitation. This reduces the rate of profit in the real economy by pushing the capitalists to financial speculation. This, in turn, reinforces the loss of dynamism in the real economy by reducing capital investment migrates as the financial market.
see clearly how greed has been deployed around the world without restrictions and how it has diverted a huge wealth of real output and useful, tangible or intangible, to support a miserable and cruel orgy of profit and accumulation, as unemployment, poverty, hunger and inequality spread like wildfire. Curious and downright insulting: to combat the famine that afflicts over 800 million people, the world's nations gathered 16 billion dollars, more, to resolve the financial crisis of Wall Street the U.S. government allocated 700 billion dollars "Amen to all that has already cost this country and other developed world their numbers are similar, ie 44 times more to continue the unbridled absurdity of Wall Street to address the hunger of the needy" dog world no?
triggered the crisis: Subprime Mortgages
As has been repeated ad nauseam, this crisis has been called the subprime crisis and has to do with mortgage loans made by U.S. banks to people who were unable to meet its obligations. As we know, in 2001 there was another financial crisis known as the "Internet bubble" that developed due to the successful entry into the stock markets of Internet firms in the United States with Yahoo and Amazon, and Spain with Terra- thanks to the very high expectations of business to be based on overly optimistic projections on the number of users who were going to capture. Well, they did not materialize, leading to the decline in funding and led to another liquidity crisis. Then the Federal Reserve Central Bank of United States-to provide liquidity to the system in two years brought down the cost of borrowing from 6.5% to 1%, which was a strong incentive to expand credit, as the low cost that the Federal Reserve charged to banks and investment funds by borrowing money. This helped the housing market and helped in 10 years, the real price of housing is multiplied by two in the U.S., thanks to increased demand that favored the availability of loans.
If to this we add the fact that for years, prevailing interest rates in international financial markets have been considerably lower, we understand the need for banks to increase credit supply to compensate for reduced profit margins meant falling interest rates. Logical rationalization of the expansion of housing loans to insolvent people was very simple: as more risky, they charge more interest and if they pay well, but if we were charged with houses priced considerably higher money will allow us to recover paid and earn a surplus. The error is obvious, house prices were being pushed up, among other things, the increase in funding poor-quality mortgages made up the demand and, consequently, the future price and supply of houses. That is, a real estate boom artificially constructed. These mortgages are called subprime mortgages, as opposed to so-called prime mortgages that have very low risk of insolvency, because their borrowers are clients with work, active and stable income.
However, the increase in the number of bank operations, cos they could not afford their own resources, so that, thanks to globalization, which remains in line to all the world's financial markets, banks could use for international funds. This, under interbank market is where banks lend money to each other. However, it weakened the enforcement of so-called Basel rules require that banks with a capital of not less than a certain percentage of their assets-which include the loans they make. That was precisely what was happening: the rise in subprime mortgage loans were made to break those rules. To save the situation, the banks acted implementing two mutually articulated operations: first, creating the so-called conduits, which consist of branches of banks in the legal form of investment funds, thanks to legislation in force today, were not required to show consolidated balances with banks that had created and which belonged to the owner, and second, creating the "Certification" which is the invention of a new financial instrument that is nothing more than a package of mortgage, in which mixing both the prime and subprime loans. Consequently, the bank now had a set of new instruments were called MBS (Mortgage Backed Securities) and consisted of a set of obligations secured by the mortgage of the property and that they were just gathered baskets of different categories of credit risk. Grace is that it made the MBS had a lower risk than subprime by themselves, since their risk averaged with that of the prime.
financial With these two inventions, the bank made the funds (their conduits) buy these MBS instruments and thus could magically reduce the vulnerability in its loan portfolio and increase the ratio of its capital and loans. This is because it sold its portfolio of customers to their funds. The absurdity is that the bank and the funds belonged to the same owner, but, in this way managed to meet the Basel standards. In turn, these investment funds through the interbank getting the money to buy MBS, and Moreover, these MBS sold to other investment funds, venture capital companies, insurance, financial, asset and pension fund managers.
