The Credit Cruch - An economy on its knees

Switch on the radio, the TV, get on the internet and one finds the media airwaves replete with news of the worsening global economic crisis we find ourselves in which has come about as a result of what is now generally agreed to be the unchecked unregulated implementation of a flawed financial model. A model that has its roots in the capitalistic mantra of accumulation of wealth as the only way to advance the lot of man.

Of course we conveniently forget that the accumulation of wealth by some must result in the dispossessing of others. And so it surprises me that people are shocked that we find ourselves in the crisis we are today. It isn't rocket science to understand that in a system where 5% of the population earn a total income that is equivalent to the income of the remaining 95% such a system will eventually fail. It isn't rocket science to understand that the people in this 5% bracket need the people in the 95% band to make the money that they do. In other words, those in the top 5% live off the rest of the population. If this is not a recipe for disaster then I don't know what is. History is littered with lessons of the masses pushed to the brink of despair, hunger and misery, rising up in desperation and taking back power from their wealthy overlords very often in bloody uprisings. While I am not advocating such, it would be stupid to ignore such warnings for the simple reason that the signs are everywhere.

The government of this country and indeed of other countries have been so unanimous in their conclusion that I'm inclined to smell a rabbit. They say the collapse of the world market was due to a few greedy speculative investors. The crisis was global. It had nothing to do with any member of their government nor did it have anything to do with their perpetuation of agendas for economic superiority. And the solution? Oh well change a few laws, redefine the roles of banks, and voila! the problems will magically go away.

Excuse me...what a load of nonsensical drivel. The collapse of the markets is symptomatic of a systemic phenomenon - inequality. Financial inequality! Our societal economic model is predicated on a premise of demand that defined by the financial institution. Cue the recipe for disaster... Money is the vehicle for quantifying demand. The value of money is determined by the financial institution. The distribution of money is controlled by the financial institution. When one sector of society dominates all others in such a fashion the notion of even distribution of wealth becomes nothing other than a pipe dream.

What this means is that irrespective of whatever promises we are made to swallow by the government, as long as this economic model persists we will keep repeating the mistakes of the past and experiencing the problems of the present. And each time with more drastic consequences.

The question then becomes: what is the solution? what model do we use? How can we restore societal equality in the true sense of the word.

See next posting.