Sunday, February 22, 2009

The Gamblers


The link below is from one of Charles' posts, and it's quite extraordinary. I have yet to read something so comprehensive, yet easy to follow describing the current economic situation. I agree with a great deal of what is written here. What I don't agree with is the conclusions at the end, and the use of broad brush protectionism terminology. That is too frequently used in that manner, and does not address the equalization powers of fair trade and common sense. I will argue those points indefinitely. Taking into consideration the rest of the article, which is good as I have said, the concept of ploughing ahead as is regarding free trade is in itself the greatest counter argument to the overall points made in this article regarding failed globalization. My pointing out the 147% increase in ocean shipping rates substantiates my point of view, and that is also supported by the extraordinary amounts of fuel required, much of which comes from troubled regions, and concerns over global warming. Anywho, it's a long read but it's a very good one. Even CB could get into this as it discusses neoliberalism, marxism etc.

"Yet what if such a crisis were to be no longer confined to the peripheries of global capitalism but instead struck at its heartlands? Now we know the answer. The crisis has enveloped the whole world like an uncontrollable virus, spreading from the US and within a handful of months assuming global proportions, at the same time mutating with frightening speed from a financial crisis into a fully fledged economic crisis. In so doing, it has undermined the foundations on which the present era of globalisation has been built, namely scant regulation, the free movement of capital, a bloated financial sector and immense reward for greed, thereby bringing into question the survival of globalisation as we now know it."

And this, it becomes more current with every passing day;


  1. Kindly do not post the names of individual persons along with statements that might be considered libelous.

    I will re-post the comments that do not appear to represent a potential problem. That is if the blog format will allow such a lengthy post. If not, sorry.

  2. Herb said...

    Well, Comrade, the corporate system is serving and protecting itself as well as it can. The only real hope of salvation would be informed voters and taxpayers demanding "Don't do this for yourselves, do that for the common good." Trouble is, there are not enough informed voters to stand up and make a difference. That "revolution" would take a level of pain that governments will do their darndest to avoid. It will be masses of band-aids and earnest protestations of having done their best after the multitudes have been run over by the economic bus.

    Dee, the reason I favour Frederick the Great right now is because there was an absolute ruler of reflection and experience who wrote a lot (only part for publication), and maintained that a ruler was "the first servant of the State" (the original meaning of prime minister!), that the common good trumped personal interests, and that the pursuit of special interests invariably blinded to the common interest.

    I would feel a lot better if I could see someone on the political horizon anywhere prepared to deal with the current situation on functional grounds only. It won't happen, of course, so we'll have to see how steerage made out after the shipwreck.
    February 20, 2009 3:48 PM

    Comrade One said...

    Herb, I'm thinking an opportunity to begin has presented itself. Reviewing GM's latest proposal and the figures already announced regarding the actual numbers of employees GM intends to have in Canada by next year, tells me it is time to make a bold move.

    A virtually bankrupt company wants repayable loans to the tune of $1 million dollars per job, and has put this forward with a straight face. It's time to look reality in the eye me thinks, and show them the door.

    Reality tells us that consumers have confidence in Japanese auto's, and they have a manufacturing presence here as well, so why throw buckets of water on a forest fire? Besides that, $7 billion would go a long way toward establishing a truly Canadian Automotive manufacturing capability.

    Time to make a real statement. Short term pain, for long term gain.

    Either that, or "Pass the tequila Sheila". Our choice.
    February 21, 2009 12:04 PM

    Herb said...

    Before I'd fork over $1M per job to anyone, I'd invest the principal amount and hand the interest directly to one of the jobless who could live on it until something else came up while the nation retained control of the capital. The GM "plan" is madness, but it will happen because they will play up the wider implications (suppliers, taxes, you-name-it.)

    Don't know if we need another "Bricklin" in Canada, or if we should leave the automotive sector to those who already do it well, while we find ourselves another niche in the division of economic labour. The galling thing is that I can see the Green Shift coming up on the horizon with carbon tax replaced by sequestration.

    All we have accomplished is to buy ourselves an addditional period of government by the relatively clueless for the relatively well-fixed.
    February 21, 2009 12:41 PM

    Comrade One said...

    Good synopsis Herb, re: clueless and the lord's.

    No need for a Bricklyn repeat though, there will be no shortage of plant capacity and expertise available if GM is shown the door.

    Besides, there will still be Ford, Chrysler, Toyota and Zenn. Magna too. Zenn's stock value runs around 60 to 80 million and their production facility belonged to GM.
    February 21, 2009 4:03 PM

    Herb said...

    Paul Krugman notes that it may take five to six years to get back to some semblance of economic normality, and asks the all-important question:

    "Who’ll Stop the Pain?"

    And no, he does not provide an answer, which implies the answer we already know: NO ONE!
    February 22, 2009 9:48 AM

  3. An entirely disproportionate and extortionate level of bonuses has ensured the enormous enrichment of top executives in the financial sector, all in the name of reward for success, when in fact it was the reward for failure. --Martin Jacques

    I think that was my favourite line. It disturbs me that people are still clinging to the same ole' same ole'.

    Hope it wasn't me that messed up Comrade.

    Thank you for the link.

  4. No Dee, it wasn't anything you posted.

    I posted on the Nortel executives salaries and bonuses recently partly for the reason Jacques illustrates, as much of what they did was for the sake of pumping up their own compensation packages, not what was best for Nortel.

    The decline of the companies stock value from $385 Billion to virtually nothing, I found astounding as well. I see a man in a toga furiously playing his fiddle while the flames grow higher and lick at his heels. His name was Nero.