financial crisis and economic crisis

Part-1

The house of cards has collapsed under the rubble and risk staying all. My contribution to the meeting today winds through a reflection on two aspects the first is the crisis of values and a betrayal of trust that this crisis proves the second is the direction that, in my opinion, you must follow to exit the current situation and restart the economy on a sounder footing.

What we are experiencing is a crisis of moral and ethical values in a field finance that without attention to himself and his needs is reduced to dry technique. And the technique, if not governed by laws and moral rules, gives rise to a vicious cycle that feeds itself and in which profit, an end in itself, becomes the sole objective. The result is what we have today under the eyes, the finance infested with toxic elements that have come to infect the real economy, plunging the world into severe recession.

Finance is part of a complex mechanism – the economy – in which plays a very precise and defined: to provide the necessary capital investment in the real economy of firms, households and public administration. Within a few years the development of an unhealthy financial engineering, passed off as innovation, has created a colossal mess and has spread the illusion of enrichment easily, effortlessly and quickly transforming the economy based on investment economy based on income.

This step is deadly because it completely changes the approach of the people’s economy it goes from the idea that the economy is a tool for improving human life and to spread progress and prosperity, the idea that, instead, an end in itself. And that, consequently, the more you earn now, the better.

In this scenario increases the savings allocated increasingly toxic assets and sick with the lure of higher returns and immediate and depressed investment, which requires more time to be repaid, but which ensures greater stability and security as long as you continue to invest in research, innovation, training for production systems have increasingly responsive to changing market needs. In terms of values and ethics of the economy, the big financial trap, which have fallen million savers and investors, has revealed a pattern of negligence, lack of control and likely collusion to put it mildly devastating.

- First of all, the financial crisis was caused by the inordinate greed of the super managers. Too many among those having been called upon to handle large firms, banking groups and brokerage, with no moral and ethical values, they put their interests before those of the firm, triggered by instruments and procedures unhealthy stock option millionaires disproportionate benefits, opportunities for enrichment out of the picture makes sense and all logic. The managers are the custodians and managers of a well, their main task is to keep the company healthy, to have them produce the profits necessary to remunerate the capital invested, pay wages and salaries of workers and employees contribute to common good through a fair tax levy (the means by which “the major shareholder of each company, the state redistributes the wealth produced by the economic system), do their part to improve the living conditions of communities which it operates. Naturally the manager must be recognized treatment commensurate with their economic responsibilities, but when the interests of the individual have the upper hand over the company as a whole, the decline is inevitable.

- Secondly, the lack of foresight. Who has designed and engineered subprime mortgages, bonds that have derived from, the bonds of all kinds, junk bonds, he knew he was putting together a system that, sooner or later would collapse. He did so because seduced by speculation and profit from short or very short period to issue securities, square, cash and run. Similarly, savers and investors, attracted by the smoke of very high interest, have forgotten that the economy is made of roasted hard work, tangible products and daily commitment that take time to produce tangible results.

This discussion will continue in the second section below