The End Of Capitalism?

It’s easy for ‘old timers’ like me to get all reflective at this moment of supreme chaos in the financial system. But allow me to pass on this comment from Irwin Kellner:
Brave new world for financial markets – MarketWatch

I remember Kellner from back in the dull days before deregulation. He makes the comment that I would be making were I still ‘in the game’.

There is no doubt that we are waking to a new dawn in American economic history. The days of the so-called ‘Washington Model’ are gone. The notion that the ‘American way’ is a superior way to create wealth is tarnished, if not permanently, at least while we attempt to clean up the mess we have made.

For those of you who feel like onlookers, or who feel lost amongst all the banking jargon floating around at the moment, all I can say is that you too are deeply affected by the crisis that has engulfed the financial system. It has been revealed to be a sham. The systems and analytical techniques used by the industry have been proven worthless, or worse, they have been proven to destroy value rather than preserve it.

It is senseless to say that some of us argued this case long ago. That is a fruitless exercise. What is now needed is fresh thinking uncluttered by the right wing ideology that infected our entire system and prevented us from being balanced or rational. The mistake made long ago was to muddle and then conflate economic theory with political ideology.

That has to stop. It has to stop now. But whence the new theory? For that I think we will have to wait. Meanwhile let’s hope there are more wise heads than there currently appear to be. We need leadership not ideology. Above all we need honesty.

And that has been in short supply these past eight years.