I spoke last Thursday at the Congressional Progressive Caucus Policy Summit in Baltimore on how our work at Capital Institute might have relevance to the 2012 Congress’s financial reform agenda. These are the hopes I shared for how policy could shape the Future of Finance:

This former banker, and now sustainability investor and humble blogger, will not offer grand predictions for 2012.  Forecasting in a world of rising uncertainty suggests a lack of understanding about uncertainty.  Instead, inspired by my holiday reading, Debt: The First 5000 Years, by anthropologist...

"If your banker breaks, you snap."  -  Herman Melville, Moby Dick

During the summer between the day I resigned from JPMorgan after eighteen years, and the horror of witnessing 9-11 up close and personal, I joined a couple of friends on their fifty foot sailboat in an attempt to sail across the Atlantic Ocean.  What better time to...

What does the collapse of MF Global, the Euro crisis, the sub-prime mortgage crisis, the collapse of Fannie Mae and Freddie Mac, and the 1998 collapse of Long Term Capital Management all have in common?

Certainly these crises all shared the following characteristics: too much leverage, lack of transparency, inadequate regulatory oversight, agency problems of misaligned incentives,...

Last Friday, I participated in a Special Briefing on Capitol Hill in support of the Financial Transactions Tax (FTT). I came as a seasoned practitioner speaking on behalf of the real economy, not for the interests of the Wall Street trading community.  What I tried to convey was that what the US and World needs is enhanced capital market function, and that an FTT can help bring it...

Bloomberg View has joined its Wall Street customers in coming out against the Financial Transactions Tax proposed by Germany and France, and recommended by the European Union, declaring it politically unfeasible while undermining economic growth.  

Presuming for a moment that the politically unfeasible can become reality when good ideas are pursued in a real democracy, it...

Attending the previous National Gathering and becoming involved with Slow Money has been transformational for me. These experiences are the basis for my growing Slow Money gratitude. After 17 years with my family’s brokerage business, I started a journey to become more aware of the social, environmental and economic impacts of my choices and actions. Slow Money has been one of the key...

“When is enough enough?”  Bernie Sanders asked during his filibuster against the Lame Duck tax bill last December.  During the speech, he referred to Bill Gates and Warren Buffett, two of the world’s richest three people.  (If you haven’t been paying attention, they’ve been pushed down to the number two and three spots by Carlos Slim Helu, the...

Forty eight years ago this Sunday, the Rev. Dr. Martin Luther King Jr. began his famous “I have a Dream” speech on the steps of the Lincoln Memorial by proclaiming it, “the greatest demonstration for freedom in the history of our nation.” And it was.

While the struggle for freedom has made progress since that historic...

Progressives have roasted Republican presidential candidate Mitt Romney for telling Iowa State Fair goers that corporations were people.  Rants about ‘corporate personhood’ popped up everywhere.

But ‘...

DISPATCHES FROM BALLE

Accelerating Community Capital Day

At the BALLE conference in Bellingham, Washington, I attended the pre-conference Accelerating Community Capital Day. Considering that the content of the conference is local living economies and the...

- A $20 trillion “externality” appears to present civilization with its BIG CHOICE: economic destruction or ecological destruction, both with chilling global security implications.  Here’s why, along with a practical and more hopeful alternative to “Sophie’s Choice.”

Carbon Tracker has released an illuminating report,...

For some time a small group of ecological economists has been suggesting that we switch the tax base from income (value added to natural resources by labor and capital), and on to natural resources themselves. Value added to resources is something we want more of, so don’t tax it (either at each stage of production as in Europe, or at the final stage as income as in the U.S.). The...

Somehow I missed the release of a new collection of essays by Wendell Berry in 2010, What Matters: Economics for a Renewed Commonwealth.  The introduction is by Herman Daly, whose clarification of how scale limits transform economics remains the most important idea still not acknowledged in mainstream economics today. 

When two of my heroes collaborate on a book...

Foreign Policy’s recent “How Goldman Sachs Created the Food Crisis” reflects the dangerous, myopic thinking all too prone to “blame Wall Street” that is a natural consequence of Wall Street’s appalling, anti-social behavior in recent...

Few people have read the dense volumes published by the economist Milton Mountebank, but his work has affected you, me and every single person on the planet. Dr. Mountebank has revolutionized economic thought, and now he has been recognized for his singular efforts. Yesterday at a gala reception in Stockholm, Sweden, the chairman of Sveriges Riksbank, Peter Norborg, presented Dr. Mountebank...

Matt Taibbi’s “The People vs. Goldman Sachs” which appeared in Rolling Stone this week is a good and damning piece.  In his latest attack on Goldman ("the Vampire Squid"), Taibbi likens the scathing 650 page bipartisan Levin-Coburn report on...

Well-established words can be misleading. In economics “production and consumption” are such common terms that it is easy to forget that they do not really mean what they literally say. Physically we do not produce anything; we just use energy to rearrange matter into a more useful form. Production really means transformation of what is already here. Likewise, consumption merely...

I’m not following the trial of hedge fund manager Raj (“King”) Rajaratnam very closely, and I have no unique insight into the case other than what I read in the press.  To me, the wiretap evidence incriminating “the king” appears overwhelming.  The defense’s strategy suggesting it was all “public information” is insulting to common...

I returned late last night from the second Institute for New Economic Thinking (INET) Conference which took place at Bretton Woods. This was the site of the historic Bretton Woods Agreement signed in 1944, establishing the IMF and the World Bank, and creating the global world financial order...