But for all this could operate "cleanly" is required the support of the rating agencies, ie, they had to be well evaluated by the rating agencies, who qualify based on the creditworthiness of financial instruments. To sell the MBS highly risky for operators such as venture capital companies, the AFP or other funds seeking higher returns, among other reasons because it meant to receive commissions based on the profitability, the banks managed to of rating agencies, a reclassification of financial instruments. To this came a new "Certification" or restructuring, this time from the MBS, creating new packages but they were called MBS tranches. Those most likely to pay were reclassified in AAA, that is, with the lowest risk, the most creditworthy. These sorted MBS tranches were renamed as CDO (Collateralized Debt Obligations), ie, debt as collateral relied on the characteristics of other debts. The story continues, as these CDO created with other tools such as CDS (Credit Default Swaps) offering more and more interest on mortgage debt of doubtful credibility.
All these operations were as a starting point, or hypothesis, that subprime mortgages would be paid and that the U.S. housing boom would not stop ever, constantly increasing property prices. However, in early 2007, U.S. home prices plummeted. Mortgage borrowers realized they were paying for their homes more than they cost now and could not or would not continue paying their debts. Automatically, no one wanted to buy MBS, CDO or CDS, and who and had failed to sell. Total loss. The crisis of credibility was installed immediately and the banks had recourse Once again, interbank loans, but either unable to borrow or were at very high rates. Consequently, there was the dreaded credit crunch, that is, no money, so it does not provide any loans or mortgages, falling demand from construction companies, dropped the price of their stock, began to raise rates interest and housing debtors began to pay more for debt, less creditworthy companies are barred their access to credit, banks were left without resources and began to sell stocks, bonds, buildings, and all this began slowly to pass prices and global demand, as unemployment began to increase, inflation and falling all the real economic activity. Ie recession.
The Root Causes of the Crisis
Many have argued that the cause of this financial crisis is the so-called subprime mortgage bubble. However, this only corresponds to triggering the crisis. Its root causes are related to the deregulation of financial markets, the behavior of rating agencies and the conduct observed by the world's central banks.
In the financial sector there is a group of hedge funds that bet on unregulated financial products with a high risk, known as hedge funds, and a group of investment banks authorized to operate in the capital market. Both now represent over half of all credit, while traditional banks are increasingly engaged in non-regulated speculative stocks, such as mechanisms of "Certification" that are not required to report on their balance sheets. These operations rely on the complicity of political authorities, was authorized by changes in government legislation, the "financial deregulation" - to the point that today, the main activity of investment banks and hedge funds is to buy and sell debt among themselves, getting obviously, any profit from each transaction. This has contributed, too, the development of computer and telecommunications that enable online financial transactions 24 hours a day throughout the world.
Nevertheless, as Lynn says Walsh, the most important factor is political and ideological. The "financial deregulation" is part of the ideological shift that operated during the last three decades of the last century, when it abandoned the liberal-inspired economic policies Keynesian and took those recommended by the Chicago School of Milton Freidman. A sort of return to the liberal policies of the early twentieth century. So also, is the result of the charge asymmetric forces pro-capitalist policies in most of the Western world and the abdication, and in many cases subordinate role for much of the political forces capitalists to the logic of capital. The "financial deregulation" is the favorite daughter of those ultra-liberal economic policies that have led to the various crises faced by the world in the last 30 years and, particularly, the ongoing subprime crisis. The International Monetary Fund himself in 1998, argued that the crises that have come to have global effects are explained by processes of deregulation and liberalization financial, as well as innovation in capital markets late last century and early twenty-first century, more than other causes.
Girón and Correa contends that among the most important structural financial changes that occurred in the past 30 years, it may be noted: the shortening of the time deposits and financial instruments and the development of an active secondary market, which has significantly reduced the time for the completion of the gain, the growth of the practice of "Degree" of credit, the enormous growth in operations "out of balance" of banks, in particular with the use derivatives and the management and trade debt, and the strengthening of mutual funds with a high degree of concentration of financial assets in the hands of a few managers who can move large volumes on short notice. All these changes have led to very worrying features of the international financial system, one of which is the lack of transparency, since nobody really knows what the risks associated with investments terrifying Another feature that damages a critical foundation of the banking system honor the commitments, ie the certainty that the debts are paid, is the separation between creditors debt and those who arbitrate, ie between those who must collect, banks, and those who traded securities based on these secondary-market debt funds, or conduits, in the predicament that when a debt is secured and sold has no relevance to the fact that the original debtors are able or not to pay those debts. According
John Hoefle, deregulation of U.S. financial system, which runs the world's financial markets were allowed to systematically eliminating protectionist legislation that resulted from the policies of President Roosevelt's fight against international bankers in thirties. Hoefle recalls that in 1993, the Commodity Futures Trading Commission (CFTC), the government agency responsible for regulating the futures market, determined that the derivative transactions made outside the stock markets, would be exempt from all regulation. This included future operations of any kind, including those related to energy. Also, in 2000, adopted the Commodities Futures Modernization Act which left some orphans derivatives without government control and supervision of the CFTC.
