AT THE FINANCIAL MELTDOWN
By Nancy Myers
There is something about what is happening now to global financial systems that brings out the gaper in me. You know, slowing down to look at the wreck. I am reading everything I can about crashing financial institutions, the arcane instruments they invented to bring about their own ruin, and the corrupt, wrongheaded, or oblivious politicians who looked the other way. Who is to blame? How did it happen? What is the story that most of us missed until it became all too evident?
Unfortunately, this is not just about investment banks and hedge funds; it is about all of us. The cliché is that "we" are Main Street and "they" are Wall Street. Actually, many of us are inadvertently or by some degree of choice living on both Main Street and Wall Street. My husband and I, for example, are in the ranks of the first victims of this train wreck: imminent and current retirees. We are, in fact, on the derailed train. We bought our tickets some time ago with our portfolio. How else do you prepare for retirement these days? Not only investment but speculation is all but required. We are both victims and participants.
As an environmentalist, I have been musing on the opportunities this financial crisis might present for our ideas. Many, like me, believe that this is a teachable moment and we are already pushing forward our agendas. Green jobs, the steady-state economy, responsible investment, comprehensive reregulation, and valuing natural capital are all being put forward as answers, or lessons, or ultimate solutions once we get past the current crisis. To read some of these recommendations go to SEHN's True Cost Clearinghouse and scroll down to the articles on "financial meltdown" and "financial bailout."
As for SEHN's agenda, as Guardian (UK) columnist George Monbiot wrote in a recent essay, "Can anyone, surveying this mess, now doubt the value of the precautionary principle?" We at SEHN have more to say about economics, including challenges to the prevalent practices of discounting and cost-benefit analysis. More about that in coming months.
Nevertheless, for all our forward-looking and ethical plans, many of us are to a great extent participants in--and prisoners of--the economic systems that are now falling down around our ears. As individuals and as fund-supported NGOs, our investments are in trouble. The trouble is not all our fault and certainly has not been under our control. But that does not excuse us from examining it with clear and unbiased eyes. And then we must decide how we are going to turn the system around, so that our investments--where we put our wealth and what it does in and to the world--lead to wellbeing rather than destruction.
Our first task, however, is to understand what is happening and why. And therefore I hope you read the two excerpts below from an extraordinary, timely draft report just issued by a UK think tank called The Corner House. And then I urge you to read the entire, well-written report, which tells what we've been missing--the whole story behind the current mess. I've included just enough from the introduction to whet your appetite to read the report, and enough from the conclusion to tell you why this is so relevant to our work.
We've seen the story happening, from mergers and takeovers, to Enron, to the privatization of infrastructure like waterworks and the Indiana Toll Road, which runs two miles past my house, and now the biggest financial crisis since 1929. We've seen the story in pieces and haven't recognized it, perhaps because people who tell it--especially politicians and the media--are afraid to admit they really don't understand parts of it. If you read through the 60+ pages of A (Crumbling) Wall of Money: Financial Bricolage, Derivatives and Power you will understand more about the current crisis than either presidential candidate has let on so far, which is a bit scary.
Besides the two excerpts from this work in progress, consider this gem from page 60:
"Greed and fear are not given as the drivers for market behaviour as they have been --unless markets are organised to allow them to become so: solidarity and prudence are equally possible moral underpinnings."
And therein lies hope. With the mechanisms and consequences of greed and fear now visible all around us, we can roll up our sleeves and rebuild our society--and perhaps even secure our personal futures--on different values. Solidarity and prudence (there's the precautionary principle) are good starting points. That would mean investing in future generations, wouldn't it? Now there's a legacy to be proud of.
(Download the full text, fully referenced, here)
Science & Environmental Health Network
Precaucionary Principle SEHN
By Nancy Myers
There is something about what is happening now to global financial systems that brings out the gaper in me. You know, slowing down to look at the wreck. I am reading everything I can about crashing financial institutions, the arcane instruments they invented to bring about their own ruin, and the corrupt, wrongheaded, or oblivious politicians who looked the other way. Who is to blame? How did it happen? What is the story that most of us missed until it became all too evident?
Unfortunately, this is not just about investment banks and hedge funds; it is about all of us. The cliché is that "we" are Main Street and "they" are Wall Street. Actually, many of us are inadvertently or by some degree of choice living on both Main Street and Wall Street. My husband and I, for example, are in the ranks of the first victims of this train wreck: imminent and current retirees. We are, in fact, on the derailed train. We bought our tickets some time ago with our portfolio. How else do you prepare for retirement these days? Not only investment but speculation is all but required. We are both victims and participants.
As an environmentalist, I have been musing on the opportunities this financial crisis might present for our ideas. Many, like me, believe that this is a teachable moment and we are already pushing forward our agendas. Green jobs, the steady-state economy, responsible investment, comprehensive reregulation, and valuing natural capital are all being put forward as answers, or lessons, or ultimate solutions once we get past the current crisis. To read some of these recommendations go to SEHN's True Cost Clearinghouse and scroll down to the articles on "financial meltdown" and "financial bailout."
As for SEHN's agenda, as Guardian (UK) columnist George Monbiot wrote in a recent essay, "Can anyone, surveying this mess, now doubt the value of the precautionary principle?" We at SEHN have more to say about economics, including challenges to the prevalent practices of discounting and cost-benefit analysis. More about that in coming months.
Nevertheless, for all our forward-looking and ethical plans, many of us are to a great extent participants in--and prisoners of--the economic systems that are now falling down around our ears. As individuals and as fund-supported NGOs, our investments are in trouble. The trouble is not all our fault and certainly has not been under our control. But that does not excuse us from examining it with clear and unbiased eyes. And then we must decide how we are going to turn the system around, so that our investments--where we put our wealth and what it does in and to the world--lead to wellbeing rather than destruction.
Our first task, however, is to understand what is happening and why. And therefore I hope you read the two excerpts below from an extraordinary, timely draft report just issued by a UK think tank called The Corner House. And then I urge you to read the entire, well-written report, which tells what we've been missing--the whole story behind the current mess. I've included just enough from the introduction to whet your appetite to read the report, and enough from the conclusion to tell you why this is so relevant to our work.
We've seen the story happening, from mergers and takeovers, to Enron, to the privatization of infrastructure like waterworks and the Indiana Toll Road, which runs two miles past my house, and now the biggest financial crisis since 1929. We've seen the story in pieces and haven't recognized it, perhaps because people who tell it--especially politicians and the media--are afraid to admit they really don't understand parts of it. If you read through the 60+ pages of A (Crumbling) Wall of Money: Financial Bricolage, Derivatives and Power you will understand more about the current crisis than either presidential candidate has let on so far, which is a bit scary.
Besides the two excerpts from this work in progress, consider this gem from page 60:
"Greed and fear are not given as the drivers for market behaviour as they have been --unless markets are organised to allow them to become so: solidarity and prudence are equally possible moral underpinnings."
And therein lies hope. With the mechanisms and consequences of greed and fear now visible all around us, we can roll up our sleeves and rebuild our society--and perhaps even secure our personal futures--on different values. Solidarity and prudence (there's the precautionary principle) are good starting points. That would mean investing in future generations, wouldn't it? Now there's a legacy to be proud of.
(Download the full text, fully referenced, here)
Science & Environmental Health Network
Precaucionary Principle SEHN
