700 billion dollar …

25 09 2008

By Economicsfairy

Thought that after all that sarcasm I should get back to business. What does it mean, 700 billion dollar, for the developing world and for ending the incredible hunger, violence and injustice on this planet?

700 billion dollar (and probably much more, who knows) …

… twice the size of the combined GDP of the 49 poorest countries in the world

… the equivalent of seven years of foreign aid

… 30 times the US aid budget

… 14 times the extra aid money needed to achieve the Millenium Development Goals

If it is possible to fundraise enough money to “fix the mistakes” of this financially and morally rotten US polit-business oligarchy, there must be money to end worldwide poverty as well.

We need to become more couragious and bold. And the Americans need to look after their “democracy” more carefully, in their own interest and in the interest of the worldwide community.

After all, whose planet is it?

Jesus for Investmentbankers

24 09 2008

By Economicsfairy

There is really nothing to worry about, guys. Absolutely nothing.

Because HE is back.

Didn’t we sense it? Of course, God will not let down HIS own beloved country, never ever, don’t you worry. So HE came back in the form of Warren Buffett and with about five billion dollars for Goldman Sachs (you remember, the bank with the extraordinary sharp and bright management). Analysts probably believed it was Christmas, nearly cried with joy and fell on their knees. One of these lunatics in Hongkong said something like: “Everybody follows God, but Warren Buffett shows the way.” Honestly, guys, read it on the net, I’m not making it up. We’re talking about the US here, so you don’t have to make anything up anyway. Turbo Finance Capitalism Insanity is REAL. (But FREE only for bankers – which makes totally sense because everybody else has to FINANCE the party, so how could it be free for them?)

Anyway, now Salvation is near, guys, believe it. Because HE will do it. Actually, HE doesn’t like Wall Street that much, but still: HE will sacrifice – okay, not himself (someone tried that already a while ago and as we know so far it hasn’t helped much). No, Warren Buffett will send five billion dollars. Maybe more, who knows.

By the way, Warren wants to avoid another “Pearl Harbour”. Yes, honestly, that’s what he said. Didn’t he know that a Japanese bank already thinks about helping out Goldman Sachs as well? – Maybe that’s what he fears …

On the other hand – doesn’t the US already belong to Asia anyway, more or less? I mean isn’t it these intelligent and hard-working guys over there who save shit loads of money in order to finance American consumption? And because the poor lads still believe in the current and future value of the dollar. I think China must own at least a few square miles of the USA already, maybe even a few states. Maybe Disneyland?

Coming to think of it, we should really do more deals with China. Firms who sell all their toys to the US could sell them directly to China, everything else is just going a long way round, isn’t it? Honestly, if the USA are living on credit to that extent, why the hell do we need them as a motor for the world economy? What exactly is their contribution apart from brainless consumption and fucking up countries that possess a bit too much oil? Selling directly to China also doesn’t make much difference in terms of morality, because both countries are no real democracies.

As for Warren Jesus Buffett, we have to stop being ironical here and thank him for his salvation actions, because 1), he knows more about the market than the guys in Washington and so might make less mistakes AND 2) the more the money comes from people like HIM, the less the burden for the taxpayers. Maybe HE can even prevent the new model for capitasocialism a la USA: Privatize profits and socialise losses.

Everything will be fine.

Ten good news about the US stock market crash

21 09 2008

By Economicsfairy

Yes, I know, it’s all very sad and shocking and unfair and guess who the hell will pay for this disaster and it’s a crisis of credibility and a system crisis and the world will come to an end anyway, but, hey: look at the positive side of things:


1)      It wasn’t a plane that flew into Wall Street – so they can’t blame Osama bin Laden this time.

2)      Americans will have to save so much in the coming years, that they will not be able to travel Europe in vast numbers.

3)      Americans will have to save so much that many of them will considerably loose weight which will increase the number of good looking men in the world market.

4)      The USA are so bankrupt by now that they will not be able to invade other countries for quite a while.

5)      This crisis will offer lots of interesting PhD research positions for all of us who are or will be unemployed soon: “The link between too much cocaine use and the world economy – a multidisciplinary sociomedicalpsychoeconomic analysis”

6)      The US government can never ever again turn down people who demand a few quid for a social or ecological project with the excuse that “there is no money”.

