On the Insanity of our Financial System

Here is Rolling Stone's Matt Taibbi on HSBC's punishment for laundering $9B for drug lords - HERE
You should really read it but here is the gist: The US government decided it couldn't prosecute HSBC for laundering $9B in drug money because the bank was too important to the financial system. Instead they made them pay a fine and "partially defer" the bonus payments of those executives involved. No one knows what "partially defer" means.

Taibbi does an excellent job of pointing out the incredible hypocrisy of this decision and contrasting it with the punishments meted out to drug users (and non-drug users) as part of the War on Drugs. I think the part that really deserves attention is the fact most of the bankers involved were fired. If they were so important to the financial system they couldn't be prosecuted, how could they be fired? The story does have a clear moral - if you are a banker, you can get away with murder. Probably literally.

The whole thing smells like shit - as news from the world of finance typically does. It reminds me of the investigators conclusions following the 2007 meltdown. At the time they ruled the system was out of control and needed to be changed but the only ones with sufficient knowledge of how the system worked were the bankers who didn't want it changed (or, more accurately, wanted to change it in the complete opposite way). The result being no change, no prosecutions, no indictments, no nothing. Except a small nation of newly homeless families living in parks and abandoned lots.

I think the world would be a much better place if we acknowledged the readily apparent fact that our financial system is not only dangerous, it's beyond our understanding. We all saw this when the Queen of England asked the professors from the London School of Economics why no one saw the collapse coming and they couldn't answer.

I'm not an economist but here are some relevant facts as I see them. People make money when the prices of things change. The more change there is the more money someone will make. The richest people in the world therefore have a reason to prefer a volatile market to a stable one. The huge majority of people have every reason to prefer a stable market to a volatile one. We are a society of people hoping we can just hold on until we get a break but that break ain't coming. The game is rigged; we already know who's going to win and it ain't you or me.

I know there are already endless complaints and this is just one more. I wish I could think of something more useful than complaint. But I can't. And thinking about it too long makes me angry and sad. No wonder I spend so much time watching reruns or Buffy the Vampire Slayer.