The existing financial and political system is in deadlock situation. It’s main problem is concentration of financial resources that most of it belongs to general public in hands of few lucky ones (definitely not the most capable) and this damages the competition, since all the financial system gave preferences in its credit policy to certain kind of activities and not to others. It is not accident that most of the banks followed before 2008 financial policy of fools, purchasing unworthy trash bonds like the Greek bonds and very little money went into real investment initiations. Other problem of the financial system and it includes the government and the central bank the main institutions responsible for printing the money, is that it also failed to channel enough economic resources into the main economic problem of today and probably even more tomorrow, which is the CO2 emissions, that according to some scientific studies will have devastating effect on the world economy within 10 years. And this means it is almost a short term problem if you take in account that anything you do today will have effect only within many years, and what’s going on with the earth heat up is result of acts done many years ago. The existing democratic political system that is managed by politicians whose perspective of existence is 4 years at most (Except in France) and who are elected by some very temporary mood of margins in the society, who change their voting behavior from election to election, cannot cope with the real long term problems, that had become within the years a short term problem. (Most of the leaders in the democratic world are elected with marginal difference of votes. Bush the son in his first time period, was elected with margin of 50,000 votes.) Another problem of the democratic political system is that it failed to incorporate in the decision process the experts and the intellectuals, and in contrary the existing trends are to exclude them from the process.
Other problem of the existing financial system is that most of its players in the so called private sector entities, i mean legal entities with publicly traded shares, like banks, insurance companies, investment and pension funds, but also the largest holding companies like GE for example or GM before its bankruptcy, have managers who are self nominated and self managing and who are not really responsible to anyone for the results of their acts. They also remain in their position for years, unless their acts bring directly to colossal failure, (viz. example of Enron). If they are successful in some kind of short term act, they take reward, and if they fail they also rewarded helping with the rescue of the company from the mess they created.
It is a well known fact that every management system that doesn’t have to cope with the two ultimate improvement generators of the capitalistic system, the Competition and the Risk, will rotten at the end. This is what happened to the whole socialistic system, but the same happened to the US auto-industry that became marketing and leasing companies that forget their primary task, how to produce good cars. By the way Ford did not go to bankruptcy only because it sold at the price pick some or most of its valuable real-estate before the crisis.
So to conclude my claim, there is a basic problems in the existing corporate legal system, but also in the political system, to which i don’t see anybody came up with some solution, but what is even more disturbing i even don’t see real intellectual talk about these problems among the leading economic intellectuals. To my opinion the first seeds of the change that will have to come in the political and financial systems are the experiments like bitcoin, kickbox, university lectures in the internet, but also some kind of referendum system that would bring the experts and intellectuals into the decision process back.