Capital injections don’t work – end of phase 3
When I traveled to Madrid this week (june 2012) to present AiREAS as a sustainocratic solution for the city problems with air polution the very first reaction of government executives was the traditional and classic public negation. “We have no air polution problem!”. This was interesting because I had just landed in the dense smog of the city and have information that Brussels threatens with sanctions if certain norms are not complied with in 2015. I also know that the local government has been trying to do its best to address the problem but that the issues go beyond the complexity of government regulatory authority and consequence driven measures.
The problem most government officials have is that they are so used to cover up their impotence around truly complex issues, publically claiming that they are in control and things will get better somewhere in the future, that they feel automatic resistence when someone walks in with a new proposition. This we see also in the world of finance. The traditional blind negation of an economic bubble, ignoring it until the bubble blew up in everyone’s face in 2008, was exaactly the same. When negation is not posible anymore because of undeniable proof the next psychological phase is entered: the one of disbelief and urgent correction. Then the negation continues. A quick massive capital injection should solve the problems overnight. 4 years and many billions of money later we all see that the problems continu.
When I got home from Madrid I watched financial analists on TV explain for the first time why the capital injected was only pushing the problems forward but not solving them. This remarkable first announcement of acceptance was a great relief to me. Of course, all huge capital injections had given the rats to cash their risks and leave the ship befor sinking, but still. It indicated to me that the phase of resistance to change and negotition for recovery of lost financial stability was ending.
The next phase (following my own model of cyclic phases of awareness and human development) is the one of fear. The large financial institutions had recovered their long term loans against public debt so that the institutions would not go broke. The citizens only had democratic rights and fear. A few 10K extra debt per person was institutionally acceptable. Of course, the public itself was never asked. It is all a game of big financial interests and liabilities played over the back of unaware masses of people. Institutions now need not fear anymore. Their power play is now over the civilians which hardly get organized to oppose and which can be submitted still under the pressures of financial law of debt.
Then the acceptance of the crisis and need of total renewal is opened. This openess is what I have been waiting for as it announces the total culture change needed to address the shaping of a new paradigm and corresponding new complex social structures such as sustainocracy. The crisis is reaching the general public now definitely. Capital injections saved the speculanting institutions but not society. The problem of greed was resolved and now poverty could stand up and protest.
But in Spain, from a sustainable progress point of view, the government executives were still hiding between their wall of negation. This will be the case in every government around the world. Reluctance to let go of old authorities and structures is largest when no alternative is know.Experts are consulted from inside the system only. Expertise from outside, like the one’s I am offering, are not recognized let alone taken seriously. One will fight against change simply because one does not know where to change into. When I presented sustainocracy in Madrid the first reaction was defensive but the seed has been planted. Before my presentation they had no choice, now they do, just like the population. Just like in Holland before, it will do its psychological work (like this blog), and some time in the near future the officials will lower their defences and accept shyly the hand that I reach out to them from the new world.
We are reaching the natural point of a psychological break through, because resistence does not seem to work but also because an alternative shines through at the end of the tunnel. I hope to find enough executive interest to join me in a world changing congres on 12.12.12 to let the crisis behind us and definitively open up to sustainocracy around the world. Sustainable human progress is more important after all than keeping up artificial, obsolete systems, even if they are called politics or banks. Capital injections did not bring back stability, it just saved some banks for some time.
Choice? Blue or Yellow?
Consider that you are driving on a road and reach a T junction. You can enter the blue road which gets you to a ravine in which you will certainly crash. The road is however one big fun fare filled with goodies (plenty of food, sex and rock & roll, mountains of gold and properties along the way) for you to enjoy quickly before you crash. Once in a while you hear a scream and wonder whether it is of joy or fear just before the crash?
The other road (yellow) is dull, even very difficult to drive due to the many horrible looking obstacles, no goodies at all, even hardship to expect, but it gets you along side the ravine safely and eventually turns away from it.
Which road would you pick? The yellow one for the long term safety where you see hardly anyone? Or the blue one for the short term joy yet unsafe and where you see a lot of people?
When you make your choice and finally encourage yourself to go for safety, the yellow road, despite the powerful attraction of fun, you notice a little man sitting there. He controls a big barrier, preventing access to the yellow track. When you ask him why you may not continue he tells you that he represents justice of a democratically chosen government and local banking system who both control the blue road and all the attractions along side. It has been decided by law that everyone has to take that blue road and he is there to assure that this rule is followed, if necessary by applying the law.
“But this will get me killed” you exclaim. The bureaucrat shrugs his shoulders and says that he is just doing his job. It’s a free country and everyone has the right to vote democratically. Short term fun was chosen so everyone has to have fun even if it gets you killed. Dullness is not allowed and long term dullness is even banned from the choices, even if this saves your life. All banking and government investment goes into placing more attractions along the blue track and upholding the system that has been chosen for.
