BBC News Special: Global financial crises
So all the rescue packages are a done deal, the credit crunch can hopefully “healed” before it gets even worse. Everybody is a state of shock, repentance or high alert.
But have we learnt anything? And are we all to blame?
Politicians finally have the chance to fix and regulate the financial system on a global scale and try to avert the next crises. But the next crises will come – like in any industry the financial markets are driven by innovation and claiming new ground. So a there will be many more Black Mondays, Tuesdays or Fridays in the future.
The real question is how we can decouple “normal” markets from the financial markets, so that disaster in the virtual money world doesn’t kill everything else?
One obvious insight would be to insist on more protection and security assets – all trade and “products” have to secured by real money.
But this is not real problem behind the current crises.
Money! Money! Monkey!
Greed is good
It’s basically the same old game: greed and unsustainable spending by the governments, banks, industry and consumers alike.
In almost all industrial nations a strange habit is universal: living on credit. The government does it, the small people do it as well.
It is the darker side of consumerism: I want it – and I want it now – and I can even have it now. My banker or car dealer is more than happy to “enable” me to get a credit and make something affordable that is honestly unaffordable to my financial power.
There is greed to consume and there is greed to make even higher profits (in companies). I don’t see any differences apart from the size of the numbers used. Consumer debt has skyrocketed in all rich nations as has most national debt.
Greed and irresponsible credit is a sport enjoyed on all levels of society.
How do you want a new financial system to be? Sarah Palin simple or rather Paul Krugman smart?
A new Quaker lifestyle?
In all such crises there are always calls for a new modesty and repentance – to simplify it all and cut it down to “reasonable” size.
This is of course bollocks.
Our financial markets are complex and global, because the global village has became equally complex and complicated. Greed, stupidity and consumerism won’t go away. These are human “qualities” no philosophy, religion or political system is able to “correct”.
So the usual call for cutting down the system and making it “work” in a cleaner and simpler way is a soothing slogan for TV discussions and political campaigns – but a rather idiotic illusion.
Two great financial experts having a good time …
Do we need new solutions?
What we need are better experts, smarter control, security and balance mechanisms.
Like in so many economical and political disasters usually there have been people warning of coming dangers, there have laws and regulations in place to prevent the “accident” to happen – but they were often simply ignored or pushed aside.
Ignorance, neglect, corruption and incompetence are the enemies of “fair and balanced” markets – not greedy investors and consumers.
It is no longer a question of either Free Markets that so famously can “clean and restore” themselves (harhar!) and the so called evils of Socialism.
It’s pretty obvious that the right mixture of good markets, greedy capitalism, oversight and directive for a common good are the way to go. No dogma makes sense in it’s purest form – and without efficiency.
Individualism and consumerism lead to waste and urban sprawl.
Cultural Changes that are needed
More efficiency, smarter and more social planning and lifestyles are needed.
Here is an excellent example what is wrong: Urban sprawl has distorted most of America’s social, economical and financial integrity.
How?
People bought themselves nice homes far away from their workplaces, schools and shopping malls – which in term meant that they were extremely dependent on their cars to get anything done.
But as soon as the petrol prices skyrocketed most families got into financial troubles: it became harder and harder to pay the mortgage for their house on time. Their living standard had to be reduced and their credit rating also took a beating.
With every failed or late payment either the credit rating went down or the mortgage went up.
The American car based suburban lifestyle is simply unsustainable, because oil prices won’t go down and urban sprawl creates many other environmental problems as well that are pretty expensive.
The solution: tighter integrated communities, where working, shopping, schools and entertainment are close to each other. People should easily be able to walk there or – *gasp* – use public transport. Less driving, more money and time saved. Fewer cars, fewer streets are needed. But most of all it’s a less costly lifestyle that is easier to sustain and finance.
Car cities like Los Angeles had once tightly knit tram and rail networks – that have been almost completely dismantled for roads and freeways.
Here in Europe urban sprawl is less of a problem, the distance we drive is much shorter and the housing bubble not as bad as in the US.
No, you can’t shop yourself out of every crises.
Conclusion
Consumerism, Credit and Capitalism plus Individualism are still good things worth having – but so is smarter planning, oversight and a more social attitude towards a greater good for all citizens.
The Culture of brainless Consumerism has to smarten up, because its financial and environmental effects are life-threatening and unsustainable.
We need the social and political will to use smart regulations and put good people into oversight committees instead of trusting slogans like “free markets will fix themselves”.
Sure they do, but not in a way a social and civil society wants them to fix themselves – not on the backs and out of the pockets of every citizen.
Therefore citizens, politicians and investors have to funnel greed and consumerism into smarter projects or create “safe playgrounds” for the big boys to waste their money.
It’s all possible – if we all show the political will on one side and accept the limits of the system on the others.
Life isn’t unlimited, nor are the markets or credit lines.
