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Credit Crisis: Leaking Money Systems are Flooded - Is this sustainable?
Money is an irrigation system. If it is distributed in well kept tubes, canals, guided by dams and digs it may create a flourishing landscape und fertile soil.
If it is unregulated or if dams have been torn down we call it a flood or even a Tsunami which destroys landscapes.

During the neo-liberal move of the 1990ties and beyond, the "new" political waves (neo-cons, neo-liberalism, new labour, new democrats) have allowed to fill ever more water including poisoned and salty water into our irrigation systems. They have even encouraged people to make holes into the tubes in the form of fees and provisions, to use the stolen water for their personal welfare and to keep those families who do the real work in society increasingly cut off from water resources. The deserts of poverty coexisted with the overspill of water in areas where nothing else was create than ever more water and ever more loopholes in the irrigation system.

The tubes have burst into pieces. The misled floods have inundated the financial centres. Water has lost its fertile function and is just evaporating into nothing. Billions of Dollars have just disappeared in a few hours.

Now the last sustainable water resort, the State, steps in and pours water into the rotten irrigation system. Insiders are afraid that the losses in the system may be quicker than the contributions.

The state justifies his action with the promise to force the owners of the irrigation system to do some repair work. But what kind of repair? Capped income for managers at 500.000 € a year - good news for a single mother. Balance sheet where the true actual value of commercial papers should be obscured by replacing it by it former acquisition price? Tax payers as minority shareholders in bankrupt companies which will do some symbolic votes to please the public?

The leaks persist and share prices soar when state money pours in so that it is made clear to each of us where it goes.

"Debtors of the world unite" could be the new slogan replacing the outdated ideas of class struggle.

In our speech to the fourth European Conference on responsible Financial Services in Strasbourg 1996 on the "regional responsiblity of banks" we drew this comparism which may be worthwhile remembering where we concluded:

"Water is a bad example

I want to get back to my irrigation example. This example was good to show the problem. It is bad to solve it. There is enough water on earth for every cultivation. We only need it clean enough and get it where it is most needed. Looking at rivers and creeks as well as the natural laws governing the rain fall we know it moves by itself. The only problem are the costs of transportation.

Money is different. Its cost of transportation can be neglected today. This is the advantage. The other side could also be an advantage: its moving depends only from the human beeings because money is owned by individuals. To make money move two decisions are needed: of the creditor to invest and of the debtor to lend the money and pay the interest. But this factor presently is more of a disadvantage because mankind as a whole seems to be more destructive than deserts are for the water system.

For many of us it seems as if the owners of money are nothing more but mere reflections of a short term profit system following the daily profit indicators without regard to real development leaving whole areas dry and discriminated.


The public aspect in private economy

Private economy is less private than bankers seem to admit. The president of the fourth largest German bank, Mr. Martini, recently refused to open minimum accounts for low income persons with the argument that banks are not social welfare institutions. I would like to object. Bank are social welfare institutions in so far as they are receivers of a lot of social care whose cost are carried by the whole of society and especially the tax payer.

Bank safety was the issue of our Bergamo Conference described in our conference report on sale here at the table. We have discussed the effects of bank failures on the state presently with high actuality in Italy with Banco di Napoli and France with especially the big banks. Too big to fail is the American explanation of state subsidies to banks. Nobody dares to contradict when states like the US, Norway, Finland, Denmark, France, Greece, Italy poured billions of tax money into bankrupt banks. The present EU directive on bank failure does not even handle the case that bigger banks fail. The schemes in force can only handle the bankruptcy of small banks.

But there is more. The second banking directive allowed banks a monopoly in savings, loans and payment systems, the balance sheet directive allowed them to keep much more secret than every other enterprise.

Amitai Etzioni in his book "The Moral Dimension" has showed with hundreds of examples that even the Chicago school built up their systems of economic behaviour on the assumption that important moral norms are tacitly underlying these ideologies. There is no free competition and especially those who defend their priviliges by militating most for these principals would hesitate to accept that policemen should compete with gangs. Etzioni called our system the "Encapsulated Competition". For a commercial lawyer, these findings only reflect our daily business.

Without government support and government care banks would not be able to exist in our society. We therefore do not follow socialist dreams when we argue that banks in the heart of the private economy fulfil public functions. It therefore cannot be left totally to the banks themselves whether they use methods and products which will create regional discrimination or whether they will openly overtake responsibility for the public effects of their business.

Encapsulated Bank Business

What could be the role of the state to induce the banking financial services industry to take care of social goals as the whole?

La Fin

Pour terminer laissons moi faire un hommage au pays dans lequel cette conférence se déroule. La France sa révolution de 1789 a crée nos principe qui dans la convention des droit de l'homme européenne étaient mis à la base de notre communauté: liberté, égalité et fraternité.

Les premiers deux siècle nous avons modelés nos états après ces structures. Pour l'économie on a toujours assumer que elle se situe dans la première des principe révoques: dans la liberté ainsi exemptée d´obeir aux principes de l´égalité et de la fraternité. Au moment ou l'états se retirent laissant les problèmes sociales sans abri nous devons comprendre que liberté, égalité et fraternité s´adressent en vérité ni à l'état ni à l´economie mais à l'homme. Nous avons besoin de ces virtues non seulement pour l'homme comme citoyen mais aussi pour l'homme comme bourgeois ou l´homme économique y compris l´ouvrier et le consommateur.

Pour atteindre ces buts il faut appliquer les grandes principes de la révolution aussi aux marché des capitaux. La liberté des marchés des capitaux étaient déjà réaliser dans l'union Européenne depuis au moins cinque ans. Dans trois ans l'union monétaire va aussi réaliser l´égalité de tout monnaie des individus et des chance pour l´investissement, les crédit et l´épargne. Ce qui reste à accomplir c'est la fraternité. Cela veut dire d´introduire le contenu social pour tous pour laquelle l'économie et la monnaie existe en fin compte.

Même les créateurs de la révolution françaises n'étaient pas sur si on devait parler de liberté, égalité et fraternité ou plutôt de la liberté, égalité et sécurité comme le versions différents de la déclaration de droit de l'homme témoignent. Dans notre conférence de Bergame comme il est documenté dans le petit livre qui nous vous offrons ici nous pouvions démontrer que l a sécurité des banques ne se limite dans une sécurité financière garantie par des mechanisme des garantie ou des assurances mais aussi une sécurité publique comprenant la protection contre la criminalité comme le lavage de l'argent ou l´evasion des impôts ainsi que la sécurité légale qui concerne la protection du consommateur et des autres client ainsi que la sécurité de l´environement sociale d'une banque comme il est au centre de notre conférence aujourd'hui.

C'est pourquoi fraternité n'est pas une alternative mais un des aspects les plus important de la sécurité bancaire. L´economie peut être sur et capable de réaliser ses propres buts de liberté et de légalité seulement si elle est sociale. La constitution allemand qui dans un certain sense peut être pris comme un oeuvre collective Européenne étant produit ensemble par des alliés de la guerre comme la France, les Etats Unis et L´Angleterre avec la participation d´un groupe des démocrate Allemands à ajouter deux principes au dessus des trois principes fondamentales de la déclarations des droit de l'homme français: la dignité de l'homme et l'état social. Ces deux principes étaient declarer intouchable meme par le legislateur."

ID: 41966
Publication date: 14/10/08

Straßburg Rede in Deutsch

Created: 14/10/08. Last changed: 14/10/08.
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