“If it takes a village to raise a child, it takes a village to abuse a child.”
This chilling statement is made by a lawyer who represented many victims of sexual abuse by Catholic priests in Boston in the 2015 movie “Spotlight.” Child abuse persisted because abusive priests were reassigned, victims were silent or agreed not speak publicly about the abuse, and others collaborated to keep the problem hidden from authorities and the public for years. Pervasive child abuse had been covered up in many other locations as well.
From: It Takes a Village to Maintain a Dangerous Financial System.
Three articles passed under my radar yesterday and got me thinking.
The first was It Takes a Village of Media, Business, Policy, and Academic Experts to Maintain a Dangerous Financial System.
Here is an excerpt:
“Stanford professor Anat Admati discusses her new paper, in which she explains how a mix of distorted incentives, ignorance, confusion, and lack of accountability contributes to the persistence of a dangerous and poorly regulated financial system.
Just as it takes a village to raise a child, the consistent flaws of the financial system are related to the actions and inaction of its “villagers,” who are motivated by their own incentives. The notion that regulators are doing their best to protect the public is false, as they succumb to “willful blindness.” These are the main ideas expressed in the May 2016 working paper by Anat Admati, the George G.C. Parker Professor of Finance and Economics at the Stanford Graduate School of Business, “It Takes a Village to Maintain a Dangerous Financial System.”
The second article was Why Capitalism Creates Pointless Jobs.
Here is a revealing excerpt:
“…A recent report comparing employment in the US between 1910 and 2000 gives us a clear picture (and I note, one pretty much exactly echoed in the UK). Over the course of the last century, the number of workers employed as domestic servants, in industry, and in the farm sector has collapsed dramatically. At the same time, “professional, managerial, clerical, sales, and service workers” tripled, growing “from one-quarter to three-quarters of total employment.” In other words, productive jobs have, just as predicted, been largely automated away (even if you count industrial workers globally, including the toiling masses in India and China, such workers are still not nearly so large a percentage of the world population as they used to be).
But rather than allowing a massive reduction of working hours to free the world’s population to pursue their own projects, pleasures, visions, and ideas, we have seen the ballooning not even so much of the “service” sector as of the administrative sector, up to and including the creation of whole new industries like financial services or telemarketing, or the unprecedented expansion of sectors like corporate law, academic and health administration, human resources, and public relations. And these numbers do not even reflect on all those people whose job is to provide administrative, technical, or security support for these industries, or for that matter the whole host of ancillary industries (dog-washers, all-night pizza deliverymen) that only exist because everyone else is spending so much of their time working in all the other ones.
These are what I propose to call “bullshit jobs.”
It’s as if someone were out there making up pointless jobs just for the sake of keeping us all working. And here, precisely, lies the mystery. In capitalism, this is exactly what is not supposed to happen. Sure, in the old inefficient socialist states like the Soviet Union, where employment was considered both a right and a sacred duty, the system made up as many jobs as they had to (this is why in Soviet department stores it took three clerks to sell a piece of meat). But, of course, this is the very sort of problem market competition is supposed to fix. According to economic theory, at least, the last thing a profit-seeking firm is going to do is shell out money to workers they don’t really need to employ. Still, somehow, it happens.
While corporations may engage in ruthless downsizing, the layoffs and speed-ups invariably fall on that class of people who are actually making, moving, fixing and maintaining things; through some strange alchemy no one can quite explain, the number of salaried paper-pushers ultimately seems to expand, and more and more employees find themselves, not unlike Soviet workers actually, working 40 or even 50 hour weeks on paper, but effectively working 15 hours just as Keynes predicted, since the rest of their time is spent organising or attending motivational seminars, updating their facebook profiles or downloading TV box-sets.
The answer clearly isn’t economic: it’s moral and political. The ruling class has figured out that a happy and productive population with free time on their hands is a mortal danger (think of what started to happen when this even began to be approximated in the ‘60s). And, on the other hand, the feeling that work is a moral value in itself, and that anyone not willing to submit themselves to some kind of intense work discipline for most of their waking hours deserves nothing, is extraordinarily convenient for them.”
And the third article was Hollywood as a lens to the American shadow.
