"Having been part of this process and even a member of the rogue’s gallery itself, I know one thing for sure: This is not God’s work – it has the unmistakable odor of Mammon."
A smart man once said "a free market can allocate resources much more efficiently than a command economy can." This has been proven true over the corse of the life of the U.S. of America, so why as Mr. Gross so glaringly pointed out are our resources now allocated so inefficiently? We need engineers, and builders to rebuild our global standing, yet we're getting financial alchemist and social networkers. Mr. Gross' rant got me thinking and I came up this: We have a broken price mechanism because our profit/loss system is out of wack and out of wack big time.
Talk to any financial wiz and she'll tell you that Americas financial market is intrical to our future success. That thought process is what led us to allocate tremendous amounts of resources to saving the financial sector, when we should have been allocating it to the engineers and builders so that the next generation's brightest would look at that sector as the most profitable, and thus, gravitating there.
How did we get here? We got here because only with a real functioning profit/loss system and price mechanism will we be able to correctly identify where to allocate the resources! We're opporating like a command economy, so, we have the symptoms of a command economy. Arbitrary guesses by bureaucrats on where to allocate resources? Check. Tragedy of commons? Let me think.... Broken property title chains all over? yeah, tragedy of commons. Check. Economic calculation problem? Let's see.. Alan and then Ben repeating mistakes? Yeah, econ calculating problems. Check.
My new hero Bill Gross laid out our needs perfectly saying:
"This country desperately requires a rebalancing of priorities. After readjusting the compensation scales via regulation and/or free market common sense, America needs to anoint a new set of Mensans who can create something more than a cash machine and
make this country competitive again in the global marketplace. We need to find a new economic Keynes or at least elect a chastened Congress that can take our structurally unemployed and give them a chance to be productive workers again. We must have a President whose idea of “centrist” policy is not to hand out presents to the right and the left and then altruistically proclaim the benefits of bipartisanship. We need a President who does more than propose “Win The Future” at annual State of the Union addresses without policy follow-up. America requires more than a makeover or a facelift. It needs a heart transplant absent the contagious antibodies of money and finance filtering through the system. It needs a Congress that cannot be bought and sold by lobbyists on K Street, whose pockets in turn are stuffed with corporate and special interest group payola."
We think we can bend the rules a little and make it work. It's the old American ingenuity complex. We think we can suspend risk/reward dynamics on one segment of society and still keep our free market economy healthy. Well, right now we just have the symptoms of a command economy, if not treated the next stage is the disease.