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Upside Down And Backwards
by David
lifted from a comment
b's link regarding a piece by Simon Johnson: Confusion, Tunneling, And Looting
Boris Fyodorov, the late Russian Minister of Finance who
struggled for many years against corruption and the abuse of authority,
could be blunt. Confusion helps the powerful, he argued. When there are
complicated government bailout schemes, multiple exchange rates, or
high inflation, it is very hard to keep track of market prices and to
protect the value of firms. The result, if taken to an extreme, is
looting: the collapse of banks, industrial firms, and other entities
because the insiders take the money (or other valuables) and run.
This is the prospect now faced by the United States.
The course of policy is set. For at least the next 18 months, we
know what to expect on the banking front. Now Treasury is committed,
the leadership in this area will not deviate from a pro-insider policy
for large banks; they are not interested in alternative approaches
(I’ve asked).
After reading this, I decided I should write something. Maybe it's
just because of the wee, weird hour my damn brain thinks I need to be
awake I feel the urge to write. I can never trust my intentions in
these dark hours; this is why I put this on the OT to make it EZ.
HeeHee.
Before one begins to write on any political subject it is wise to
understand the subject being argued; but one shouldn't let one's
ignorance of a subject preclude posting an argument. In fact, many of
the best political arguments have been won by humans who haven't the
slightest idea what they're talking about (it should also be noted that
many of these people possessed large armies – having one of these is a
key element in winning most arguments or at the very least, profiting
from them.)
Those who are the best at turning wind into energy, the true idiot savants
of political rhetoric, rise quickly and have soon distanced themselves
from the rest of the pack. They do this by using their seemingly
endless supply of hot air to give them extra "lift." The best, become
politicians; anyone loftier become like Rush Limbaugh (though maybe not
as "blimp-like.")
The ability for certain people to use their mental excrement as a form
of power, are green in the truest sense of the word. And this, despite,
the actually physical environmental damage they are also usually guilty
of. But then one needs to also define green, as it is a word that means
many things to many people. For the purpose of this piece, "green"
needs to be defined as, "totally covered by a pile of $100(us) dollar
bills."
Capitalism I want to define in the simplest of terms… I have a dozen
eggs and you have a bunch of carrots, so we trade because I was an ass
and forgot to plant carrots and your dog ate your chickens… And we are
both living on land that was empty and useless so we improved it and…
Well I guess it’s too hard to explain where the land came from, hmmm…
O.K., forget that, instead imagine a Disneyland of Capitalism where
everyone is living side by side happily every after trading freely and
not messing with each other… I can almost hear It’s a Small World playing in the distance, can’t you?
In a not-too-distant neighborhood is a bad part of town called
socialism. Here everyone lives a communal life of hell in identical
gray concrete apartment buildings that hum from the drone of workers
completing their mind-numbing menial task night and day. This drone
drains the population of their spunk and everyone does the barest
minimum required of them, not out of rebellion or even laziness, but
because this is what keeps everyone equal.
Where do you want to live?
Being the author, it’s easy and also convenient for me to leave many
things unsaid. Why confuse the reader with a bunch of logic or reason?
Why try to explain the nuance of the “Butterfly Effect” to the world?
Why not try and raise a few socialist hackles?:)
Meanwhile I’m somewhere in a house located between those two subway stops trying to write a reply to b’s link above.
And as far as these banks go, I trust capitalism more than socialism,
which means I trust letting the fuckers fold and waiting to see how the
void is filled, rather then bringing them all together under the
government’s umbrella. American government control of all the banks
only means having fewer people that I neither trust nor like,
controlling more shit.
But I wouldn’t be against the government starting a bank from scratch
that loaned money directly to businesses and people. Have the other
banks try and compete with it. Actually I’d like to see a bunch of
Muslim banks opened-up here in the States, they seem like they have a
decent business model for dealing with money. But I only know this from
reading and not from practice; I suppose I should be careful what I
wish for.
The world is upside down and backwards and I don’t even need alter my body's chemistry to see it.
I agree with David, with the extra jab: The process he describes has been going on I would say since 2001. Precise year cannot be pinpointed.
(One cannot dope out when short skirts *really* came into fashion, during the 20s period or the 60s…these things ‘happen’..)
There has been no real growth in the US since 2000 or so, ‘growth’ was only consumer spending fuelled by debt, a veritable treadmill of financial churning (much of it fraud) and hyper-consumption.
Now come to a terrified halt and leaving behind a surplus of houses, cars, Barbies, microwaves, yachts, oven gloves. As well as a pile of debt that probably cannot be paid off.
I think many saw, felt, intuited this state of affairs, from the very top tiers (e.g. Bush family), or Marcie, realtor, estate agent, mortgage lender, whatever, and all of them colluded in keeping the party going, the balls in the air, the GDP uppping along; making hay while the going was good, or just generally participating and looking out for number one.
All the fraud that went on was condoned because it did bring in profits, to particular persons or groups, which is, at heart, what “free market capitalism” of a certain kind is all about. Deregulation was a *necessity* in that model. (Since Reagan.) If the rules and boundaries don’t fit for earning money, then they have to be changed, circumvented, or ignored.
Thinking again about the Banks and Insurance cos: What we see the US doing has never been done before.
Failed entities of that kind have been saved, wound down, or killed off, by Recapitalization (public, or other parties, countries, sovereign funds, etc. taking an interest, it has its limits), the creation of a Bad Bank, e.g.: Sweden, Switzerland twice for Cantonal Banks, France: Credit Lyonnais, all recently.
