The financial crisis: a great excuse for Jubilee

George Soros says the financial system has already disintegrated, and Paul Volcker agrees with him. It has already collapsed, in some ways more comprehensively (and certainly more globally) than in 1929. It’s just running on fumes– or maybe we’re like the cartoon character who ran off a cliff but is just starting to look down and doesn’t yet realize he’s supposed to fall.

So, America’s now in for $700 billion or more, China for $586 billion, Japan and Europe and everyone else is upping the ante, and these ’stimulus’ packages may be only the beginning…. Hell, if even two years ago, you’d have asked me to draw up what a worldwide “Jubilee” forgiveness of debts would have looked like, i wouldn’t even have made it anywhere near as big as all these current bailouts.

Seriously, and don’t dismiss this out of hand: I think it’d be more effective if these bailouts are presented as not just a serious set of economic loans/grants and restructuring, but ALSO a religous ‘jubilee’.

As long as the basis of debts and loans and credit has collapsed, let’s take it all the way. Honoring one’s debts seems to no longer apply to banks and billionaires, so why should it apply to ordinary people? One is judged for having less or more, money is power, to not have it is to be ‘broke’. Yet forces far larger than individuals have rendered that whole logic moot.  We should admit that the way we morally as well as fiscally judged people was based on a deeply flawed logic.

Jubilee– the original concept– asks that we ‘reboot’ the system every 50 years, and forgive all debts and free all ’slaves’. It posits that all people should be returned to their lands and ‘inheritances’, to the unconstrained opportunity for self-sufficiency: liberty and justice for all. And it’s holistic: one lets plants grow and the ecology restore itself.  This encompasses many of the ideals the stimulus bills only dream about; and it’s a more comprehensive moral solution to the human condition than any of the half-baked reforms being proposed and discussed by our leaders.

We might as well get all the religious folk involved, get a lot of the nutcases to help society instead of planning for apocalypse.  And invest it with real spiritual meaning. The bottom line is, as long as you’re going to blow several TRILLION dollars and mortgage the planetary future, you might as well pull out all the stops!

People talk about end times, ‘2012′.  Yes, the world as we know it is ending.  But that’s not such a big deal–that’s happened a couple of times already this century! WWI for Europe, WWII for everyone, 1990 again for the soviet bloc. Moving on from such seminal moments takes real courage.

So, there needs to be a real blueprint for the world to come.  Something that’s Bretton Woods, the founding of the UN, and the peace of Westphalia (which ended and transcended religious war) all rolled into one, with radical environmental and political reform built in. A set of ideas whose time hasn’t quite come yet– but just might come quite soon.  We live in a world where hundreds of millions of migrants are far from home, in debt or in effect indentured servitude to escape hardship; where national boundaries don’t reflect ethnic realities; and where the allegedly respectable and civilized western countries and societies are the deepest in the hole, the most wildly out of whack with the basic math of money and sustainability.  Jubilee would inspire not just the policy wonks but the whole world.

But it’s crazy, you say! What if you’re wrong?

Dr. Peter Venkman: This city is headed for a disaster of biblical proportions.

Mayor: What do you mean, “biblical”?

Dr Ray Stantz: What he means is Old Testament, Mr. Mayor, real wrath of God type stuff.

Dr. Peter Venkman: Exactly.

Dr Ray Stantz: Fire and brimstone coming down from the skies! Rivers and seas boiling!

Dr. Egon Spengler: Forty years of darkness! Earthquakes, volcanoes…

Winston Zeddemore: The dead rising from the grave!

Dr. Peter Venkman: Human sacrifice, dogs and cats living together… mass hysteria!

…[the Mayor considers the implications of helping the Ghostbusters stop the Apocalyspe... and asks what if they're wrong?]

Dr. Peter Venkman: If I’m wrong, nothing happens! We go to jail – peacefully, quietly. We’ll enjoy it! But if I’m *right*, and we *can* stop this thing… Lenny, you… will have saved the lives of millions… of registered voters.

