Friday, January 23, 2009

Greed is good. Discuss.

Greed is typically considered a major source of evil that is the root cause for stealing, hoarding, plundering, and treason, just to name a few sins. However, greed can be good, while other types of greed can be very bad.

Greed is good, because it is the most important incentive for people to work hard, get a good education, start a business or invest in a company. This makes people productive and contributing members of society. In return, people are paid a salary, become more educated , and build wealth so that they can live a prosperous, more comfortable life.

Greed is inevitable and a powerful motivator. Left as the prime motivator, without laws or regulations, greed overwhelms markets and ultimately, the greedy themselves. But when greed is regulated, when greed is focused, it can achieve good despite itself. Society makes it clear the greedy can achieve their dreams of unlimited weath ONLY by doing something useful.

The materialistic world we live in is a very harsh place and without greed, nothing can survive. It is greed that prevents us from becoming push-overs; it boost self-confidence (you overcome yourself) and helps a person move up in life. It is the BASIS OF AMBITION and as a person desires to obtain more and more, it makes a person successful. If we were all complacent and not greedy, there would be no hope for people to do better or to do their best. People would eventually get monotonous.

It is true that necessity is the mother of all inventions. It is this necessity that brought early man to prepare food, clothing and shelter, to enable him to survive his harsh environment and keep him from extinction. It was this necessity fueled with greed that compelled him to make appliances that made hs life easier. With the use of money, there came the need of accumulating money, once again the need to make life easier. The complexity and the ease of life are the products of greed. If we stuck to necessity or to fulfilling our survival needs, we would have been extinct long ago. There have been many creatures on this world, none of them had enough intellect and greed, as a result many of them are facing extinction. Our greed enabled us to survive and we will survive, despite the damage done to the earth for many centuries to come.

Greed can improve failing public schools. Economist Walter Williams say, in areas where people are motivated the most by greed are the areas that wins the most satisfaction, like Supermarkets, Computers, FedEx. While those areas where people are motivated by caring are areas of disasters in the country such as education, the post office, city garbage collection and police services.

"Greed is good." At least that's what Gordon Gekko proclaimed in Wall Street, 1987. That is, greed is good for corporations and stockholders. As the saying goes, "No Risk, No Gain", investors who think that the market will return so little that they must embrace risk to expect any meaningful gains. Risk-takers are seemingly greedier and earning more than Non-risk-takers, because many types of stocks that are considered risky, based on factors like valuations, volatility, have been continuously producing much bigger gains than the less volatile stocks! In the United States, small capitalization stocks are still confounding, market strategists who have long been saying investors should reduce risk by sticking with shares of large blue-chip companies. In 2006, the Russell 2000 index of small stocks has surged 9%, while the Standard & Poor's 500 index of large-capital stocks is up 3%. In other words, the market has kept rewarding risk-takers, and handsomely so.
However, good greed leds to types of bad greed. Firstly, after some people have collected a large enough personal wealth, they retire. Thus making these people no longer a productive member of society, who use more resources than they provide. Though these people invest their wealth in stocks, bonds, real estate, and other financial investments, they are selfishly idle as they could still be contributing more to society. For example, instead of playing golf with other retirees in Florida, retirees could help their children by babysitting their grandchildren or even teaching their grandchildren how to fish or knit a sweater. It is alright to RETIRE FROM WORK, but DO NOT RETIRE FROM SOCIETY.
Secondly, some people continue to collect wealth even after they have far surpassed the amount of money that they need for the rest of their lives. Some people leave so much inheritance that even their children and grandchildren cannot possibly use all of it. This is why some people, such as Bill Gates, and his wife Melina as well as Warren Buffet are donating most of their huge fortunes to charity. They understand the virtue of generosity, instead of succumbing to greed.
Thirdly, greed is contagious and can go out of control. It brings out the devil in man. To acquire wealth, man will do unethical, immoral, and illegal things in the pursuit of more money like murder, bribe and loot others. Excessive greed can even cause a person to pay up his life in exchange. A well-known example of greed is the Pirate Hendrick Lucifer, who fought for hours to acquire Cuban gold, becoming mortally wounded in the process. He died of his wounds hours after having transferred the booty to his ship.
Greed for animal delicacies also damages nature and our ecosystems. When poachers deplete one species, they move on to another. Snakes are poached for their blood, known to have have a healing effect, to make snake wine. Therefore while predators fall in number, preys will increased as the flow of energy throughout the food web is not evenly distributed, causing over-population of some species and extinction of another.
Greed for the consumption of food or drink for pleasure, combined with excessive indulgence in them, is called gluttony. Similarly, excessive greed for and indulgence in sex may be called lust. There was much more peace and harmony in the world before the system of money started. With money came greed. Greed of wealth brings about the downfall of man, as it led to corrupted bureaucracy and corrupt practices like bribing. An example is how slums keep expanding. People bribe officials and then build slums. The living conditions of slum dwellers are unhygienic. They spoil the surroundings and they don't pay taxes, thus affecting the rest of the population. Greed makes these officials richer and the country poorer. This is also not sustainable.
At the end of the chain, we have fights and wars on the issue of wealth. The Bush administration fought the war in Iraq and will fight the war in Iran because of looming worldwide oil shortages and China's growing demand for a larger share. (Although oil is now sold on the open market, the United States will have a hard time competing with China for it. China has over 1 trillion US dollars of reserves. It would almost certainly spend this to keep its economy growing and its energy needs met). In the end, there is bloodshed and destruction which are unsustainable.

