(Note: There are many articles of various kinds of "America is decaying", and some of the analysis is a statement of facts and logical self-consistency; however, some judgments may be biased (such as a series of articles by a "financial big V" who was recently arrested for illegal deposits). It just so happens that Mr. Pang Zhongjia and I co-authored "Why the United States" (published in 2012), which I co-authored 10 years ago, introduced the economy, science and technology, military, education, business, and people's livelihood in the United States, which seems to be outdated. Then from April 2nd, we will excerpt some of the content and share it with you... ）
4-3-9 Wall Street is drunk, but who gave it?
Wall Street dominates the world's largest capital market, helping tens of thousands of companies to go public and raise funds, successfully mergers, manage wealth for investors, and establish a smooth financial trading environment; and has created many venture capital funds, inspiring the development of science and technology, thereby promoting the development of the United States and the global economy. In the final analysis, however, Wall Street's most important function is to raise and allocate capital to serve the real economy; any time it deviates from or even deviates from this purpose, it will go to the opposite side of history and even lose the fundamental meaning of existence.
It's all a recipe for the virtual economy. However, the virtual economy cannot be denied, and the real economy in the era of globalized market economy is inseparable from the virtual economy.
Without the proper capital operation of the virtual economy, the development of the modern real economy may stagnate or even die. Capital operation has the function of optimizing the allocation of capital. Resolving the contradiction between the rich and the poor and building a harmonious society requires the operation of capital so that all people have a fair opportunity, access to funds and opportunities to develop themselves. In the 1960s, the United States relied on an unprecedented scale of capital operation, provided sufficient venture capital funds for emerging technology industries, and with the help of the vigorous development of the securities market, supported the high-tech industry to obtain funds for sustainable development, and the information revolution sprung up, and the United States was able to firmly occupy the position of the world's "superpower"; all clearly proved the importance of making good use of the "virtual economy". However, once the virtual economy is separated from the real economy, it loses its original meaning of existence and will inevitably go astray, which in turn will interfere with and endanger the real economy.
The virtual economy is very speculative. Speculation does not equal bad things. Speculation has its unique function in the market economy, which can activate the market, contribute to the performance of prices, promote market equalization, and thus achieve the goal of optimal allocation of resources. In investment theory and practice, there is no securities market without speculation. But as a mature securities market, it is impossible to exist for speculation. If speculation dominates the market, the "bubble economy" will rise like a shadow, often first the price soars, and finally plummets sharply, and even leads to a market crash, which is extremely harmful to the macroeconomy. "Too late" is also.
Today, after experiencing the largest economic crisis and the worst recession after the Great Depression, the United States is in the weakest and slow-paced economic recovery period after World War II; but if it cannot achieve major economic restructuring, cannot return to the financial definition standard in time, revitalize the real economy, and jump out of the bubble circle of money rolling money, new crises and recessions may follow.
This round of financial crisis shows that Wall Street has gone astray, deviated from the real economy, sown a vast net of virtual economy, and even trapped the entire world and broken into a catastrophe. Angry people liken Wall Street to an economic villain and a financial cancer. Some say Wall Street is drunk, the speculators are drunk, and everyone is drunk, but we might as well ask: Who gave the wine?
Let's take a closer look at our thinking. It can be found that the real source of this crisis turned out to be the government. Not only did the government single-handedly create a housing bubble, but it had long since given up its ability to regulate Wall Street. And all the players in the market are chasing for profit. Chasing for profit is the nature of the market, which is actually understandable.
Just like the author of "The Great Game", John S. As Gordon put it, "The gamers in this great game field on Wall Street were, and still are, great and small, noble and lowly, intelligent and stupid, selfish and generous — they are all, and always will be, ordinary people." ”
The effective functioning of financial markets is first and foremost based on the instinctive egoism of human beings. It is the strong desire of human beings to make money that makes groups of investors willing to take risks and actively participate in trading activities, thereby providing liquidity for the financial market; but if the egoistic nature tends to extreme, it is inevitable that selfishness and greed will lead to crime, and this inevitable tendency can be described as the "original sin" that everyone is born with. Jeffersonians thus abhor speculation in financial markets and blame it on Hamilton's erroneous policies; he called New York, where speculators gathered, "the great gutter of the depravity of human nature."
Human beings, endowed with the creative power of special spirituality, realized the necessity of regulating the altruistic mind (the public interest), and thus developed a morality unique to the "Spirit of All Things". Historical experience proves that moral power is based on self-consciousness, but the tendency of selfishness and greed, or the allure of Satan the Devil, is so great that it is very easy to knock the noble but fragile consciousness to the ground and become worthless.
Self-awareness alone is not enough. In order to guarantee the effectiveness of moral power, an effective mechanism of checks and balances must be established. Especially against the wealthy and powerful strata of power, their self-discipline is almost always inversely proportional to the growth of power.
If the "American spirit" embodies the clever way of self-interest and altruism to reconcile with each other, and becomes the deep reason for the successful rise of the United States, then "balance of power" is her faithful patron saint.
People used to praise Wall Street's self-discipline. It wasn't the government that first established the rules of the game for Wall Street, but the brokers themselves. But relying on Wall Street to establish its own rules, especially those that are clearly unfavorable to itself, is an irresponsible and unrealistic absurd concept. (To be continued)
Written in October 2011 on the Hudson River in New York
(Sijin Note: Except for the author, all articles are original by Sijin.) 【Disclaimer】This article only represents the personal exposition and views of the original author, and readers are kindly requested to judge for their own judgment. The content or data is for informational purposes only and does not constitute any specific investment advice, is not used for any commercial purpose, and is not responsible for its authenticity. Investors operate accordingly at their own risk. ）
