The recent case of the overly candid trader on BBC has obviously shocked many, and has surely helped to swell the growing dissatisfaction with our current financial system, which has effectively become a tax on anyone who tries to save money (which is most of us given superannuation schemes and pensions). To make it worse the proceeds don’t go to governments but to a small group of bankers and traders. The fact that this individual is salivating about the money to be made from a financial crash and doesn’t seem to connect that crash with the lives of millions of people shows clearly what is wrong. Regulation has been systematically dismembered over decades, and has not been materially improved in the wake of the GFC, leading to more and more schemes which make a quick buck out of other’s misery. Short selling (to pick on one problem amongst many) now makes it easier to profit from a crash than a company’s profits, partly because it is more obvious that it is going to happen, and partly because many of those profiting are large enough to influence the outcome. So what’s next? Will they decide that the US would make a good feast, or go after easier prey such as Spain, Portugal or Ireland? I’m not arguing that Europe and the US are blameless here; just that short selling and the like are an abomination. They are purely destructive, and even supporters only claim that they speed up the market. You would think that just at the moment the market could do with a bit of slow. There are many things wrong with the system but surely a basic rule should disallow making money from destructive acts of this type. Two Swiss students doing a thesis on the psychology of share traders were shocked to find that on average traders are even more “reckless and manipulative” than psychopaths.
I’ve previously addressed the fact that speculation on food is also rife, with estimates that 70-80% of trades are speculative. Again it distorts markets, making a few rich and many miserable, and again governments are reluctant to intervene.
And there does seem to be growing dissatisfaction at the way business has pursued profit at all costs, and has perverted the political landscape. While the Hoi polloi are not exactly revolting they are muttering darkly. I would suggest it’s the main reason for the near universal fall in status of politicians. In most places including Australia it remains unfocused, but recent events suggests it could gain traction. The Occupy Wall Street protests in the US have been a surprising success, helped along by some stupid policing, and Avaaz for one has had over 150,000 signatures on its online petition.
Some pollies understand the dynamic, though none of them seem to be in power. Ed Miliband at the recent labour conference in UK promised a tough fight to recast a new capitalism built around British values that reward the hard-working grafters and producers in business, and not the asset-stripping “predators”. He was predictably derided by the business community, but picked up a fair amount of support from the press.
Even in growth obsessed China, there are serious efforts to measure more than just GDP. Niu Wenyuan has proposed a GDP quality index which measures environmental, resource efficiency, social, quality of life and governmental quality. He is an adviser to the Chinese state council, chief scientist at the Chinese Academy of Sciences, and director of the Chinese Ecological Economics Society, and has been trying to formulate a Green GDP for some time.
Al Gore has also weighed into this debate, saying “In the language of computer culture, our democracy has been hacked” and argued that America has suffered a “breakdown in democratic governance”, because members of Congress are obsessed with appeasing special interests in return for campaign funding.
And it’s not difficult to see why people get upset when some of the conflicts of interest are so blatant. For example the public hearings into the proposed pipeline to bring carbon intensive tar-sands oil to the US are being run by a contractor for the pipeline company.
In the same speech referenced above, Al Gore also warned that there is now clear proof that climate change is directly responsible for the extreme and devastating floods, storms and droughts that displaced millions of people this year. “Observations in the real world make it clear that it’s happening now, it’s real, it’s with us”.
And the weather has by any objective measure been weird. NASA reports that sea levels fell by a record 6mm this year (against a regular 3mm rise), due to the extreme La Nina which dramatically increased precipitation in many areas. This Climate Progress article details the extra rainfall and flooding and includes this quote from The Economist Magazine report on the subject:-
“When reality is changing faster than theory suggests it should, a certain amount of nervousness is a reasonable response.”
In a nice ironic twist Monsanto is selling a new variety of broccoli which is claimed to “help maintain your body’s defences against the damage of environmental pollutants and free radicals” Those would be the pollutants that Monsanto’s GM foods have helped increase (This report showed that herbicide use increased as a result of GM foods).
Finally Guardian contributor David Mitchell, has a good rant putting the onus back on the dissentients. Well worth the 3 minutes.
