Lets’s try a quick sum up of what’s going on big picture wise at the moment. Debt in the Eurozone has been dominating the headlines with the Greek situation coming to a head, Italy hot on its heels and now the rumour mill starting on France.
The UK, having not joined the Euro, is playing high and mighty and telling the rest of Europe to get their act together, like none of it had anything to do with us. (I guess you have to admire the gall if nothing else. Of course London financiers had nothing to do with deregulation in the financial sector and encouraging unsustainable borrowing that has inflated the bubble did they. It would be funny if not so tragic. The tragedy being that huge swathes of the general public having been living on a diet of ***ing breakfast TV for news still believe the nice Mr Cameron). Anyway back to the story. Here’s a little cartoon to break it up. This, I think encapsulates, in a nut shell. the root problem.
The Occupy protests are often displayed as being anti-capitalist, and there are anti-capitalists mixed in amongst protestors, but I don’t think most of them are. In the last century we saw the rise of communism. At its heart was a notion of fairness, but this was quickly distorted by a different type of powerful elite rising, and innovation being stifled by lack of competition and an overly controlling state, with plenty of corruption to boot. The experiment failed and we put our faith whole heartedly in the capitalist model. It is now clear to anyway prepared to peep out of their blinkers, that capitalism is in chaos. Although this is now beginning to be talked about more openly, as we inch closer and closer to real crisis (and potential collapse); there have been those who have seen this coming for some time but up until now have found it impossible to get heard. The reason for this is pretty obvious to me. Our leaders do not have a clue what to do about it (added to which many of them have a vested interest in the extreme inequalities that lie at the root of the problem). Because they can’t find an answer in the existing economic model, they are in denial, so anyone challenging the prevaling, business as usual view of the world, is rapidly sidelined. The upshot of this being that their has been bugger all debate and development of alternative options.
So as the Eurozone situation is developing, we have the leaders trying this way and that to get more bailout money together to keep the all important markets happy. Worryingly this now involves so called technocrats being put in powerful politcal positions in Greece and in potentially Italy too. What do we mean by technocrat? Just how close are they to Goldman Sachs? (I’m sure I heard somewhere that ‘Super Mario’ who now gets to play in charge in Italy, cut his teeth at Goldman Sachs) Personally, I find this a truly frightening development. Back to tragedy, and this one very Greek. The birthplace of democracy has to cancel plans for a referendum and accept a government lead by technocrats with their strings operated by others outside the country.
Why has this happened. Well the story goes that the greeks have borrowed more than they can afford to pay back and we are told that the books were cooked. Now we hear that they should never have been allowed to join the euro. That the systems of tax collection were not well enough established. There was too much corruption etc, etc. Who did they borrow the money from? Various places, but the mostly the Germans. Note this is not the German government, but German Banks – Deutsche Bank. I read somewhere that Deutsche Bank is owed about the same amount by LA casinos, but nobody is bothering to chase too hard on that one, because casinos don’t have a population that they can impose austerity measures on.
How well will all of this work? From where I sit we have a box of sticking plasters that we are getting through more and more rapidly. The patients are just about alive, but the wounds aren’t healing and there are more and more patients stacking up behind with bigger and bigger wounds and we still only have the same box of sticking plasters.
This is not going to work. The problem is with the system itself and we can’t fix it without recognising that. In the UK our Government constantly tells us that reducing the deficit is the number one priority. Leaving aside questions about whether this should be the priority and whether it is happening, what does the rest of the economic plan if successful look like? The important bit of this to understand is that reducing the deficit does not mean reducing the debt. In the Cameron/Osborne masterplan, the government debt still rises astronomically. See this post. At this point the forecast was based on Government borrowing increasing from £772bn in 2009/10 to £1,320bn in 2015/16. Now how do you think that extra borrowing will be financed? Well in wonderful world of Dave and George we’re going to have a whole load of miraculous growth and all that lovely consumption will be helped along by us ordinary people doubling our current personal debt. I’m trying to work out how to make my bold button get bolder. Let’s try this
DOUBLING PERSONAL DEBT (I think I might have pay for some more features on this blog like big letters)
Anyway what we have we got from our great leaders is – the way out of the problem is to make you borrow more.
So what would I do? Well classically I wouldn’t start from where I am now. That may not sound very helpful, but actually I think it is. If we try to think about how to resolve current difficulties, its takes only minutes to caught up in the minutiae of rules and regulations and how things opetate currently and all the barriers in place and how impossible it all is. Looking at the current situation to understand what’s wrong with it is fine, but then we need to mentally step out of it. Think it through from scratch. Play god. If you were organising the world, how would you do it? (Note – the blueprint is allowed to chance, let’s just start making one). When ideas about how things could work better from first principles are in place – then it will be much easier to see some steps that need to be taken to get there.
Incidentally for those who think I’m having delusions of grandeur here – I’m not, I just don’t see anywhere near enough people doing this and I would like to see everyone doing it.
What are we trying to achieve? Nice things that’s what. How about this for good old vision statement ‘The human race leading fulfilling lives peacefully and respectfully in a beautiful, abundant and sustainable world’. Well if we’re going to this we might as well aim high.
More to follow.