Wednesday, September 17, 2008

Green Response to the Financial Crisis

Just put a page on the financial crisis up on the new Green Monetary wiki.

The wiki has had a visitor already (thanks Stuart).

In case you are too nervous to go and look upon a wiki, or just cannot be arsed, there is what I wrote*:

The deregulated financial crisis was a neo-conservative accident waiting to happen, a 21st century version of the South Sea Bubble. From boom times, when banksters, (a neologism to cover banks and other lending institutions) were making aggresive loans to everyone, because loans meant interest meant profit. Drunk with greed, they loaned without making sound judgments about the ability of the debtor to pay, and without regard for the amounts of capital their company actually held. Obscure high falutin financial instruments were created, essentially bets on future prices. Little criticism came from the media, mainly because nobody understood what was happening, although Warren Buffet, who did, said "Derivatives are financial weapons of mass destruction". Treasury Ministers should have taken notice.

So we are now facing a financial implosion, a bursting of the easy credit bubble. It is likely to be a mother, because of globalisation of the financial markets, because of recent rises in oil and food prices, because of climate change (the cost of hurricanes come back to the insurance market, and UK plc is heavily into insurance) because of Peak Oil, and because of Cilmate change.

So this is unlikely to be a little 2-year blip.

Luckily we have the Green New Deal to offer as a remedy for the desperate situation of unemployment, poverty and financial paralysis that is likely to ensue.

The Green Wage Subsidy should form a part of this Green Keynesianism.

Local parties can form Time Bank (LETS) groups.

So the Green Party is well placed to respond politically to this crisis, turning the danger to a opportunity.

*(there are hyperlinks on the wiki)


Jim Jay said...

Hi Richard,

I found the format a little difficult on the eyes. I'm curious why you've chosen a wiki format for this... I use wikis a lot at work and I think they are very useful for collaberative projects (and of course wikipedia is the largest and most well known of them) but I'm not sure about the reasoning behind using them for sparking discussion.

It seems to me the blog format is much better for that - forums seem hard to get off the ground.

Anyway. I wonder if growth is the problem - or the *kind* of growth that modern capitalism throws up. We want to see a massive investment in renewable technologies for instance - that productive activity and others are a positive thing.

Toronto real estate agent said...

I have to disagree with few things.
"the desperate situation of unemployment, poverty and financial paralysis" THIS is what you think about actual situation?? I hope you will never see real unemployment and poverty.
And when blaming lenders for today's crisis - who was the one at the beginning? Wasn't it US government and FED, setting interest rate incredibly low in a try to control the economic growth? And by the way, Fannie Mae was established as a part of the New Deal - to ensure liquidity to the mortgage market...

DocRichard said...

Hi Jim
I chose the wiki precisely because they encourage collaboration. Also because email lists are linear, and wikis allow branching, more representative of a system. And I am very fond of trees...

You're right about growth. I am a passionate advocate of Green Growth.

Hi Elli
I was referring to how things are likely to go. We ain't seen nothing yet. As for the lenders - yup, we all share in the madness. Govt removed the regulations on the finance industry, in pursuit of the free market. Consumers wanted a shiny big car and went and asked for the loan. And the banksters indulged in aggressive marketing of loans.

Glad to learn that Fanny and Freedy were made by Teddy for the New Deal.

Thanks for commenting.