On air: Can we trust ourselves not to get into another financial mess?

marketsIf you haven’t been affected by the economic crisis in one way or another, a) you’re very lucky and b) where do you live?! I want to move there!

This past year has seen many of us who don’t really have an interest in the business section of the newspaper sneak a peak to try and make sense of it all.

Every economist was trying to get their head (and ours) around what had happened. Even the Queen of England wanted to know why no one had predicted the crisis?

In this discussionon the BBC’s Radio 4 this morning (8:45 London time to help you find it on the page), Economics editor of the Telegraph Edmund Conway and Andrew Lilico, chief economist at the Policy Exchange think tank, debate the emotion in economics and whether the the so-called efficient markets theory still holds.

Here on WHYS we’ve dedicated hours trying to look at different angles of why we are where we are at the moment with the financial crisis and if the free market is to blame for the world’s plight. We’ve even asked if testosterone was to blame for the extensive risk taking that took place behind the walls of the City and Wall Street.

Regulation was the word de jour.  Many of you said that governments should regulate the market and make sure things are stable and rational. But doesn’t that assume that we as humans are stable and rational?

Let me put it another way.If Markets are run by humans who are likely to react to major events and behaviours, how rational or stable do we expect the markets to be? Is human emotion the one thing you can’t regulate?

Take the Internet boom or the housing boom before it crashed. If you strip it down to basics isn’t this merely humans (people who run the markets) reacting to other human behaviour (those who went on a spree buying houses they can’t afford)?

“Is The Market Rational? No, say the experts. But neither are you–so don’t go thinking you can outsmart it.” That’s the headline of Justin Fox’s article written back in 2002 and reiterated in his book The Myth of The Rational Market.

This is a blog from an NPR radio program called Planet Money where they speak to Mr.Fox about the issue. They say:

“Anyone who has spent any time looking at the stock market has to think there’s at least a decent chance the whole thing is crazy — prices pinging around, investors making crazy bets, regulators trying to figure out who’s flouting the byzantine rules.”

So without getting too concerned with the semantics and definitions, is it realistic to expect financial markets to always make sense when they are run by humans who will inevitably make (in this case very expensive) mistakes? Are the financial markets only human?

And , more importantly, can we stop another recession from happening if humans are in charge of the market?

Have you been rushed into an investment because everyone was doing it and thought it was a good idea? Have you bought a house a little too soon because you were desperate to get on the property ladder? Were these decisions (and be honest) a result of careful calculations and readings of the market or were they made as part of a trend, a ‘if everyone is buying stocks I might as well do the same’ state of mind?

Madeleine adds: Mary in Oregon has just sent us this article by a former head of the IMF. It gives a very interesting perspective on the crash from the developing world.

75 Responses to “On air: Can we trust ourselves not to get into another financial mess?”

  1. 1 Gar Adel - Sudan
    July 31, 2009 at 11:11

    Dear all
    Financial markets are less than human because the humans’ inventions and can suffer from any other that the man can suffer from.

  2. 2 Deryck/Trinidad
    July 31, 2009 at 11:42

    The markets are human and therefore the markets will react to the whims and fancy of those controlling them. The problem is greed and that, CANNOT BE REGULATED.

  3. 3 Eduardo Marin
    July 31, 2009 at 11:43

    Sugestion for a debate:

    “Terrorism in Spain”

    The terrorist group ETA has killed 2 people and almost killed 60 more in two days of bombings. The main focus of UK News bulletins has been the travel disruptions caused to many tourists in Mallorca.

    I believe that is a very selfish and misleading approach, fed, obviously by that idea of calling ETA a “separatist group”. Seems it was OK to call IRA a terrorist group but ETA is no more than a bunch of naught thugs that go over the limits sometimes.

    And because of that broadcasting policy lot of people is not getting the real scope of how things are in Spain. Since there are a lot of Spaniards living in UK and reading this blog, it would be a nice thing to discuss this.

    • 4 RightPaddock
      July 31, 2009 at 23:18

      @Eduardo Marin – I’ll second that

      It would make a change from “What Women Should and Shouldn’t Wear” or “The Blurtings of Barry O’Barrel”

  4. 5 VictorK
    July 31, 2009 at 11:44

    There are countless markets, not one. Which market are you referring to?

