None of us can honestly believe that financial institutions did not know the consequences of the abuses they made concerning the use of private real-estate debt as an investment option. It would be unfathomable to believe that the unavoidable Global Economic Crisis was completely unforeseen by the mathematical brains employed by the world’s most powerful banks. It must have at the very least occurred to them that offering incentives for private citizens to incur into debt beyond their capacity for credit and then using the re-financing of that debt as the means to fill investors’ pockets was a flawed concept to say the least. Also, to even think that they could not have know that lending the same values in digital “pixie money” many fold, thus generating an illusion of a greater availability of funds that there really existed, was obviously going to have penalties down the road.
I think it is perfectly logical to believe that a financial institution that is replete with economists, mathematicians, strategists and what not, makes scenario studies for whatever options they decide to make available to the market in general. It would be irresponsible of them not to. So, if they did run scenarios, it is reasonable to think that the consequences we face today were indeed predicted; even if not precisely. After all, even through plain common sense it is easy to figure that lending money to someone who cannot repay you is bound to end up badly, more so even if you have the brilliant idea of using the debt to attract more money into your pocket by saying that the payment of the bad debt is the thing that will generate a return to your investors. Come on! We cannot be naive to the point of thinking these institutions were not well prepared to anticipate and counter these effects.
So, if they knew – and I say again that they had to know – why did they do it anyway? The unsurprising answer is quite simple: For Profit!
This scheme perpetrated by these institutions must have generated such a flow of funds to them that it was all worth it; at least to those men and women who controlled these institutions. Some say we are the ones paying the bill for it, and they are correct. We happy investors and private citizens, but can we blame them? Certainly we can, but not only them because we were greedy too. Each of us, investors, has a share in the guilt for the current crisis. Why? Because we CHOSE to believe in a continuous growth of world economy that could not possibly be. We CHOSE to let them mislead us into thinking that constant economic growth was a good thing and that it would make us all very rich. We chose to surrender to the allure of consumerism and easy money.
The dynamics of the world economy in the age of globalisation is a very perverse thing. It is wicked in the sense that it is totally dehumanised. Investors see only the return upon their investment as a collection of numbers on a computer screen. They are not privy to the consequences of those numbers in terms of the human, social and ecological cost of their profits. Banks and corporations have a glimpse, though. They should know better but greed is supreme to them; it’s their nature. As for us, we let them do it because it is comfortable to us. Now, we pay the bill and rightly so.
The Global Economic Crisis is an opportunity for us to re-think our ways. It is a time of reflection for the lot of us, greedy consumers, who were doing everything for easy money so that we could own luxury cars and travel with style to exotic destinations. In the process, we ruined our economy, our society and our planet. Shall we try something different now?
Friday 6 March 2009
Do You Really Like Your Car?
It has been a while since I wrote last. Like many of us, I’ve been busy trying to stay afloat during the phenomenon we all have come to know and cherish as the Global Economic Crisis. The good side of the crisis in my personal life is that the lack of orders and new projects – I work with international commerce – leaves me a little extra time to partake in more idealistic activities.
Yesterday, during a conference with representatives from a few prominent NGO’s and associates of Mr. Jim Garrison, I was exposed for the first time to the certainty that global warming will influence our daily lives as of 2015 and to the palpable possibility that we will all face famine and water shortage by 2100. There is no mistake about it; the scientific community has presented conclusive evidence to this effect. Truth be said, I should not have been so surprised as this theme is present in the back of all our minds for decades. I remember having seen Carl Sagan talk about it on TV during the 1980’s in his series “Cosmos”. Yet, we – as a species – have done next to nothing to work towards the prevention or at least the minimisation of the emission of greenhouse gases into the atmosphere. It simply isn’t “economically interesting”.
Of course some of us do a little here and there to help and to feel good about ourselves, and this is where I include myself so I know what I’m talking about. We recycle, abdicate from our cars once or twice a month – maybe share one “green” car between husband and wife, take short showers, turn off the lights when no one is using the room, buy the occasional “green” product and watch cultural programmes about ecology on the tele so we can talk intelligently about the subject. This is all commendable, but it frankly isn’t enough! Nevertheless, the sad truth is that we, as individuals, can do very little beyond incorporating sustainability and preservation into our habits.
There are certain individuals who are catalysers for the type of change we need, and these include politicians, industrialists, bankers and a lot of such notable people around the world, who detain the power to effect the change with the necessary expedience. Unfortunately, they are also much more concerned with their own priorities and will not act unless we, as a group, tell them that they must. Greed, self preservation and self promotion all take precedence over taking courageous action to prevent the worst and most immediate crisis in the history of Mankind: Global Warming.
