Thomas Friedman concludes his column “All Fall Down” in today’s New York Times: “That’s how we got here — a near total breakdown of responsibility at every link in our financial chain, and now we either bail out the people who brought us here or risk a total systemic crash.”
The recession is upon us, not only Americans, other OECD countries residents, but also the billions of our fellow citizens in the global South. Indeed “All Fall Down” including future generations and even the planet herself on account of the ecological impacts of this recession, particularly the deepening climate crisis.
Though stimulus packages are being prepared by many governments—the term bailout is out, even stimulus is to be replaced by recovery—the growing inequity of the last 40 years which is also partly to blame of this recession and the 1930s depression is hardly being tackled in growth strategies that soft pedal the equity dimension. Remorse is also hard to find in those many different groups who contributed to the breakdown in “every link in our financial system.”
Are bailout and systemic crash the only options in the way forward as Friedman seems to suggest?
Three former UBS board members felt constrained to receive their full bonus packages given the $50 billion losses by the company and the infusion of Swiss tax payer’s dollars of a similar amount. They would forgo $27 million in compensation that was legally due to them.
Is it possible for those persons “in every link in our financial system” who made extraordinary bonuses or compensation also to bring themselves to feel remorseful and make restitution?
I for one would support fiscal policies that would revisit those very high income persons’ tax returns. Perhaps, Larry Summers’ example of bringing the present wealth gap back to the 1970s level by taxing the top 1% of families with an income of $1.7 million an amount of $800,000 and writing checks of $10,000 to the bottom 80% should be considered as an other option between bailout and system crash. While considering these fiscal measures, the Obama Administration could also device rules and regulations, particular by fiscal measures, that would prevent the emergence of more billionaires, not only in the US but also in developing nations where their numbers are growing, again showing the preponderance of growth over equity.
Wednesday, November 26, 2008
Tuesday, November 25, 2008
Four phases of the Terra International Monetary Union (TInMUn) Initiative
The Delors Commission in 1989 presented three phases for the EU to arrive at a monetary union that was based upon the ecu (European Community Unit) accounting unit which become the Euro. Cf. Barry Eichengreen's history of the international monetary system. In a similar fashion I am proposing a phased approach to an international monetary union that would be based upon the Terra accounting unit indicating accounting of both economic and ecological (climatic) realities. Given that the proposal includes not only statistics of a regular international balance of payments mechanism, but also of carbon emissions accounting, the fourth phase is added.
First phase would be started on April 20 when the G20 and hopefully representatives of the global South decide to fund a Commission for a Transformed Bretton Woods to be made up of a representative sample of countries in different levels of socio-economic development. The Commission would become part of the UN ECOSOC and draw also on its resources.
The second phase within a 2-3 span would consist of the establishment of an International Monetary Institute would start developing the recommendations of the Commission and setting up rules, regulations, rewards and institutions.
The third phase would consist of the establishment of the Partial International Monetary Union which would implement the rules, regulations and rewards dealing with a balance of payments mechanism dealing with “only” economic realities.
The fourth and final phase would consist of the Integrated International Monetary Union which would add to the balance-of-payments the ecological credits and debits of the member countries. At this juncture the UN ECOSOC Council would be integrated with an Ecological Council where UNEP has been upgraded from a program to an UN institution.
While many monetary observers such as those of The Great Transition (GTI) Listserve of the Tellus organization think of a reformed Bretton Woods, the TInMUn proposal or Initiative is a transformed Bretton Woods, needed given not only the global recession of these times but also the perilous predicament of an ever deepening climate crisis.
First phase would be started on April 20 when the G20 and hopefully representatives of the global South decide to fund a Commission for a Transformed Bretton Woods to be made up of a representative sample of countries in different levels of socio-economic development. The Commission would become part of the UN ECOSOC and draw also on its resources.
The second phase within a 2-3 span would consist of the establishment of an International Monetary Institute would start developing the recommendations of the Commission and setting up rules, regulations, rewards and institutions.
The third phase would consist of the establishment of the Partial International Monetary Union which would implement the rules, regulations and rewards dealing with a balance of payments mechanism dealing with “only” economic realities.
