Economic bailouts

I have been caught up in reading and listening to the various banking firms going belly up partly because of the housing crisis with Freddie Mac and Fannie Mae.  There have been way too many financial institutions failing in recent months to really ignore this as just part of the capitalist survival of the fittist rules of the game.  So from my humble position of not being an economist, it seems that there is something systemic that needs to be examined and corrected. 

I am not convinced that the government implementing a department with a czar who has the broad sweeping powers to swoop in and rescue failing banks is the answer.   What the solution does is place increasing burden on the tax payer to the tune of $700 billion for this year. (What will it be next year?)  The tax payer in this case, given our current tax structure, is the shrinking middle class and the working poor. 

This strategy only postpones and amplifies the coming crash.  It is like turning tax payers into the multitude of fingers placed to stop up the holes in the dyke without draining the water behind the dyke. The dyke will burst and cause even more havoc and suffering than if the system was examined and prepared for a long term fix.   

We have been convinced that growth in the economy is always good.  It is a capitalist theorem  that growth is the favorable scenario.  What if our assumptions are not correct?  What if continous growth is not good.  What if there is a natural cycle like there is in organic cycles of birth, growth, maturation, and death?  A plant that grows too fast towards the light becomes spindly and cannot support itself.  The plant will collapse upon itself and die.    (What if Chauncey Gardener in the movie Being There is correct?)

Fannie Mae and Freddy Mac and AIG are examples of companies that grew too fast within the housing mortgage market.  They did not take the time to look at their infrastructure to ensure that they were developing good solid foundations. Times were good.  Money was flowing in like Niagra Falls.  So who could blame them for not seeing the fault lines developing in the ground beneath them?  Growth at all costs seemed to be the mantra. 

I am not convinced that the Federal government has any better means of developing infrastructure since the Federal government operates from the erroneous belief that deficit spending is a good mode of operation. Both sides of the political aisles have used this methodology over the years so I am not advocating here for one party over the other.  The Federal government believes erroneously that the taxpayer has deeper pockets.  And the Federal government has ensured that there are sufficient tax benefits and shelters for the top 5% who control the wealth in the country–those who really do have deeper pockets. 

Where am I really going with this line of argument?  I think our American priorities are misplaced.  We value money and consumerism over relationships and the welfare of people (citizens).  When 9/11 occurred Americans took a moratorium on spending and spent time with family and friends.  The Government told us healing our relationships was Un-American, shopping and spending was patriotic.  And we bowed our heads and rung up our credit cards as fast as we could because who wants to be considered unpatriotic.  The things that matter most in our spirituality as a nation was short shrifted from expression.   

Rabbi Arthur Waskow of the Shalom Center wrote the following on what he calls Sacred Economics: 

      “The basic religious economic  premise was not just about being nice to poor folks. It was about the flow of God’s abundance that must move through the whole society, not get stuck in the pockets of the rich.  When the flow gets stuck, the clumps of super-wealth become an embolus. They stop the flow of healing blood,   the arteries choke up, the heart stutters and stops   —   and society collapses. 

        “Massive  depressions are not good for societies or for the human race. I had just  been born when a major industrial nation that had lost a war, had lost its  sense of place and identity and its allies in the world, had gone through  a massive economic disaster, then responded to its own fear and anger by  choosing an addled war hero to hold power.  Faced with rising chaos,  he chose as his successor a ultra-right-wing crazy, who everybody said was  sure to calm down once he actually held power.

        “The war hero was Von Hindenburg. His successor? Look it up.

          “So it is certainly urgent to  shape our financial system so that such a collapse does not descend upon  us.  But are we simply propping up the old system – the same one that  has set up our risk of disaster? Are we turning over the process to many  of the same people who set up the disaster in the first place?    

           “Or can we address the basic issues, the ones our religious traditions teach, the ones that the hard-headed masters of disaster dismiss contemptuously?  

            “So far, the most “radical”  poultices have been that a governmental economic czar will save the financial institutions that are in trouble,  by buying and selling their assets  — and taxpayers will bear the burden and the risk. 

            “There has begun to be discussion of a slightly deeper remedy – the re-regulation of these institutions so that greed and ambition cannot so  easily pocket the abundance that must move through society.

            “But so far the whole notion of rhythmically redistributing wealth -a vision at the heart of Biblical economics – is not on the agenda. That vision is encoded partly in the redemption and redistribution of family land each fifty years — the Jubilee – and the annulment of debt each seventh year – all in the context that for the seventh day, the seventh month, the seventh year, and the year of seven cycles – seven times seven plus one -the whole society rests and reflects, along with the earth itself. Not only physical work pauses, but hierarchy pauses as well.  Boss and servant vanish, for a day, a month, a year.

           “And the redistribution is also encoded in the right of the landless to feed themselves by working, gleaning, in the fields of the landowners. No one can deny them this relationship with the means of production. No ‘unemployment.’ 

           “And no compulsory overtime. Shabbat is for  everyone.

           “Let us start to imagine how to transcribe this wisdom for a society that needs to let the earth rest from our pouring CO2 into its atmosphere, from our sucking out the water from its veins, from our injecting poisons in its body.

          “We can restore our  economy for both work and rest by building energy-efficient railroads,  windmills, solar collectors.  We can use the new governmental oversight of banks to insist on micro-lending to the poor for urban  gardens, for workplaces within walking distance of our homes, for  insulating our houses to save the heat and money that are pouring out of  our porous doors and windows.   

         “We can insist on a living wage, with livable hours.  Time to sing, to dance, to pray and  meditate, to rear the children, to care for the elders, to make love. If  the flow of abundance starts at the grass roots, it will reach everyone.  Our banking crisis and the fear that elevates a Hindenburg will vanish.”

Now perhaps it would be impossible to institute a jubilee year of equity.  But we can shift our mind-set regarding our relationship with money and consumerism.  We can begin to see that money was not meant to be the ultimate end purpose of life but rather as a means to aid in our enjoyment of life to the fullest with one another, with our families and friends, with our local communities.   It is our relationships with one another that are to come first.  Our government is to help ensure that the well-being of all of its citizens is ensured.  It should not be focusing on the well-being of things like corporations and big businesses but people, the ones that operate the things of corporations and big business.   Blessings,

Published in: on September 22, 2008 at 4:19 pm  Comments Off on Economic bailouts  
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