Forum Post: Who's responsible?

The problem is, that most people are lazy and stupid. It's that simple.

The rich, got rich, by using their available capital to increase their earnings. They control their spending, and invest prudently. That's the simple way to create and maintain wealth. It's available to everyone. There is no banker that can stop you from getting rich if you so desire. But stupidity and laziness will stop you every time.

The poor, got that way, for the most part, by spending beyond their means. Wanting everything, and wanting it now. The inability to control spending, will lead to poverty, no matter how much you earn. I have seen people who earned more than $250,000 per year, who couldn't pay their bills. It's not about how much you make. It's about how much you spend. If you don't have enough money, it's not because somebody took it from you. It's because you felt entitled to something which you couldn't afford, and someone else was quite willing to sell it to you.

The gap between the rich and the poor is not a testament to the greediness of the rich, it is the result of the attitude of entitlement which prevails in our society today. The poor are addicted to consumption, as much as a drug addict is addicted to the high. Rest assured, as long as you are willing to spend beyond your means for things that you feel entitled to, someone else will be willing to sell it to you. It's not a one way street.

So how do we fix this problem? In a way we already are. You tighten credit, making it harder for people to live beyond their means, and for a society addicted to consumption, that's a painful process to go through. For both the debtor, and the debt provider, it's not an easy solution. It means the value of things bought on credit will decrease, as less credit is available. It also means the income of the lender will be constrained. Have you checked the stock prices of the big financial institutions lately? It ain't pretty.

A viable banking system is essential to the operation of a vibrant economy. Banks are supposed to be there to provide for the efficient flow of funds, both for daily operations, and for ongoing investments. Providing capital for the expansion of the economy, and the growth of productivity, is what banks are supposed to do.

Unfortunately, in today's society, financial institutions have gotten away from their core purpose. Things like triple leveraged ETF's would be more at home in Las Vegas, then they are on Wall Street. The current regulatory environment fails to constrain our financial system prudently. This needs to change. But that being said, such regulations must not be put in place simply to punish. They must reform the banking system such that it fulfills the purpose that it is meant to serve.

In the end there is enough blame to go around. There are consumers who can't control their spending, there are financial institutions ready and willing to benefit from that lack of control, and there is a government which seems complicit on both ends. It seems willing to borrow and spend to keep the whole thing going, by handing out money to both the bankers and the spenders.

In the long run, it ain't gonna work. But before you villify the banks and the Congress, take a look in the mirror. You've got control of two things, the pocketbook, and the ballot.

I'm not against your right to use both. Nor am I against protest, so long as it's informed, and peaceful. What the world needs now is someone with a Steve Jobs type leadership. Someone who sees the possibilities for the future, and is not satisfied with simply staying the course, but rather sets out to create what others merely imagine. It's easy to protest against the way things are, but much harder to envision, and then bring about, the way they should be. Some fail in the vision, others fail in the implementation. But what makes true leaders, is they do both.