I guess I kind of shifted the focus of the recent posts from anything technology related to the financial mess we’re in right now. But it’s pretty fascinating to me how this house of cards could have been built and how it’s now collapsing rather quickly.
CDOs, or collateralized-debt-obligations, are one of the big the financial weapons of mass destruction causing the mess:
Where will it all go?
I wonder if in the long run the US will realize that the American model has simply failed and revert to a more moderate European capitalism. One that includes government oversight and social responsibility as a core pillar of the economy – rather than putting the focus on profit alone. Europe might not have quite the perfect mix either, but are years ahead in that regard. Unfortunately even the Europeans bought into Wall Street’s craziness and have the price to pay for it now. Globalization is one of the big reasons why many countries will have to work together to solve this underlying problem — the wrongdoings of one can just affect others too much. Think about it, the country of Iceland is basically bankrupt because of this. Unfortunately the Bush administration doesn’t exactly have a good track record of working with other nations (remember “either you’re with us or against us”?). Yet in many ways our system of countries and government seems too outdated to effectively combat the world of international finance.
On a side note, the national debt clock right around the corner from my office on 6th Ave in Manhattan ran out of digits today. There are many reasons for this, especially over the past 8 years. The focus of any adjustments that are made in the future to the financial system and economy as a whole have to focus on sustainability.
An interesting topic in the current election is the focus on universal health care. The US health care system is run by profit-oriented companies and their special interest organizations and really just hitting the fan. Many people aren’t cared for and many that are can’t afford to pay their bills. Having lived in Europe for most of my life I must say I prefer the European approach to things. The quality of live is just simply better and no-one has to worry about medical bills putting you out in the street. And I never got the impression I was cared for less over there — quite the contrary, American doctors annoy the crap out of me, all they ever want to do is make more money on tests and drugs without any real reason for it. I miss paying my 10 € a quarter even when going to a specialist. And not getting hit with about 10 bills after my $25 copay every time I go to the doctor (secretly my message here should be: eat more vegetables).
Let’s hope people learn out of this one. I’m really an optimist at heart :)