    Those who blame ‘the free market’ are disingenuous on two scores: firstly the ‘free market’ is not an ideological construct – it’s simply shorthand for the aggregate of freely chosen decisions of individuals and firms; and secondly, blaming the free market (i.e. ordinary people) is fine if the blamers are prepared to admit their alternative to it, which is socialism, government control, the abolition of choice, and the coercion of individuals.

    The only sense financial markets have to make is that people sell what others want, buyers pay whatever price obtains in the market, and a legal framework exists to enforce contracts and punish breaches of the same. Part of that framework should involve preventing ‘casino capitalists’ from gambling with other people’s money, and holding them legally accountable when they do. Market failures occur when savers/investors have no control over – or even information about – how their money is used, i.e. when the proper operation of a market has been subverted. A perfectly rectifiable position.

  5. 6 Deryck/Trinidad
    July 31, 2009 at 11:52

    The guys behind the market are the biggest religious nuts out there. Their god is money and they have faith in their god. They have a hunch(faith) based on greed and an internal certitude that a particular stock should be gambled on because it will come good. Then bust! it all crashes.

    But just like religious zealots who have proven to be wrong they go and do the same thing over again. Our next round of boom and bust has already begun.

    • 7 Linda from Italy
      July 31, 2009 at 14:26

      Brilliant Deryk – nail hit firmly on the head, can I refer everyone to this year’s Reith lectures!

    • 8 RightPaddock
      July 31, 2009 at 23:08

      @Deryck/Trinidad – but if its their money, or that the third party investor has given their consent to invest the money in that way, then what’s it to you.

      Or are you one of those who would close down all forms of gambling, sounds a bit Taliban-ish to me.

  6. 9 VictorK
    July 31, 2009 at 12:22

    Of course financial markets are ‘only human’. All markets are about people and their choices, so couldn’t be anything other than human.

    Greed is not the driving force of markets, which involve buyers as well as sellers. Markets are driven by a desire to exchange, and to do so in a manner advantageous to BOTH parties to the exchange. Profit is commonly the motive for one of the parties (which is not the same as greed, at least without knowing how that profit will be used). But the other party is usually motivated by non-financial considerations (convenience, pleasure, aesthetics, etc).

    It’s price that relates buyers to sellers, and indicates to sellers where they should allocate their resources, & to buyers how best to expend their resources. That is the ‘rationality’ of a free market. Those acting in defiance of that rationality end up bankrupt if they’re sellers (unless state-socialism bails them out), or using their resources sub-optimally if they are buyers. Economic crashes are a necessary corrective for irresponsible decisions by buyers, sellers &/or investors (decisions often resulting from state intervention – e.g. sub-prime loans).

    • 10 RightPaddock
      July 31, 2009 at 23:01

      @ViktorK – you’ve given a theoretical economicists definition of the perfect free market, but such a thing has rarely existed, and it’s not existed in recent times.

      You write “Economic crashes are a necessary corrective for irresponsible decisions by buyers, sellers &/or investors (decisions often resulting from state intervention – e.g. sub-prime loans).”

      I’d add “and decisions resulting from lack of state intervention – e.g. failure to reign in the proliferation of Ponzi schemes, such as Mr Madoffs, of which state regulatory agencies were fully aware.”

      You also write – “Those acting in defiance of that rationality end up bankrupt”

      But either they don’t end up being bankrupt because the tax payer is “FORCED” to bail them out, or the bankruptcy laws are so pathetic that they are effectively “get out of jail free cards” or a combination of both.

      I appreciate that markets will fail for the reasons you’ve proffered. But why should those who’ve always paid their taxes in full and on time, who have a lifetime record of managing their financial affairs in a prudent manner, who’ve never had a check bounce, who’ve never been levied any overdraft charges, who’ve paid off their mortgages on or ahead of time, be made to pay.

  7. 11 Nigel
    July 31, 2009 at 12:25

    Unfortunate truth is that those who have succeeded in amassing money and wealth have used their heads not their hearts and emotions to get where they are. It would seem though that the effect of success would be emotional and opposite to the effect of having your personal income trashed. As hard economically as it is, the overriding result of losing income is emotional. The old cause and effect syndrome.

  8. 12 patti in cape coral
    July 31, 2009 at 12:57

    Is economics emotional? I guess if you lose your house or livelihood because of it, it can be very emotional. For those of us who didn’t have a lot to begin with, we didn’t lose much, so our emotions are on an even keel. It is not pleasant to see so many others losing their homes, though.

