Sunday, October 12, 2008

The end of an era... Soros on financial crisis

Friday night on the PBS weekly program, Bill Moyers Journal, Bill's guest was billionaire George Soros. Soros made his billions as a speculator and withdrew from the market quite a while back. (See former Federal Reserve Chairman Paul Volcker on that at the link highlighted above.) Republicans and others from the right don't like Soros, partly because he does not believe the free market, if left alone, will always work efficiently and partly because he funds liberal (a dirty word in rightist lexicons) causes and organizations. is one of them. He is also among those who believe global warming is the most urgent issue facing mankind.

Soros is 78 and his demeanor during the program was grave and at times quite emotional though reserved. When Moyers asked him if he thought the American Dream was dead, he shook his head and said, "Oh, no," softly and his eyes lit up slightly. But he did say that the Bush Administration was still "behind the curve" with solutions, adding that Treasury Secretary Henry Paulson was not up to the job. He criticized Paulson who came to Treasury from the Wall Street firm Goldman Sachs for being too enmeshed in the complex mathematical manipulations that had become standard among financial firms and that had led, in part, to the current breakdown.

Moyers also asked Soros, "Is this the end of capitalism?" Soros laughed gently and said something like, 'I hope not.' He did say that free market idealogues had been proven wrong, in that unregulated by government, the free market has fallen prey to its inherent weaknesses.
He added that the U.S. and the world were facing an end to an era of a certain phase of capitalism in which the global economy was based on unlimited spending by American consumers financed by cheap credit and soaring trade inbalances. Soros said this trend which has been going on for the past 25 years could not go on forever and had to come to and end.
He referred to this as the "big bubble" underlying the smaller "housing bubble." The current chaos in world markets is a result of the big bubble exploding which was "detonated" by the collapse of the housing market.

According to Soros, three things must happen to stabilize the world economy:

1. Banks must be recapitalized either privately or through government assistance.

2. Housing prices must be stabilized. Foreclosures slowed down as much as possible.
Homeowners with negative equity must me helped.

3. A new economic engine must be found to replace the endlessly expanding consumer spending by Americans which has driven the world economy over the last 25 years. Americans must learn to save and conserve energy. Capital investment and job creation could focus on development of 'green' energy instead of endless consumer spending.

For Part II of this post click here.

A ripple of hope... Remembering Bobby Kennedy

Too much and for too long, we seem to have surrendered personal excellence and community value in the mere accumulation of material things. Our gross national product now is over $800 billion a year but that gross national product, if we judge the United States of America by that, that gross national product counts air pollution and cigarette advertising and ambulances to clear our highways of carnage. It counts special locks for our doors and jails for the people who break them. It counts the destruction of the Redwoods and the loss of our natural wonder in chaotic fall. It counts napalm and it counts nuclear warheads and armored cars for the police to fight the riots in the cities. It counts Whitman's rifle and Speck's knife and the television programs which glorify violence in order to sell toys to our children.

Yet this gross national product does not allow for the health of our children, the quality of their education, or the joy in their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debates, or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country.

It measures everything, in short, except that which makes life worthwhile and it can tell us everything about America except why we are proud that we are Americans.

-- Part of a speech by Sen. Robert F. Kennedy given in 1968, on his first full day of campaigning while speaking to students at the University of Kansas.

'A ripple of hope'
I first heard the above excerpt from Bobby Kennedy's speech while listening to National Public Radio on June 5, 1993, the 25th anniversary of his death. I was so moved by his words that I wrote to NPR to get a transcript of the program. I think I had to pay for it. That wasn't important to me. I wanted to remember those words. When I heard about Congressman John Lewis' recent warning to Senate John McCain about the increasingly negative tenor of his campaign and McCain's subsequent scolding of Lewis for being an alarmist, I begin to think about the 1963 Birmingham church bombing Lewis mentioned. Back then I wrote a poem about the bombing which I've kept in a folder with news stories about the incident. I got out the folder thinking I might finally put the finishing touches on the poem so I could share it; I found a copy of that NPR transcript of Bobby's speech in the folder. I read it again and begin to think of what George Soros had said on Bill Moyers' Journal about how the world financial crisis represents 'the end of an era' of rampant American consumerism which turned the engine of not just our own but the global economy.

In his beautiful speech of 40 years ago Bobby suggested a basis for the American dream that is beyond materialism, beyond owning things and the wasteful consumption of energy. I'm still not ready to put the finishing touches on my poem about the Birmingham Church bombing. But I couldn't resist reprinting his speech. I find it an appropriate reminder and encouragement for this time and the days ahead.

As for John Lewis and his warning, I agree that John McCain is no George Wallace, and I can understand why Sen. Barack Obama distanced himself from Lewis's remarks. But Obama was a boy during those awful days; Lewis was older and so was I. I remember how much hate was in the atmosphere; I remember how much we lost in the sixties. And I pray, oh God, how I pray that we never have to suffer those awful things again. Racial hatred is bad but it is not the only kind of hatred. And John Lewis is right; many people attending John McCain's political rallies are spewing hatred. I also agree with those critics of Sarah Palin who say that she is coming very close to inciting hatred in some of her speeches. Following is a short tribute to Bobby Kennedy which can be found at Home for Following the tribute is a video from 1968, that year of hope and heartbreak.

The assassination of Robert Kennedy on June 5, 1968, has never attracted the same level of public fascination and passion as the 1963 assassination of his brother, President John F. Kennedy. But, the passing of Bobby, as many affectionately called him, may have impacted our country in a more significant manner.

Robert Kennedy was unique in American politics; he reached out to the poor and disenfranchised, he reached out to working class whites, he reached out to inner city blacks, he reached out to the migrant worker - the very classes of people most politicians of that time ignored. He came from a place of privilege and money, yet passionately spoke for the victimized and the oppressed. Robert Kennedy embodied an attitude and idealism that is rare for any generation. By leading with an inspiring call to action he asked the American people of that time to support racial and educational equality, to accept environmental responsibility and to negotiate for peace in a war ravaged world. RFK asked Americans to believe that as individuals they could make a difference in the world.

Bobby understood that America's real greatness came from empowering its citizens through equal opportunities to secure a better life, but Robert Kennedy's vision for a better tomorrow was not limited to the United States. He went to Poland and Latin America to tell them that their dream of freedom was obtainable, and when South Africans suffered the tyranny of apartheid, RFK was there to say:

Each time a man stands up for an ideal or acts to improve the lot of others, or strikes out against injustice, he sends forth a tiny ripple of hope, and crossing each other from a million different centers of energy and daring, those ripples build a current that can sweep down the mightiest walls of oppression and resistance. - RFK

For a companion to this post click here.