Yesterday’s chaos was a huge gift to the financial reform movement

Robert Reich on the plunge yesterday

Regardless of why it happened, it’s further evidence that the nation’s and the world’s capital markets have become a vast out-of-control casino in which fortunes can be made or lost in an instant — which would be fine except for the fact that most of us have put our life savings there. Pension funds, mutual funds, school endowments — the value of all of this depends on a mechanism that can lose a trillion dollars in minutes without anyone having a clear idea why.

So much of the market now depends on computer programs and mathematical models that no one fully understands, so much trading is in the hands of a few people whose fat thumbs or momentary carelessness [or outright criminality, as the SEC is now investigating] might sink the economy, so much of global wealth now depends on who can move their money quickest at the slightest provocation — that we are toying with financial disaster every day.

The financial reforms being considered on Capitol Hill are steps in the right direction. But the “systemic risk” now embedded in our capital markets is higher than ever, and will require far greater understanding and vigilance than now being considered.

The problem of course is that with few exceptions, Congress is the lap dog of Wall Street, corrupt, bought sold and paid for. They are part of the same elites and the elites are functioning to protect themselves now and screw everyone else.

Anger in this country is reaching boiling levels. The change will come, I’ve no doubt of that. Whether it happens peacefully or otherwise is probably up to Congress. They can do what the people want or events may well force them to.

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