– The ‘bank’ part of ‘bad bank’ is a misnomer, because the entity is then no longer a bank but an auction house selling off putrid assets and dodgy paper. –
Lastly, Nationalization – the tax payer takes it on, e.g. Northern Rock.
The US has veered between these models and hasn’t invented a new one. The Gvmt. has simply paid failing entities trillions of dollars, without a plan presented to the public, transparency, or oversight.
That signals desperation and extravagant hopes of muddling thru.. Shows that the barriers, distinctions between Gvmt. and corporations, para-state organisms, or indeed any other entity, no longer exists.
Posted by: Tangerine | Mar 6 2009 16:20 utc | 5
David, I am glad you found your way to the Moon, reading your posts is a pleasure, you seem to speak always from your heart. And although I don’t necessarily agree with all your views, they are much appreciated. So let me just add my two pesos.
Capitalism v Socialism is portrayed as white v black, two irreconcilable concepts of ownership and class. By doing so, the debate on how to move forward is needlessly polarised, preparing the ground for dogmatists to take over the ship only to ram it against the next best iceberg. By us falling into that trap and not seeing how both systems are partially mutually inclusive we are becoming apostles of a nonsensical dualist approach, similar to the often heard notion of man v nature. Just as We are Nature, so is Capitalism Socialism.
A socialist system of government and ownership of assets still requires capital to operate, and a capitalist system still requires the state to also hold assets and provide a degree of non-productive social security to its people.
Both arrangements contain aspects which are to be endorsed and others which are not in the best interest of the people. Why not pick the raisins from both cakes instead of rigidly defending the taste of one and dismissing the other as uneatable? My idea of socialism is not based on people’s servitude to the state nor does it exclude the concept of profits or entrepreneurship, quite the opposite, effort must be rewarded. But I believe what constitutes effort needs to be redefined.
That a company CEO earns more than the lowest paid cleaner working for the firm is to be expected, but their earnings must be linked. I suggest a ratio of max 20:1, meaning that for the CEO to earn 1 million per year, the lowest paid employee must be on $50K. Should the CEO want to double his income, he must also double the lowest paid employee’s wages.
Private ownership of assets and companies is the way to go, however essential services, such as schools, public transport and hospitals should be state owned or controlled. Capital, eg investment funds and their private equity holders, are not in the business of looking out for thy neighbour, they plan for profit maximisation, which is ok for goods or services that are being sold, but the provision of quintessential human needs, such as medical treatment, education of the people or commuting between places should never be allowed to be driven by passion for profits. A society with enough foresight to avoid social unrests or even revolutions should be able to provide its less fortunate members with basic human requirements, such as housing, food and health care in a non-profit framework.
The flaw in the capitalist doctrine is that it is too one-sided in its approach to entitlements, to the point that puritans go as far as to argue against any benefits being handed out to the needy. Stiff shit, that’s social Darwinism for yer, better luck next time. Not recognising that capital itself is constantly asking for its entitlements, as it is also needy. Capital also asks for government handouts, it’s just not called “the dole” but “R&D Grants”, “Subsidies” or “Bailouts”. Capital is needy, of a peaceful and harmonious society in which it can operate and securely invest its profits, and when listening to business leaders you get the impression they feel entitled to that.
The state needs to be far more regulatory than what it is at the moment, ensuring that the excesses the capitalist component inevitably is drawn to are contained to a reasonable limit and are not running counterproductive to the well being of our fellow men. Free (as in unregulated) enterprise as we know it is the reason for surplus food & produce harvested in a pumper season being destroyed so as to keep the wholesale prices up in the US and Europe. Utter foolishness, and yet that’s what happens.
As Marx said, “From each, according to his ability; to each, according to his need.” Apply this logic for example to the ever growing disparity between rich and poor nations. Year after year, the relatively few bobs which are given in Foreign Aid by donor nations more often than not disappear in bureaucratic channels or are embezzled by corrupt leaders in the recipient nations. Nobody seems to be accountable for the lack in progress, everybody points the finger at everybody else. There is neither a pragmatic and coordinated approach to FA nor an incentive for the donor nations to ensure long term improvements are achieved. Every five years or so world leaders meet at some posh retreat to discuss the plight of the countless people living in third world conditions, emerge with a communiqué in which they express their firm desire to half within the next few years the number of people dying of starvation, only to meet again five years later to lament how things have gotten even worse. What a bloody circus of fuckwits, drives me mad just thinking about them shits. But what’s even worse is that it is us who elected them in the first place, and when its election time again all their lies and incompetence are forgotten.
So here is my idea on how to tackle the wealth gap across the numbered worlds and improve on that equality thingy. All the world’s countries are grouped by size and ranked by wealth. From the resulting lists, the richest nation is paired with the poorest; the 2nd richest with the 2nd poorest, and so on, till lets say on a list of 100, the 49th is teaming up with the 51st. Now every rich country has one other country it is “responsible” for, which would imho allow for a more focused attitude to FA and over time would lead to better outcomes. If every affluent country would adopt a poor nation of similar size, and without ideological blinkers tried to assist in its humanitarian and economical development, via means ranging from student exchanges to technology transfer, the world would see friendships develop where there were none whilst at the same time causing the boat-lifting tide to rise.
To sum up, Churchill once said “The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.” I see it the exact other way round, the inherent vice of capitalism is the unequal sharing of miseries, the inherent virtue of socialism is the equal sharing of blessings. I hope this makes sense and doesn’t sound too rumsfeldish.
Posted by: Juan Moment | Mar 8 2009 5:53 utc | 19
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