Chinese Communists control the capitalist world…

The debt of western countries, especially America and England, is supported in large part by the central banks of developing and eastern countries– most of all China.  China holds hundreds of billions of dollars and pounds and euros as their currency reserve.  While it has been true for a long time that the dollar is the ‘reserve currency’ of most of the world, the US debt has skyrocketed in the last decade and has mostly been picked up by Asian countries.  And now that the US economy is crashing and the stimulus bill is vastly scaling up the debt and deficit, SOMEone has to keep lending America the money.  Japan, South Korea, Singapore, and other countries have also been major purchasers of US debt, but China is the biggest.  All of their economies depend on export trade to the US; thus the theory, or assumption, is that they cannot let America fail.

But people forget that they may not have the same goals, desires, or ideology as America or the west.  China is STILL run by the Chinese Communist Party.  Since the 70’s when they began to snap out of the insanity of Mao’s Great Leap Forward and Cultural Revolution, the communist leaders actually went back to their sources– and discovered what Marx had actually said: capitalism must precede communism.  It must grow, peak, and collapse- and from that place of ‘highest development’ would be ready to be succeeded by true communism, and the state would wither away. So the Chinese decided to try it: roll with world capitalism until it’s ready to collapse.

And boy have they ever.  Workshop for the world, skyscrapers, hundreds of millions of people brought into the world middle class, the most rapid industrialization the world has ever seen– as big as all previous ones combined.  But their leadership is still the same.  Quietly but certainly, it’s still the same communist leadership. They still openly believe in a communist future.  And somehow, all the western capitalist countries have become dependent on China for capital? Doesn’t this strike anyone else as odd?

Apparently Israeli voters are bigger idiots than Bush-voting Americans

I’m appalled and shocked that Kadima is leading the exit polls.  If people didn’t want to vote for Likud, if people were afraid to vote for a right-leaning party, if people had a personal dislike for Benjamin Netanyahu, I could respect their choice to vote for someone else, even if I disagreed– but have the decency to vote for a party with principles!  Have the decency to vote for Meretz, a real left-wing party that’s never had a corruption scandal! Vote for Labor, who at least has some genuine if utterly misguided socialist views!  Hell, vote Hadash, the mostly-Arab Communist Party of Israel, who at least stands for SOMEthing! Vote for right wing parties who also never are corrupt and are honest about their views about settlements and Arabs!

But Kadima, whose sole reason for existence is the comatose vegetable Sharon; whose only ‘issue’ was the withdrawal from Gaza– the most ridiculous failure of Israeli policy in the last 20 years (and that’s SAYING something!); the ‘party’ which proudly has NO ideology and stands for NOTHING at all; the party that claims as ‘victory’ the half-assed recent re-invasion of Gaza, which should never have been necessary, if not for Kadima’s withdrawal of all military and civilian presence, if not for Kadima’s tolerance of the growth of the Hamas regime there, if not for Kadima’s waiting for eight THOUSAND rockets to fall on Israel before it took action… Kadima! the party of Olmert, whose approval ratings make Bush look like Brange f’ing Lina– for six months ZERO percent of Israelis thought he was doing a good job… one and half million Israelis took to the streets demanding his resignation, which is more than voted for him in the first place!! Imagine 55 million Americans taking to the streets demanding Bush’s resignation!

How about some accountability for God’s sake!  Kadima is responsible for the utter failures of the Lebanon war, responsible for the Gaza war which killed 1400 Gazans but didn’t even defang Hamas, responsible for failing to make Israel’s case to the world… Kadima is responsible for Olmert’s corruption scandals.  Kadima is responsible for the horrible theft machine that the Israeli government has become.  Kadima deserves to be– to be charitable– retired.

I hope Kadima voters can look at themselves in the mirror.  I don’t know what’s wrong with them.  I feel like Americans felt in 2004, after Bush got re-elected in spite of his manifest idiocy.  But more is at stake here.  The definition of insanity is trying the same thing again and again after you know it doesn’t work.  Kadima is a failure.  Its policies are failures.

I hope to God that Livni fails to form a gov’t and that Netanyahu winds up prime minister.  His term as finance minister created Israel’s current prosperity and his appointment of Stanley Fischer helped create Israel’s current bank solvency and fiscal stability.  He’s shown that he can capably speak in English to the world about Iran, about Israel’s need for self defense, about the difference between terror and morality.  Unlike Livni’s tortured Neanderthal Englisch, which sounds like Ah-nold circa 1984.

