Promised notes from Patt Morrison’s KPCC interview of Matthew Bishop (author of The Road from Ruin, and U.S. Business Editor of The Economist) at the recent Drucker Business Forum:
September 2008 was a defining moment; but now the real danger is sliding back into a comfort zone without enacting needed changes in the financial system.
The capitalist system has serious flaws that the September 2008 crisis revealed, but the debate on these flaws isn’t happening.
No one in an important policymaking position now is independent from the problem – “They got us into this mess, and they aren’t the people to get us out.”
Patt Morrison asked “How do you change what is essentially a Cro-Magnon incentive system?” Bishop’s answer: “There is nothing natural about capitalism: it is a product of the rules we set. Markets work best when they have clear rules and the rules are well-designed.”
Patt Morrison asked “What’s anticapitalist?” then went on the argue that average American interests aren’t being served by the export of jobs to countries with lower labor costs.
Bishop countered that financial literacy needs to be raised in this country, and that the financial sector profited in a very scientific way off the ignorance of consumers. Individual pension plan owners must insist that managers adopt a Warren Buffet strategy of long-term holdings and investing only in attractive companies with good bottom lines. Wall Street will change strategy only if led by the large pension funds.
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