Tuesday, October 28, 2008

Hand over fingers

It would be amusing if it weren’t so bloody serious to
observe the governments of the world faffing about
and flapping their hands over “solutions” to the
“global crisis.” One can only view with the deepest
cynicism the cloudy bluster of politicians who now
undertake to "fix" the problem with "strong" action.
(Barack Obama is no better than the others in this
respect; to make a real difference, once in the White
House, he would have to promote an economic
revolution.) The fact is that by a series of considered
decisions from the 1970s on, these same governments
deliberately fostered the conditions in which capital
markets could run free from virtually all restraint. The
borders of nation-states melted away as sharebrokers,
investment bankers and currency speculators pretty
much did what they liked, especially when
computerization lent wings to their transactions. Nor,
at the global level, was there ever a regulatory body
such as commodity trade has with the WTO, however
ineffectual it might be. You could say it was a licence to
print money but hey, not even a licence was required.
Now we (viz, the vast majority of the world’s population
who are not market players) must all bear the negative
consequences of a speculative bubble that we never
shared or even saw the benefits of.

New Zealand signed up to all this, of course, in the 1980s,
so can hardly complain now. Maybe we had no choice in
certain matters, eg, unpegging the dollar, given the way
the US and Britain were moving in those days; but we
could have done a lot more to protect our national
economy and the people who make it work. Imposing GST
on financial transactions above a certain limit, for instance.
But no, the “markets” were not to be trammelled in any
way; they were supposed to be our saviours, ensuring that
by means of “the invisible hand” everything would work out
fairly in the end. Well, we can see the invisible hand now:
and it turns out, all along, to have been giving us the fingers.

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