Yesterday’s conference was aimed at making preparations for the State of the World Forum (http://www.worldforum.org/state-2009.htm). The World Forum itself is an entity created by Mikail Gorbachev and Jim Garrison to prompt global leaders and influential individual to act in the creation of creative solutions to critical global challenges. While Jim Garrison himself was in a meeting with President Luis Inacio “Lula” da Silva in Brasilia, we were in Sao Paulo – one of the largest and most populated cities in the world – discussing global warming at an abnormal 34ºC weather. We could see through our open window to the outside the perpetual cloud of brownish-grey carbon dioxide that hovers over the commercial and industrial heart of Brazil; a by-product of the city’s primary mode of transportation.
The problem is, we’ve been telling people to own cars for 50 years. We told ourselves that we need them and that they make us more important and happier. Now, it has become difficult to reverse that process, but it is paramount that we do. Ministries and regulatory bodies around the world should tell individuals of the consequences of utilising an automobile on a daily basis. Governments should work towards making automobiles unnecessary by providing quality public transportation that’s based on an energy matrix different than fossil fuel. We, as civil individuals, should realise and press for these changes in our habits lest we are forced to change much more than that by the effects of global warming. This is something we, as individuals, can do. We can get together to change this one thing common to every nation on the globe. We can unite, as a species, to do away with the petrol era and replace it with a different model. The current economic crisis has affected the automotive industry very gravely and it will have to rethink itself and rebuild its foundations. Perhaps now is the time for that change.
Yesterday, during a conference with representatives from a few prominent NGO’s and associates of Mr. Jim Garrison, I was exposed for the first time to the certainty that global warming will influence our daily lives as of 2015 and to the palpable possibility that we will all face famine and water shortage by 2100. There is no mistake about it; the scientific community has presented conclusive evidence to this effect. Truth be said, I should not have been so surprised as this theme is present in the back of all our minds for decades. I remember having seen Carl Sagan talk about it on TV during the 1980’s in his series “Cosmos”. Yet, we – as a species – have done next to nothing to work towards the prevention or at least the minimisation of the emission of greenhouse gases into the atmosphere. It simply isn’t “economically interesting”.
Of course some of us do a little here and there to help and to feel good about ourselves, and this is where I include myself so I know what I’m talking about. We recycle, abdicate from our cars once or twice a month – maybe share one “green” car between husband and wife, take short showers, turn off the lights when no one is using the room, buy the occasional “green” product and watch cultural programmes about ecology on the tele so we can talk intelligently about the subject. This is all commendable, but it frankly isn’t enough! Nevertheless, the sad truth is that we, as individuals, can do very little beyond incorporating sustainability and preservation into our habits.
There are certain individuals who are catalysers for the type of change we need, and these include politicians, industrialists, bankers and a lot of such notable people around the world, who detain the power to effect the change with the necessary expedience. Unfortunately, they are also much more concerned with their own priorities and will not act unless we, as a group, tell them that they must. Greed, self preservation and self promotion all take precedence over taking courageous action to prevent the worst and most immediate crisis in the history of Mankind: Global Warming.
Yesterday’s conference was aimed at making preparations for the State of the World Forum (http://www.worldforum.org/state-2009.htm). The World Forum itself is an entity created by Mikail Gorbachev and Jim Garrison to prompt global leaders and influential individual to act in the creation of creative solutions to critical global challenges. While Jim Garrison himself was in a meeting with President Luis Inacio “Lula” da Silva in Brasilia, we were in Sao Paulo – one of the largest and most populated cities in the world – discussing global warming at an abnormal 34ºC weather. We could see through our open window to the outside the perpetual cloud of brownish-grey carbon dioxide that hovers over the commercial and industrial heart of Brazil; a by-product of the city’s primary mode of transportation.
The problem is, we’ve been telling people to own cars for 50 years. We told ourselves that we need them and that they make us more important and happier. Now, it has become difficult to reverse that process, but it is paramount that we do. Ministries and regulatory bodies around the world should tell individuals of the consequences of utilising an automobile on a daily basis. Governments should work towards making automobiles unnecessary by providing quality public transportation that’s based on an energy matrix different than fossil fuel. We, as civil individuals, should realise and press for these changes in our habits lest we are forced to change much more than that by the effects of global warming. This is something we, as individuals, can do. We can get together to change this one thing common to every nation on the globe. We can unite, as a species, to do away with the petrol era and replace it with a different model. The current economic crisis has affected the automotive industry very gravely and it will have to rethink itself and rebuild its foundations. Perhaps now is the time for that change.
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