The fourth and final phase would consist of the Integrated International Monetary Union which would add to the balance-of-payments the ecological credits and debits of the member countries. At this juncture the UN ECOSOC Council would be integrated with an Ecological Council where UNEP has been upgraded from a program to an UN institution.
While many monetary observers such as those of The Great Transition (GTI) Listserve of the Tellus organization think of a reformed Bretton Woods, the TInMUn proposal or Initiative is a transformed Bretton Woods, needed given not only the global recession of these times but also the perilous predicament of an ever deepening climate crisis.
Needed international monetary policies
During this these times of food, fuel, climate and financial crises the economic discourse rarely connects the monetary dimensions of the economic challenges ahead. Financial solutions are couched in rescue or investment terms of increasing liquidity by making loans available to banking and manufacturing in their respective countries. It seems that well-nigh all policy makers do not think in global terms for an economic system that is sinking ever deeper into a global recession.
Apart of the recent G20 meeting in Washington, D.C. and its sequel on April 20 next year countries and regions seem to deal with their economic stimuli without giving much attention to their currencies and exchange rates.
Particularly countries such as South Korea which had much foreign investment see the value of their currencies go down by some 30% against the dollar, while even countries such as Brazil with less dependence on foreign capital had their peso currency devaluate by some 18%. In the first case, investors left South Korea for 30 year US Treasuries, while they were invited by Brazil to shore up its currency. Of course, such “turmoil in currency markets threatened to reorder trade relations and complicate recovery efforts”. Cf. Washington Post, October 25, A01.
What is needed in these times of global economic downturn or recession is an urgent international approach that would reduce the wide swings in currency values and its associated exchange rates. What are needed are economic policies that include international currency stability where exchange rates would fluctuate within a predetermined band. Such policies are to take place within a transformed Bretton Woods system which would also include in its balance-of-payment system the debits and credits based upon the quantity of GHG emissions. A very tall order, but one that is necessary to transition into sustaining futures of both countries in the global North and South.
Apart of the recent G20 meeting in Washington, D.C. and its sequel on April 20 next year countries and regions seem to deal with their economic stimuli without giving much attention to their currencies and exchange rates.
Particularly countries such as South Korea which had much foreign investment see the value of their currencies go down by some 30% against the dollar, while even countries such as Brazil with less dependence on foreign capital had their peso currency devaluate by some 18%. In the first case, investors left South Korea for 30 year US Treasuries, while they were invited by Brazil to shore up its currency. Of course, such “turmoil in currency markets threatened to reorder trade relations and complicate recovery efforts”. Cf. Washington Post, October 25, A01.
What is needed in these times of global economic downturn or recession is an urgent international approach that would reduce the wide swings in currency values and its associated exchange rates. What are needed are economic policies that include international currency stability where exchange rates would fluctuate within a predetermined band. Such policies are to take place within a transformed Bretton Woods system which would also include in its balance-of-payment system the debits and credits based upon the quantity of GHG emissions. A very tall order, but one that is necessary to transition into sustaining futures of both countries in the global North and South.
The $8 trillion question.
WHAT I WOULD DO WITH $8 TRILLION.
submitted to Brian Lehrer Show on www.wnyc.org
Tuesday, November 25, 2008
Given this enormous sum we have to not only look at long-term expenditures, but also globally. So, here is my breakdown in trillion dollars:
$4 trillion: Implementing and evaluating the UN MDGs (Millennium Development Goals) for the next 20 years
$2 trillion: planning of investment in infrastructure and human services in the USA during the next 10 years with roughly equal billing to infrastructure projects and to the development of sustainable communities
$1 trillion: educating humanity to transform its attitude from an anthropocentric to biocentric worldview by adopting and applying the integration of social and ecological values as presented in the benchmark version of the Earth Charter
$1 trillion: worldwide program for an Earth Charter value-based planning and implemention to make humanity transition to a full sustainability revolution after having gone through the agricultural and industrial revolutions in a haphazard and spontaneous fashion.
