Just read an article in the Guardian where the IMF managing director Christine Lagarde tells Europe to bail out the banks – again. Excuse me? What? So after having bailed out our banks, and them seeing them one year later going on with business as usual, paying out massive bonuses instead of using profits to provide better conditions for the people – we should bail out the banks again?
Let me suggest a compromise to all the finance ministers and others who are meeting in Washington during this week end to discuss how to avoid a second recession:
if the banks really need more money, then pay off loans of regular people and small businesses.
In that way, you will provide more funds to the banks, and avoid the obvious risk of them putting it into pockets where they don’t do much good. You’ll get a lot of political plus points from the people, which you all know that you need. The general trust in banks is quite low to say the least, for good reasons, and I think you might be risking a deep, global crisis in trust for politicians if they go ahead with another bank bailout.
The key finding that the Edelman Trust Barometer representatives took up this year was that it is essential for businesses to align profit and purpose for social benefit. I think that one can assume that the same goes for our politicians, and bailing out the banks is not going to give the impression to the employers of the politicians, i.e. the voters, that that is what is being done. It will not build up the trust in and reputation of “the establishment”, and there are much research on the importance of both these immaterial assets showing them to be essential for a successful society on many levels. There are even those, like Matt Ridley, who suggest that trusting each other is the base of our capacity of co-operation and exchange of ideas, which in turn leads to that trust is and always was essential to our evolution into the most successful species on this planet. Besides, I really think that paying off loans of people would be much more beneficial to the global economy than a bank bailout.
I’m not an economist and there might be better solutions than the one that I have suggested here, but I think that this solution points in the right direction. On the other hand, a bank bailout like the last one could be a political and financial catastrophe at this point.
People are already taking to the streets, demanding more fairness, wealth equality, an end to corruption etc. We all remember the images from the massive demonstrations in Spain and Greece, we know what happened in Egypt and Tunisia, and what keeps happening in Syria and Bahrain. I think the message is clear – people will just not take it any more. What exactly “it” is – what we won’t take any more is up for discussion I guess, but I can assure you that another bank bailout wont turn up on any list of demands.
The people who are occupying Wall Street right now are hinting at something that might grow into a massive, world wide protest. The Occupy Wall Street movement is explicitly expressing the connection between this protest and the Real Democracy Now movement, who in their turn have set a date set for a global mass protest: the 15th of October. The Mayor of New York, Mark Bloomberg, has said concerning the Wall Street protests: “You have a lot of kids graduating college, can’t find jobs. That’s what happened in Cairo. That’s what happened in Madrid. You don’t want those kinds of riots here.” I think that it is great that Mayor Bloomberg recognizes and spreads the insight on the very high unemployment rates among US youth and young adults (including academics). But his choice of words, particularly one word – “riots” – is strange to me and others. Let me quote the comment that the journalist Amy Goodman from Democracy Now made on that in a great analysis on the Wall Street protests, published by The Guardian: “Riots? Is that really what the Arab Spring and the European protests are about?”
Well, I’m going to give a hint to all politicians and other policy makers who do not want any more protests – another bank bailout might make the 15th of October even more explosive than it already is. These movements are all for non-violence, but that does not mean that they do not have the means to overthrow their governments. In a democracy politicians are actually hired by the people. Remember that.
I sincerely think that many politicians and other policy makers want to do a good job for our future. That they want to be trusted and remembered as the people who saved our economy and our environment, instead of the ones who blew it – just like we all do. Somewhere I think we all realize that it of course would be great if we could align the power of all these people on the streets with the power of all those “in power”, and make the world a better place. For the first time in history, we have to do it – otherwise, we might mess up our world so badly that we cannot live here any more.
I believe that the power of the human survival instinct and capacity for love and compassion will prevail if we just open up to it, and I believe that we will. If we need to overthrow some of our leaders, systems and “old ways of doing business” on the way, then so be it. But I think that it would be preferable if this process could happen calmly, without so much fights and anger. Starting another round of bank bailouts now would be like throwing large amounts of gasoline into a forest fire – the anger of the people will explode. Is that what we want right now – anyone of us?
Image: I don’t know who created this image, but it is literally all over the internet, so I have assumed that it has been made for free public use, at least for non-profit publications like this one. If this is not the case, please tell me.