Vanguard Group Founder John Bogle says that $32 trillion in securities change hands each and every year, and none of it is of any use at all to the wellbeing of the Treasury, Government, consumers, savers, society, education, healthcare, transport, the economy.

And that’s just Wall Street. The larger private banks across the US and EU, Mr Bogle told Time magazine recently, could work for less than a week, and take the rest of the year off with no real effect on the economy.

I’m glad this is finally being outed in the MSM, because as you know I’ve been going on about it for years, and been told endlessly by patronising chinless idiots that “I don’t understand”. There is a peach of a quote in the article that could’ve come straight out of an early Slogpost:

“The job of finance is to provide capital to companies.” Is the correct answer. It is not to trade intrabank, or persuade that 32 trillion bucks. But as Bogle asserts, “99% of what we do in this industry is people trading with one another, with a gain only to the middleman. It’s a waste of resources.”

Hurrah for an important finance guru with the head screwed on using a right-hand thread.

Another good piece at Marketwatch making the same points adds the perspective one needs to grasp just what a dysfunctional scam Bourse-Globalist neoliberalism is.

$32 trillion is almost twice the entire U.S. economy simply shifting from one pocket to another, with a Mr 5% in the middle. These soi-disant ‘stockbrokers’ are nothing of the sort: they’re a sort of cross between leeches and wasps: they’re just there but to no known purpose. David Cameron’s father was a stockbroker who made a pile of money this way….most of which he didn’t declare to the UK taxman.

Sadly, even Bogle is the kind of chap into IPOs, mezzanine capital, reverse takeovers and the one-time big moneyspinner for the Lehmans of this world, M&A – mergers and acquisitions – whereas what the world really needs now is local, mutualised entrepreneurs using actively involved shareholders, not remote investors scouting around for any money any which way. But even the institutional investors got nothing out of the M&A gravy-train: in 2003, the Economist noted that 58% of ALL M&A destroyed shareholder value.

It didn’t just dent it, or depress it….it destroyed it. That is a staggering statistic….but it does go to show that Bourse capitalism does nothing it was intended to – that is, fund socially-spreading growth, and reward the institutions and older investors prepared to take part in that.
But it is this very pointless, profitable and ultimately destructive sort of activity that morons like Boris Johnson, George Osborne and Dan Hannan think are central to the ‘recovery’ that is never going to happen.
And we didn’t even get into derivative betting.
This is how obscenely out of whack the world’s financial and fiscal values are; and why a little bit of tinkering here and there simply isn’t going to cut it.

Yesterday at The Slog: Why the Greek problem doesn’t begin to be solved by bailout 3