Plunging stocks have raised three things: fear of global depression; Democratic election expectations; and a cry for a world wide reassessment of capitalism. Greed, once again has become "the heavy thighed beast slouching toward Bethlehem."
The French President, Sarkozy, is quoted as saying, "Together we need to rebuild a capitalism that is more respectful to man, more respectful to the planet, more respectful to future generations and be finished with a capitalism obsessed by the frantic search for short term profit."
President Bush has called for an economic summit in the tradition of the famous Bretton Woods gathering. Our current president no longer has the personal or geopolitical capital to jump start anything far reaching; that will have to wait for January 20th, although time's a-wasting.
A powerful concept of fiscal modesty is gathering powerful momentum in the face of unfathomable financial meltdown. And by the way, what bad loan exactly was the straw that broke the camel's back? A perfect and sad example of complexity theory in action. But I digress. It is clearly time for deep breathing and broader focusing on our world, our direction, and our values. Back to basics.
Galloping greed and instant gratification get the big blame for our financial straits. Is this simply human nature out of control? Can we recalibrate regulations so the majority will be protected from the corrupt and grasping few? Yes, we can, for a while anyway, until the one with the three cups shuffles that pea around again so fast that no one notices where it went.
The first step will be to prohibit lenders from passing on loans and combining them into alphabet soup. Credit is tight and will stay that way until confidence and common sense regulations return. The second step is to loan and borrow within logical boundaries.
What we need is a new attitude toward world wealth and what constitutes it. Not an easy task. A reevaluation of what economic growth is and what are its limits is hardly a topic on which anyone expects universal agreement, but President Sarkozy is right to bring it up.
On the campaign trail, accusations are hurled by the McCain camp at Obama of "socialism." (Like his advisors Warren Buffet, Robert Rubin, and Paul Volcker are renowned socialists.) Well, George Bush, the Congress, Federal Reserve and Treasury Department have stolen a march right out from under the McCain accusations. The large scale buying into banks and companies, although necessary, is certainly not your standard Ayn Rand capitalism.
Markets, as we witness daily now, are mercurial. Free markets are not always free. The world is intermeshed as never before, and the days of letting huge money institutions collapse are past, because it causes wide spread damage of hurricane force. So capitalism has already morphed into another "ism." We just don't have the right nomenclature yet.
When events as perilous as the current ones erupt around us and threaten all our cherished beliefs in banks, government oversight, and financial institutional stability, our brains as well as our instincts tell us to recalibrate, or indeed, to revise our system.
Few silver linings pop out just now, but we can hope that positive fallout for our earth and environment may be a bright spot. We might just approach extraction from the earth with a kinder, gentler attitude. Conservation and preservation as core values can become trusted and honored again. Good manners toward our earth. A caveat is that falling oil prices may lull us into torpor towards full speed ahead on alternative fuels. For us to prosper in fiscal and climate meltdown, we will need to walk the walk more carefully on our sustenance, earth itself.
A new map for manageable, accountable prosperity is needed. President Sarkozy speaks wisely and perceptively. I hope our new president will also be wise enough to join in a plan for a future that is more equitable, more responsible and therefore brighter for us all.