Monday, 21 May 2012

canary in a coal mine

It is not as if we have all collectively woken up in some bizarro-universe that’s suddenly, jarringly ruled by the friction, influence and speed of money, not the viscosity or ingenuity of wealth.

It was a gradual process, of course, and financial collapses have happened for eons, speculating on war, religion, tea, whale oil, opium and even tulips (Tulpen), and the systemic development has transformed money from a store of wealth into an instrument, a fishing-lure or a decoy that’s tossed into the wilds with hopes to bait more. Maybe one day in the future the indebtedness of petty kingdoms, petroleum, gold, and industry stability will seem just as anodyne and antiquated, insofar as economic indicators go. This newly established energia has not only created a casino atmosphere with high-stakes and lighting fast reversals of fortune, it has also invited unthinkable mingling of tools and vessels and self-regulation, where the office of the banker and bursar are one and the same.
A sufficiently sophisticated economy will certainly grow to incorporate a service and servicing sector, but the enforcement of a regulatory framework should not be totally outstripped either: mingling and forced fraternization ought not be tolerated—building and loans should not be trying to ensnare savers with investment opportunities (not tempted to cover losses and reduce risks by mixing funds), likewise, perhaps automobile manufacturers should not be boasting a banking and loan division that justifies its own sales, nor should the central banks that set monetary policy be governed and influenced by executives (of their familiars) of the private financial institutions they are trying to buoy up (with public funds). There is no threshold beyond which an institution is too big to fail, but rather it is measured, I think, to the extent that it estranges people and resources from their purpose, and the insistence of maintaining such a status ensures corporate welfare, reduces liability for loss over (encouraged) precarious behavior, placates clients and limits scrutiny and regulation.