  9. 13 Crispo
    July 31, 2009 at 13:28

    Markets are emotional, because in real terms and aspects its the people with the ability to buy who form the actual market and not the place of transactions. Depending on what structural form that allows people to meet and do business, the whims and sentiments at these places are for the buyers.

    When people speculate in the market, it seems to us that the markets are reacting, but in reality its the emotions of the hidden faces of those who represent the actual market that the emotions are actually for.

    I don’t know if you do understand the church-church situation. Who is the real church, the people or the buildings? That’s very much the case here.

  10. 14 scmehta
    July 31, 2009 at 13:41

    Those who knew and saw it coming never disclosed it; they crookedly kept putting up an over-confident front. These are the kind of money-players or institutions who are never emotional in their heartlessly selfish manipulations; otherwise, economics is all about social, ecological, gainful, justifiable and emotional regulation of the material resources and labour/workforce of a society.

  11. 15 Roy, Washington DC
    July 31, 2009 at 14:33

    The “If everyone else does XYZ, then I may as well do the same” mentality is a big part of what got us into this. People (especially here in the USA) saw each other buying houses and other things they couldn’t afford, and they decided they wanted one too. It’s a herd mentality, and in the past few months, we’ve seen what kind of effect it can have. Greed factors in as well, as others have mentioned.

    As for emotion, I’d say that is more of a reaction to what is happening than a cause. In some cases, as when someone is laid off from their job, this is understandable…but in other cases, as when people took on loans they couldn’t afford, I say “too bad.”

  12. 16 Roy, Washington DC
    July 31, 2009 at 15:10

    To expand on what I said about herd mentality — It isn’t just consumers who are guilty of this. Companies see other companies lending and spending recklessly, so they decide it must be safe to do so. Then, they see other companies being given bailouts, so they decide they want one too.

    The auto industry bailout is a good example of this. It struck me as an egregious case of the auto manufacturers saying, in effect, “We see other companies being given bailout money, and we want a piece of the pie too.”

  13. 17 Shaun in Halifax
    July 31, 2009 at 15:22

    Are markets emotional? Yes. Yes the are.

    Qualitatively, humans are ruled largely by emotions. We can effect another’s decisions by getting them emotional. Therefore any endeavor we engage in will necessarily have some emotional factor.

    Quantitatively, the proof is in the formulas investors design. Every time an investing house or person designs a formula intended to maximize returns while minimizing risk, they eventually fail. The math can be perfectly sound, but there will always be an ‘x factor’ that the formula cannot account for. This factor is the emotional aspect.

  14. 18 mike
    July 31, 2009 at 15:32

    Of course economics is as emotional as the people who control it. Will there be a repeat of the current crisis? lol. We’ve never been out of it and will never be. The few people who control the world economy are not going to become sentimental overnight and say, “here, you honest and hardworking man / woman of the world, here’s a share of what you’ve been toiling night and day for.” Rich nations are not going to stop exploiting poor nations, and the richer rich nations become the itchier the fingers that control ther financial institutions get. A vicious cycle that makes honest work and integrity a very trying task indeed.

  15. 19 steve
    July 31, 2009 at 15:39

    Of course not. These things always happen. There is boom, then bust, when the house of cards collapses. People will forget how the system is just an illusion, fake wealth will be created, and then the house of cards will fall again….

    the next big one in the US will be student loans, if there are no high paying jobs, people owing $120,000 out of college with a history degree won’t be able to repay it making $8/hr at Barnes and Nobles.

  16. 20 Jeremy from Lansing MI USA
    July 31, 2009 at 15:47

    Normal every day capitalists can trust themselves not to get into such a mess again. The problem with this mess was not the regular business people, it was the people who know nothing about business putting their noses where they do not belong. Idealists in the government caused this financial crisis by requiring banks to lend to people that could not afford the loans. Let me say that again, they REQUIRED banks to practice very high risk lending. Actually, the requirement was around fifty percent of their home loans was to be to low-income, high risk people who the banks knew would have trouble paying them back. However, since the banks HAD to make bad loans, they did whatever they could to try to make money off them, and sold as many of the loans as they could. So, if the government never would have stepped into the realm of business, the first domino (the housing crisis) would have never happened.

  17. 21 Anthony
    July 31, 2009 at 16:06

    Are you kidding me? There is the Student Loan bubble that will burst, and no one seems to be worried about the U.S. Social Security system collapsing. I get scared when I think about it. Canada, here I come!!!

