Saturday, October 4, 2008

Calling for a new Economic Order

"There is an element of an unnaturally high level of living standard and national expenses and other unhealthy materialism at the expense of others and the environment that is coming home to roost in all these events. With or without this bail-out we are arguably headed off an economic cliff in the near future."

These are all sensible comments and they are in line with what I have been saying. My main theme is the battle of the powerful against the powerless. This is the war that is going on. The concept of Justice in one case comes from the justice of the powerful and is based on the assumption of Human Power while in the other case the concept of Justice is the Justice of the powerless and it is based on the assumption of Divine power.
Economic Justice can only come from the powerless as long as they are not greedy. It can seldom come fro the powerful as they are inclined to be both greedy and arrogant. Greed and Arrogance create injustice.
Thanks for sharing.
Khusro--- On Thu, 10/2/08

Namaskar Madhusudanaji,

I don't see a metamorphosis of capitalism into PROUT as much as a transfer of wealth from American taxpayers to prop up, to socialize the costs of the failures of capitalism's predatory excesses, much as had been done during previous bubble bursting periods such as the late 1980's Savings and Loans bailouts... In this case there is an additional ingredient of a type of state capitalist intervention to protect foreign investment in US markets so as not to scare away those all important international lenders who have infused 3 trillion dollars into the economy in recent years and fund the governent, and trade imbalances. Rather than run financial services as a state run industry locally regulated as needed to meet local needs to bolster principles of self-sufficiency and economic democracy/sovereign ty, fiscal responsibility geared toward actual social needs in a rational fashion for the purpose of the welfare of all, this bailout is largely meant to save the current state of affairs of heavy reliance on foreign investors, to insulate from the possibility of a run on the banking system as a whole (internationally) , and spur the movement of credit. In this case, it seems the Paulson plan even if it was to take a sharehold in various institutions in the name of the US taxpayers, which may be profitable for the state perhaps, the intent is to reserve the profits to the private sector by limiting the profitable return of taxpayer 'investment' while socializing the risk, limiting public return. I know that with AIG the government took a majority share of the failed company, but its not clear that the Congressional plan which may likely be passed will plan to just purchase majority control of the companies, or may just be a supply of emergency credit via the Fed. I haven't checked the details yet and suspect that the US gov will not be a controlling stakeholder in the institutions it bails out.

You're right that we don't want capitalism to fail in the sense of utterly collapsing so that people are without essential items, without jobs, etc., and hurt people's ability to survive, etc. But we do want a fundamental altering of our economic, social, spiritual collective lives which requires the demise of capitalism as an old shirt which must come off to make way for the new shirt to be put on. There is an element of an unnaturally high level of living standard and national expenses and other unhealthy materialism at the expense of others and the environment that is coming home to roost in all these events. With or without this bail-out we are arguably headed off an economic cliff in the near future.

"The movement for economic democracy will never come from Washington DC or from Wall Street. That's got to come from grass roots movements to develop the concept of local economies. That's where I think the effort of PU should be."

Absolutely. Its time to be the change.


----- Original Message -----
From: Madhusudana
To: Ananta Alex J
Sent: Wednesday, October 01, 2008 9:24 AM
Subject: Re: [PRI-USA] thoughts on current happenings
Namaskar Anantaji,It could be argued that if the government acquires an ownership stake in the companies it bails out, that this is a step towards government ownership of large financial institutions, which is part of PROUT. Could it be that we are beginning to see the metamorphosis of capitalism into PROUT? Then what would be necessary is the transformation of the political system. I'm of the belief that if PROUT is to be the successor to capitalism, then we don't want capitalism to "fail", because that would make the job of PROUTists that much more difficult in rebuilding the economy. Rather we should try for the transformation of the economic and political structures. If that fails, then revolution would be the likely outcome.The movement for economic democracy will never come from Washington DC or from Wall Street. That's got to come from grass roots movements to develop the concept of local economies. That's where I think the effort of PU should be.In Him,MadhusudanaAlex J wrote:

It had appeared to me that the current crisis of the banking industry, with major banks failing one after another and not all at once seemed to be somewhat of an orchestrated series of avoid the panic of a collective collapse all at once so as to space them out some and a more scheduled collapse which could be 'managed' at each point, be met with the perception of meaningful government intervention. The major US banks have been failing at a rate of about one a week for 5-6 weeks, and each time the government had had a plan to take care of the events in advance even while the Treasury has a list of another 115 banks on the verge of failing or in trouble. Each time the public announcements have been on weekends with markets closed giving the Fed/Treasury opportunity to announce the corresponding 'plan' to meet the problems. Last week we had the largest banking failure in the history of the world with the demise of Washington Mutual, and more seem to be on the way and certainly there must be much that the public isn't being told yet as part of the plan of maintaining certain levels of perception to avoid panic. It seemed to be a very orderly demise, and the perception of the government intervening to protect credit and some of the larger companies seemed equally to assuage the panic and consternation of foreign 'investors', etc...check out http://www.politico .com/news/ stories/0908/ 13690.html .

