While "the networks" are replete with images of guys in Armani suits holding back tears on the floor of the NYSE, LSE and other trading pits around the globe, and sure, we are feelin' their pain (as Governhater Palin might say), consider the situation in Zimbabwe, which today has recorded an inflation rate of 231.000.000%!!! According to this story, more than 80% of Zimbabweans are now living on about 1 EURO per day. No Armani suits scavenging the trash pits of Harare, that's for sure. It's worth following the above link, just to see what a 1 billion dollar bill looks like. Even the greedy green eyeballs of Dick Cheney must be jumping out of their sockets at that concept, imagining the cumulative amount of cash he could stuff into a Halliburton travel bag as he prepares to flee Washington.
The point here should be clear, but since the purpose of writing a commentary is to indulge in comments, i'm going to go ahead and articulate some thoughts on the intensifying global economic meltdown. The whole bailout business at its heart is about making sure that the people who have screwed up don't get too screwed and find themselves having to live entirely off of their Cayman Islands accounts. Again, that's my view of the bailout plan, i'm not an economist but i do grasp the purpose of reading glasses. The pundits are freaking out about W going all commie on us by nationalizing banks, but i'm guessing in the corridors of designer wealth, the more substantial freak out is over how the bailout pie will be divided up among the miserly tentacles of JP Morgan Chase. The fact that it's no longer a bull market in Wall Street shouldn't fool us into thinking there's no bull being chucked around. The fate of money markets is not controlled by small mortgage providers, sick people buying insulin with credit cards, or families living in grandpa's shed after losing their homes to foreclosures. No, these markets are controlled by people with the money to control them, people who are willing to let the mid-level traders fry in the interest of pushing their own economic control up another notch or two.
What we are seeing happen now is starting to be described as class warfare precisely because it's going to result in a lot more people falling to the bottom of the barrel; meanwhile, those looking over the top of the barrel are now on extension ladders reaching into the stratosphere. While i'm not stupid enough to claim "We are all Zimbabweans now!" i do believe there is an important parallel to note between the willingness of rich countries to let poor countries' production levels and ergo, their economies, entirely collapse and the unflinching demand by Wall Street bankers that the US taxpayers should take over their debt. Perhaps if by US taxpayers we were referring to the 5% of the population harboring extreme wealth (over $100.000.000? $500.000.000?), one might see a tone of fairness thrown into the equation. Yet that's not who is going to pick up the bill. Haitians may emit a little grin at seeing the IMF turn its sights on America with SAP manuals in tow, but the stark truth is that countries like Haiti (who actually deserve reparations from the US) are being even more completely hung out to dry as what help they might have received is now being directed toward rich bankers who've convinced people that the entire US economy will implode if they no longer have board meetings to attend. Implode, i might add, is absolutely the correct term to apply here.
To some extent, the lack of concern among average Westerners towards poverty in the Global South - specifically, the inequalities and lack of fair playing field that has perpetuated this impoverishment - is now coming back in kharmic fashion to bite them. The attitude that the prosperous West was disconnected from the flailing South created an isolationism of the mind, a belief that "we" have a system that works (but you don't, sorry), and a total lack of attention to the fact that this system has become a complete house of cards - cardboard - loose leaf paper - post its! - built on very little that's tangible even as it's eaten up tangible wealth in order to spread laterally as well as vertically. Calling the current state of affairs a trickle down disaster would be generous albeit erroneous; we're dealing with something closer to the volume of the Yangtze than we are the River Jordan. The really sickening thing about this is that the practice of using money - wealth on paper, a kind of smoke and mirrors exercise - to generate more money (accumulating interest in accord with whatever the financial markets determine that interest should be), has so penetrated every aspect of the economy that real, tangible wealth is being ground up like hamburger meat in order to save a system which is essentially just theoretical even though it allows those who control it to live a life well beyond the planet's means. It's worth noting, as well, that for the first time in a very long time, a West European country on the verge of economic collapse - Iceland - has gone to Russia for assistance. It's going to be interesting to see if the approach here is to use the rubles to rejuvenate Iceland's economy from the ground up, i.e. by investing in things which will produce real wealth, or whether it will mostly be dumped on trading floors to raise the value of financial assets.