“The stealing of the United States from the American indian and the subsequent pillage and rape of the land which the American Indian considered sacred is a trauma that, as far as I can tell, has not yet been discharged. It has become shadow – the leper child stowed in the basement.
American poet and founder of the Men’s movement Robert Bly has spoken much of this, of the repression of emotion that is required to live in this world as if it’s a place of sanity. He laments the lack of grieving in American culture. He laments the lack of grieving for the plight of the Native American. He laments the lack of grieving for the plight of the US war veterans, worshipped and idealized while still fit to represent heroic ideals, yet discarded the minute their bodies and minds take on the scars of war.
In observing all these Hollywood movies with stories of threats from afar and dark conspiracies from within, it may prove interesting to reflect on the following: The threat from afar was once the white man.
In the absence of fully feeling, grieving and discharging the impact of the plight of the Native American on the collective US psyche, protection mechanisms have been put in place.
One of these mechanisms is a powerful army. Its use in combat against a perceived threat conveniently distracts from the unhealed trauma at home.
Staying in conflict thus becomes an imperative.”
These articles brought into sharp focus my search for the shadows of our dysfunctional, disorderly, disconnected and imbalanced leadership and managment styles at home which we have inherited from our colonial masters and which have been perpetrated by the neoliberal money masters over in the USA. These reinforced and consolidated the conclusions which were drawn in two of my previous blog posts, Why are our institutions no longer beacons of light and why have they become shadows of darkness?, and Coming Out of the Shadows into the Light.
Unless and until we address these shadows of First People’s genocide in the Americas and the horrors of the Atlantic slave trade in a Global Truth and Reconciliation and Integral Healing Exercise, our shadows will continue to steer us in more maladaptive ways, and our projection of our national insecurities to others without and to own within will continue to escalate. US hegemonic imperial dysfunction will continue to breed more conflict with its neighbours overseas and create tensions and conflict at home and will evolve to a police state. If not dealt with comprehensively, it will evolve into an empire of delusions and contradictions, where the disparities in the system will widen.
The sooner we take stock and help each other exorcise the demons of our past shadows, the better off we will all be, not only in the Americas but all over the world.
Since we know, as explained in Adam Smith’s Invisible Hands Revealed!! that our money system is the root cause of this dysfunctionality, we need to tranform our money systems based on Integral transformative and development principles as elaborated in The Trans4m Movement – Integral Worlds Theory: Articulating a “Whole” (New) Perspective and Integral Worlds Theory Deconstructed and Applied to a Deeper and Wider Understanding of the Life-Grounded Self Via Illustrations.
The article that seems to have made the diagnosis that we have dysfunctional dangerous financial system that tied up everything for me and has higlighted the real and present danger ahead, if we do not heed and make the Great Turn now, also presented itself yesterday. I have reproduced the article below: https://www.project-syndicate.org/commentary/trump-chinese-debt-global-imbalances-by-yanis-varoufakis-2016-11
ATHENS – If Donald Trump understands anything, it is the value of bankruptcy and financial recycling. He knows all about success via strategic defaults, followed by massive debt write-offs and the creation of assets from liabilities. But does he grasp the profound difference between a developer’s debt and the debt of a large economy? And does he understand that China’s private debt bubble is a powder keg under the global economy? Much hinges on whether he does.
Trump was elected on a wave of discontent with the establishment’s colossal mishandling of both the pre-2008 boom and the post-2008 recession. His promise of a domestic stimulus and protectionist trade policies to bring back manufacturing jobs carried him to the White House. Whether he can deliver depends on whether he understands the role America used to play in the “good old days,” the role it can play now and, crucially, the significance of China.
Before 1971, US global hegemony was predicated upon America’s current-account surplus with the rest of the capitalist world, which the US helped to stabilize by recycling part of its surplus to Europe and Japan. This underpinned economic stability and sharply declining inequality everywhere. But, as America slipped into a deficit position, that global system could no longer function, giving rise to what I have called the Global Minotaur phase.
