Saturday, February 21, 2009

Soros Sees No Bottom

From Reuters:

Soros Sees No Bottom for World Financial "Collapse"

NEW YORK (Reuters) - Renowned investor George Soros said on Friday the world financial system has effectively disintegrated, adding that there is yet no prospect of a near-term resolution to the crisis.

Soros said the turbulence is actually more severe than during the Great Depression, comparing the current situation to the demise of the Soviet Union.

He said the bankruptcy of Lehman Brothers in September marked a turning point in the functioning of the market system.

"We witnessed the collapse of the financial system," Soros said at a Columbia University dinner. "It was placed on life support, and it's still on life support. There's no sign that we are anywhere near a bottom."

His comments echoed those made earlier at the same conference by Paul Volcker, a former Federal Reserve chairman who is now a top adviser to President Barack Obama.

Volcker said industrial production around the world was declining even more rapidly than in the United States, which is itself under severe strain.

"I don't remember any time, maybe even in the Great Depression, when things went down quite so fast, quite so uniformly around the world," Volcker said.

No one really wants to hear this, but there is no way the old system is going to be revived. Which is just as well, because why on Earth would we want to revive a system so clearly manipulative, exploitive and corrupt? -- to the core! Am I the ONLY one who sees this?


  1. Am I the ONLY one who sees this?

    Ehm... no.

    Yet would this crisis have happened in the 1970s (when it really started, though was diverted through a series of speculative bubbles) you'd see red banners everywhere. Since the 1990s though there has been a lost of perspective as the Capitalist system has proclaimed itself as "winner" and created a new "ideal enemy": Islamism (which is not antiapitalist, just a scarecrow of limited influence).

    So people, after 2-3, maybe 4, decades of Toyotism/Globalization is confused about where to head towards. There's no (or rather limited) popular organization and no clear projects.

    So while these alternatives take form, the crisis will continue. Much like someone who falls into a long-lasting depression and finds no exit to such situation.

    The system is morally and logically bakrupt. Capitalism needs perpetual expansion of the market and perpetual restriction of costs (specially salaries and social benefits). It also derives most of the real costs to the ecosystem (including humans), as it has an accountable value of zero. But Earth is finite and the patience of people too.

    There's nowhere to expand this giant Ponzi scheme. That's all. So every capitalist is a Madoff (more or less consciously) and every one of them should simply admit their plot and put up with the consequences.

    What then: only eco-socialism with a focus not on productivism but on humanism. Reduce working hours, share the jobs and the power of decission on what to produce and what for. Globalization has brought some interesting stuff like the Internet but otherwise the focus should now be more local (excepted global ecological and socio-economical problems, as well as peace). It just makes no sense to pay an euro for cabbage produce maybe in Chile, packed and washed and sent by airplane to your local supermarket. The logical, economical and ecological thing to do is to produce the cabbage locally and acquire it fresh. There are to many people producing for global markets and too many produces from far reaches. The focus must be local and sustainable, both enviromentally and humanly sustainable.

    But it needs another economical science: not this simplistic, yet twisted, accountants' doctrine.

  2. I agree on just about every point, Maju. You're right about the 70's, when so many were radicalized and ready to make all sorts of changes. I was a part of that scene, though never much of an activist, and it had a huge influence on me. I wonder what's happened to all those others of my age, all the Hippies, Flower Children, SDS, Black Panthers, etc., who acted as though they were ready to change the world and then just either burned themselves out or vanished into the woodwork of mainstream Europe and America. I'm proud of the fact that I never fell into either of those traps, but have carried a burden of disappointment and frustration for many years as a result. Despite all our efforts, the status quo asserted itself and prevailed. Now, ironically, the whole thing is finally falling apart, not through the efforts of political activists or self-styled "revolutionaries," but as a result of its own out of control success! Or should I say: excess.

    The monster has devoured itself. And we, its beaten down victims, have no idea what to do next. Interesting situation.

    I agree that one alternative is to focus on local matters and local resources, whenever possible. Even on small-scale bartering systems, once money loses its value, and its hold over us.

    But like it or not we do live in a global economy and not everyone is situated in the sort of environment that could sustain locally based economies. I'm thinking now of some of the really vast urban areas. For this reason, I see no alternative but a shift to managed economies on a large scale, at least on a national scale, with regional offshoots that would have a certain amount of independence. This would not necessarily be inconsistent with the model you've described.

    In any case, this is the sort of thing that should now be the subject of national and international debate -- instead of all this pontificating, hand wringing and whining over what went wrong, who's to blame and how to "fix" it so we can go back to a status quo that never really worked to begin with.


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