Living in Peace and Wisdom on our Planet

  My Profile  Log In   Register Free Now   
Living in Peace and Wisdom on our Planet Planet Thoughts Advanced       Click to see one of our videos, chosen at random from the database, along with its PlanetThought
 Try a video
Home   About   Books&Media   Resources   Contact  
   News   Quote   Review   Story   Tip   All   Blogs   News   Quotes   Reviews   Stories   Tips
Get Email or Web Quotes
or use our RSS feeds:
New Feed:  Fossil Fuel
 Full  Blog  News
Read & Comment:
A Solar Community In Isr...
'Let's You And Him Fight...
Paul Krugman's Errors An...
Why Climate Change Is An...

Most recent comments:
From Farm To Fork
A Simple List: Things We...
Can the affluent rest at...

Bookmark the site
Contribute $
Easy link from your site
Visit Second Life
Visit SU Blog

Blog item: Private Profit, Public Bailout, and the Coming Collapse

    Email a Friend     See Related

10 comments, last: Sep-23-2008   Add a comment   Author:  PT (Sep-21-2008)    Play a Video
Categories: Economic/Financial, Peak Oil/Gas & Energy Demand, Political, Population Growth and Control, Sustainable Living

How tall has the pyramid grown? How far will the fall take us?This story is too important to ignore.  It may well shape our national economy and our national behavior for the next 20 years, and it relates to a dominant social culture that values paper profits over birds, fish, and frankly, humans.

I am talking about the Great Financial Meltdown.  The expression "Private Profit, Public Bailout" expresses explicitly the causers/profiters and the solvers/victims (us) of the current disaster-in-the-making.  This financial calamity may not have affected you, the reader, yet, but I do see more and more home-for-sale signs in my neighborhood and everywhere I go.

And I have heard that New York City, my home town, is one of the least affected areas in the country – so far.  And, to state what may be obvious, the effects will extend way beyond the real estate industry.  We are only seeing the visible top of the iceberg.

National foreclosure rates have doubled since one year ago.  Debt levels are four times what they were 25 years ago (in inflation-adjusted dollars).  And the full impact on jobs has yet to hit; as an analogy, even though the great crash in the stock market and the bank run occurred in 1929, the economy did not slow down dramatically until 1930.

According to Kevin Phillips, author of "Bad Money" (and other insightful books on economics, politics, and society), we are at most halfway into this financial situation.  It is not "over".  But I want to go beyond lamenting the seriousness of the current situation; the purpose of making the above broad statements is simply I suppose to gain your attention.  Excuse me if that was not necessary, but we have here a stark case-in-point of the same forces that have been leaving our planet's health twisting in the wind for a long time, with more and more dangerous consequences as the size and automation of human society has rapidly grown in its ability to consume and dispose of natural resources.  As playwrite Arthur Miller penned, "Attention must be paid!"

I watched several excellent guests tonight on the Bill Moyers Journal on PBS.  The last of the guests, and the most direct, incisive speaker on economics and the human factors behind it that I have ever seen, was Kevin Phillips.  I will use some of his insights below, but what he said on the Bill Moyers program was primarily clarifying what I, as an observant but non-professional citizen, had suspected was going on in the financial world and in the environmental world as an expression of our growth-at-all-costs way of life.

Our nation, the United States, has fallen victim to control by the financial world.  This accelerated about 25 years ago, and has continued through both Republican and Democratic administrations - yes, through the Reagan, Bush, and also the Clinton years, and worst of all, in the current Bush Administration. 

The unholy financial-government complex has been marked by repeated bailouts of the financial sector such as during the Savings and Loan disaster of the 1980s (do you remember the Resolution Trust Corporation that re-funded the S&L industry? You would have to be of a certain age).  This current situation, however, dwarfs that crisis in size and complexity, by a long shot.

According to Kevin Phillips this crisis may be with us for two decades.  What was refreshing was that he both knows the economics and the personalities, and he does not shy away from speaking the truth.  He called Alan Greenspan a key supporter of the rah-rah runaway financial-bubble-making machine from 1987 to 2006, and has similar harsh words for Robert Rubin, the Treasury Secretary under Bill Clinton and who now Barack Obama is using as an adviser.  In fact, Kevin Phillips said that if Robert Rubin was part of the Hindu tradition he would be reborn as a pail because he has been behind bailing out so many mismanaged financial institutions.

While the same people who set the fire to our financial system currently claim we should now bail it out to avoid a worse situation, few people are pointing out that the bankers and mortgage brokers, and the derivative-makers, are all running away with their bags of money, while the tax payers, us, are left holding the (gigantic) bag.  In fact, I have seen several analysts argue that the current bailouts ease the immediate pain, but guarantee a further shrinking of the middle class and a greater divide between the super-wealthy and everybody else.

And the bailouts guarantee an on-going struggle that will be more protracted than would be the case if things ran their course without a rescue by government.  For example, could the banks that profited from the fraudulent and unethical mortgage loans and re-sold their bad loans to larger institutions, why could those banks not have rescued Bear Stearns and AIG?  They could have.

