Author Jordan Mamorsky to Moneynews: US Has Morphed Into 'Crony Capitalism'

Monday, 17 Jun 2013 07:35 AM

By Glenn J. Kalinoski and John Bachman

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Author Jordan Mamorsky cites a worldwide "holistic lapse of ethics," with consumers, ratings agencies and Wall Street's casino culture coming under fire.

"We are now at the end of ethics because you have seen so many financial swindlers," Mamorsky told Newsmax TV in an exclusive interview.

"You’ve seen countless financial scandals, and you really need to find out where the root problems of these issues are. It is lapses of business ethics, lapses of corporate culture, which have really worsened the way capitalism has operated.

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"It has morphed into this crony capitalism model where you have these large banking institutions that control the way markets work and they manipulate it," said the co-author of “The End of Ethics and a Way Back: How to Fix a Fundamentally Broken Global Financial System.”

Editor's note: To order 'The End of Ethics' at a great price — Click Here Now.

"It’s more exploitation of markets rather than the free market and letting private systems work properly. These too-big-to-fail banking institutions really run the world."

Mamorsky was asked why more hasn’t been done to reign in credit ratings agencies.

"These rating agencies really were the cause of the financial crisis because they gave these glistening AAA ratings to these junk mortgage bonds that resulted in tremendous financial calamity," he said. "The investors really lose a lot because the AAA rating isn’t exactly an accurate barometer of the financial product.

"These rating agencies are making more profits than ever before and it’s a major problem that no one’s really addressing. The SEC’s not involved, the administration is not involved, and it’s really a tremendous problem that no one’s really looking at."

The American consumer didn’t escape blame.

Editor’s Note: Put the World’s Top Financial Minds to Work for You

"American consumers feel that they’re not responsible for anything," he said. "We have this mass consumerist culture where people think that they can rack up all this credit card money when they really can’t. They don’t have enough income coming in."

The problem extends beyond people accumulating excessive debt at shopping malls and restaurants.

"You see it with the way the system is run," he said. "You see colleges, you see law schools, business schools give out these tremendous loans that no one can afford, [that] they’re not going to pay back for 20, 30 years. It’s really absurd and it’s a major problem and no one is really addressing that, either.

"People realize that American consumerism is a major issue, but there’s money to be made and that is the issue. People need to look in the mirror and realize they cannot afford certain things that they’re charging to their credit cards and that goes back to the financial scandal. The major cause was you had American consumers trying to procure mortgages that they couldn’t afford and … homes that they just couldn’t afford. They [signed] mortgages and they were exploited."

Editor’s Note: Put the World’s Top Financial Minds to Work for You

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