    -Anthony, LA, CA

  18. 22 John Henry - Trinidad and Tobago
    July 31, 2009 at 16:13

    Markets are human and carry ALL the emotional baggage that humans do. There are no natural laws that apply to financial markets…not even cause and effect.

    Being lucky and being unlucky are not natural laws but represent the closest that one can get to natural law re financial markets.

    I was told recently that when one is in a recession it’s best to put one’s foot on the accellerator and descend the down curve really fast. That way, the momentum is greater to get back to the top of the next boom (curve). This is exactly the approach being used to resolve today’s economic problems.

    Natural law suggests that “what goes up must come down.” Markets, on the other hand, live in the hope that “what goes down may/will come up.”

    Let’s hope that the speed with which it took the Western world to begin climbing out of the recession will not be equated by the speed with which the next down curve begins.

  19. 23 John in Salem
    July 31, 2009 at 16:20

    I’d be giving a thoughtful, reasoned reply but I don’t have the time – I have to get ready for bankruptcy court on Monday.

  20. 24 kipsang
    July 31, 2009 at 16:22

    we have learnt a lesson or two, but we haven’t learnt all of life’s lessons.
    economic crisis might be abeting, but our next move could generate another crisis. let us only prepare for more teachings. kipsang kerich in kericho, kenya

  21. 25 Jennifer
    July 31, 2009 at 16:30

    Maybe we should worry about truly getting ourselves out of this one first. We wouldn’t want to put the cart before the horse!

  22. 26 Abram
    July 31, 2009 at 16:39

    I think people should start to learn talking less about finance. We spend more time talking about money than other important things in life.

  23. 27 Andrew in Australia
    July 31, 2009 at 16:39

    Of course not!

    It is simple, the money markets etc are run to make money, profits for those involved and where money and profit is involved you cannot escape greed and corruption. And what we have seen is not just that money markets seem to have bounced back quite well in a reasonably quick period of time despite having the GFC described as the worst financial event since the 30’s depression, but that governments were quick to bail out those institutions that were incredibly stupid, incredibly irresponsible and incredibly overindulgent with their executives in terms of bonus payment and their willingness to cover up debt and mistakes.

    What message does this send out there to those in the City? That you can totally screw up the system, you can totally screw the system and you can bleed it for whatever you want to get out of it as quickly as you can do it regardless of moral or ethical considerations or who else will lose out in the end and no matter what happens we the governments of the west are so willing to bend over and grab our ankles to accomodate you with bail outs as we are so scared to see you fail despite you deserving to fail and culling the bad institutions and we are even more scared of the electorate that keeps us in our limited outlook of the next election and our positions on the top of the rotten heap we belong to.

  24. 28 Mark Chamberlain
    July 31, 2009 at 16:56

    It seems that this Government has systematically sold off the Nations Gold and silver at rock bottom prices, then proceeded to spend the nation into debts that our Grandkids wont be able to pay off and we look at our American Cousins and we see the unscrupulous connections between the banks and all the cronies who have ripped the good people off holding the tax payers to ransom. Its sickening to see and to be truthful, heads have rolled for less and its a bourt time we took firm action and brought solid justice. We need convictions. Simple as.

  25. July 31, 2009 at 17:08

    This is a nonsensical question, guaranteed to have people going around in circles.

    The system crashed, but some people made tons of money. They achieved their greedy ends. Because of their wealth and power, their decisions had greater effect than the decisions of the people at the bottom.

  26. 30 Tom K in Mpls
    July 31, 2009 at 17:31

    There will always be people finding loopholes in the system. We will keep closing them. Because of this, the older the system gets, the better it gets. Look at monopoly laws, anti-trust laws, margin (borrowing) limits and such. From the current crisis we will see better ‘truth in lending’ laws and derivatives formally classified as insurance making it subject to the same regulations. No big deal, a lesson learned.

  27. 31 Jessica in NYC
    July 31, 2009 at 17:36

    The purpose of government and legal regulations is to have checks and balances in place to minimize human error. This crisis could have been minimized, if not all together avoided, if we hand not relaxed government oversight on the markets and stupidly assumed greedy wall street could regulate themselves.