If you saw the movie Ransom, you may remember one of the great touches was that the lead kidnapper returned at end under the guise... well, I don't want to ruin that movie for you.  Let's just say that all this government bailout action should not be accepted as necessarily the best action at this time, and the hidden consequences on the economy should not be ignored and will be with us for a long time.

Now, how is this all this related to the environment?  First, this Web site is not only about grass, trees, and animals.  It is about our human way of life, driven by our attitudes and understandings that have such a strong impact now on our planet.  My goal with this Web site is to make the planet a better, more conscious and more humane, place to live.

In addition, the current crisis is about our society's greater and greater separation from nature and simplicity, away from the simple enjoyments toward enjoyments of faster, bigger cars, more exotic vacations, and fresh tropical fruits 365 days a year.  We build lofty houses out of cards and then enshrine that activity as creating wealth and building the American Dream.  In reality, the House of Cards game creates wealth for 1% of the nation, and robs the dreams of the remaining people who need to work long hours or multiple jobs, just to get by and pay their bills.

This crisis is part of the perpetual growth nightmare that some thought was a heavenly dream; this crisis results from the perpetually growing economy that consumes the planet as we consume energy, travel, and dig for minerals, oil, uranium, and other dwindling resources more and more voraciously.  Most of humanity is a victim of its own blind urge to grow, and as a result the planet is suffering the fever of global warming, water shortages, and desertification.

Am I being pessimistic?  No, maybe not.  I think we can come away from this in the future with a better society.  But I am tending to believe that there will be deep trouble first, and that we may not cross into the promised land of sustainable, peaceful living for many years to come.

Despite all that, I am not down, I know that an answer lies within each of us.  I only feel sad for the struggle that will be thrust on many who had no part in creating an imbalanced world, and who are not ready for the challenge.  Did this have to be?  I wonder.  Maybe we will see a more positive trend of ethical behavior in the coming years, with a resulting more stable and humane system of economics.  We will just have to wait, however long it takes.

Related reading:
  Tearing Down the Master's House: An Interview w... (Aug-23-2009)
  While Everything Else Stops, Green Still Means Go (Jan-19-2009)
  John 'Nuke Bailout' Bryson must NOT be Secretary... (Dec-7-2008)
  Conspiracy Theory: The Wages of Greed is Debt (Nov-23-2008)
  Alternatives to an Auto Bailout: Help the Econom... (Nov-15-2008)
  Bailing Out the Biosphere (Oct-23-2008)
  Bill Moyers and George Soros, and the Fruits of ... (Oct-11-2008)
  Lust for Leverage - The Economy, Debt, and the A... (Oct-5-2008)
  Our Delinquent Leadership (Oct-3-2008)
  Michael Moore Speaks Up: They're Stealing the Si... (Sep-30-2008)

Click one tag to see readings related specifically to that tag; click "Tags" to see all related readings
^ top
Add a comment    
  Follow the comments made here? 
  (Please log in or register free to follow comments)
Comment by:  PT (David Alexander) (Sep-23-2008)   Web site
Thank you for the thoughts and the full disclosure.

I always suspected that dollar double burger that someone advertises on TV wasn't the way to go!
Comment by: auntiegrav (auntiegrav) (Sep-23-2008)   

Well, years ago they spent up to 40% of their income on food. Government loans and the 'Green' Revolution brought the price of what they eat (not food anymore) down to 10% or less of income on average. (poor folks still tend toward the 40%, while the rich tend toward 5%). That translates into more money available for housing and 'marketed' products..i.e. "value-added" items. The constant 'improvement' of cheaper food, cheaper consumable goods, and inflation makes the investment opportunities look endless and perpetually increasing. Everyone in the business of debt-based finance gets to justify their actions based upon these trends, even if the trends are illogical in the natural world.
Cheap food and "always low prices" don't help anyone in the long term. The necessities of living are food and water, shelter, clothing, with some redistribution of surplus for the needs of children and society (recreation/education/etc). If we value these things equally, then 20% of our time/income should be spent on each one. That puts food and water at 40%. By devaluing one or the other in order to globalize profits, we lose perspective on what we need to survive individually and collectively.
Disclosure: I'm a farmer so I have a vested interest in higher food prices--;-)
Comment by: City Worker (Sep-23-2008)   

Years ago, when someone tried to get housing, the guideline, was to not have them spend more than 20% or 25% (can't remember which figure) of their after-tax income on it. Then, the banks were giving mortgages and housing cost, based on, I believe upwards of 40% of pre-tax income. I wonder who was feeding the banks these figures, that they were using.
Comment by:  PT (David Alexander) (Sep-22-2008)   Web site

I was an optimist? Maybe you are being ironic, in a nice way of course.