Live and unite in justice, peace and praise.
Yours for sustaining futures
Frans C. Verhagen, M.Div., M.I.A., Ph.D., sustainability sociologist
Director, Sustainability Research and Education
Earth and Peace Education Associates International (EPE)
Chair, United Nations and Global Affairs Committee at the Community Church of New York, Unitarian Universalist, 40 East 35 Street, NY 10016
Adjunct Associate Professor Sustainable Communities at Pace University, NY
Visiting Scholar on Sustainable Communities at Pace University, Spring 2006
Executive Director, Metro New York Sustainable Communities Network
Sustainability Fellow, Green Institute in Washington, D.C.
Rego Park, NY 11374, USA
voice: 1+(718)275-3932; fax 1+(718)275-3932; cell 1+ (917) 617 6217http://www.globalepe.org, gaia1@rcn.com; www.fcvnyc@blogspot.com
“…..the verb sustaining holds open the actively normative questions that the idea of sustainability raises. We are required to probe: What truly sustains us? Why? And how do we know? Conversely, we must ask: What are we to sustain above all else? Why? And how may we do so?"
Aidan Davison, Technology and the Contested Meanings of Sustainability, 2001: p.64
submitted to Brian Lehrer Show on www.wnyc.org
Tuesday, November 25, 2008
Given this enormous sum we have to not only look at long-term expenditures, but also globally. So, here is my breakdown in trillion dollars:
$4 trillion: Implementing and evaluating the UN MDGs (Millennium Development Goals) for the next 20 years
$2 trillion: planning of investment in infrastructure and human services in the USA during the next 10 years with roughly equal billing to infrastructure projects and to the development of sustainable communities
$1 trillion: educating humanity to transform its attitude from an anthropocentric to biocentric worldview by adopting and applying the integration of social and ecological values as presented in the benchmark version of the Earth Charter
$1 trillion: worldwide program for an Earth Charter value-based planning and implemention to make humanity transition to a full sustainability revolution after having gone through the agricultural and industrial revolutions in a haphazard and spontaneous fashion.
Live and unite in justice, peace and praise.
Yours for sustaining futures
Frans C. Verhagen, M.Div., M.I.A., Ph.D., sustainability sociologist
Director, Sustainability Research and Education
Earth and Peace Education Associates International (EPE)
Chair, United Nations and Global Affairs Committee at the Community Church of New York, Unitarian Universalist, 40 East 35 Street, NY 10016
Adjunct Associate Professor Sustainable Communities at Pace University, NY
Visiting Scholar on Sustainable Communities at Pace University, Spring 2006
Executive Director, Metro New York Sustainable Communities Network
Sustainability Fellow, Green Institute in Washington, D.C.
Rego Park, NY 11374, USA
voice: 1+(718)275-3932; fax 1+(718)275-3932; cell 1+ (917) 617 6217http://www.globalepe.org, gaia1@rcn.com; www.fcvnyc@blogspot.com
“…..the verb sustaining holds open the actively normative questions that the idea of sustainability raises. We are required to probe: What truly sustains us? Why? And how do we know? Conversely, we must ask: What are we to sustain above all else? Why? And how may we do so?"
Aidan Davison, Technology and the Contested Meanings of Sustainability, 2001: p.64
Wednesday, November 19, 2008
ww.change.gov and www.change.org
http://www.change.gov/ and http://www.change.org/
By chance I entered http://www.change.org/ in my effort to go to the Obama page on http://www.change.gov/. It was a pleasant surprise.
Change.org is a well-designed and powerful website that provides an international network for social action. One of its features is the invitation for ideas for the new administration, the most voted ones of which will be presented at Inauguration Day and pursued after that with the hundreds of non-profits affiliated with the website.
I accepted the invitation and presented 4 ideas for the Obama Administration. 1. transformation of the IMF and the World Bank (listed earlier on this blog); 2. Obama becoming the Sustainable Communities Organizer in Chief; 3. Earth Charter values-based planning; 4. the ITTS Initiative of $300 billion 15 year integrated transportation program.
