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  • Finance: The Teeth Of The Predator State

    The five fatal flaws in the financial sector’s current structure have created a monster.

    Upstart is a pretty positive site, wouldn’t you say?

    Rather than take a pessimistic or fatalistic approach to what’s going on in the world, in our economy, our earnest desire is to assist you in 

    1. taking control of our own destiny,
    2. making the most out of every opportunity that arises,
    3. understanding emerging trends that will affect your career, business and/or life, and
    4. gaining insights, information and resources to help you accomplish your goals.

    Having said that, this is not the most upbeat topic, but it is an important one for all of us to recognize so that we can act appropriately.

    There’s a lot of talk about recession. One of the most eminently qualified experts in the world to talk about what’s really causing the difficulty we’re experienceing is Dr. Bill Black.

    Bill Black is the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. He is a white-collar criminologist who has spent years working on regulatory policy and fraud prevention as Executive Director of the Institute for Fraud Prevention, Litigation Director of the Federal Home Loan Bank Board and Deputy Director of the National Commission on Financial Institution Reform, Recovery and Enforcement, among other positions.

    I had the chance to read his article “How the Servant Became a Predator: Finances Five Fatal Flaws.” Before I talk about it, check out a recent interview he did with the Daily Ticker.

    Dr. Black was hired by President Reagan to clean up financial corruption in the 80’s. He obtained over 1,000 felony convictions on senior insiders!

    In “Five Fatal Flaws,” Black exposes some of the fundamental challenges created by the size and structure of the finance sector both here in America and around the globe.

    When it comes down to it, the financial industry should be a tool for the real producers in any economy. Wealth is not created out of thin air, or by manipulating money; wealth comes from production.

    The finance industry, from banks to stock brokers, has become an end unto itself rather than a means to achieve an end.

    Black says that finance has actually become a parasite, sucking vitality directly out of the economy instead of making it more robust.

    James Galbraith takes it a little further:

    “The financial sector functions as the sharp canines that the predator state uses to rend the nation. In addition to siphoning off capital for its own benefit, the finance sector misallocates the remaining capital in ways that harm the real economy in order to reward already-rich financial elites harming the nation.”

    My background is not in finance, and I haven’t studied economics since high school. Heck, I don’t even go to the bank any more. So I won’t complicate matters by trying to further expound.

    If you have any interest whatsoever in the economic crisis, if you’d like to understand how we got to this point, and what can be done to rectify the situation, check out Dr. Black’s resources, starting with the “Five Fatal Flaws” article.

    (You can watch a longer, more in-depth video of Dr. Black discussing the corruption in the financial system here.)

    Upstart: Business and Management for 20-40 Year Old Professionals

    Filed Under: Gamechangers

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    About the Author: Donnie Bryant is a direct response copywriter and marketing consultant. He specializes in improving businesses' sales and profitability by creating compelling marketing messages and strategies. Find out more about Donnie at http://donnie-bryant.com. You can also follow him on Twitter at @donniebryant and connect with him on Google Plus at +donniebryant.

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