7)      Socialism is not dead: The USA are currently turning into a socialist country with all the wretched banks they’ve bought themselves. (Hey nostalgic Eastern Germans: Get a Green Card – now!)

8)      George Bush’s final speech will be even more hilarious than we already anticipated.

9)      A strange riddle could finally be solved: The “American Dream” is an expression to describe people working under the influence of drugs.

10)  Many Americans will loose their homes; but: Don’t worry, be smart – just buy shares of trailer producing companies this time!

Economics of Illusions

19 09 2008

By Economicsfairy

So, they had a traumatic week at Wall Street? Financial disaster, catastrophe, apocalypse …?

I really love all this typical vocabulary when it comes to an extraordinary event, whether good or bad: “Nothing will be like before …”, “Our world will never be the same again …”, “The world as we know it has collapsed …” People desperately try to find adequate words to express their shock and surprise (!). Because, yes, aren’t we all very surprised about the horrible news from Wall Street?

I can’t help finding this a bit hypocritical. I’m not an expert on stock markets, but, honestly, wasn’t it quite clear that at some point something like this was going to happen? Shouldn’t at least people in the money scene have realized that for months before this new black day in the history of Wall Street there was a lot of moving and shaking going on in the banking world? What about the real estate market crash in the UK last year?

Selling illusions

Everybody knows that you can’t make money out of nothing more than taking high risks and selling illusions forever. Somehow, maybe subconsciously, all of us must have known that there will be a bill to pay at some point. But now: Nothing than shock and utter helplessness when it comes to the need for an explanation. I read the German newspapers quite intensively this week, and while some point to greed beyond any responsibility combined with sheer stupidity or demand the usual “more professional regulation by the state”, others describe how “the responsible people” just hang about in talk shows and declare that they wouldn’t understand today’s complicated financial system either …! One commentator suggested that it looked a bit like scientists who tried to publicly defend an experiment that went wrong. One joked about the much feared “black holes” that the CERN experiment might produce somewhere in the universe … well, obviously, some banks vanished in black holes these days.

This “Oh my God, how could this happen?” and “Oh shit, I’ve lost ten million dollars – how will I survive without my Ferrari?”-attitude including a complete lack of feeling responsible is a bit shocking. These guys seem to live (no, they don’t SEEM to live, they LIVE) in another universe than we “ordinary” people do. They have made up a complete dream (but nevertheless very comfortable) world, and this week it collapsed.

Adrenaline and Megalomania

Well, we could say, who cares? A few ridiculously arrogant and megalomaniac guys who had lost their senses (and any reasonable contact with themselves) anyway and who probably needed this kind of high adrenaline-providing job (for whichever reasons …), turned Wall Street into a casino, and now they have to wake up. Good for them, we could say. Better late than never.

The trouble is that we are so connected these days, that it matters quite a lot for the rest of the world what a few insane brokers at Wall Street do. Look at the trouble other institutes are in, look at the panic at other stock markets, the problems for the world economy (Germany already fears the next recession after a short boom – but okay, we always fear something!) and last, but not least: The vast amounts of money that governments and central banks are currently pumping into the markets worldwide. While I hope that they will be successful in order to prevent a really big world economy crisis, I nevertheless ask myself: Where does all this money come from? What will be the impact on inflation and the value of the dollar? And who will have to pay for these rescue actions one day?

“Crisis of Rationality”

I can’t help it, but I feel that somehow many people are living under illusions and “postpone the real catastrophe”. One German commentator wrote something about an “era of misfortune” that we had constructed ourselves, and that it had already begun with the Iraq war and also (at least in Germany) with a lot of economic and social reforms that would have been too much motivated by shareholder values and demands and not enough by a common vision for the future. I’m not overly happy with the German tendency to be too pessimistic, but I think he has got a point, especially when he describes the current financial crisis as “a crisis of rationality”.

This is exactly the problem: A society (or a world) in which the economy and the stock markets are regarded as the “Mother of Rationality” AND in which nearly everything that happens has to be justified economically AND in which the very economies and stock markets are (ironically!) driven by too much insanity, greed, illusions, … (which “are then sold as rationality”) can not be regarded as sane anymore, can it? How could we ever believe all this neoliberal rubbish??

