By G.A. Dwyer Astaphan
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The capitalists are nationalising and subsidising like crazy, while the Communists are doing all they can to get consumers to spend more money.
Since 2007, certain economists had starting warning that the mortgage and finance industry in the United States of America was in trouble.
But very few people were willing to listen, because money was flowing, the housing market appeared robust (at least on the surface, which is where most of the American psyche dwells, with the rest of the world following like rats behind the Pied Piper), and people, who over the last few decades have, more often than not over the past two or three decades, come to be described as “consumers” were spending money which they didn’t have, while the predators on Wall Street and their counterparts in England, France, Holland, Germany, Japan, Italy, Spain and elsewhere, were raking in profits.
The proverbial house built on sand was on the verge of collapsing and very few people saw it. Who cared?
But the world financial system and economy were being put under unprecedentedly severe pressure, and major Governments, operating more under the influence of these greedy predators than in accordance with any administrative vision, backbone and responsibility, fiddled while the situation worsened.
They could not even introduce regulations to bring discipline to the financial sector.
Then in 2008, the ‘stuff’ started to hit the fan. Big scandals started to unfold, and high-profiled financial institutions such as Fanny Mae, Freddy Mac, Wauchovia, Merrill Lynch, and others, started going belly up.
And we started seeing the same pattern unfolding in Europe and beyond, and more recently right here in the Caribbean.
People began losing their jobs, their homes and their retirement savings like never before. Wealth, both real and artificial, was being wiped out in catastrophic proportions.
All caused by greed on the part of the corporate predators, irresponsibility, squandermania on the part of much of the population who desperately wanted to acquire the things they
thought they needed in order to be comfortable and to keep up with the proverbial Joneses, and complicity by those in Government in the USA and elsewhere in the world’s leading economies.
Why else would a bank design a mortgage (a sub-prime mortgage) which is a high-risk, even an irresponsible, instrument, and lend its depositors’ money to unqualified borrowers?
And why else would a husband and wife jointly earning, say, US$150,000.00 per annum, want to buy a US$1 million house?
Worst of all, why would a Government allow that to happen in the first place?
But that is exactly what happened.
And you know what? None of them have apologised for this mess that they got the world into.
They had enslaved, colonised and plundered, and instead of atoning, they said that they had ‘civilised the brutish beast’ who had been ‘the white man’s burden’.
They had deprived people of their basic human rights and dignity and instead of making amends, they had boasted of having laid the foundations for democracy in the Third World.
When they had had their belly-full of political control through the colonial administrative mechanism, they came in a second wave of plunder and put leaders of the new, deprived, under-developed Third World nations under the gun of political survival by forcing sweetheart deals for themselves, and again taking all of the gravy from the pot without having the administrative responsibility for these nations.
Why assume the official responsibility of a nation when you can have practical control without the extra burden?
And as they sucked the very life blood from these economies, they also sucked out as much brain power as they could, leaving us high, dry, and to die. No apology.
Then when they thought that they had reached the point of receiving enough of our brain power, they slammed the immigration doors shut in our faces, leaving us, high, dry, and to die.
No apology.
They had set up export industries and sold us ‘refined’ products. They had sucked up our raw materials and labour for nothing (they still do), giving us back something which they said was “refined”.
Back in the day, they had sucked up our land, sugar, molasses, tobacco, and so on. They had sucked us dry. No apology.
And today they continue to suck us dry. The very last thing we have left is being sucked up: our patrimony and our national integrity, independence and dignity. (Of course, we have been complicit in this to some extent, but I will deal with that another time).
But are they apologising? Not them!
One or two big investors move into these territories of the Third World and take a dominant position in the economy and society, so that they become more powerful than the Government which is elected by the people. And the result of that is that democracy is undermined, a nation and its people are held at ransom, and a balanced, sustainable process towards economic, social and national development is thwarted. And our dignity is compromised.
Does any one of them up there apologise to us? You must be crazy!
You know what they are doing instead? They are telling us that we must run our financial services sectors, our economies and our societies in a more democratic, professional and transparent manner, and that we must abide by their high standards.
THEIR high standards!
And we must open up our borders, our lands, our banks, and our entrepreneurial opportunities to create a level playing field in our poor countries with their citizens, but we have little or no chance in reality to be reciprocated in their countries.
Do they apologise? No. Instead, they chastise us? Can you imagine?
They pollute the world’s lands, seas and air, and they pollute the minds, the souls and the cultures of the Third World, and what do they do to atone for it? Zilch!
Look, Adam Smith (or whatever his name was), God rest his soul, can say whatever he likes about the “invisible hand”. The truth is, societies and nations cannot be run primarily on the profit motive, because that itself is driven by greed and it sets up a scenario in which the money has the power rather than humanity having the power, and money becomes god while humanity becomes increasingly deprived and depraved.