The more people read the ideas and vote for them, the stronger they become for presentation to the Obama Administration. Happy reading and voting!!
By chance I entered http://www.change.org/ in my effort to go to the Obama page on http://www.change.gov/. It was a pleasant surprise.
Change.org is a well-designed and powerful website that provides an international network for social action. One of its features is the invitation for ideas for the new administration, the most voted ones of which will be presented at Inauguration Day and pursued after that with the hundreds of non-profits affiliated with the website.
I accepted the invitation and presented 4 ideas for the Obama Administration. 1. transformation of the IMF and the World Bank (listed earlier on this blog); 2. Obama becoming the Sustainable Communities Organizer in Chief; 3. Earth Charter values-based planning; 4. the ITTS Initiative of $300 billion 15 year integrated transportation program.
The more people read the ideas and vote for them, the stronger they become for presentation to the Obama Administration. Happy reading and voting!!
Africa and the Monetary System
No African country or region was participating the recent Washington Financial Conference of the G20 group. However, they are the ones that are most affected by the present financial and economic downturn or recession. It is a question of procedural and social justice that would given them have a voice in these deliberations, which, unfortunately, are taking place outside the UN gambit.
It is high time that the IMF and the World Bank not only be reformed, but transformed into a Keynesian monetary system of balance between nations with a trade surplus or trade deficit. George Monbiot of the Guardian in his post of November 18 entitled “Clearing Up the Mess” not only shows how the present system came into being, but also how the Keynesian system can work now.
However, there is one major modification I would make to the Keynesian system which would be of great benefit to African countries and other countries in the South.
The new system has to include the ecological debt and credit among nations. A country’s social trade balance as is being proposed in the Keynesian “bancor” proposal is to be augmented with its ecological trade balance. The integrated of both trade balances can be expressed in “terra” the Latin word for Earth.
This Terra integrated monetary system becomes the more urgent as the climate crisis deepens and a system has to be put in place that is historically based and ethically strong. Substantial work has to be done on UNFCCC’s Article 3 dealing with the shared and differentiated responsibilities of countries and regions in the global North and South.
It is up to African regions and other Third World groupings to claim their rightful place in these ongoing economic, financial, and monetary deliberations and push for these deliberations to include the ecological balance sheet as a matter of social, economic and ecological equity. It is this integrated view of ethics which can be called sustainability ethics that humanity has to progress to and which is being reflected in the people’s covenant called the Earth Charter. It is its frame of reference of the community of life rather than a narrow anthropocentric frame that will lead humanity to new thinking and new institutions.
It is high time that the IMF and the World Bank not only be reformed, but transformed into a Keynesian monetary system of balance between nations with a trade surplus or trade deficit. George Monbiot of the Guardian in his post of November 18 entitled “Clearing Up the Mess” not only shows how the present system came into being, but also how the Keynesian system can work now.
However, there is one major modification I would make to the Keynesian system which would be of great benefit to African countries and other countries in the South.
The new system has to include the ecological debt and credit among nations. A country’s social trade balance as is being proposed in the Keynesian “bancor” proposal is to be augmented with its ecological trade balance. The integrated of both trade balances can be expressed in “terra” the Latin word for Earth.
This Terra integrated monetary system becomes the more urgent as the climate crisis deepens and a system has to be put in place that is historically based and ethically strong. Substantial work has to be done on UNFCCC’s Article 3 dealing with the shared and differentiated responsibilities of countries and regions in the global North and South.
It is up to African regions and other Third World groupings to claim their rightful place in these ongoing economic, financial, and monetary deliberations and push for these deliberations to include the ecological balance sheet as a matter of social, economic and ecological equity. It is this integrated view of ethics which can be called sustainability ethics that humanity has to progress to and which is being reflected in the people’s covenant called the Earth Charter. It is its frame of reference of the community of life rather than a narrow anthropocentric frame that will lead humanity to new thinking and new institutions.
Wednesday, November 12, 2008
Brdiging the wealth gap
“Spreading the wealth around” was one of president-elect Obama main thrust upon which he was elected. It was clearly shown to be the opposite of Senator McCain’s thrust of growth at all costs.
