Friday, July 10, 2015

The Last Word on Financial Matters

The Last Word on Financial Matters

I have decided to bring my column and blog to an end.  Much as presidential political candidates offer comedians endless material, the financial services industry provides critics with an unending opportunity to comment on inappropriate, and on occasion, illegal activity.  Over the past three years, I’ve researched and written over 750 posts and columns about money management, investment banking, and portfolio management.  At the same time, I’ve discovered that I need much more time to draw and paint.  Thus, I’ve decided to spend my time making art.

To be clear, I remain deeply concerned about the completely corrupt culture and unfettered political power of the financial services industry.  The corrupt culture continues to nurture an industry that puts its interests before its clients.  More disturbingly, the industry’s short-term and amoral mentality has captured our political process. 

While visiting Ecuador a couple of days ago, Pope Francis perfectly expressed the dangers to a world driven by the culture of the global financial services industry: 

The tapping of natural resources, which are so abundant in Ecuador, must not be concerned with short-term benefits.  As stewards of these riches, which we have received, we have an obligation toward society as a whole, and toward future generations.

The Pope could have cited John Bogle, the founder of Vanguard Investments, who has led an unsuccessful campaign against “short-termism” for the past several decades:

A culture of short-term speculation has run rampant, superseding the culture of long-term investment that was dominant earlier in the post-World War II era. But today's model of capitalism has gotten out of balance, to the detriment of the investing public - indeed, to the ultimate detriment of our society.

Until we address the undue influence of the financial services industry, we won’t begin to tackle problems ranging from poverty to global warming.  Short-term financial interests will block or co-opt any reform that impedes the ability of bankers and money managers to pursue their only interest: making more money.  As a Republican or Democrat, you probably think that you are going to get a chance to elect a candidate who reflects your views on matters of public policy.  Although this may turn out to be case on some social issues, it isn’t going to much matter if the next President is named Bush, Clinton, Rubio, Walker, or any one of the candidates on matters of economic, environmental or foreign policy.  Just as pension trustees, and legislators are largely controlled and owned by Wall Street, our next President will do a fine job of representing the interests of the financial industries industry.

While the nature of our economic and political systems is in sorry shape, the same cannot be said for our creative communities.  I’m not talking about some financier who comes up with a clever new derivative product or a software engineer who writes an amazing piece of code.  I’m talking about writers, musicians, and artists, who develop ideas and create works that define what it means to be a human being.