  28. 32 Stephen in Portland/Oregon
    July 31, 2009 at 17:43

    You know the movie “Wall Street” by Oliver stone is supposed to be a cautionary tale about GREED and most of these guys in the markets think Gordon Gekko’s character is something to aspire too.

    Thatcher and Regan created the ME society we live in today remember “there is no such thing as society only the individual” the guys playing with our investments, retirements pensions and such cant see further than the Exotic car showroom at the end of the street.

    Imagine someone giving you a truckload of cash on the Vegas strip and then telling you to go have fun with no consequences to you.

    We have to do something to protect us; I will leave that to people way smarter than myself.

  29. 33 JP in Portland, OR
    July 31, 2009 at 18:13

    I trust that people will be themselves which unfortunately tends to be greedy and self-involved. You might have a majority of people learn from their mistakes but it will only take a couple bad eggs or a new, future generation of corruptible individuals to throw us into another crisis.

    The problem this time was that people who very obviously knew what they were doing continued on a path to financial destruction and those who recognized the problem were summarily dismissed and ignored.

  30. 34 Sena
    July 31, 2009 at 18:18

    In human relations there are ups and downs , problems here and there and in human to be in financing is good and bad.
    It good because some companies may employ people who don’t know financing concept but they are put into these positions work . when these happens huge losses are generated and fore this reason fiancial cranch comes in . this affect the ordinary person, cos a business man mmay go for a loan where a huge interest may put on , item prices increases etc, i think for human to trust ourselves not to go into financial mess is impossible.

  31. 35 Peter
    July 31, 2009 at 18:18

    Economics 101 did not take into account cheats. The banks should be made criminally liable. Its a no brainer that giving people loans knowing that the can’t pay back and passing it off to become toxic is a crime.

  32. 36 Chintan in Houston
    July 31, 2009 at 18:19

    The market is like a gambling table, you can make money but as they say “the house always wins”. The economy always has cycles, booms and bust,s this is probably most natural phenomenon associated with the business world and no amount of regulation can correct its flaws. The market will eventually fail, all the laws will do is prolong the eventual death.

  33. 37 Desire
    July 31, 2009 at 18:31

    Booms and bursts are inherent to capitalism. At this very moment, another financial crisis is already lurking in the shadows. We can’t have an economy that keeps growing endlessly. It’s the price to pay for welfare.

  34. 38 John LaGrua/New York
    July 31, 2009 at 18:34

    Markets reflect the cultural environment of an age.The West has abandoned it’s Christian heritage and descended an era of greed ,gluttony and instant gratification.It’s youth are deluded by a sense erntitlement and the unpleasant side of life has been ousourced to mercenaries ,volunteer armies; the poor and unskilled.Public participation in risk aspects of invesment has been promulgateed by banks and brokerages with deceptive advertising of puffy titles of salesmen to financial advisors.Security salesmen should be identified as such so that the unwary are not misled to believe the vendors are acting in their .,clients,interest.Risk appetite must be correlative to the capacity for loss.since the gains take care of themselves.Expansion of financial institutions has depersonalized the investment process and the public investor is more at risk than ever.”.Where are the customers yachts” ‘published in the 1930’s is still valid.The old saw “,The broker makes money ,the brokerage firm makes money and two out of three ain’t bad” still resonates .Government, now must be a virgilant watchdog in the public interest .Every decade or so the public, like sheep, get sheered .Ca plus change ,la plus le meme chose” However,this time the entire economic and political structure was nearly brought down .Be wary.!

  35. 39 Tom K in Mpls
    July 31, 2009 at 18:35

    Bank bonuses is a totally separate and unrelated issue. Banks hired people at a relatively low salary, set goals for them, and then contracted to pay them a bonus based on the proven ability to achieve goal. It lowers risk to the bank if they hired the wrong person and better rewards those able to what they are hired to do. This is an excellent policy.

    The problem is the goals that were set. Don’t blame those that perform well, but the staff that hires with the wrong goals in mind. Also, there is no justification to cancel those contracts.

  36. 40 Keith
    July 31, 2009 at 18:38


    When I began reading your post, I was prepared to disagree with your post. However, I found that I fundamentally agree with it, especially one particular part: when you say that
    “Economic crashes are a necessary corrective for irresponsible decisions by buyers, sellers &/or investors”
    It is the market’s natural tendency to cyclically enter recessions, we can’t prevent them. It was obvious that we would eventually enter this recession- people buying houses they ultimately cannot pay for, and people giving loans that they should have known the people could never repay. As long as people are willing to delude themselves into making idiotic financial decisions, we will occasionally have these crashes.
    It would behoove the general public to live within a decent degree of financial security, so they don’t get nudged off the financial cliff whenever we go into a recession.