The NY Times report by David Kocieniewski on GE’s aggressive tax strategies under the leadership of John Samuels, a former Treasury Department tax lawyer, which enabled the company to pay no income taxes to Uncle Sam on their $5.1 billion of US-based income has many...

In the last quarter century, states from Virginia to Colorado to California have seen privatizing roads as a great source of immediate cost savings and cash. But what do these deals mean in the long term? What effects will they have on our society? And what does the nineteenth century experience with privatized roads and bridges teach us?

Penn State law professor...

I attended the annual US Department of Agriculture conference this week in Washington DC.  My job was to participate on a panel with The Savory Institute, organized by the Risk Management Agency of the USDA.  Our topic was “Critical Thinking: The Best Risk Management Tool.” 

My message was about systems thinking, and how the financial system collapse...

Let’s start with this phrase: “sustaining our commonwealth.” By sustaining, I don’t mean preserving inviolate; I mean using, without using up. Using with maintenance and replenishment is an important idea in economics. It’s the very basis of the concept of income, because income is the maximum that you can consume today and still be able to produce and consume...

I sure got that one wrong.

At the end of my 2009 year end letter to Lloyd Blankfein, Chairman and CEO of Goldman Sachs, the third in an exchange that took place during the depths of the financial crisis, I predicted that Goldman clients would begin to defect, either of their own volition, or because their own...

I have discussed the problem of reductionist thinking, grounded in the Enlightenment, in the past.  Nowhere is reductionist thinking more in force than in finance.  Derivatives disaggregate risk into component parts, and then atomized parts are reconstructed into new wholes using securitization.  This process goes on, with greater and greater leverage applied until it...

The mystery of derivatives, the secretive multi-trillion dollar market that few understand but is believed to be at the heart of the financial meltdown needs illumination. Without it, policy makers have no chance of getting much needed regulation right.  The recent NY Times piece, “A Secretive Banking Elite...

Preface for Sustainable Welfare In The Asia-Pacific: Studies Using the Genuine Progress Indicator, by Philip Lawn and Matthew Clarke, 2008

It is no small thing to shift the burden of proof. Yet that is what Lawn and Clarke, and their colleagues, have done in this remarkable study....

After my Thanksgiving turkey, I digested two recent commentaries on the financial industry, “Inside Job,” the mostly fair but incomplete documentary narrated by Matt Damon, and the balanced and accurate New Yorker essay, “What Good is Wall...

Obama had a bad week at the G20.  He was rebuked by Western leaders on the weak dollar consequences of QE2, and he failed to secure a Trade Agreement with South Korea.

There is something not terribly compelling about a trip to India, Indonesia, Japan, and South Korea, and pitching these countries on expanding exports from the US to create US jobs.  After the pummeling he...

In his latest entry, Capital Institute Board Member Peter Kinder reflects on the legacy of Adam Smith and his conceptualization of human nature. Invoking a lively debate in academia called 'the Adam Smith Problem', Peter reminds us that reading The Wealth of Nations with The Theory of Moral Sentiments as context is optimal to understanding Smith.

 ...

I recently gave the keynote at the annual meeting of Oregon Rural Action in La Grande, Oregon, “Making the Shift: Building a Vibrant Local Economy Amidst the Broken Global Financial System.” (My slide deck is posted on our resource section here.) To...

The global economy now uses 1.5 times the earth’s capacity to regenerate the natural capital we use every year, up from the 1.4 times of the prior year, according to a report of the well-respected Global Footprint Network.  In their Living...

There are several "Great Transitions" circulating, visions for a transition to a just and sustainable economy and society.  Tellus Institute convened the Global Scenario Group, to produce the Great Transition Initiative in 2002, a comprehensive set of alternative futures.  More recently, the New Economics Foundation...

Last week, Capital Institute co-convened with futurist Hazel Henderson at Ethical Markets Media (USA and Brazil), her company's facility in Florida, the new Committee on Transforming Finance (CTF).  The CTF is a group of seasoned capital markets practitioners, scholars, and financial writers who share a belief that the policy responses to the financial crisis were more...

The more I discover about the modern financial system, the less I recognize it, and the more incredulous I grow.  And I worked at the center of the financial system until 2001.

My comment is prompted by the latest news that several leading hedge fund managers and private equity moguls are lashing out at the Obama Administration and funneling money, lots of it, to the GOP...

Stress-test complacency will be a cause of the next financial meltdown.

Economic commentators have been increasingly using the word "uncertainty" of late.  The context has included the business climate, the stimulate vs austerity debate, and forecasting the investment outlook across capital markets.  Two examples:

"When...

The first and overarching theme of the G-20 Toronto Summit is "laying the foundation for sustainable and 

...

"John, I think you are pursuing one of the most important initiatives around these days. Please call on me any time. All the best, Gus"

Well, I decided to take Gus at his word, and today I am pleased and honored to welcome Gus Speth to our Council of Advisors. Gus' impressive career of service to the environment...

Capital Institute Founder and President John Fullerton addressed the US Senate on Wednesday April 21, 2010, lending his voice in support of Senator Brown and Kaufman's SAFE Banking Act.

Drawing upon years of...

No doubt, we've all been to conferences that are both stimulating and exhausting at the same time. 

The George Soros backed Institute for New Economic Thinking (INET) inaugural conference that took...