Collapse and reconfiguration (omega & alpha)

29 09 2008

Has the recent economic crisis stemming from a lack of regulation in the financial sector opened up a new opportunity to organise society and economics in a more equitable way? Or has the new “bail-out package”, so called conservative socialism, supported the corporations and the very people who created the problem? Only reinforcing the capitalist system?

These high-level economists seem to think the current/recent capitalist configuration has reached its end (1).

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Commenting on the initial package proposal put forward by Henry Paulson Naomi Klein on Democracy Now states:

“it is in times when people are panicked, when we’ve seen again and again the [political] right push through radical pro-corporate policies, what they call “free market reforms,” precisely because it is in a crisis where the space for debate rapidly closes, and you can invoke this state of emergency to say we have no choice…and we’re seeing a very dramatic example of this tactic right now with these really extortionist kind of tactics playing out in Washington.”

The opportunity was perfect for Paulson, a previous CEO of Goldman Sachs, to support his pals back at the banks and effectively steal from US society. His original plan gave himself immunity and the banks an immediate and very large payment, which was not warmly accepted by many in Congress. The revised package sees an initial $250 billion payout to banks, with the remaining $450 billion positioned for control only by Congress ($350 billion) and The White House ($100 billion). Banks taking money will have to give shares in return, take out insurance to protect themselves from further losses, there will be no large pay-offs for bankers and four agencies will monitor the progress of the deal.

This does not sound like the end of fundamentalist capitalism to me. In this small list of conditions very little relates to the question of poverty alleviation across US society. How are these payments going to “trickle down” to all those who’ve had their homes repossessed and lost their jobs over the past 6 months?

As usual and in line with Naomi Klein’s theory of disaster capitalism, corporate elites have hijacked the political system, effectively pouncing on the space created by collapse, in a hope to maintain their staus-quo. The screams permeating from US society have surely been ringing in some Congress men’s ears. But they havn’t been sufficient to alter the trajectory of the economic system.

I have mentioned omega and alpha in this title. This is because I want to try and generate a theme throughout this blog that fits political, economic, social and ecological dynamics with Holling’s adaptive cycle of change and resilience theory (3). Interesting concepts that allow us to understand how the world changes and can be changed to improve human well-being and move away from the threshold of ecological collapse.







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