Paying the Driver

I have tried to wait until the dust settles on the current financial ‘Crisis’, ’Correction’, ‘De-Coupling’ or whatever you wish to call it before posting more, only to see some kind of preferred path forward out of this mess.

With US banks collapsing, and Billions of US tax payer Dollars being thrown at the problem, it seems at first as if  the solution has already taken place:  The system has ground to a halt, and this infusion of funds grease the wheels of its recovery like some mostly empty 747 being towed up the runway in the teeth of the mighty hulk-like Treasury. Of course that is what it is meant to look like. But what is to stop this fuel being used for a quick pleasure trip to the Bahamas for it’s crew once again, instead of a flight to simply get the groceries for the feeding of the starving community? Simply Government controls? This is far more endemic a problem than simply the hoarding of free money in case of bankruptcy or, the multi-Billion dollar paying of golden parachutes to bungling, myopic executives. The amount of financial sector interference in US Government fiscal policy (Hello, Hank Paulson!), and the ‘re-alignment’ of the domestic  savings accounts industry means that any further nationalization of the banking system appears to be too far-fetched. At least, the strings attached for this gigantic bailout, could have benefitted all, with the provision of a re-payment schedule directly into the social safety net, that at the moment is as threadbare as my 90-year old neighbor’s hearth rug. Re-paying the Government directly into Medicare, Medicaid, and the retirement financial program would show the US stakeholder citizens that something positive was being done with their money, rather than have it save ‘A few institutions’. That their funds were being used to feather their own future nests, now that they will have to work until their mid-70’s.

If everyone concerned really means what they day that all of this will pass, it’s a cycle, it will get better, then simply prove it. Why should the suddenly ubiquitous Joe-The-Plumber have to continue his or her savings down the black hole of private enterprise on the hunch that it will better them, when they could have these enterprises use a portion of their recovery to help those that kept them afloat for a generation and a half? A simple look at the last few censuses shows that for a quarter of a century, we have been earning less, while the cost of doing business has gone down thanks to technology. Now, we have saved what we can in the face of rising prices and falling salary, we have not only lost it all, we are paying for those that were responsible for losing it a reward to keep them in business. It’s like rewarding the coach driver for driving you into highwayman country against all warnings, when your coach is robbed. What’s more this loss has been downloaded across the globe. No wonder the US aren’t too worried about their economy – they aren’t ones responsible for its re-payment. Their banking system soiled itself, and the rest of the World now has to pay for the dry cleaning: The highwayman only takes from you, but the rest of the coach has to pay the driver for your loss, and theirs .

 

We should be learning from all of this. After all, we have been through it all before: Those of us in our mid-forties and older saw all of this 35 years ago, when we were teenagers. The result then was a drift the left politically to force governments to do their duty, but now the parties of the right have commandeered the centre of political debate across the West, leaving voters to re-elect the party in power so as not to suffer any further trauma to their lives. When you have a left-wing government, though, the answer is always the same – a pragmatic approach to problems large and small that leads to short term thinking: Short term government action to preserve power, hand-in-hand with short term enterprise thinking only interested in profit. The two work hand-in-hand. So be careful of trying to talk that driver of taking that fork in the road – he may have a highwayman partner in the bushes up ahead.

High Gas Prices – The Roll of the Dice

During coffee on the smoking patio of my local ‘Blenz’ last week, I eavesdropped on a conversation. Not tough to do, either, given the volume of what turned out to be a lecture along the lines of: “When I was a lad….”. Among the butts, discarded cups and peeling steel tables, this guy began with the history of gasoline prices, and the exact and only reason why we have fuel prices that very soon will have to be mortgaged, to be afforded.

This caffeine-guru’s answer isn’t the point for this Post (But, in case you are interested, it was Oil Futures traders -Bastards!), but rather how odd that there has to be one answer. Ever since I have lived in North America, I have been disturbed by this logical way of looking at life. In sports, the MVP (Or Man of the Match, as we used to call it in the UK) in any sporting occasion, is simply the guy that throws the winning ball, or makes the winning score. I am used to unsung heroes being MOTM: The plucky midfielder whose runs into the other half of the field were undefendable, or the hard-as-rock defender that held up the opposing strikers enough to put the opposition out of position on every possession. Over here, though, there has to be one reason why your team won, and this is it.

Likewise, Elections are called way before the final ballot is cast, so that everyone can see the result in Prime Time, instead of waiting until tomorrow morning. It is instant gratification that, therefore, can be pegged to one reason, one moment, one state, that someone won and someone lost.

I miss my British all night, overnight parties that we held to see who was going to be called winner around breakfast next day. They were exciting to see the tides turn gradually, then sweep back again in a vast organic tide, like a pile of autumn leaves blowing over your driveway. Made up of thousands of individuals, it sweeps back and forth as one, fawn, wave.

I often have fun looking at the build up of soccer goals, to see where the ‘killer touch’ occurred in the move – the clever fake, the short pass, the misplaced defender, looking at the scorer as a part of a team effort, not an individual – still, that’s the Socialist in me, I guess.

Oil prices are this high for many reasons and, while I blame the society that let Futures traders get so out of control, we aren’t also counting in the rise of the middle-class in developing countries, the loss of the ozone layer, greenhouse gases, the inability to make and sell a car in the US that does all the right things, rather than one that sells only on gut reactions of shape, colour, and speed.

In fact, it’s almost like rolling a hand of poker dice. You are only going to count three out of five, but it is the array of all five that you are looking at, and the decision process becomes way more complex very quickly.

I have thought for the longest time that coincidence is much more of a primary mover of human affairs than anyone thinks. When I look at the string of situations that led to me flying to Los Angeles 20 years ago, it makes my heart beat faster to think that one change somewhere along the way, and I wouldn’t have got a look in. Recently, my wife and I were shown ‘The Secret’, and it says mostly the same thing: It’s all going to hit the fan, no matter what you do – just get out of the way and keep your head down.

For an outlandish and entertaining look at this subject, Leonard Mlodinow’s book on the illogical turning of our World and universe: “The Drunkard’s Walk” . It is a revealing, and very entertaining look at how we cannot look at one answer for every single situation in out daily lives. Just as molecules fly through space with all the wayward grace of well-oiled drunk, so too, do we stagger through our uncertain world mistakenly believing in cause-and-effect, purpose and direction.

There are lots of reasons for every situation in life that we can now look back on and unravel like a troublesome knot in a skein of wool. The trick is to learn from these disparate strings of chaos to ensure that they don’t happen again.

It’s a pity that our own need for transportation highs over the last 150 years in Europe and North America have trumped the sensible voices for restraint that would have helped us get out of this knotty oil situation long before this.