Financial Speculation 101

It is amazing to me how simple things can seem sometimes. I just started reading The Value of Nothing and am loving it. Raj Patel has a intellectual's ideas with a layperson's way of explaining things. I'm barely into the book at this point and am already plotting what it will be that I'll be reading next to further my goal of books that actually institute change in my life and thinking. So now to the point of that first sentence. In the opening of the book Patel talks about the current economic crisis and how ideology is in part of blame. We all have an ideology, it is what makes us understand and operate in the world around us, but it is when we begin to see other people's ideas of the world that we can sometimes be left confused.

Alan Greenspan was the chief financial advisor and Chairman to the Federal Reserve for nearly 20 years. It was his insight into the economy the led this country along in its highs and in the end led us to our current lows. This was all due to an understanding that he knew the behaviors of our finances and could be trusted to act accordingly. Patel shares some of Greenspan's closing words though and we find that we was as much of a chance speculator as anyone else. When pushed on why he didn't regulate banks more stringently or act more aggressively against speculative trading that was rampant on the stock exchange his answer is simple: his model was flawed.

And I can accept that strangely enough. Any model for running a government has to be willing to bend and balance and grow with the times. But that there is where I can't accept what Mr. Greenspan says. His model changed very little over the nearly 2 decades he held office. Why you may ask? Because he was basing his predictions on a very narrow margin of the financial markets. Some say he assumed to much about the ethical backbone of American business but to me it just appears he was content and lazy the let things be as they always had been. The issue with that being now there are people worldwide that are dying based on his faulty speculations.

Now I don't pretend to be an economist. In fact, I am horrible with money. I love to throw it around and give it away and it is a joy to spend it in exchange for the joys that living in a free market can provide. What qualifies me to write here is my humanity and the fact that it hurts me to see those in power making decisions that affect the day to day living of every person on this planet. So who gets held responsible when the people in charge of keeping the wheels turning fail? Sadly, it appears the only people that will pay are those that are the hardest hit by this economic crisis.

Can I make a suggestion instead? I'm trying to be positive in all things. It isn't easy. I ride the pessimistic wave with glee most times. Often times I think I like pessimism probably because it is something so familiar but I'm trying. Instead of just throwing up our hands do something about our current state in this country. Find a charity you can believe in and give what you can. Give a warm meal to a family that you know is struggling looking for work. Offer a ride to your neighbor if he is having an issue getting to and from school/work/etc. Find a cause, understand it, and go to a place where you can rally and make a difference. I do my own things and can tell you it brings me great joy knowing that I understand hardships and that makes me want to give back even more. It doesn't have to be much...even a smile and a "hello" can make someone's day. We may never see anyone pay for these mistakes but we can rectify them outside our front doors.

As always...