This mandate to bridge the wealth gap in the US cannot also be applied internationally, given that so many governments and particularly people all over the world are supporting Mr. Obama.
The real challenge in the US and less so abroad is to make the financial system serve the common good. Economist Robert Shiller in his book about the Suprime Solution and in his article in the New York Times of November 9 has pointed out to three main strategies.
Besides these institutional changes corporations such as Blockbuster are instituting “Say on Pay” which seems to work in the UK given that executive compensation has been rising less rapidly.
Finally, if wealthy people in the global North and South become convinced, that, in the Earth Charter words, “Being more rather having more”, there will be further acceptance for a genuinely progressive taxation system.
This mandate to bridge the wealth gap in the US cannot also be applied internationally, given that so many governments and particularly people all over the world are supporting Mr. Obama.
The real challenge in the US and less so abroad is to make the financial system serve the common good. Economist Robert Shiller in his book about the Suprime Solution and in his article in the New York Times of November 9 has pointed out to three main strategies.
Besides these institutional changes corporations such as Blockbuster are instituting “Say on Pay” which seems to work in the UK given that executive compensation has been rising less rapidly.
Finally, if wealthy people in the global North and South become convinced, that, in the Earth Charter words, “Being more rather having more”, there will be further acceptance for a genuinely progressive taxation system.
Monday, November 10, 2008
The Sustainable Communities Organizer in Chief
During the eighties Barack Obama was a community organizer in distressed communities at the South Side of Chicago when major steel plants closed down and putting thousands out of a job, creating hopelessness.
Now, the president-elect can become the sustainable communities organizer in chief reducing unemployment and creating hope.
Given his grassroots emphasis with its self-organizing capacity and the smart use of the social networking capability of the Internet, his campaign has set in place a network in all fifty states to be used in crafting his policies and implementing them, even in post-party fashion.
In www.change.gov he invited Americans to present their vision of the future and tell their American story. One of the four elements of my vision for America that I submitted one or two days after the website was launched deals with him doing community organizing on a national (even international) scale by using the sustainable communities development (SCD) paradigm which contains a method of community development that is based upon the vision and integration of social and ecological values of the Earth or Community of Life Charter.
I am working on an article that spells out the context, contours, challenges and constraints of this SCD approach which is applicable to communities in the global North and South. It is a paradigm of sustainable development whose time has come as part of the sustainability revolution which also includes less inclusive movements such as the smart growth, new urbanism and eco-village movements.
Now, the president-elect can become the sustainable communities organizer in chief reducing unemployment and creating hope.
Given his grassroots emphasis with its self-organizing capacity and the smart use of the social networking capability of the Internet, his campaign has set in place a network in all fifty states to be used in crafting his policies and implementing them, even in post-party fashion.
In www.change.gov he invited Americans to present their vision of the future and tell their American story. One of the four elements of my vision for America that I submitted one or two days after the website was launched deals with him doing community organizing on a national (even international) scale by using the sustainable communities development (SCD) paradigm which contains a method of community development that is based upon the vision and integration of social and ecological values of the Earth or Community of Life Charter.
I am working on an article that spells out the context, contours, challenges and constraints of this SCD approach which is applicable to communities in the global North and South. It is a paradigm of sustainable development whose time has come as part of the sustainability revolution which also includes less inclusive movements such as the smart growth, new urbanism and eco-village movements.
Wednesday, November 5, 2008
On the Road to Real Change
Having watched the election coverage on CCN, MSNBC and FOX and listened to their many invited guests and specialists, and having read reports this morning in the NY Times I asked myself how real change takes place.
Lasting social change depends upon values change. When values and principles change, the whole social structure tends to change. New values are the building blocks of a transformed society.
Obama’s election has changed many values in different areas and pushes US society to a new level of awareness of opportunity and possibility. However, they may not yet be integrated enough to form a coherent perspective and vision that can inform and inspire.
