Monday, November 07, 2011

How Goldman Sachs Created The Food Crisis

More reasons to hate bankers :-)

Seriously, the inventions of the financial sector have consequences in the real world. The problem is that no-one in the financial sector is responsible for assessing or avoiding negative consequences before launching new products. No one in government has effective oversight or enough power to prevent launches. And once the products are launched and people are making money from them, everyone is very reluctant to give them up. I'm sure there will be plenty of flakes ready to swear that these products are absolutely essential to motivate the production of food, despite the fact that agriculture is around 9000 years old these products have existed for barely a decade.

Here's my suggestion : whenever the financial sector wants to launch a new type of product, it needs to go through a public approval process before it's allowed. (Just like a new medicine.) The approval process should include both academics hired by the government, but also a completely public process where the descriptions, financial models, an dpredictions are published online and any interested party (blogger, economist, freelance mathematical modeller) can comment and raise concerns.

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