Another important change that "deregulated" financial activity by the euphemism of modernization financial services, was the Financial Services Modernization Act of 1999, which represented the biggest change in the regulation of U.S. financial system since 1930. The Act created a new type of financial institutions called Financial Holding Company (FMC), authorized to carry out activities in securities, banking, insurance, as well as in any activity classified as financial. This will break the separation between commercial banking and investment banking, which established the Banking Act of 1933, because at the time of the Great Depression, a large number of bank failures were attributed to speculative activity by banks in the stock market.
economist Emilio Ocampo adds, furthermore, that in 2004 the rule was relaxed forced investment banks like Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers and Bear Stearns, to maintain a minimum ratio between debt and equity . This led in the period 2003/07, the debt ratio on equity of Morgan Stanley spent 23 to 32 and so did other banks. In contrast, in late 2007, total debt as a commercial bank JP Morgan (supervised by the Federal Reserve) did not exceed 12 times its equity. The report
No. 78 Bank for International Settlements (BIS) "it is undeniable that changes in the financial system over the years have also contributed significantly to the outcome of events. In particular, the numerous innovations related to the spread of financial model based on originating and distributing risks have had a tremendous influence. Recent innovations such as structured financial products initially were considered a good way to spread the risks. However, the way they were made significantly worse quality of credit ratings in many markets and was a clear lack of transparency, which has generated a huge uncertainty about the actual amount of losses and their distribution. Indeed, innovative financial techniques of "bundling" and Redistribution of risk to which they were more expensive but less likely, at least for some time. In practice, this meant that the risks inherent in new loans seemed to disappear, thus raising the ratings, until suddenly reappeared to materialize completely unexpected loss. "
The legendary Nobel laureate in economics, Paul Samuelson, author of textbooks that many economists we should review and refine our years of study, in an article published by El Pais newspaper in January, says that when Bush became the presidency in 2000 and the Republicans win a majority in both houses of Congress, the "compassionate conservatism" of Bush compassionate resulted in tax giveaways to the plutocrats, and a further deregulation of business accounting that would allow them to hide losses and inflate the benefits through a balance sheet management that violated strict accounting rules created in the years before Bush. Professor Samuelson continues, "bankruptcies and macroeconomic swamps the world is suffering today are directly related to the financial engineering shenanigans that the official apparatus approved and even encouraged during the Bush era."
No less important has been the role of central banks. The role they played also played a critical factor in this crisis, since, using the mechanism of abnormally low interest rates, supplied the big players with fresh money, low-cost operations. Recall that central banks act as lenders of banking and financial system, for which set an interest rate that acts as a benchmark for credit operations. In particular, the Federal Reserve, the U.S. central bank, increasingly faced with a threat of instability, responded with new injections of liquidity. Alan Greenspan, a long time at the head of the Federal Reserve, was the architect of this policy which continues today Ben Bernanke. Moreover, government debt has been one of the most important foundations for the growth of financial assets. Some argue that growth in the 2001/07 period was fueled by low interest rates, Greenspan and Bush's huge budget deficits that made up the titles and volumes of debt in the financial system. Likewise, the European Central Bank has been injecting cash flow for banks to have money.
Torres Lopez argues that central banks are partly responsible for the crisis in the first place because they corresponds to the work of monitoring the status of business banking, warn of the risk and prevent their consequences. There are few instruments that have to do the task and is not negligible information available about the real financial situation that was being generated, but chose the complacency and silence regarding the increased volatility and the real risk of global recession that was incubating, and secondly, because central banks have used monetary policy, which is an instrument of economic policy, only to control inflation, forgetting any other purpose, such as output growth or employment and acted as a support financial system by providing liquidity to speculative business.
As argued by the Bank for International Settlements (BIS), in recent years have clearly shown a series of unusual financial and economic trends, such as the rapid growth of money and credit, in the context of inadequate assessment risk across the board. The high rates of money and credit growth registered throughout the world for a long period, among other things, are the result of a monetary policy based on official interest rates extraordinarily low in recent times, compared with their levels of post-war This was possible through increased credibility that central banks have in recent years.
