economic system must change?

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banks are getting way too greedy, to the point where recession and economic boom becomes a cycle. For a while banks and businesses calm down and the economy settles, but then banks and businesses get more and more greedy, and the recession that came before is farther and farther behind them. Banks begin loaning money to people with bad credit scores so they can make more money, knowing these people will never be able to pay off their mortgages. eventually the bank has no more money to give away, and people who are stuck with unpaid mortgages still aren’t paying. We are in a market of instant gratification, banks and businesses see a way to make money, they jump on the opportunity, regardless of what that might mean in the future. As a result, banks became bankrupt, leading to many businesses failing, people getting laid off.

Then, the recession is like a snowball rolling down the hill, causing panic, reluctant spenders avoid buying things that they do not absolutely need, and further businesses collapse, leading to more unemployment and more panic/hysteria. When the market recovers businesses go about as they did before the recession, not learning anything.

the government should impose some laws against overinflation so that this cycle can be stopped and markets can be stable. I must say people really are suffering, two colleagues of mine were laid off today as well as a few other friends of mine.

  1. Reply
    Cheer Up
    November 10, 2011 at 4:12 pm

    You’re not alone. Look who agrees with you:

    Goldman Sachs should be getting split up so it’s not “too big to fail.”

    Same for JPMorgan and the other large financial houses.

    Congress should be reinstating Glass-Steagal and the other regulation that was systematically dismantled by an overwhelming majority of both parties during the Clinton years.

    Congress should be investigating the crooks at the SEC who gave Madoff a free pass for 20 years. They should be in prison longer than he is, because it was their job to stop people like Madoff.

    That would be just the beginning of the reforms that are urgently necessary.

    Instead, all we get is a partisan witch hunt over Bush interrogation tactics. Sounds like a smokescreen to divert attention from what a failure Obama is.

  2. Reply
    Bored Goblin
    November 10, 2011 at 4:55 pm

    yeah, it sure has to. Karl Marx was the first to point it out.

  3. Reply
    November 10, 2011 at 4:57 pm

    is there a question in here?

  4. Reply
    Reuben Goldstein
    November 10, 2011 at 5:48 pm

    Hi Shuo,

    I am in agreement with you that the economic system must indeed change. But what must be considered is how best to instigate that change and make changes that will last. We have tried before to regulate things and all those attempts didn’t work. In fact a large number of banks were fined for breaking terms and conditions on lending. All the regulations that we try and impose are invariably circumvented by peoples egoistic desires that will always try to get out of things. Similar to people who dodge taxes.

    These attempts to change the system failed because people have failed to take into consideration the human ego which has now grown to enormous proportions. It’s for this reason that Communism failed, because Lenin did not take into account the fact that people want to receive for themselves and they don’t want to give. As you quite rightly pointed out what we really need is a cure for greed, but what that entails is a change in the attitude that we have towards each other.

    Our current financial system is just reflective of the lack of connection we have with other people and the inherent hatred that we currently relate to our fellow man with, because of our egoism. Changing that is the key to changing the economic system and indeed changing the world. Every other thing that you try to use to change things will be destined to failure. In order to kill a weed you need to take it out at the root.

    Have a look at the following links because I believe they offer a remedy for the current situation:

  5. Reply
    November 10, 2011 at 5:54 pm

    Change, I can believe in. But change to what. An economy based on being “not greedy.” Wouldn’t that mean that instead of trying to make a profit companies would try to lose money. And when they lost more money than they had where would the money to operate come from? Borrowed from “not greedy” bankers who were trying to make bad loans instead of good loans. That looks worse than what we have.

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