One question we might ask is well, should the bail-out be supported... a bailout of over 1 trillion dollars (315 billion already), costing most Americans a few thousand dollars per woman, child, and man? I think that as Proutists we could argue that a bail-out of the financial sector, the commercial centers and some of the largest and most wealthy corporations must be avoided in favor of securing some protections of the economy of jobs, housing, access to minimum necessities of life (including heating assistance), etc. What we are witnessing is a going to be a deflation of the dollar as the Fed will have to inevitably print money for a bailout of one of the most wealthy sectors of the economy...socialism for the very rich while socialism for the lower classes is denied.

Of course, its a complex issue of what strategy should be used to ease the stress of people during a period when the economic bubble is finally beginning to pop.Yet the numbers we have already had to swallow --1.2 trillion dollars of the federal budget is related directly or indirectly to military expenditure and entitlements, another 30% of the 2 trillion national government budget goes to paying barely more than just the interest on the national debt also mostly caused by military expenditures largely during the Reagan years, with only 10-15% of every taxed dollar going to some aspect of the welfare state or discretionary national spending. With these bail outs the deficit this year will already be over a trillion dollars even without a 700 billion dollar bailout...all this when according the the UN about 60 billion dollars would help to alleviate the worst of world poverty! Most of the strategies being discussed, essentially revolve around trying to save the system of international globalization linked directly to the US economy and US domestic consumption which may be largely impacted with a collapsing credit market for both businesses and consumers. If there is a downturn in the US economy the whole international capitalist system may collapse, and along with it the dollar. It seems we have finally arrived at the beginning of an unavoidable breaking point....


I have been predicting the decline of America for a year now but I must say that I have been taken by surprise at the speed of events. The combination of Military, Political and Economic decline seem to have come together right at the end of the Bush Presidency although the rot started well before him.

I agree with Dr. Omar that this is nothing to celebrate as the domino affect on the world will be felt by the weakest and vulnerable the most. Unfortunately the nature of the animal is such that at whatever time this happened it would not be an orderly transition. It would not be orderly because the Americans are in denial that they are no longer a super power and it does not help that they stutter around the world behaving as if they are. They can make the transition orderly or they can make it worse. They seem to have chosen to make it worse.

For the time being we are transitioning from a unipolar world to a multipolar world. Life without a super power would be very good if a group of countries like the Bric Countries, the Gulf countries and the US and the G7 joined forces to fill the vacuum.
The US is not even ready to take responsibility that it is the cause today of causing the break up of countries and the dislocation of millions of people. It is not ready to take responsibility that it is the cause today of world Economic turmoil. Bush admits to no mistakes even while he plots to destabilize Russia.

I have therefore given up any hope of an orderly transition. Incidentally I had also predicted that
the fall of the US will be accompanied by widespread chaos and bloodletting. When things are not allowed to evolve there has to be a revolution and this is what we are witnessing. The US with it's insistence on solving singlehandedly all the worlds problems as they see them and solving them by force gives no chance to evolution and literally invites a revolution.

For the first time in the History of the world, this revolution is difficult to comprehend because it is faceless. There is no emerging power waiting in the wings to pick up the pieces, there is no heir apparent but the age of super powers is over. It is not just the US which is in denial, all of us who lead comfortable lives ( at the cost of millions) are in denial about the threat to our way of life.

I wish I had the authority to come up with recommendations that would make a transition orderly and relatively painless but I do not. I do have the clarity to warn people of the coming events. Noah's floods will look like filling a bath tub with water in comparison to the events which will unfold before our eyes. A month ago, people could have fairly accused me of gloom and doom even though I am an optimist by nature but I have to tell you that in my scenario what was supposed to happen in 2018 is happening in 2008.

The question is no longer whether the catastrophe is upon us ( it is), the question is what happens next. The question is no longer whether it can be stopped or resolved, the question is which side of justice are we on. In the battle of the powerful against the powerless, the powerless will win but at a huge cost to both sides.


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