I enjoyed the long rant, kind of like a white collar rap song.
Comment by: auntiegrav (auntiegrav) (Sep-22-2008)   

I had a great rant but it was too long.
As the System readjusts to the 'bailout' (a.k.a. "destruction of the dollar"), we won't be able to buy as much oil from overseas. This isn't a bad thing, since 99% of the resources we use are wasted anyway. (Warning: New Math) Since we import 60% of our oil, but we waste over 90% of it, then that leaves us a 30% buffer until we figure out what we really need as people.
I'm just trying to come up with ways to be optimistic like David...;-)
Comment by:  Susan (Susan) (Sep-22-2008)   

I can't even wrap my head around the number "one billion" let alone anything in the trillions! You might as well just say to me..."a bazillion dollars"...because it's almost meaningless to talk about numbers this big. Am I the only person who thinks this is crazy??
Comment by: auntiegrav (auntiegrav) (Sep-22-2008)   

A good place to keep up with the situation and discussion about what is really going on is
When my son was studying the 1929 crash in school, he asked, "What happened to all of the money?" At that moment, I realized I knew more about the stock market than most people. I answered, "It was never there to begin with."
That's what all this bailout business is about: hiding the fact that most of the 'wealth' which buys yachts and McMansions and corporate jets and wars for oil isn't really there yet. Those things are all bought on promises that someone will pay in the future for indulgence now. The instability of the system is coming about because the high price of gas has caused people who shouldn't have been given loans to default on those loans. These defaults caused more people to take a second look at the derivatives of those loans and something called "credit default swaps". As long as everything was growing, the bets were covered by the PERCEPTION of perpetual growth (borrowing money based on resources our children would burn up to pay it back).
Lose the perception, and the house of debt cards falls down. The government is trying to glue the cards in place just long enough to make it through another election and long enough for the rich to get far enough away from the guillotines.
The damage has already been done and nothing can be done to remedy it. We're talking about a 700 billion dollar bailout in a 450 TRILLION dollar derivatives system. The money is so gone it doesn't even have a smell anymore. Everything we are doing right now is on borrowed money.
The thing to do would be to shut down the entire U.S. economic system and start over as a new country, but the Bushes are busy trying to get their hidey hole in Paraguay set up first. We'll just have to muck it out ourselves, trading chickens for medical care, potatoes for labor, and going to bed when it gets dark. It can be a bright new world, but we first have to get rid of the overhead.
Comment by:  PT (David Alexander) (Sep-21-2008)   Web site

Part of the problem with the current system is that it is beyond the understanding of most of us. I am simply, maybe, 1/2 step ahead of the typical citizen. OK, one step.

The government will be helping banks and other corporations stay in operation, or taking ownership (Fannie Mae / Freddie Mac, and AIG). Meanwhile, it is not clear how many homeowners will be helped due to the unfair squeeze of a worsening economy and unfairly sold mortgages. The banks and Fannie Mae and Freddie Mac will be deciding who gets saved and who does not.

It is already too late for many, who have already lost jobs, homes, or retirement benefits. We will be seeing more 70 year olds working in McDonalds or other McJobs. Fannie Mae and Freddie Mac may help some of those with troubled mortgages, but many will fall by the wayside.

We are talking over a trillion dollars of risk now faced by the US government (that is, by we the citizens). There will likely be some rescues, but don't leave your job too quickly. My advice, and what I will try to do, is follow the numbers of those who are kept from foreclosure out of all the troubled loans, and "follow the money". In situations like this, it is still the best indicator of what is controlling human actions.
Comment by: City Worker (Sep-21-2008)   

Glad this topic came up. I really don't understand what's going on with the buying of the troubled mortgages by the Government. Who will benefit? Will the homeowners with the troubled mortgages avoid foreclosures because of this? Or will the ones who lent the money for the mortgages -- the banks,... just end up not losing as much money as they would have?

Comment by:  Susan (Susan) (Sep-21-2008)   

I feel ill equipped to comment, knowing so little about why this all happened. I understand the concept of bad mortgages, but have no real idea of how that caused all of what happened last week. I do think you're right about the whole "needing bigger and better".....and how that drive is one of the causes of our current environmental woes.

^ top 
About author/contributor Member: PT (David Alexander) PT (David Alexander)
   Web site:

Member: PT (David Alexander) My lifelong pursuit, since age 18, has been to live more fully and find wisdom. This has involved studies with Zen masters, Tai Chi masters, and great psychotherapists while achieving my license as a gestalt therapist and psychoanalyst.

Along the way, I became aware of how the planet is under great stress due to the driven nature of human activity on this planet.

I believe that the advancement of human well-being will reduce societies addictive behaviors, and will thus also help preserve the environment and perhaps slow down the effects of global warming and other major threats to the health of human societies.

Visit Green Wave Email Marketing
Email Marketing for You and Your Planet

We won a Gotham Green Award for 2010, on Earth Day! Thank you Gotham Networking for this award.

See the attractive event brochure.

Recommended Sites

  Member of:
GOtham Green networking
Green Collar Economy
New York Academy of Sciences
Shades of Green Network

     Members/Affiliates *

Approaching the Limits
    to Growth
Environmental News Network
Heroin and Cornflakes

* Members of PlanetThoughts      
  communities on SU or MBL,      
  and blog article affiliates      

  Other Favorite Blogs
21st Century Citizen
Center for Bio. Diversity
Easy Ways to Go Green
Good Bags
Opposing Views

Valid my RSS feeds

We Do Follow

  Volunteer      Terms of Use      Privacy Policy  

Copyright © 2021 All Rights Reserved.
Except for blog items by David Alexander: Some Rights Reserved.