This is a continuation of my series about how the economy works. I do not claim any originality here: quite the opposite, I only urge you to see the obvious. And it is perfectly clear to everyone that the so-called financial industry is evil. Every poll shows this – although, of course they don’t use the word evil.
Americans are demanding that it be brought under control – but that is unlikely. The reason for this is simple: because it controls the government, not the people. To my simple, moralistic mind, this is evil, because it is destroying the economy.
How can this happen? Consider my first posting in this series The Economy is a Network. I argued that networks can be analyzed, and we can use our networking skills to control the economy. But the Financial Industry is far ahead of us; they have already done this, and figured out ways to game the economy at everybody else’s expense. They hire the smartest brains money can buy and pay them obscene bonuses to do this.
To my mind, the situation is similar that in the late Middle Ages, when the Church became totally corrupt. Northern Europe and Southern Europe were divided on how to solve this.
The North went with the Reformation. For it, the situation was intolerable, and they did something about it. The end result was the Modern World.
The South decided it would do nothing about it, and it became a developmental and economic backwater.
The developed world now seems to doing this same: doing nothing about the corruption that is threatening it. The result will be the same: economic stagnation.