Truer Words

.... were never spoken. This quote is taken from a financial newsletter and is talking about the American financial system. But as you read it, think willingness to pay taxes, sacrifice on energy policy, live modest lifestyles, and on and on and on:

We all know Adam Smith as the author of the bible of capitalism, The Wealth of Nations (1776). But he first wrote what is arguably a far more important book, The Theory of Moral Sentiments, from which the quote that heads this month's newsletter is drawn. America is rushing headlong into the 21st century without a proper understanding of what economic policies and financial tools are going to be required to prosper in a changing world. For more than two decades, the United States economy has favored financial speculation over production. Over the past century, our legal system had developed an increasingly outmoded concept of fiduciary duty that privileges short-term, single-firm interests over the kind of long-term, society-wide interests that could lead to prolonged prosperity [my emphasis]. The current meltdown in the financial markets is a symptom of a serious disease that is eating away at the stability of our most important institutions. What we are witnessing might well be the end of American financial hegemony, which is the result of a burgeoning global economy.

The writer, Michael Lewitt goes on to offer a solution that, if I didn't know better, could have been written by an FDR appointee in 1931. On top of it all, the article appears in a very financially and politically conservative newsletter, albeit in the "Outside the Box" segment.

The so-called Reagan revolution has led to a multi-generation exaggeration of the rewards of greed without the fear of risk. The U.S. is headed down a correction of sorts where these "imbalances" will have to be corrected one way or the other. Without correction, we will be a second rate culture, a second rate society and go the way of the Roman and British empires.