Global Financial Meltdown

I just read this long article in Rolling Stone about the global economic crisis. http://www.rollingstone.com/politics/story/26793903/the_big_takeover. It gives a very comprehensive and yet amusing (because of Matt Taibbi's sardonic writing style) explanation of the global financial implosion.

During the past few months, as the world economy (and my 401K and my children's 529s) have tanked, I have been thinking about how we can get the best and brightest young people in our country to go into government service instead of working in finance. As long as an investment banker or hedge fund manager can make tens if not hundreds of millions of dollars working on Wall Street and the maximum pay grade in government is below 6 figures it is going to be very difficult. The incentives are too distorted.

What I think we need is a Peace Corps or ROTC type of program that would give graduates the opportunity to go into government service in return for having their college and graduate school paid for, or their loans forgiven. If we could get whiz kids majoring in math, accounting, finance, economics, and law and business school graduates to go work for the SEC, the Federal Reserve, the Treasury, NASDAQ or the OTC maybe these regulatory agencies could keep up with the greedy bastards on Wall Street or even get one step ahead of them. Any maybe we do need a tax code that takes away some of the incentive to becoming ultra rich.


There are some bright and talented people who go into low paying professions (think teachers, social workers, artists and peace corps volunteers) because they love what they do and the non-financial, psychic rewards are more important to them than the monetary. Unfortunately in the U.S. culture we have become increasingly materialistic and our whole economy and way of life is dependent on consumption. Since about the 1980's, more than 25 years, we have come to believe that it is our birth right and indeed the American Dream to own 60 inch flat screen TVs, the latest electronic gadgets, mega mansions, designer clothes, and SUVs. It takes a lot of money to fund that type of dream. But pursuing "things" for their own sake is just and endless and vicious cycle. Whether it's a new car, an iPhone (but I really want one!) or a new pair of shoes, the novelty wears off fairly quickly. It starts early in life. A child sees a toy advertised on TV and begs his parents to buy it. He plays with a new toy non-stop for a few days but then quickly forgets about it. The toy ends up in the bottom of a closet, gathering dust. The bottom line is that we don't have a critical mass of bright, talented folks going into public service because it doesn't pay well enough for us to have the life we think we should be able to live.


Perhaps the silver lining the clouds of this financial storm is that we will be forced to reassess what is really important, what really creates a quality of life. To me it is to have the luxury of time. Time to spend with family and good friends, to enjoy the beauty of nature and the benefit of a clean environment, to have time to spend on creative endeavors like writing and painting and cooking, even blogging. Time is the ultimate luxury as far as I'm concerned.

I am hopeful that Obama's presidency will succeed; that the economy will recover, our troops will come home from Iraq and Afghanistan (although things are not looking good on that front today.) and we can spend our resources on something other than war and weapons. I hope having the Obamas in the White House will make it "cool" again to work for the government. Something we haven't seen since JFK was President.