The world is in trouble, why?
The whole world is in a financial crisis. How did this happen? Here’s my own analysis of the past events.
I believe greed is the key word. When greed comes in, and is not controlled, it behaves like agression. Agression uncontrolled leads to crime, sometimes murder, most times war (which should be a crime, but isn’t).
When greed is not controlled, it leads, usually, to more greed. Capitalism is not to blame, though. The goal of capitalism, as I was told in my first economics class, was not profit. That was a misunderstanding. The goal of any organization is continuation of the business. That’s why usually you don’t see businesses like Apple or Yahoo (!) being purchased and stripped apart for profit. E.g. in the latter case, Microsoft was only interested in Yahoo’s services, not the money they could make off selling it again. At that level, continuation of the business is much more important. And that is what MS is looking at right now, a risk of not being able to compete in the OS market. Well, enough about that side story about Microsoft.
The banks, just like any other business, should be in the system for continuation of the business. However, when the economy is in a surge, going uphill, there is no stopping the banks. They get more and more money, and since they are in the money business, continuation seems only so easy. And since none of their clients really understand that business, they can basically sell anything. Just like it was with IT in the eighties. And guess what, IT also experiences these collapses for almost the same reasons (web 1.0 bubble, web 2.0 bubble).
I don’t have a good solution for this, I have to admit. Some things that spring to mind are to have more regulation, but regulation doesn’t always work well. Perhaps more transparency would be enough. Perhaps when the fine print is actually readable and understandable, and has to pass a readability score, then we’d all know what we be getting into.