Realizing that this all seems rather abstract or more than likely, mentally impaired, i'll try to bring it down to earth a little vis a vis this short film about a kids' bank in India. Sometimes it's helpful to return to basics, which in this case means thinking about what the purpose of banks should really be. Taking a firm anti-capitalist position on the entire banking system has its obvious appeal, but as the kids in this report point out, there is an important service being provided and a perspective on banking that is actually service-oriented in ways that money markets and currency speculation most definitely are not. Consider it a simple reminder that whatever financial structure a society embraces, its ultimate success depends not on whether it can be milked to excess for personal gain, but the extent to which it contributes to the functioning of the community as a whole.
What we are seeing happen now is starting to be described as class warfare precisely because it's going to result in a lot more people falling to the bottom of the barrel; meanwhile, those looking over the top of the barrel are now on extension ladders reaching into the stratosphere. While i'm not stupid enough to claim "We are all Zimbabweans now!" i do believe there is an important parallel to note between the willingness of rich countries to let poor countries' production levels and ergo, their economies, entirely collapse and the unflinching demand by Wall Street bankers that the US taxpayers should take over their debt. Perhaps if by US taxpayers we were referring to the 5% of the population harboring extreme wealth (over $100.000.000? $500.000.000?), one might see a tone of fairness thrown into the equation. Yet that's not who is going to pick up the bill. Haitians may emit a little grin at seeing the IMF turn its sights on America with SAP manuals in tow, but the stark truth is that countries like Haiti (who actually deserve reparations from the US) are being even more completely hung out to dry as what help they might have received is now being directed toward rich bankers who've convinced people that the entire US economy will implode if they no longer have board meetings to attend. Implode, i might add, is absolutely the correct term to apply here.
To some extent, the lack of concern among average Westerners towards poverty in the Global South - specifically, the inequalities and lack of fair playing field that has perpetuated this impoverishment - is now coming back in kharmic fashion to bite them. The attitude that the prosperous West was disconnected from the flailing South created an isolationism of the mind, a belief that "we" have a system that works (but you don't, sorry), and a total lack of attention to the fact that this system has become a complete house of cards - cardboard - loose leaf paper - post its! - built on very little that's tangible even as it's eaten up tangible wealth in order to spread laterally as well as vertically. Calling the current state of affairs a trickle down disaster would be generous albeit erroneous; we're dealing with something closer to the volume of the Yangtze than we are the River Jordan. The really sickening thing about this is that the practice of using money - wealth on paper, a kind of smoke and mirrors exercise - to generate more money (accumulating interest in accord with whatever the financial markets determine that interest should be), has so penetrated every aspect of the economy that real, tangible wealth is being ground up like hamburger meat in order to save a system which is essentially just theoretical even though it allows those who control it to live a life well beyond the planet's means. It's worth noting, as well, that for the first time in a very long time, a West European country on the verge of economic collapse - Iceland - has gone to Russia for assistance. It's going to be interesting to see if the approach here is to use the rubles to rejuvenate Iceland's economy from the ground up, i.e. by investing in things which will produce real wealth, or whether it will mostly be dumped on trading floors to raise the value of financial assets.
Realizing that this all seems rather abstract or more than likely, mentally impaired, i'll try to bring it down to earth a little vis a vis this short film about a kids' bank in India. Sometimes it's helpful to return to basics, which in this case means thinking about what the purpose of banks should really be. Taking a firm anti-capitalist position on the entire banking system has its obvious appeal, but as the kids in this report point out, there is an important service being provided and a perspective on banking that is actually service-oriented in ways that money markets and currency speculation most definitely are not. Consider it a simple reminder that whatever financial structure a society embraces, its ultimate success depends not on whether it can be milked to excess for personal gain, but the extent to which it contributes to the functioning of the community as a whole.
2 comments:
i'm reading naomi klein's "the shock doctrine" and although i'm only 50 pages in, i'm already trying to figure out how the powers that be will use the global financial crisis to further their own ends...
As Naomi Klein recently commented, the fact that there has been widespread public opposition to the bailout may indicate that people are becoming immune to shock. Her book is really insightful in tying the global panic phenomenon together. i think in the case of the current banking 'crisis', we must keep in mind that what is a crisis for some presents an opportunity for others.
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