Good interview here with Robert Shiller on the reality of financial capitalism. He says:
“The most important thing to do to reduce economic inequality is to fix financial capitalism, to make it work better, is to democratize it, that is, to make it more accessible to the more vulnerable people in the world.
Major human tragedies, as seen around the world, seem most often to be traced to some failure of application of modern principles of insurance, diversification, risk hedging, and the promotion of efficient production structures. Making these principles relevant to a broader swath of the world’s population, on an enlightened basis, with proper regulation so that the financial institutions serve their interests, is the best possible reaction to the Occupy movements.
Young people today, contemplating how they should respond to the idealism in the Occupy movements, might well consider taking on the task of learning finance thoroughly so that they can get inside the financial community or the government regulatory authorities and expand their operations from within, to the benefit of everyone in the 99%. “
It’s like this – Wall Street is huge because the demand for Wall Street’s services are huge. This means huge revenues, huge pay checks, huge inequality in pay, etc. So how do we fix this? How do we bring Wall Street back to some sense of normalcy where bankers don’t appear (at least according to their pay checks) infinitely more important than teachers, doctors and fire fighters? I think it means creating a new class of investors who are smarter and more empowered. If you want to become less dependent on Wall Street then you have to better understand Wall Street, the monetary system and we need to create a more financially empowered society. Big developments from me on this subject are coming in the next few months. I’m putting my money where my mouth is on this one….
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.