  37. 41 Dinka Aliap Chawul-Kampala,Uganda
    July 31, 2009 at 18:41

    What does BBC have to give people affected by economic downturn? am tied of 2years question of economic status!!!.

  38. 42 Reverend LMF McCormack
    July 31, 2009 at 18:44

    I am listening online.

    Can someone please tell me why it that when these things happen it is the taxpayer, who is hurt the most by all of it and who didn’t bring this about, gets stuck with the bill?

    • 43 Tom K in Mpls
      July 31, 2009 at 20:01

      That’s easy, most believe that either you help failures succeed (bailouts) or you enact programs to directly create productive jobs (infrastructure development). Neither is free and there is only one source of money, taxes. Also, it is our fault. As a people, we uncured outrageous debt and when investing (home or stocks), we forgot that no trend will last.

    • 44 RightPaddock
      July 31, 2009 at 22:34

      Democracy perhaps ?

  39. 45 wolf
    July 31, 2009 at 18:51

    I heard that many managers could be diagnosed as psychopaths. To be able to climb up the ladder that much, probably many of the big ones are.
    Since they have no conscience, they will not learn from this crisis, nor will feel the need to want to. This shows in their behavior at the moment.

  40. 46 Tom D Ford
    July 31, 2009 at 18:52

    Economists come from the more wealthy and write up their theories based on the thinking and behavior of the wealthy, and the wealthy are some of the most socially dysfunctional people in our cultures. The wealthy are the worst behaved people around!

    We need to rewrite our economic systems to fit our well behaved and well socialized middle classes.

    Back to the middle! To the center!

  41. 47 Tom D Ford
    July 31, 2009 at 18:56

    There is no more useless person in the world than a banker. They make no product like a car or skateboard,and they provide no service like fixing a car or a skateboard.

    A banker is like a malignant cancer, diverting essential money from our body politic to themselves , a sickness in our political body!.

  42. 48 James
    July 31, 2009 at 18:56

    There are four important points to make:

    1. The free market has been in force for thousands of years; it isn’t likely to go away, and because of its drive for innovation, it’s an important part of the mix.

    2. The corporate ideal of perpetual growth is unsustainable and has to change.

    3. There are and likely will always be cycles to the world economy.

    4. Be that as it may, we must continually improve all human systems and inventions; there are countless examples where vigilance for improvement results in a near perfect product (alla Six sigma methodologies). The same applies to the world economy.

    • 49 RightPaddock
      July 31, 2009 at 22:33

      @James – I wont argue the merits or of six sigma, except to point out that its inventor, Motorola, has had plenty of product recalls – phones, battery chargers, set top boxes, and they’ve had their share of market failures too – e.g. there are not too many 68000 based computers sold these days.

  43. 50 Linda
    July 31, 2009 at 18:56

    Greed is not new; the history of the world teaches throughout times, a very few have controlled the majority of the assets. It’s not the fault of capitalism (look at communist Russia, or China); rather, a reflection of human nature. Any attempt to preach the development of the appreciation of “moderation” – which, although I personally espouse – would only be adopted by the people who can afford to espouse it; the people who are making the type of money that we’re talking about are not going to suddenly decide they don’t want their bonuses and nice living style. If I had the chance to earn that kind of money, I would as well. It’s just honesty to admit it; very few would turn down the kind of opportunity and freedom that sort of money affords.

  44. 51 Julius in Florida, USA
    July 31, 2009 at 18:58

    Expecting the government or financial markets to regulate the minds of the persons involved in them is folley. The institution that has historically been responsible for regulating human greed and emotion is religion and faith.

  45. 52 tekkooo
    July 31, 2009 at 19:39

    The other day was telling some of my friends that “if stole one dollar from one million persons and whatever I do with that million dollars, it is going to grease the wheels of the economy and benefit quite a number of people.”Those who lost their one dollar, well don’t think they would care the less
    That is some taste of the importance of greed. Immoral- of course! But then, God created me the way I am. And believe nothing is going to change –the world will stop functioning and progressing, if we were able to eliminate some bad things like greed
    Nonetheless, it is important to put in place some regulation to mitigate the effect of greed and irresponsibility. Just like tug of war, that how our world works!