Capitalism as we know it, with its greed and rabid consumerism, and with politicians who dance to the of big money, has turned people into shallow, even empty, spending machines. It has disembowelled the soul of man.
And it is based on a false premise and on false promises.
A core component of wealth development is savings, and what one does with one’s savings. But in the model of capitalism used throughout most of the world today, the emphasis is not on savings, but on spending.
And remember, the fool and his money are soon parted.
How can one part with one’s money like that and still become wealthy? How can one spend money which one neither has, nor stands a snowballs’ chance in hell of getting, and still become wealthy? How can a nation fool itself into believing that, in blatant contradiction of the fundamental importance of savings to the growth of wealth, it can indoctrinate the vast majority of its people to spend themselves into unmanageable debt and still tell them how wealthy they and their nation are?
This is the ugliest trick in the book! And it is not even smart!
People are being brainwashed to spend so that somebody else can get rich, and so that, hopefully, some people can get jobs in the process.
I see nothing convincing or dignifying about that. And it is not the best way to grow wealth and to create and sustain jobs.
But in the typical capitalist economic model of today, there must be industrial expansion, there must be job growth, and there must be signs of a growing economy.
And for these ‘nice’ things to happen, people must spend, spend what they have, and spend what they don’t have. And that is where credit comes in. Credit which, like the proverbial house built on sand, must fail.
So pressured are the growers of the economy, that instruments and devices are designed to produce ‘money’ for people to buy what they cannot afford. It is all false. And foolish. Dangerously so!
And we run into the inevitable: a “credit crunch”, which is what we are facing in the world today.
Imagine you and I in St. Kitts & Nevis are being punished for this gigantic crime against humanity that has been caused by greed and acquisitiveness in the bigger, so-called more developed and ‘civilised’ nations of the world.
And are they apologising? No.
So what did these capitalist Governments do?
They took up taxpayers’ money and bailing out companies which had failed because of greed, corruption and mismanagement. A failed capitalist system (not that capitalism is bad, it is just that the model in use is in the long term, unworkable) had to turn to socialist methods to prevent total collapse of an economy! And under a Republican president, no less!
Now, what are the chances that failed corporate leaders will all of a sudden change for the better once they get their hands on some taxpayer dollars? Isn’t this a case of new money, but same old good-for-nothing hands?
In pure capitalism (that may be an oxymoron) those who fail become fertiliser for those who succeed. It’s the law of natural selection as posited by Charles Darwin, the evolutionist, as applied to the world of capitalism as we have come to know it.
And individual failure in that system is just as important as individual and collective success, because it is the competition and the standards that are so widely spoken about which determine success and failure, and which also determine the availability, the quality and the prices of goods and services that are made available to the consumer.
Good market, good balance between supplier and consumer, good system, good economy.
Capitalism is supposed to be self-cleansing, self-strengthening and self-sustaining, guided by that ‘invisible hand’.
But in order to fix the problem, did the US and other Governments go to the Capitalism Handbook?
I can’t say if what they did is in the Handbook, but they went in, intervened with taxpayers’ money, and actually nationalised some companies. To me, that looks like socialism. Was it the wrong move? I am not saying that at all, but it was certainly not pure capitalism. And funny enough, that is a move that has been made in the past when capitalist systems have run into failure like what we are witnessing now.
Maybe it is that deep down there is only a very fine line between capitalism and socialism, and that the rest is basically superficial stuff. I don’t know.
Consider this: when you are a small businessman, banks and Governments may respect you, but you don’t have the power to shake up either, or the entire community. You and a hundred others like you might fail, but things go on for the rest of the world.
However, when you get big like Merrill Lynch, Wauchovia, Washington Mutual, AIG, and Clico there are too many people invested in you, there is too much power invested in you, and banks and Governments have to go along for the ride, deadly as it may be.
That means that the powerful few exercise the control, which you more expect to see in a socialist or communist society, rather than a more open, fair and level playing field, which you expect to see in a democracy.
But that is what got us into this mess in the first place, isn’t it?
And as the capitalist world turns ‘socialist’, the Government of the largest communist society on the planet, China, has launched an initiative, through which it would spend US$562 billion, to stimulate consumer spending in rural China.
As you know China has been the main supplier of goods to the world for the past several years, and as demand abroad has contracted and caused a slowdown in China with a massive loss of jobs, the Government, in as capitalist a move as there has even been, is now trying to get the poor country folks in China to cough up the two and three pence ha’penny that they have or don’t have.
What next?
What I know is that these doctrines and dogmas have to be re-examined and an approach to economic development needs to be taken which respects human dignity and the earth, and its bounty.
Economic growth for its own sake does not make sense, and economic data which looks and sounds good but which cover up the face of inequity, suffering and other realities, are no good.
