Broke in a broken system

With spectacular size comes spectacular impact. The collapse of the global financial system is just that – spectacular.

I searched for exactly what the ‘Global Financial System’ and was (un?)reliably informed (by Wikipedia) that is a system, operating across borders and nations, for the movement of money and other financial instruments.

So, simply put, it is the basis for international trade and mutual economic dependence.

Trade has always existed between nations and the GFS is only the most recent attempt at trying to regulate it. As crooked as it now appears – riddled with greed and devoid of social conscience, it may have started with some semblence of honourable intent.

It is perhaps laudable that by engineering a state of fundamental interdependence, the creators of the GFS were , perhaps in part, aiming to replace military conflict between States with a more overwhelming concern – security and health of connected economies.

The only trouble is , when a system is so interdependent, crucial points of failure start to emerge. Pinch one of these points and the system fails. As we now see happening.

Yet this system was founded on the interests of the rich and powerful, they gang together – deciding who sells what and for how much. Wait a second, I hear you chime – the markets decide. Of course they do. But barkets are about demand and supply… and cash and control. The global rich and powerful (corporations and governments – who can tell the difference) control so much raw cash that they use their financial might and the power they weild through thier political arms, to bully and buy control of the markets.

Yet, it is the only system we seem to have, so whether we realise the markets are fiddled, what choice do the rest of us have. Especially when there is little steadfast unity amongst those who are overwhelmingly disadvantaged by the GFS.

Any system (financial or otherwise) that begins with a uneven playing field can never be fair. I hate to play the colonial card , but if you look closely enough, the economies of former colonies are

So, something as simple as banks (the arteries in this system) not lending to each other has crippled all the other functions of the system.

The lending issue is only a symptom – the underlying disease being unregulated sharks, fueled by greed, destroying what little trust was in the system.

We, the poor and middle-classes – the beasts upon whose labour the entire system is funded, are left broke and starving from a bankrupt and broken system.

Who Pays?

Israel launched hostilities against Hezbollah in Lebanon, destroyed homes, infrastructure and brought human devastation.

Who paid to rebuild shattered buildings?
Who paid to rebuild shattered lives?

Then Israel had a lock-in in Gaza. It cordoned it off from the outside world (mostly, though al-jazeera still got real reports from their on the ground teams). Then they went to work, in the name of stopping Hamas missiles from being launched against civilian targets within Israel.

Neither of these are wars. They are brutal acts of aggression by a recognised State against non-state actors. Nevertheless, Israel is accountable to international humanitariand and human rights law to behave properly. This means they must avoid harming civilans and they must ultimately pay for the damage.

War or not , Israel must be held accountable for the scale of destruction of life and property in these attacks.

I’m not naive enough to think that Hamas is saintly or bears no responsibility for at least part of this mess – any group that launches missiles from within civilian populations, effectively using innocents as human shields are immoral and criminal. Their actions make them complicit in the ensuing crimes against humanity that occur. Both sides are to blame in this tragedy. That is not the same as condemning them as out and out terrorists without a cause. Which is a topic for another piece.

For either side to then claim any kind of victory against the background of babies and infants on fire and children trapped under collapsed building, is both obscene and chilling.

My primary concern in this piece is who bears the costs of rebuilding broken buildings and infrastructure, of compensating fathers for the murder of their children, of mothers for the death of their breadwinners (though with 80% unemployment in Gaza, not much bread is being won!).

The EU emissary to Gaza said European taxpayers are tired of paying for buildings to be rebuilt only for Israel to blow them up again. Why must the rebuilding costs be borne by anyone else but those who knocked it down?

Why isn’t the United Nations drawing up resolutions forcing Israel to pay for the devastation is has wracked – perhaps knowing that they will have to pay the rebuilding costs and compensate for the human carnage will encourage them to negotiate a peace?

My questions resound within the emptiness of the international community’s resolve to hold Israel to account. It is the State entity here after all and must be made to play by the rules of Statehood, which must include bearing the financial consequences of the military policy.

Gutless Government Part 1

I think someone changed the rules while I slept or perhaps I missed the class on Demo-Capitalism.

Within a free market economy ,as the US and the UK claim to have, the market is king! It determines who profits and who doesn’t. Selection by competitiveness is proclaimed to be the prevailing law.

Yet in this current crises in the global economy , these governments (and others) are going against the very rules of free market economics that they claim to be abide. By using unbelievable sums of public money to shore up the losses of private enterprise, they have tampered with a system, though fundamentally flawed and unsustainable, does have a weirdly fair way of self correction. Simply put, the free market weeds out those participants who, by the change in demand OR by making overwhelmingly bad decisions and business practice, are weakened and failing. Call it free market natural selection. The bailouts and so called stimulus packages are not only wrong, they are obscene and a spiked gloved slap in the face of those already peddled by the State in the name of free markets. Obscene because by their actions , future generations are condemned to penury and phenomenal national debt.

Government gutlessness is a disease caused , in part, by a lack of social conscience and an intrinsic incompetence in the running of a fair social system. We, the people, simply ask that the government take our taxes and provide for our common needs. We mandate them , with our votes, to protect us as from those to whom we are simply donors to be bled. We ask them to exercise their legislative and regulatory powers (which, by the way, they get from us) to ensure that we, the people, are not exploited, poisoned and abused. In this key task, they failed.

