Cyprus banks, safe havens and tradgedy of the commons

What good is money without a vibrant economy? Money can just be numbers in a computer. Even gold isn't edible.

So many of the world's wealthy don't seem to care about their communities. They hoard money, looking for tax shelters and so forth. They hoard their money in places like the infamous banks of Cyprus that are now teetering on bankruptcy. Wealthy Russian and other investors have dumped money into those banks, from what I understand.

Vast fortunes can be numbers in a bank account, but there has to be an economy of goods and services for the wealth to be realized. So many of the rich don't do much to contribute to the wealth of society. They often look for ways to dodge taxes. They pay low wages to their employees and try to figure out how to put as little into the overall health of society as they can. Then they expect their money to remain safe in the society that they so often neglect.

At least when one buys stock in a corporation, one assumes that wealth is dependent on the health of the corporation. If the corporation isn't healthy, the stock can loose value. That's understood.

Seems like these days, a lot of investment isn't in stock. The investment is in so called "safe haven" investments, like bank deposits or government securities. These are things that are supposed to retain their value in spite of ups and downs in the economy. Safe haven investments are often heavily placed in government debt which, in the age of Grover Norquist, is problematic. If governments aren't allowed to collect the taxes they need to pay off their debts, the money can come into question.

Maintaining the perceived wealth of the world, whether it's in bank accounts, stocks, real estate or whatever, requires there to be a healthy and vibrant economy. This requires investments in both private and public infrastructure and other things such as education. The wealthy class can't just "park" their money. They need to be part of the solution also.

Some of my thoughts after hearing news about the banking crisis in Cyprus. Also this interesting round table type discussion on the Diane Rehm Show carried over NPR Radio.