I, for one, believe that we need a vision that defines the “common good” not only in terms of the well-being of the human community, but, especially, in terms of the community of life. We have to search for and implement a vision based upon the integration of social and ecological values. The present benchmark version of the Earth Charter is a good place to start with. We cannot solve our serious social problems in the global financial system, etc without at the same time dealing with the Earth’s most serious challenge of the climate crisis. We need strong spirituality on the road to real change. “Without vision, people perish” states Proverbs 28:19.
Lasting social change depends upon values change. When values and principles change, the whole social structure tends to change. New values are the building blocks of a transformed society.
Obama’s election has changed many values in different areas and pushes US society to a new level of awareness of opportunity and possibility. However, they may not yet be integrated enough to form a coherent perspective and vision that can inform and inspire.
I, for one, believe that we need a vision that defines the “common good” not only in terms of the well-being of the human community, but, especially, in terms of the community of life. We have to search for and implement a vision based upon the integration of social and ecological values. The present benchmark version of the Earth Charter is a good place to start with. We cannot solve our serious social problems in the global financial system, etc without at the same time dealing with the Earth’s most serious challenge of the climate crisis. We need strong spirituality on the road to real change. “Without vision, people perish” states Proverbs 28:19.
Sunday, November 2, 2008
Deflation and the food crisis
Millions of people around the world, particularly in the industrial societies in the North, are being laid off and, consequently, loose income for a proper standard of life. Costs for essentials such as food, shelter, health become increasingly burdensome, particularly if unemployment insurance runs out.
Macro-economically this situation leads to a reduction in purchasing power which in turn leads to more layoffs in manufacturing and services, which in turn leads to deflation, the harbinger of a recession or even a depression.
It goes without saying that deflation will greatly increase the 854 million persons who suffer from hunger in the early years of the new century. Though food prices may come down in the near future on account of the deflation of economies in the global North and South, these hungry fellow citizens are still caught because their deepening poverty prevents access to these cheaper food staples.
It can be anticipated that more food riots will place, that more ecological damage will be done by people, particularly in the South, who try to survive.
This contextual sustainability blog has answers to address this completely unacceptable situation.
It has pointed out several times that a value-based overhaul has to take of the overall global economic system that enriches the few, impoverishes the many and endangers the planet. This overhaul has also to take place to counter the economic concentration in national, regional and local communities.
This overhaul or revamping of economic systems on all these interconnected levels is to start with the abandonment of the growth illusion where the creation of a larger pie is pursued without the consideration of its impact on the distribution of the pie. It is the challenge to balance growth and equity. Basically, the struggle between the two US presidential candidates which will be decided in two days by the American people is a struggle between “creation of the pie” and the “distribution of the pie”. Today, my spouse Anita Wenden and I will be driving to Philadelphia to knock on doors for Obama’s choice of equity over growth or equitable growth..
Macro-economically this situation leads to a reduction in purchasing power which in turn leads to more layoffs in manufacturing and services, which in turn leads to deflation, the harbinger of a recession or even a depression.
It goes without saying that deflation will greatly increase the 854 million persons who suffer from hunger in the early years of the new century. Though food prices may come down in the near future on account of the deflation of economies in the global North and South, these hungry fellow citizens are still caught because their deepening poverty prevents access to these cheaper food staples.
It can be anticipated that more food riots will place, that more ecological damage will be done by people, particularly in the South, who try to survive.
This contextual sustainability blog has answers to address this completely unacceptable situation.
It has pointed out several times that a value-based overhaul has to take of the overall global economic system that enriches the few, impoverishes the many and endangers the planet. This overhaul has also to take place to counter the economic concentration in national, regional and local communities.
This overhaul or revamping of economic systems on all these interconnected levels is to start with the abandonment of the growth illusion where the creation of a larger pie is pursued without the consideration of its impact on the distribution of the pie. It is the challenge to balance growth and equity. Basically, the struggle between the two US presidential candidates which will be decided in two days by the American people is a struggle between “creation of the pie” and the “distribution of the pie”. Today, my spouse Anita Wenden and I will be driving to Philadelphia to knock on doors for Obama’s choice of equity over growth or equitable growth..
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