This failure , borne from the unhealthy alliance between elite, big money and politics, is supported by a complacent population, who care about what happens to them and their country, but not enough to do anything to change it.

This gross failure, terrible as it is, pales in comparison to what these gutless governments have done instead. They have taken our hard earned taxes from this and future generations and poured it into saving the very private corporations that have exploited and profited from us. This is equivalent to compensating the rapist with the victim’s wages. It would be a black comedy if it wasn’t so damn tragic.

The right thing to do is let the cards fall where they may. Let the companies that screwed up and gorged on greed, fail. Strengthen the social system to catch those cast aside by those failures. It would cost less to provide social aid to all those who have lost their jobs from the collapse of failed corporations (for the rest of their natural lives!), than it is costing to bail the companies out.

Rather than pump new money into a failed system, be brave and use a fraction of the bailout money to fund a new , fairer and sustainable system.
Let the businesses that were built on unsustainable and unrealistic models fail. Failure is an integral part of free market economics. It is the inbuilt and natural system of self improvement. Yet our gutless governments crumble in light of what they should do.

This crises is a golden opportunity to repair the foundations of our society. Sure money will be spent, but by bailing out failed and failing greed-mongers, it will be badly spent.

Instead of bailing out car manufacturers (there are too many cars on the roads anyway), invest public money in revolutionary public transport systems based on sustainable and self generating energy, that encourage an active lifestyle and low environmental impact.

Instead of encouraging unrealistic levels of home ownership and profiting from the ensuing unsustainable mortgage markets that plunge people into unrecoverable debt, invest public money in public housing that embraces and fosters community and sustainable living.

Instead of pouring money into short term measures like a reduction in VAT, use taxes wisely on progressive educational policies and a health care system that cares about the health of the country and is equitable to all.

Instead of bailing out banks and investment firms that screwed us all, create community based public lending institutions with public money that lend at a grassroots level in accordance with sound and fair practices (and if those don’t exist, create them!).
Better still, hasten their departure by giving them three months to fully and publicly disclose the extent of their losses and therefore show the world that they (mostly) are incapable of resuming any kind of appreciable level of lending. If they do not comply, revoke their banking license and shut them down.

Take radical action to get more value for money from the unprecedented levels of public money that is poured into the National Healthcare Service, lose the horde of incompetent managers and pay nurses more, fund and foster a holistic approach to care that treats people as human beings and not just as patients.

Instead of being complicit in the destruction of domestic manufacturing and production in favour of ‘cheap’ foreign imports (their true cost, when externalisation of cost to the environment and to its workers is factored is far greater) , re-invest in training and supporting the domestic manufacturing base. Do it now, before we lose the knowledge of how to manufacture. Sure, the goods will be more expensive – but they are made here, to our standards and our tastes. They keep jobs in our communities and the government can legislate that profit stays in our economy too. Its called protectionism and we are led to believe it is unfair trading practice. But if our government was not elected to protect us, then what the hell are they good for? Of course there are some things that are not feasible to produce here (not because we can’t but because the true cost of doing so makes it unsustainable) and those can form the basis of fairer international trade.

Instead of selling our sensitive industries to the highest bidder and divorcing government policy from its primary responsibilities, protect those essential aspects of our social and economic lives. Create a list of national security assets – basic universal healthcare, energy, security, transport , basic financial services , education and the environment. All those assets which, if interrupted or jeopardised, would cause our societies to come to a halt. Treat them exceptionally – fund them with public money and make them work (they are not supposed to be profitable!), protect their independence by barring private or foreign and therefore , profit-driven ownership (partial or otherwise). Invest in the skills to run them, service them and keep them fit for purpose. It is possible to have well run and financially accountable public systems, it takes guts and passion and a commitment to make a difference for the whole of Britain, not just the rich!

These are not revolutionary and rare ideas, they are clear as day to the fair mind. They require courage because they go against the interests of the elite, they require tenacity because they cause transformational change in the collective personality and such change takes time, they require vision that is unencumbered by a need to be re-elected or even popular in the short term. Everything they require has hitherto been lacking in our succession of gutless governments.

Ironically , perhaps the most gutsy leader of Britain in the modern age has been Margaret Thatcher – and before my peers razzle me for going over to the dark side, let me explain my thinking. She oversaw massive privatisation of public assets – that was wrong but hugely gutsy. That said, it was fairly gutless to release them to profiteers rather than reform them.

So, finally , I question why have the bailout and the answer I find, in the media and from the government, is that to allow these corporations to fail would erode the trust in the system and the economy. In case they hadn’t noticed – no one trusts the banks (and we haven’t for a long time) and we all know the economy is screwed – read as ‘recession’. We know it and our trading partners know it. Perhaps a better way to encourage trust is to communicate fairness to the world. To say that we will not bet the future earnings of our people on the fate of a handful of greedy bankers (as Gordon Brown and his chums are doing). That we are willing to take the short term hit of job losses for the long term health of a fairer , more sustainable financial system. But, cynically perhaps, I believe this is simply impossible to expect from our gutless governments.