The Exchange

Much has been written, spoken, bemoaned and lamented over the credit crunch which has ‘rocked’ the world. The language used to describe the crunch has been superlative and monumental. ‘Worst financial crisis in a hundred years’, ‘catastrophic proportions’ and even ‘the end of the world as we know it’ – or so we have been warned.

The solution? 700 billion dollars, 500 billion pounds (and that’s just the UK and US!). Imagine the number of items I could buy from a pound shop, given that type of money… ok, the math is beyond me, but so many thousands for sure!

A crude title and two short para’s into this piece, and surely my position is clear – the crunch is a joke and the western worlds reaction to it is utterly disproportionate and immoral. (Ok, I guess the claim of it being ‘immoral’ blindsided you.) Let me explain why…

My first problem is one of semantics. Is this really a crisis? A catastrophe? We need some perspective here.

Bear in mind that the credit crunch is a manmade problem, with repercussions which are completely within the control of man and are intangible for the most part. There are many types of global crises and catastrophe’s, and the crunch just fades in comparison. It is no tsunami, hurricane Katrina or Sichuan earthquake. No one has died or been displaced and no property has been destroyed. It is not global warming which threatens the very survival of humanity and all creation as we know it. It is no epidemic – aids, malaria, dengue, (you name it) which continue to claim millions of lives throughout the world. It is no famine or drought, irreversible deforestation or the extinction of species after species from the face of the planet. It is no civil war, illegal occupation or genocide. No one has been gang-raped by the credit crunch, tortured or racially abused by it.

But within weeks, insane amounts of money have been pledged, collected and dispersed in response to the crunch. I haven’t done the research, but I speculate that the money put in to save the banks surpasses all the moneys collected in response to the many ‘real’ crises listed above! Oh, and by save the banks, I actually mean finance six figure bonuses to greedy and corrupt men and women who put us in this predicament in the first place.

And this is my second issue – the completely disproportionate panic filled response to the non-crisis. Why oh why, should tax payers cough up so much money for such dastardly purposes? I would sooner finance a hair transplanting operation for Clive Anderson’s balding head than reward a faceless stranger for ruining my mortgage!

As a newcomer to the west, I find the way this society reacts to all sorts of situations, to be mildly amusing but frustrating at the same time. Whether it is the response to terrorism, the reaction to Olympic success, or the fear of inflation, the west (and I mean the UK and US in particular) is often far too quick to announce heroes and villains, booms and depressions. For those enjoying a strong economy, it is amazing how little it takes to faze the west; to bring in doubt and cause panic. 5% inflation is a disaster to the UK – Zimbabweans would kill for 50% inflation! The threat of terror justifies invading two nations and imposing 42 day pre-trial detention and control orders (before you say it, I know the Lords struck the detention down… but what about the Commons?). There is great propensity to panic. Little bumps are magnified into great mountains. Far too often, the result is irrationality, disproportionality and gross injustice.

And it is this gross injustice which is my third contention. Surely, if so much money was necessary (and I have great doubts) it could have been better used to ensure that mortgages were made available and people were not randomly fired for no fault of theirs? A little loyalty and solidarity in difficult times never hurt anyone. All industries and companies could respond to this ‘crisis’ by tightening their belts a bit; forgoing their bonuses and new yachts for their CEOs. Instead, people – vulnerable people – are being fired. Those high up the food chain get great severance packages and may never need to work again, but the masses below must now fight to avoid destitution. The response has been extreme, disproportionate, unfair and unjust. The response to the ‘crisis’ is creating a greater, more tangible crisis; one which I predict, will not benefit from such an enthusiastic and generous response.

Finally, I am extremely concerned of the implications of this hugely unprecedented financial intervention to stem the credit crunch. The crunch is the result of the unabashed promotion of laissez faire financial activity over many decades. The de-regularised market has been consistently promoted as an economically sound and morally superior system. Words such as protectionism, socialism and nationalisation have been mercilessly attacked and scoffed at as being sources of perversion, corruption and downright evil! But I put it to you (and I am not the first or the most articulate) that the laissez faire state is a morally bankrupt invention which promotes great imbalance at greater cost to mother earth and her resources. Capitalism as it has evolved is a destructive creature with unsustainable greed and little conception of justice and fairness. Many of the ‘real’ catastrophes listed above have been created or expedited by the forces of capitalism (such as global warming, political destabilisation and even invasion for capital gain as well as the consistent deterioration of labour rights and standards); others have not been tackled head on due to constraints imposed by capitalism (the generic drugs debate) and still others have been ignored, because they fall outside the prism of vision of the capitalistic world (famine and drought for example).

The fall of deregulated capitalism, should therefore be celebrated. The unsustainable greed was raping the earth, exploiting men, women and children and preventing well intentioned human beings (and I believe we are in the vast majority) from effectively addressing the great (and little) catastrophe’s of our time.

Instead, everything possible is being done to maintain the status quo, to protect the laissez faire [and contradiction of contradictions – to protect it through state (i.e. taxpayers) interventions] and ensure that the rich keep getting richer, their impunity is strengthened and in fact, they are rewarded for their sins.

I know very little of economics, and would greatly appreciate if someone could educate me as to how international finances really operate. But common sense tells me that this is the opportunity which should have been taken. Something had to give and the market did before the environment. That was the paradigm shift we were eagerly awaiting to reshape the status quo and put our house back in order. To insist on stronger regulations and greater safeguards. To build in insurances for catastrophes and demand cheap drugs for the sick and vulnerable. To safeguard the worker and freeze our mortgage rates. To demand the ban on weapons production and prosecute war criminals and financial criminals.

This did not happen. The market has been bailed out. It has been given a second chance. The second chance which should have been given to humanity and this earth instead.