Moreover, in this crisis, the rating agencies have been frankly incompetent or engaged in serious conflicts of interest. Debt insurers that act as collateral in all-denominated debt issues Monline because that is their only activity, which began insuring debt of U.S. government institutions and for some years decided to expand their business and embark on emissions private endorsing any type of bond or financial instrument structured as MBS, CDO or CDS, have lost credibility and, consequently, the stock valuation trade. These were even accused of being heavily involved in the business and explains why they were not interested to show the true and dangerous nature of the securities and financial instruments.
discontent against these rating agencies are spread throughout the world, since they were unable to foresee the risk and continued sorting through notes AA (low risk) financial instruments contaminated with subprime mortgages. Rating agencies like Moody's and Standard and Poor's, among others, gave the highest ratings (AAA) financial instruments that were known as the subprime loans backing. Lehman Brothers, the giant U.S. bank recently-fallen held a low-risk classification (AA) a few days after his resounding failure. U.S. Risk Insurance world's largest - Fitch, Standard & Poor's and Moody's-have been blamed by the U.S. Congress of the crisis and its consequences. More oil was The Wall Street Journal, who has said that these insurers not only pushed the crisis, but a lot of money won titles with subprime mortgages contaminated. Maximum ratings of these financial instruments that gave this rating, allowed them to sell and put those "instruments junk to investment banks, in return, as not-for substantial market rates.
Life Crisis
Ignacio Ramonet, quoting columnist Martin Wolf of Financial Times, reports that estimates range from twenty years if we're lucky, or less than ten years if the authorities act with a firm hand. The truth is that the dimension of the problem is not well calibrated, there is still much uncertainty and this is reflected in the frenzied rise and fall of the stock. It is not known who are all affected, how many banks, many AFP, many mutual funds.
Clearly, the duration of the crisis depends on the amount of losses that could occur in the course of it. Lynn Walsh citing Morris's book "The Trillion Dollar Meldown" argued that only the losses on subprime mortgages amount to 450 billion dollars, but today is known to be a low estimate of the amounts that the U.S. government has invested in sustaining financial market. For companies greater potential losses estimated at 345 billion dollars in credit card losses amount to 215 billion dollars. In total, a billion dollars in losses and wealth vanished. If this is added the potential loss of the CDS-the-side debt and are hard to pin down, would not be eager to continue to benefit since any figure who ventures should not overlook that the nominal value of these amounts to a staggering $ 45 trillion. That is why Morris argues that if the CDS fall "we would be facing a complete thrombosis of the credit system" and that, given the volume, it is pointless to try to estimate the magnitude of losses. For sake of completeness, Morris argues that a crisis chaotic, convulsive, a disastrous collapse of the financial system, could cause losses of up to $ 3 trillion.
solution measures
Financial crises are difficult to avoid in the context of capitalist development more even in the context of a capitalism with a hypertrophied financial system. The old saying "greed breaks the sack" is applied to this capitalism financialized mathematically, but here we talk about bags and no bag. The uncontrolled ambition is the breeding ground for these monumental crises, where speculative activities are not only the daily bread, are also shown as more legitimate activities, technical, political and moral. However, there are economic policy instruments and institutional and legal mechanisms that can correct and contain such crises. That's what was used in the thirties as a result of the Great Depression: a whole institutional system of economic regulation which has led to dismantling the current crisis. Among other measures, consideration should be imposed on international capital flows, lace systems forced to swallow the short-term capital to maintain a percentage of their capital in countries of destination for their investments, which increases investment and punishes speculative famous eliminate tax havens, forcing banks to transparency by the end of the operations "out of balance" that enables them to cover risky operations, building state institutions devoted to the risk classification to prevent conflicts of interest. In short, more control and regulation by public institutions to ensure citizen interest above any other political goal. Not far off to return, in glory and majesty, the antitrust laws should never be abandoned.
That is, nothing more, which suggests Michael Moore with his special way of communicating, by requiring that "all regulations must be restored" and order the death of the Reagan revolution, who noted as part of its deregulation policies " The problem is not the state, the state is the problem. " In particular Moore proposed to the United States to revoke the Financial Services Modernization Act of 1999, enacted by Clinton and promoted by Republican Senator Phil Gramm, chief economic adviser to Republican candidate John McCain. This proposal is very likely to be welcomed in a new government led by Democrat Barack Obama.
