I suppose I should not be surprised that five years into the financial crisis that nothing has really changed in the way that the financial markets work. Either way it is disappointing that our economic system, arguably the most adaptable, has not adapted. The explanation: no change will come until it is really needed (forced on us).
Yesterday, Andrew Ross Sorkin posted this piece on why individual investors are fleeing equities. I should say still fleeing, because individual investors have been leaving the market this entire time. Here is a post I wrote on the subject in May 2010.
My thought then was that Goldman Sachs and the other market manipulators would eventually want real regulation because they would need it to get customers to come back. Imagine if we had as little confidence in the FAA as we do in the SEC -- Amtrack might have a viable business!
It now seems like such a polylanna-ish thought that we would ever be able to overcome the influence of Goldman Sachs and the other insiders.
Our real "problem" is that the rest of the world is in worse shape than we are, and everyone wants to park their cash in the US. So in the end we only have to be less corrupt than the alternatives to avoid making changes.