  46. 53 Keith
    July 31, 2009 at 20:35


    Good post.

  47. 54 Marco Polsen
    July 31, 2009 at 21:42

    Hi there,

    For the second day running, the show’s podcast is M.I.A. Please try to repair this service soon so that we can share in the discussion. Thanks in advance. Regards,


  48. 55 RightPaddock
    July 31, 2009 at 22:15

    Money is the only true invention of mankind, everything else is an exploitation of nature, thus money is not subject to natural law, and man made laws are always flawed and rarely just.

    The individual has an ethical obligation to manage whatever wealth they may have in a prudent manner. Most folks will only GAMBLE a small fraction of their “hard earned” in a lottery, but many of those same folks will INVEST a substantial part of their fortune in things they don’t understand – like hedge funds, dot com companies, or irrational schemes like Mr Madoff’s. Others will borrow amounts they cannot be sure that they’ll ever repay.

    Governments can’t outlaw stupidity, but they could stop bailing out those that profit from the stupid and stop encouraging the stupid to live beyond their means. They could make a start by declaring that the word “consumer” is a profanity.

    People like Madeleine Morris need to grow up and manage their own affairs prudently, and recognise that the nanny state is part of the problem, not the solution. They should stop expecting other people to bail them & their banker mates out of financial difficulties. And they should stop forcing other people to pay exorbitant interest rates because don’t service their own debts in a timely manner.

    I have a simple rule – if I don’t have the cash to buy what I want then I probably don’t need it. Fortunately I’ve always had enough for food, water & shelter. Many don’t even have that, they deserve my charity infinitely more than Wall Street wankers, Mayfair pimps, Collins Street touts and Detroit tin bashers.

  49. 56 Bert
    July 31, 2009 at 22:56

    Engineers know that when a system is showing signs of going “open loop,” trouble is soon to follow. It took an amazing amount of unbridled greed, and I’m talking on the part of the common man here, not just bankers or other oligrachs, to not understand that housing prices increasing 25 to 30 percent per year were harbingers of a huge meltdown.

    The article posted by Madeleine places way too much trust in government. They were a large part of the original problem. It was the government guaranteed loans that made the gargantuan mortgage companies reckless. And it was political correctness and politicans seeking out popular vote that established the loan guarantee programs of Freddie and Fannie. Which precipitated the crisis.

    I have very little faith in government doing the right thing here. They are much too vulnerable to political pressure and not nearly as objectively expert as they think they are.

  50. 57 Bert
    July 31, 2009 at 23:07

    Specifically about greed, since I see posters thinking that greed can be curbed by external means (even religion!?), the economic system needs to be workable EVEN with greedy people in the equation. Robust systems cannot be built on wishes and prayers. Robust systems are stable because they are self-regulating.

    So, do not remove the risk with tax-payer funded loan guarantees. Let the financial institutions bear that risk, which will make them more cautious in how they approve loans. Excessive executive compensation is obnoxious and unseemly, but quite honestly, a government that pretends this is a major problem, a government that obsesses over this one small issue, is a government that is incompetent at managing the national economy.

  51. 58 David
    August 1, 2009 at 00:53

    How do you get rid of greed? So long as the present system of capitalism prevails, the next bang will be the bang to end all bangs.

    My suggestion is THAT the world rich and the world poor need to get together to design a system, which takes all forms that have been tried before. I suggest we come up with a mathematical model: CAPTIALISM + COMMUNISM + SOCIALISM = A BETTER SYSTEM WHICH CAN BE FAIR AND RELIABLE FOR OUR FUTURE GENERATION.

    Greedy people should be denied the opportunity to exploit

  52. August 1, 2009 at 01:48

    No. Why? Because of greed! The people are too greedy to be realistic!

  53. 60 T
    August 1, 2009 at 04:21

    Humans by nature are greedy. They want enormous returns (even when it’s obvious that there’s no chance of that). And if “socialist” economies are so bad, then why do so many other populations worldwide live longer than the States?

  54. 61 Tan Boon Tee
    August 1, 2009 at 05:02

    This current notorious financial crisis is our own making, the nasty result of the people-in-the-know intentionally cheating the blur and the ignorant.

    We have been less-than-willing victims, prone to fall into another trap, again and again.

    In short, the endless crave for instant wealth and the insatiable greed for more are killing all of us.

