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Todd Harrison: Capitalism not at fault for pols' flubs

amny

amny

It’s been a wild week on Wall Street as the stock market saw more swings than a hedonism vacation. A steady stream of earnings and a slew of misinformation emanating overseas had traders chasing their tales and investors covering their heads— it’s trippy out there, and few have been immune.

I wrote a column this week that spoke to the enormity of the economic condition and the ramifications of our rapidly shifting social mood. This has been a longstanding theme in Minyanville — the cumulative imbalances and its collective toll — and it was shared in the context of education; to understand where we are, we must appreciate how we got here.

The takeaway — at least for me — was the venomous reaction from both sides of the proverbial aisle. The left accused me of being part of the Wall Street machine and the right called me a tree hugger. Sticks and stones, I know, but the reaction to news is always more important than the news itself.

As a registered independent — financially conservative and socially liberal — I’ve watched this financial storm build through the years. Some would say I saw it coming a mile away which is positive on the margin — it means we’re one mile closer to where we need to be: the inevitable comeuppance of our social conscious.

The unfortunate reality is that free market capitalism hasn’t been allowed to dictate the process of price discovery for many years as policymakers engineered the business cycle. It’s never wise to mess with Mother Nature and now she is knocking at the front door, with the world’s children as her army.

One of the great misperceptions in financial history is that the crash caused The Great Depression when in reality the Great Depression caused the crash. Social mood and risk appetites shape financial markets, not the other way around. I will ask you to view the current social uprising through that lens and take a deep breath..

We will get through this — we always do — but it’ll likely get worse before it gets better. Quite hopefully, we’ll remember the lessons learned from this mindful revolution, grow from our past rather than repeat it and leave this world a better place than we found it. The future is in our hands and it starts today. 


Todd Harrison is the author of “The Other Side of Wall Street” and the founder and CEO of Minyanville, an Emmy Award-winning financial media platform. Read him daily at www.minyanville.com.

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