Eric Scheiderman Gets it Wrong
According to the Attorney General, as quoted in the Daily News, stock prices are volatile because people distrust Wall Street. "The trust bank is empty and we have to restore public confidence in the instruments of government and the instruments of the private sector," Scheiderman said. Scheiderman said people need to believe that Wall Street "is not a rigged casino."
Actually, stock prices are volatile because they are too high, because the suckers have too much trust. The dividend yield is 2.0%, down from a historical average of 4.3%. Those running the rigged casino are looking for the signal to get out before the suckers. Scheiderman is repeating the Spitzer line, and perhaps enough trust was restored after 2000 that the suckers were fleeced again. What people need to believe is that Wall Street is, in fact, a rigged casino, and that government will not be trustable until all those incumbents are tossed out. The real debate is whether our public and private institutions can be reclaimed, or the best we can hope for is to rebuild after an institutional collapse that we only hurt ourselves more by forestalling. The problem, Mr. Scheiderman, is the values of Generation Greed.
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