  55. 62 scmehta
    August 1, 2009 at 06:19

    Only if you can trust your politicians and the financial institutions. In the present dismal scenario of their making, they are definitely trying to win your trust; but, there’s no denying the fact that it’ll take a long time to do that and then who knows after playing fair for some time, they may revert to their bad-old crooked and selfish manipulations.

  56. 63 Beaufort Goup
    August 1, 2009 at 07:39

    Everyone, especially Americans, has been deluding
    themselves about the nature of capitalism. There is
    a fundamental conflict between it and morality. Totally
    unbridled capitalism is even corrosive of free enterprise.
    Walmart world, mego-corporations, mega-banks will
    destroy the world because they have grown to the point
    where they define control which is like the devil defining
    your faith.

  57. 64 kponee jude
    August 1, 2009 at 11:13

    The rich and gullible are insatiable they will always find away to undermine whatever control mechanism put in place to check the financial leakages in our economies. nigeria is a good example of a country where politicians are good at circumventing laws to suit their greed.

  58. August 1, 2009 at 11:52

    The markets are chaos theory writ large. If you can’t stop a butterfly flapping its wings can you stop the flappers on the stock exchanges worldwide? That is the challenge of regulation.

  59. 66 Dennis Junior
    August 1, 2009 at 19:10

    I think the whole idea of trust and returning to another financial mess is simply…nonsense…Until the systems, are reformed the financial messes will be around for a long time….

    ~Dennis Junior~

  60. August 2, 2009 at 20:41

    As long as those big rats with ten fingers run the markets with their greed and ego, it may take time since all eyes are on them now but we will definitely get into another financial mess.

  61. August 3, 2009 at 11:02

    this so called financial crisis in the west and everywhere else apart from 3rd world countries was just a fear of living like the 3rd world hustlers who had no money saved and are still not saving today or tomorrow.its these hustlers life which needs a progress in order for there not to be a financial crisis for those guys who would like to maintain their positions.

    tambua village(TV),

  62. August 3, 2009 at 11:05

    the west’s prosperity depends on the progress of hustlers.

    tambua village(TV),

  63. August 3, 2009 at 11:43

    The truth is that what is being called capitalism is controlled by pure robbery.

    Unjust laws establish the credit card user as prey. They not only are subject to exploited raised minimum payments and hiked credit charges but are kept in debt so others can use their constant income of payments to afford other enterprises.

    The Bank not only play the stock market with their payments but their credit line is being used by others as collateral to buy real estate or establish a business. The credit card user is paying for the default of others in case they fail to repay their debits no matter those borrowing on their credit line repay their debits.

    It is simply a play of words being used when a media says:

    On air: Can we trust ourselves not to get into another financial mess?

    These words above are a ploy of theft and abuse of the peoples consciousness. Using such words empower the thieves that control the economics of society stealing from the people.

  64. August 3, 2009 at 12:06

    I have well repaid my debt, now pay me my worth!

  65. 72 Tom D Ford
    August 3, 2009 at 18:09

    “Can we trust ourselves not to get into another financial mess?”

    That is the wrong question!

    Nobody went out and demanded that somebody create Derivatives and the financial scams and schemes that resulted in our current problems!

    Nobody demanded that Conservative Republicans pass the law against Oversight and Regulation of Derivatives!

    No, those problems were imposed on the public from wealthy elite Conservative Republicans.

    Your question blames the victims. Let’s put the blame where it belongs.

  66. 73 NSC London
    August 4, 2009 at 11:28

    “If Markets are run by humans who are likely to react to major events and behaviours…”

    The markets aren’t run by the collective “us,” they are run by an elite cabal of powerful banking families who use debt to generate profit for themselves. This recession wasn’t the result of “our” behaviour, it was the result of carefully planned economic manipulation. For more on this topic I highly recommend reading “Secrets of the Federal Reserve.”

  67. 74 Katharine Rutherford
    August 4, 2009 at 18:56

    The world needed a financial enema. Anyone with any sense knows the financial market is cyclical. People are greedy. There is no allegiance to anything or anyone when money is involved.

  68. 75 Dinesh
    August 5, 2009 at 15:08

    No – we can never trust any individual or ourselves. Greed – Corporate greed, Individual greed its like a man eater crocodile who has once tasted and never forgets – only waits for an opportunity but fails to understand – it is laying a trap foritself to be hunted down.

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