Funding the Green Revolution

I believe in Main Street and am philosophically opposed to Wall Street and what it has become. The financial sector’s purpose should be the reduction of risk and the efficient allocation of capital. Wall Street has failed at both tasks.

Finance is a means to an end, but the financiers of capitalism have turned finance into a profit center that essentially skims more and more out of the Main Street economy and into the pockets of a few. They often add no value yet have manipulated the game for their benefit. Those folks care about money and money only. Don’t expect them to understand the green revolution. I personally don’t believe a publicly-traded company can be sustainable anymore than a rock can fly.

Everywhere you turn, you see rules created by corporate lobbyist and their politicians that protect Wall Street to the detriment of Main Street.

As a result of the rules, Americans have $14 trillion invested in IRAs and 401(k)s with 97 percent (97%!) invested in Wall Street’s stocks, bonds, CDs and money market funds. Just 3 percent of individual retirement funds are invested in alternative assets like real estate, private lending, VC investments, private placements, precious metals, LLCs, international holdings, etc.

How many of us green minded folks would like to defund Wall Street and refund Main Street using our retirement funds? I certainly would and this isn’t an all or nothing proposition. But many people have six figure retirement accounts with their money invested in the very companies who are destroying the planet. Does that make any sense?

In my next post I will disclose an approach we could use to help fund the Green Revolution.

Where is the Change?

“You cannot solve a problem from the same consciousness that created it. You must learn to see the world anew.” Albert Einstein

I would love to see the economic crisis end. I think we all would. However, I have little faith in President Obama’s economic leaders because they come from the same mindset that caused the problem. They are the consummate insiders trying to restart their broken system.

I believe the root cause can be traced back to Wall Street and financial speculation. As I’ve written before, the solution resides on Main Street, not Wall Street.

Federal Reserve Chairman Ben Bernanke is a fairly traditional economist whose thoughts, beliefs and training have all been from the consciousness that created the problem. The same is true of Secretary Timothy Geithner. Both come from the world of banking that is at the core of this mess and because of their history, have mental models that can only see a solution in that arena. I believe it would be impossible for them to envision a world without our current monetary system (private bank that creates and controls money) or the behemoth financial sector from where they emerged.

As I’ve stated before, much of our financial services sector does little to add real value to our economy. Trading paper is not economic output despite what we’ve been led to believe.

I wonder where we’d be if we stopped focusing on the banks and instead focused on the American people. How far would $9 trillion go towards fixing our economic problems if we targeted that money towards Main Street instead of Wall Street?

I suspect their solution (buying worthless assets with taxpayer money) will cause as many problems as it might solve. I have a real fear of hyperinflation as the government floods the economy with more money to purchase worthless assets from private banks and investors. They’ll get the money, we’ll get the bill and in the end, will have nothing real and tangible to show for it except little pieces of paper.

“Insanity: Doing the same thing over and over again and expecting different results.” Albert Einstein