Oct 11 2008
There are but a handful of my friends who will actually recognize the name Gordon Gekko… yes, Michael Douglas, Martin Sheen, Charlie Sheen and many others in the seminary Wall Street epic by Oliver Stone of the same name.
A few days ago, Kevin Rudd, the Prime Minister of Australia gave a most insightful speech on the current global financial meltdown and banking system failure.
It’s required reading for anyone who thinks that unrestrained extreme capitalism is truly the way to go….
A couple of excerpts from his talk:
Gordon Gekko wasn’t tamed in 1987; he was simply ignored. Much of the root cause of the sub-prime crisis came down to our financial markets rewarding people for taking extravagant risks. Executives earned huge bonuses. Their rewards were skewed to short-term success rather than long-term creation of asset value.
Indeed. During the tech bubble of the late nineties, how many of my friends compared themselves (and me) to Gordon… all hoping to swing trade another double on a lofty new IPO of a tech startup selling watermelons on the new World-Wide-Web. Oops… at the time it was eWaterMelons or iFireWoodOnline or what have you.
These were the most obvious manifestations of the culture of greed and short-termism that pervaded large parts of the US financial sector. This culture was never challenged by a political and economic ideology of extreme capitalism. And this crisis bears the fingerprints of the extreme free-market ideologues who influence much of the neo-liberal economic elite, free-market ideologues who have a naive belief that unrestrained markets are always self-correcting and that markets left to themselves will always achieve optimum outcomes. Ideologues who believe that any regulation of private business is fundamentally wrong. Ideologues who have resisted the regulation of financial markets and the supervision of a wide range of financial institutions. Ideologues who lectured the developing countries caught up in the Asian financial crisis a decade ago about the need for transparency and disclosure, but did little to reform their own financial systems. Ideologues who believe that government is always the problem, never the solution. Except, of course, when there is a crash; then, the self-same ideologues argue, having privatised their profits, that we should socialise their losses. And, by the way, after they have demanded lower and lower taxes all the way through.
’nuff said. He gets it. Read more in an excerpt of The Children of Gordon Gekko by Kevin Rudd.