In 1987 Oliver Stone made the film Wall Street and its infamous lead characters, Gordon Gekko became household names. The "greed is good" mentality brought on the Stock Market Crash of 1987 and played a part in global recession of the early 1990s.
Greed is the reason behind the meltdown of the corporate bond market. To stimulate the financial markets after the shock of the terrorist attack on the United States in September 2001, the Federal Reserve began a series of interest rate reductions. This stimulated the bond market, as the cost to borrow mone dropped. At the same time, the mortgage industry sold adjustable rate mortgages (ARMs) which were packaged into bonds, to eager investors.
ARMs are mortgages that begin with below market rates for the first few years, after which the rates are adjusted to the market, the mortgage payment can increase dramatically. The pre-supposition behind the ARMs was that by the time the interest rate adjustment occurred, the mortgages would be either refinanced or the homeowners would be able to make the increased payments. In many cases, neither of these became a reality. As a result, many homeowners were burdened with higher mortgage payments than they could afford, which caused the default rate to dramatically increase. Lenders were lenient in their lending criteria and therefore made loans to many people whose credit worthiness (A person's ability and willingness to pay his or her obligations) was suspect. Hence, there were many borrowers who lacked the trustworthiness to maintain a mortgage in good standing.

The greed of the borrowers who sought to use the ARMs as an opportunity to buy more house than they could afford, greed of the loan originators who possessed an insiatable appetite for more business and, the greed of bond investors who overlooked the lax lending criteria of the loan originators and failed to consider the pre-suppositions behind the ARMs, cause bond investors to be hit with losses as well as lose interest in investing in the bond market. The cost of corporate borrowing increased also amplify the cost of borrowed capital, which serve as a brake to slow down the economy due to the consequences of greed.
Any grasping after riches, leads to temptation, a trap, and ultimately ruin and destruction. It is the love of money, and not money itself that creates evil in our lives. Money itself has no power, but we give it all the power it has. Like our automobiles, we must determine who is in control and how its use influences our behavior. Any earthly possession, great or small, cannot guarantee true peace or security.
The practice of generosity also protects us from the deadly effects of greed. Isreal's Jordan River remains a source of life as it flows into the Sea of Galilee and then travels to the Dead Sea. In all livelihood, the Sea of Galilee is witnessed for its generous irrigation as well as abundant fishing resources. In contrast, the Dead Sea has no outlet, greedily robbing the arid region of moisture. Both man and animal refuse to drink from its acrid waters. It contains no life of any sort, except a few kinds of microbes that result sea fishes to die rapidly. Greed causes our lives to also become foul before God. But a life that flows abundantly shares all the God has given us. When we give, we truly prosper and are refreshed!
Greed is a strong desire in each and every one of us that is extremely difficult to overcome. Only through continuously contributing and donating to society can we find true awards that are far greater then the illusion that greed provides.

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