According to ancient myth, King Minos of Crete owed his hegemony to the Minotaur, a tragic beast imprisoned under Minos’s palace. The Minotaur’s intense loneliness was comparable only to the fear it inspired far and wide, because its voracious appetite could be satisfied – thereby guaranteeing Minos’s reign – only by human flesh. So a ship loaded with youngsters regularly sailed to Crete from faraway Athens to deliver its human tribute to the beast. The gruesome ritual was essential for preserving Pax Cretana and the King’s hegemony.
After 1971, US hegemony grew by an analogous process. The Minotaur was none other than the US trade deficit, which devoured increasing quantities of the world’s net exports. America’s burgeoning deficit was financed by billions of dollars of daily net inflows into Wall Street from the foreign (and often US) owners of these distant factories – a form of modern tribute to the Global Minotaur.
The more the deficit grew, the greater its appetite for Europe’s and Asia’s capital. What made the Minotaur truly global was its function: it helped recycle financial capital (profits, savings, and surplus money). It kept gleaming German factories busy. It gobbled up everything produced in Japan and, later, in China. But at the same time, Wall Street learned how to turbocharge these capital inflows through exotic financial instruments. The floodgates of financialization burst open and the world was flooded with debt.
In the autumn of 2008, the Minotaur was mortally wounded after running into the wall of private debt that was a by-product of its appetite. While the Fed and the Treasury refloated US markets (at the expense of weaker Americans left behind since the 1970s), nothing would be the same: Wall Street’s capacity to continue “closing” the global recycling loop vanished. The US banking sector could no longer harness America’s twin trade and budget deficits for the purposes of financing enough domestic demand to sustain the rest of the world’s net exports. From that moment on, the world economy would find it impossible to regain its poise.
Following the Minotaur’s mortal wounding, America has not only the Fed and the Treasury to thank for helping to avoid a new Great Depression. The US was also saved by the Dragon: the Chinese government cranked up domestic investment to unprecedented levels to pick up the slack created by the contraction in spending in the US and Europe. For many years, China allowed credit creation by its formal and shadow banks to run amok, even permitting them to benefit from the Fed’s easy-money largesse by taking out dollar-denominated loans. Put succinctly, the Dragon stepped in to rebalance the West when the Minotaur no longer could.
China’s leaders knew what they were doing. They were creating a bubble of unsustainable investment to give Europe and the US a chance to get their act together. Alas, both failed to do so: America because of the standoff between President Barack Obama and the Republican-controlled Congress, and Europe for reasons too painful to recount. And when the perfect storm hit in 2015, with US interest rates climbing while commodity prices fell, China had to crank up credit creation once more.
Today, China’s credit boom is underpinned by collateral almost as bad as that on which Bear Stearns, Lehman Brothers, and the rest were relying in 2007. Moreover, because the Chinese renminbi is grossly overvalued, corporations are borrowing dollars to repay their legacy dollar-denominated debt early, putting downward pressure on the exchange rate.
Trump’s plan for helping those left behind since the 1970s, to the extent that one is discernible, seems to turn on two axes: a domestic stimulus and bilateral deal-making under the threat of tariffs and quotas. But if he plays hardball with China, pushing the Chinese to revalue the renminbi and employing threats of tariffs and the like, he may well end up pricking the bubble of China’s private debt – unleashing a deluge of nasty consequences that would overwhelm any domestic stimulus he introduces.
In that case, Trump’s infrastructure spending would morph into more corporate welfare, implying a negligible multiplier effect. That, in turn, would set the stage for future austerity, as panic over further US interest rate rises and federal budget blow-ups put the squeeze on the government’s existing unfunded commitments (for example, Social Security).
If Trump’s medium-term economic strategy is to have any chance of success, he must grasp that it is not US public debt, but Chinese private debt, that needs to be restructured. Otherwise, US Treasury yields could go through the roof, severely weakening US debt sustainability.
Likewise, Trump must realize that he cannot make America great again by emulating Ronald Reagan’s unfunded stimulus. That trick worked when the Minotaur was chained and fed; it won’t work when the Dragon has run out of fire. Instead, if Trump truly wants to rebalance the US economy so that growth benefits the abandoned people to whom he has promised so much, he should emulate Franklin D. Roosevelt and pursue a Keynesian makeover of Bretton Woods.
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