JUST AN OLD FASHIONED GUY

I don’t pretend to be an economics scholar. But who cares? The practitioners of the “dismal science” may have exemplary credentials, but that doesn’t stop them from disagreeing with each other. From the left-wing comments of Nobel Laureate Paul Krugman to the madness of that Ayn Rand Libertarian Alan Greenspan, there are as many opinions as there are economists. They can argue about how many economists it takes to change a light bulb, but finally they have to offer solutions that work. Instead, many of them run around in convoluted circles trying desperately to find evidence that their theories are right. Which leads me to believe they are more devoted to their mind-set than they are pragmatic i.e. if it works – use it. Or, how can you go on believing in the “silent hand” of the marketplace, when the big players are up to their old tricks. It doesn’t take a Nobel Prize in Economics to see that bankers are now raking in billions once again doing what got us into trouble. The circle is vicious. And like all circles, it is never-ending.

Is anyone else alarmed that banks are repaying their TARP bailout loans by making billions in stuff like hedge funds? The numbers are jaw-dropping. The market is recovering because banks were bailed out. Smart guys are raking it in because they bought sinking bank stock by divining that they would have to make a comeback because the government would intervene.(In fact they probably didn't "nuy" they leveraged the action by buying "calls" or options to buy.We'll never know.

Therein lies the irony, the paradox, the contradiction, the madness. The “investors” (what a laugh!) make money by fiddling around with money. They are “investors” like the guy who “invests” in the outcome of a horse race or the chances of “bringing” your number before you roll a seven (Craps devotees please accept my apologies for lowering your noble sport to the status of a Wall Street investment.)

I am naïve and old-fashioned because I believe that investment means taking a piece of something real; of buying stock so you could share in the fortunes (or misfortunes) of a company they really makes things, or provides tangible services. The messing around with derivatives and hedge funds, where you have no idea what the geniuses behind them are doing with your money, is not investing – it is crap shooting.

I had a conversation a couple of nights ago with a noted historian, writer, and professor emeritus. We agreed about people who make money by shuffling money. There is absolutely nothing productive about being Switzerland. (Figure that one out for yourself.)

If the economy, any economy, is to have a real future, and if we are to get out from under the manipulation of money to make money, we must begin to recognize that the earliest development of the joint stock company was to create an arena to which you could attract people who wanted a piece of the action, people who wanted to own a piece of “real” production.

So America, in its usual way of fiddling with money, is going through more agonies trying to get what should be a simple piece of banking regulations and consumer projection passed into law.

Go head. Tell me I should stick to what I know and keep my nose out of economics. Yeah sure.