I've been to a talk at the Hammer Museum and learned something interesting. In the advance to the last recession, a two-hundred and fifty billion dollar company lost all its value. That figure, two-hundred and fifty billion dollars, is roughly, according to the speaker, the value of the bad debt which caused the recent economic failure. Investment in a company can become worthless with no significant results, he said, but when investment is in debt, the result is spiraling loss of confidence and recession. He also pointed out that before the economic failure forty percent of the so called gross national product was financial, the product of buying and selling money, and now thirty percent. He did not make the obvious connection between the two statistics: the reason one two-hundred-and-fifty billion-dollars is different from another. In one case, the loss is localized, more or less, in a single company. In the other case, the loss is out of the foundation of an economy based forty percent on speculation. Speculation is making money out of confidence, either the buyer or seller's.
The speaker, a specialist in economic statistics, also commented that other countries, notably Germany, invest in businesses that produce things rather than buying and selling money. These businesses look at their employees as valuable assets in the production process and so take care of them. It was better that way for business, at least those that produce things, better for the economy as a whole. Of course it was out of the question for him, an employee of a large corporation, to say that people might do things for reasons other than profit.
It was however said by a member of the audience. But what to do? Ridiculing politicians doesn't work. Telling the truth doesn't work. Informing the public doesn't work.
As usual, I am watching the lecture on the wall monitor, out in the entrance lobby with the museum guards. We try to answer this question ourselves.
Probably people have to be better before they can get the better government they ask for. The government, like the present economy, is a kind of confidence game, based on our leaders' speculation on what can be gotten away with. When they cannot rely on the people's agreement that there is no purpose in life other than profit their confidence will fail.