He even pinpoints far in the distance where you can still see a very narrow bridge over the ravine. “See”, the bureaucrat says “that is the place where the bankers and chosen politicians stand to assure that this system keeps running. It is a small bridge and has only room for them and their interests, nothing else. And look at poor me, I have to sit here and have to tell everyone to take the blue road full of attractions. A hell of a job”.
Now it is again up to you. What do you do? Do you follow the rules imposed onto you or do you make up your own mind?
The story reflects our current system of economies of growth. They are on social and ecological crash course but still oblige people by law to stick to the money driven dependencies of consumption, even if you want to take another route. Sustainable progress is blocked by bureaucracy. The only choice we really have, if sufficiently aware of disaster, is to avoid the bureaucrat, jump the gate and walk the road of safety even though we travel alone in a desert.
Strangely enough most people still take the road of consumable pleasure knowing that it ends in disaster. They do it either for the short term fun, out of lazyness to build a new life out in the empty desert or out of fear for the authorities that impose the laws. What is needed for the masses to pull down the barrier, fire the bureaucrat and build a new society along the empty road?
will you eat bread today?
Just imagine a baker in a village of 100 people. Every day he bakes 100 loafs of bread that he sells to the villagers for 1 euro per bread. Every one is happy, every villager has bread to eat every day and the bakery has an economic situation of 100.
For some reason one day there is a shortage of wheat and the bakery cannot make 100 breads, he makes only 80. Due to the wheat shortage the cost price went up and the baker had to sell his bread for 1,50 euro. People were not happy but paid the difference. 20 of them came late and were left without bread. The baker did not really care. His turnover had gone up to 120. The wheat shortage continued. The local population reacted by purchasing half a bread instead of one whole. They had become conscious of the shortages of wheat and realized that they could perfectly well survive with half a loaf since they had been throwing away part of the other loafs anyway. They called their social responsibility “sustainability” but the bakery was not happy at all. He had sold 100 halfs at 75 cents = 75 euro. His economy had dropped despite the rise of the price and he had to throw 30 unsold breads away. Thinking that the market had reduced he decided to stimulate the market again with some marketing and kept the reduction of his production due to the wheat shortage. Due to the marketing costs he had to increase the price a bit more, to 2 euro.
Half the people bought half’s and half bought whole breads. So 50 halves against 1 euro = 50 euro and 50 whole breads against 2 euros = 100 euro. The baker was happy. Marketing works he said. His turnover had grown to 150 euros, double the previous sales! And he only had to throw 5 breads away this time. Market working they call that in economics, and all the consumers had something to eat.
The world market of wheat was struggling further and he had to compete to get his resources. The energy costs were rising too so he ended up reducing his average production to 50 breads against a sales price of 5 euros. Some angry people were buying bread by the slice now and some could not afford bread at all anymore. The 20 richest people of the village did not want to reduce their consumption and offered 8 euro per bread. The baker loved this deal and sold all his bread every day now with a turnover of 20 x 8 euro = 160 euro for the rich people and 30 x 5 euro = 150 euro for the normal people. The economy of the bakery had grown to 310.
The local village council was worried because a number of people had no bread to eat but happy with the growth economy. They could raise the local tax on bread to help the 50 people that were starving and gave them some social help with money. The baker was making a lot of money after all. Government treasury was doing fine as a consequence too. With all his profit the baker had bought a nice house with a large mortgage. The city council had invested in a bit more bureaucracy to assure that the growth economy was properly taxed and invested. People complained about to increase of the cost of living and blamed the baker. He blamed the increasing costs of wheat, production and marketing. But also the tax pressure. The government hammered on economy of growth to be able to tax more and cover the expenses of the socially needed. Meanwhile poverty and social unrest was rising. People were meeting to see what they could do about it and someone threw a stone through the window of the bakery. The next round of baking the baker could make only 30 breads but the population was already in front of his door claiming the entire production for equal distribution. He had no turnover that day and his bakery was damaged. The rich got no bread that day and were furious. They lobbied with the local government to see if their taxes could properly used and get bread from elsewhere. The baker went broke, couldn’t pay his mortgage anymore so the bank went broke too. The government had no one to tax anymore while the bread market got into the hands of the Chinese. After a period of economic growth the village got into a severe recession and chaos.
This simple, funny but realistic story gives a view that economic growth does not solve anything when resources are running out. The only option left for the villagers would be have been to grow their own wheat to eliminate their dependency on outside forces. But what did they know? If they can’t produce their own they have to find something else to eat. But for all they new everything was fine, the economy was growing after all, wasn’t it? How do we deal with this in the big cities around the world where money rules the systems and the dependencies of the people? How aware are people of the world wide shortages if the only point of measurement is the local supermarket and one’s own cash availability? How aware are governments when the economy of growth, tax and social welfare is their only worry?
Moral of the story: A growing economy does not necessarily get you a daily loaf of bread.