Most immediately, it would be possible to bring into play the power that sovereign investment funds created by states and central banks with funds mainly from the oil and gas. Russia, Norway, some Asian and Arab Emirates, have established such funds whose size is estimated at 3 billion dollars. Have their origin in the fifties under the assumption constitute a "fund for future generations" and have, as claimed by Ibrahim Warde, characteristics, objectives and different modes governing the hedge funds responsible for this crisis. This and their financial power, makes functional political-strategic objectives apart from the speculative frenzy that characterized the economy finaciarizada. In fact, have been playing an important role in politics bailout banks disgraced over the last thirteen months that lasted the subprime crisis. As highlighted by Warde, in November 2007, the ADIA fund of the United Arab Emirates bought 4.9% of Citigroup, the first World Bank; two weeks later, Singapore's GIC injected U.S. $ 10,000 million in the Swiss group UBS, tenth World Bank. In December of that year, the Chinese sovereign wealth fund CIC bought 9.9% of the large capital investment bank Morgan Stanley, Merrill Lynch received 4,400 million dollars from Singapore's Temasek fund. This among other operations being undertaken by these funds and now, in light of the flagrant failure of the financial market to solve the problems created in the context of deregulation, might be skillful and politically used to manage the flow behavior international investment.
Other important reforms that should implemented, is related to wage policies for senior executives. Emilio Ocampo argues that companies and banks must change their culture and compensation structure and bonds, since it is unlikely that these institutions can continue paying their executives and employees 50% of their income. Moore in the same direction requires that "no executive should be paid more than 40 times what their average employee earns." Moore's figures are shocking: in 1980, the average president of a company earned 45 times what they earned their employees in 2003 earned 254 times and now after the Bush era, charged 400 times, while in Britain, the president of an average company earns 28 times what a typical employee received in Japan and only 17 times. Conclusions
In an article by Victor Ramos, entitled "Right to food, right to rebel", it is argued that very recently, when the bombs fell on Iraq in March 2003, international stock markets, mainly European and Wall Street reacted with euphoria and this would have led to recognize leaders of the English Popular Party (PP), which Spain had lost a great opportunity to withdraw troops. The quest for exorbitant profits has brought the world to a grave setback in the structure of values \u200b\u200bthat guide human affairs and this has implications monumental by growing inequality, poverty and destruction of natural ecosystems on the planet, skyrocketing rate of pain and suffering of thousands of millions of people. When humanity to regain its center and restore certain values \u200b\u200band human virtues that have been sent to the penalty area during the last thirty years, most likely what is happening on Wall Street will be incorporated into the group of large disasters human history, as were the Nazi concentration camps, Stalinism, nuclear explosions of Hiroshima and Nagasaki, AIDS, hunger, African and Latin American dictatorships among many others.
Meanwhile, while this crisis that is not as expected by the traditional left-wing thought as the "terminal crisis of capitalism", at least hopefully Ignacio Ramonet, an editor of Le Monde Diplomatique, is right when he argues that the collapse of Wall Street is comparable, in the financial sphere, to which was, on the geopolitical arena, the fall of the Berlin Wall, which would end the era that began with Ronald Reagan in 1981, ending the " golden age "of Wall Street. If this happens it would be quite an achievement and progress for humanity, but, as Paul Samuelson argues, everyone knows that today, the money used to buy votes legally. So the nuance realistic optimism with caution.
Marcel Claude, an economist
References
Ignacio Ramonet, The End of an era of financial capitalism.
Fernando A. Torres, Armageddon comes upon the "free market."
Michael Moore, How to fix the mess on Wall Street.
Leopoldo Abadía, La Crisis Ninja.
Victor Ramos, Right to food, right to rebel.
Alicia Girón and Eugenia Correa Global financial markets, deregulation and financial crisis.
Bank for International Settlements, BIS, Report No. 78.
Clara Elena Parra and Natalia Salazar, The Financial Crisis and the International Experience.
John Hoefle, The lesson of the Enron debacle: the regulation must be restored.
Emilio Ocampo, Requiem for Wall Street.
Ibrahim Warde, The "sovereign funds" absorb banks.
Lynn Walsh, Global economy: A crisis foretold.
Alicia Girón González, Financial Crisis: causes and effects.
Juan Torres López, Ten ideas to understand the financial crisis, its causes, perpetrators and their possible solutions.
Paul A. Samuelson, Bush and the current financial storms.
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