Jeffrey Sachs, the influential economist at Columbia University shared a sobering perspective as part of an impressive lineup of speakers at Tuesday’s World Business Forum. In his speech, he pulled a fire alarm on the optimism on leadership in business and opportunities abroad with his perspectives on the bipartisan failure of US policy making and the world’s near-certain risk of ecological bankruptcy.
The saddening part is that the message may have fallen on deaf ears, with Wall Street Journal running what was only a side comment from Sachs, and little of the message making it out of Radio City Music Hall unscathed. This was due, perhaps in part, to the audience’s composition and the slightly morbid tone of his presentation. Sometimes bad news is just bad news.
Bipartisan political failure in the US
Sachs began with a quick overview of the essence of our current crisis, which is, he argued, financially based. “Beneath the rubble, lay complete lack of proper regulation in lending, which was the direct cause.” We broke down walls between investment and consumer banks, he explained, and created derivatives that could be sold to those who had no idea what they were really buying, and all of this occurred outside of regulation.
Then, as bailouts were handed out to Wall Street’s banks, the underlying and critical problem with our political system became clear as the financial sector spent $3.7 billion lobbying for its interests. Yesterday, Nobel prize-winning economist and World Business Forum speaker Paul Krugman, reiterated this, noting that we may have bailed out banks too fast, restoring them back into full control only so that they can lobby against any regulation that may be in the sector’s best interests.
Sachs described the current state of policy-making as something that happens behind closed doors and by parties focused on their own interests. Guess which sector is the second largest spender in lobbying? Healthcare.Click to continue reading »