Proceeds of crime cannot be kept

Unrest in the world is mounting and it is increasingly clear that there will be no easy ways out of our current financial crisis.  The issues are interwoven and complex and the crisis of today was born in the reckless excess of the past 30 years. 

It is infantile thinking to blame the right or the left, or current governments for not “fixing” this.  It is equally infantile to name corporations and free enterprise as the sole enemies.  The enemy has been within all of us.  There can be no doubt that all sides deserve varying degrees of blame in creating our current concoction of troubles and challenges: financial “wizards”, corporations, governments and individuals who knowingly or blindly went along for the ride.  “Add credit/leverage and stir” may have looked like a free ride–now we are coming to understand that in fact it was a costly round trip to nowhere.  Worse than nowhere, as society today will be paying for the aftermath and clean up of our previous choices for years to come.  The future will have less funding for the foundations of civilized society: healthcare, education, arts, investment, infrastructure, science–now that we have to pay for the reckless, wasteful, foolish behaviour we have collectively indulged and promoted over the past many years. 

Whether it be China vs. the west, Germany vs. the rest of Europe, or indeed the wealthy 1% vs. the remaining 99.  The common plight can be distilled into the same timeless meme: “neither a borrower nor a lender be”.  China sold the west trillions in goods–mostly non-productive consumer assets–over the past 20 years.  Japan did the same thing for decades before them.  Both countries facilitated continued consumption past sustainable levels through a form of vendor financing:  they spent little of their revenues so as to recycle them back into buying western bonds (debt) in order to keep their exports going.  Germany did the same thing with the poorer countries in Europe. The wealthy 1% did the same thing with the other 99% of the population all over the world.  Off balance sheet accounting, special purpose vehicles, collateralized debt obligations, subprime debt, securitization, not allowing the Yuan to float, adopting a common Euro, Central Banks suppressing interest rates, intervening in capital markets, politicians raising constitutional borrowing limits, financial bailouts:  all of these were contrived for the same purpose–to defy math– to keep customers buying goods past what could ever be repaid.  Now, the truth is out.

Ever since the credit bubble began to burst in 2006, the 99% has been continuing to pay the price for their participation in this late, great, global Ponzi scheme: they have been losing their jobs, their homes, their cars, their health, their families.  Heading toward the third global recession in 12 years, the losses of the 99% are only started.

The outrage of the “Occupy” movement today is not so much born of the inequality of the boom as it is the inequality of the bust.  The leaders, financial firms, and multinational corporations have been largely made whole–bailed out by the tax payers who continue to suffer ongoing degradation. The executives took the ‘free money’ of Ponzi credit and the ‘free money’ of rescue funds and used accounting gimmicks, accountants, lawyers and politicians, to sneak the money out the front door as profits and bonuses to the 1%.  We cannot continue to hide behind this fraudulent system that privatizes profits but socializes losses and insist that it is capitalism.  This is not survival of the strongest, but a dishonest, repugnant promotion of the weakest most immoral leaders.

Just as the 99% is now giving back the “wealth” they thought they had amassed, the 1% must also take its lashes.  They will have to give back money which they should never have earned.  We will all have to suffer the consequences for bad policies, bad leadership and bad choices.  We will have to pay more in taxes to rebuild our dilapidated society.  In cases where our laws say that we had a fiduciary duty to not put our own interests ahead of the people who trusted us, some of us will also have to go to jail. 

Democracy demands fairness and equality under the law.  History warns us that we will have unrest and revolution until we restore some semblance of both.  In the end, we will all pay for our role in this debacle, one way or another.

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6 Responses to Proceeds of crime cannot be kept

  1. JW says:

    Well said. It is comforting to know that people still cares.

    A discussion about Occupy Wall Street –

    Enjoy. And, thanks. JW, Vancouver

  2. Jack from Surrey says:

    Thank-you again. Great article!

  3. Robert says:

    I don’t think that it is infantile to blame those who caused the problems. The people who deserve the blame are the politicians of all stripes and labels who used our money and borrowed money on our behalf to buy votes promoting some groups and demoting others. Our economic system does not function if the government is short circuiting the market mechanism of supply and demand producing price allowing willing buyers and willing sellers to cooperate.

  4. Lepax says:

    Why is there always this “Battle Cry” that taxes must be increased?
    All taxes are is an unwanted hand in my pocket.
    I don’t need a nanny to look after me & mine.
    Yes, there are a very few ‘essential’ services that need to be provided by the government – but outside of those essentials (police & fire come to mind) – most others can be provided far more efficiently by the private sector.
    Why should I be taxed so that some lobby/interest group can have a parade or festival?
    Let them support themselves. No community support – no party.
    Why am I supporting able bodied people to stay home & play video games all day – there are leaves to be raked, snow to be shoveled, …
    Let them earn their keep.
    If taxes were lowered, people would have the income to hire help.
    If taxes were lowered, both spouses would not have to work full-time.
    Children would be guided and hugged – not thrust into group babysitting parlours.
    Taxes are enslaving.
    Taxes empower the government by stealing my freedom.
    Tax freedom day is in June – so half of my time is as an indentured servant to the state.
    Forget this mantra of “Raise the Taxes”
    Instead, force government to REDUCE taxes on an annual basis until they are able to justify the necessity, not the nicety of their programs.
    I will work hard enough and long enough to provide those things that “I” feel are nice for me & mine.
    If I then have some free time, I may even spend some of it helping those outside of my tribe.

  5. Pingback: Occupy Movement-Part 1 - The Mind Body Spirit Blog

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