It’s raining heavily today, for the first time in months of drought, so I take that as a good omen– that the evil king is fallen, that better times are coming.  But if we wind up with Livni, with Kad-f^&*g ima again, I’ll seriously consider forming my own party, or starting a revolution, or leaving.  Gee, maybe they’ll offer all the west bank to Hamas too! and the Golan to Syria and Hezbollah! In exchange for NOthing!  It’s done so well in Gaza, that idea! Maybe they’ll sell off all gov’t contracts to the mafia directly!  Maybe they’ll make Olmert Prime Minister for life or until Sharon, zombie-like, returns to power!

It may be hard for outsiders to understand why electing a ‘centrist’ party could be such a travesty.  Picture Rudy Blagogevich returning to power AFTER being convicted… picture an election a week after 9-11 where a party wins proposing ceding Afghanistan to Al-Qaeda, saying “we’re tired of fighting.  we’re tired of winning”.  I don’t have terms strong enough to describe to you how evil Kadima is.  Pure opportunists who simply want to stay in power.  One of the blessings and curses of living in Israel is that things MATTER, elections MATTER, positions matter… and to take no stand amounts to taking a stand.  To take no stand on corruption, to take no action as rockets continue to be shot from Gaza (even today!)– this is a stand FOR weakness.  FOR corruption. FOR terror.  In a country smaller than Vermont, with tens of thousands of armed monsters within walking distance and a massive economic crisis looming.  Like American Bush voters, Israelis may be secretly wishing for apocalypse.  And they may get it.

Money won’t be worth the paper it’s printed on

Meridith Whitney, one of the few analysts to successfully predict the current crisis, had a simple rule of thumb to determine the value of any given bank or financial firm: take a hard look at the crappiest assets they had bought or invested in with borrowed money, and figure out how much they’d be worth in a fire sale.

Now that sub-prime markets started pulling the rug out, and Ponzi schemes like Madoff and smaller ones have started to unravel, the creaky foundations of the whole interconnected capital markets are shattering.  As much as 40% of the world’s “cash” has simply disappeared, if it ever really existed beyond mere Enron-style projections.  New financial ‘instruments’ including derivatives and other creative accounting practices allowed huge amounts of money to move around.  But the bottom line is that they have caused the fundamental trust relationships that held up the basic belief in the VALUE of all money, not to say stocks, bonds, banks, etc., to be damaged if not destroyed. We’re all in that fire sale.

Where is this going? With cascading bank failures and a catastrophic credit crunch now resulting in massive layoffs even by “healthy” companies, more than ever the crisis is revealed as a crisis in belief, in faith.  It is naive to think that this problem can be solved at the level of awareness that created it– a paradigm that essentially took people’s belief in the value of any abstract measures such as money for granted. Previous currency collapses, over the last 60 years, could always be recovered from if there was a core of solid western currencies and economies to bail them out; third world debt could be absorbed as long as first world prosperity was relatively stable.  Now there are no givens, as the dollar, pound, Euro, and yen all face severe constriction whether inflationary or deflationary, and governments including the US hover on the edge of debt behavior which in any ordinary company or country would result in bankruptcy.

Responsible thinkers need to start planning for a world in which the only certainties are ‘needs’, fundamental commodities such as food and water, and barter.  And, sadly, guns and instability.  The 30’s– the last comparable time– led to massive reinventions of public life and ideology in every major developed country.  “Faith” in markets or banks, in currencies and basic concepts of value, in law and liberal civil society itself, nearly died– and was partly reborn or reinvested in fascism or communism.  This radical change did indeed revitalize major economies– but at a terrible human cost which was only fully paid by the devastation we collectively call WWII.

We need to confront the absolute necessity of providing a vision to the world, a cognitive and moral and even theological framework, within which civil society and economy and personal growth can be expressed.  The right question is not “will things really get ‘that bad’ again?” but “what can we do to give people hope and something to work for if and when things DO get that bad?” Prudent contingency planning demands it.  Currencies are not backed up by gold anymore– they’re not backed up by anything except people’s belief that they have value– belief which can change or collapse.  Our world could easily degenerate into the warlordism of China in the 20’s, the Afghanistans or Somalias of today, or the Europe of the 30’s.  Wise folk from all walks of life need to realize that we all need to take responsibility for our future and our lives, individually and collectively, as governments and institutions have failed us.  Obama is not a messiah and can’t save us.   And empty optimism that things will ‘get better’ or ‘turn around’ in defiance of concrete proof comes from the same kind of judgement that led to this collapse itself.