The trouble is: 1) too much greed and 2) the dominance of “rationality”.

But the REAL trouble is: Greed that comes along as rationality and leads to economics of illusions.

This crash is not sooo extraordinary. Every intelligent person could have foreseen it. Not exactly for this month and this year, but in general, yes. The more interesting question is: What lies behind it? What kind of symptom is it? What does it tell us about the world and ourselves?

Is this the one and only vision people have for themselves and the world: Making money (even out of nothing) and crying if it vanishes into a black hole?

And why?

If you want to investigate the level of development a society has achieved, just look at the Gods it worships.


9 09 2008

By Teasome

It’s a bit scary. Oil has peaked or will peak soon, whatever. Wars for oil are inevitable anyway. They have already been led for a long time (since people discovered oil, perhaps), and they will persist and become more fierce and cruel.

Russia has a lot of oil. Consider the way the US government deals with oil shortage: name an oil-rich country’s regime undemocratic, overturn it by force, and gain the power over it. Extrapolate, and it’s easy to predict what will happen. Consider that recently the political regime in Russia has become extremely undemocratic – from the American government’s point of view, naturally. Extrapolation works?

To spark off a war with Russia would be too much in political sense. Of course, it’s easy for the rest of the world to murmur approvingly when the Russian regime is being attacked; but to actually start military actions against a Christinal country with acknowledged market economy and enormous mutual investment would mean a dramatic loss of political points. The problem is, while oil is becoming more scarce, political points matter less. In the face of scarce oil, the power will be not with the one who has more political credit with the rest of the world, but with the one who has a better bomb. A more effective one, or better few, the most advanced and expensive.

Bleak isn’t it. All this makes me think: ok, the most pessimistic scenario works out, Russia is invaded and destroyed by America, China, whoever. Fine. While I’m writing this, I should check on the Internet: how many people get killed per second all over the world? Why should I think that my country is any better than any other? Why is it more worthy of remaining intact than any other?

I think that the moment a nation or an ethnic group, or a tribe, becomes extinct, a voice is lost in the universal chorus. That voice cannot be replaced. It has a message which no other nation, ethnic group or tribe can deliver to the humankind. The humankind becomes forever deprived of a certain knowledge, which hinders its development, if not questions survival.

So, judging from the amount of wars we’ve had and nations, ethnic groups and tribes become extinct, I’m not surprised the survival of the human race is under a big question.

Not that I’m in an especially bleak mood today 🙂 Though the weather is rubbish in St.Peters today actually, yes.

Creative capitalism

1 09 2008

Constantly debating on the best system or framework for the progress of world economy, economist’s world over remain confined to the mainstream view of a market driven capitalistic structure.

Marx seems to have failed after the two socialist giants adopting the free market capitalistic regime. Gandhi and Schumacher never got very noticed with their ideas of decentralized economies (Gandhi wanted India to be a federation of 700,00 village republics, but Nehru and his successors had different plans). Capitalism has been the greatest driver for the world economy; it comes with its threats of externalities of social inequality, environment damage, but ends up creating a market for every externality.

Corporations have become islands of economic power; the largest 500 corporations of the world literally control the world economy. The have dominated policy decisions across the world and thus dictate the framework of demand and supply.

In the 1970’s Friedman   introduced the concept of corporate social responsibility in a magazine article, and restricting the responsibility of a corporation to creating profit for its shareholders, and leaving the social responsibility to them. More recently belief’s regarding this have changed, Gates and his peers believe  that corporate image as a sensitive an responsible part of the society helps improve the bottom line, by creating a greater positive image. Other argue that social needs and priorities can not be left for charity of corporations.

Personally I agree with Schumacher, who believed that small is beautiful, and that many small changes can make a big difference, therefore smaller initiatives taken in the sprit of positive change should be supported, whether they are to reduce poverty, combat climate change or sustaining peace in the planet.

 Social entrepreneurship is the perfect guise for today’s generation contributing to society   by working on alternatives and creating markets for the externalities.