Thought I’d let you know we got another rather nice review of the book. This one from Caroline Lucas of the Green Party.
“A passionate call for a world organised around social justice”
“David’s book, The Debt Generation, follows the unfolding of the financial crisis and captures those catastrophic events in a lively and immediate narrative that dramatically exposes the failures of the banks and financial system that let us all down so badly and are still behaving in very much the same way. The book is a passionate call for a world organised around social justice, and not by and for the pursuit of greed.” Caroline Lucas
You can see this and other reviews at http://thedebtgenerationreviews.blogspot.com/
just a wondering, all this shiny greenie social justice stuff
will be have to shop and pay the high prices of waitrose and the coop? or is that just me being greedy?
Ive also had a good search through your site and I find no reference to Spains problems with its mutuals or cajas.
interesting that the greedy banks and the greedy mutuals made the same mistakes..something must have been giving them some false signals.
Sean,
I am geniunely sorry the site is so hard to search. I know it is. Others have pointed this out to me. I am just not clever enough to know what to do about it.
But I have written quite often about the stinking mess of the Caja's. If you like I will go back and find the posts where I did so. I am an equal oportunity insulter. I have no interest in party political favouritism or point scoring.
The people running the Caja's made the same stupid greedy loans to developers and to people who could not afford the mortgage they were asking for and being advised they could buy (both sides have to dance).
As for the 'greenie social stuff', I think some of it does imply higher prices for some things.
For others it implies leveling the playing field so that local producers can compete. If the actual cost of importing stuff from around the world was included, then local produce, paying higher British wages, would still compete.
You would, indeed pay more, but that extra cost would at least benefit the economy around you and provide a local job. Taking someone off werfare thus easing your tax burden.
It's always a cheap laugh to deride 'greenie stuff' I know, but some of it has been thought through more carefully than much of the half baked Tory and Labour reforms we have suffered for decades.
Sean,
Are you sure that Spain's Casas were indeed mutual in the true sense of the word, i.e. Originate and Hold model of lending?
I suspect a heady doss of de-regulation turned them in to O2D securitisation machines.
For an explanation of how modern banking actually works, try this:
Potential Flaws with securitisation
Personally I don't have much time for Lucas – she's a politician and as with all politicians they latch on to things that suit them in the moment – they are with principles like goldfish with memories.
That said on the increased cost of goods – an interesting narrative is how debt filled the hole that was left by the wage stagnation caused by "offshoring" jobs.
The counter narrative is that this was good because in a global world everyone gained we got cheaper goods the developing world got improved living standards.
I suspect reality of course, is a mix of the two.
I think the facts and events have shown that indeed developed countries wages have stagnated and that debt – particularly the debt driven Ponzi scheme of house prices – kept alive a mirage of wealth for a while*.
There was and is a transfer of jobs from the developed to the developing world and it has provided cheap goods. It's also the case that the living standards of some in the developed world has risen. However in amongst all that has been massive arbitrage of wages, health and safety and environmental rules. Is it right that corporation can reduce its costs because China is happy to choke its cities and pollute its rivers. Or that certain countries managers are happy for children to work twelve-hour days for pennies in conditions adults would not be allowed to work in the west. Well if you were to go by the purchasing record of the western consumer you would think so because while the debt bubble was making everyone feel good we were happy to turn a blind eye to much of this.
My current "layman's" assessment as to a way forward out of this mess sits a top the following.
* Debts that can't be paid won't be paid – they should be defaulted on.
* Implement Steve Keen's two suggestions for more sensible finance http://www.debtdeflation.com/blogs/2010/10/04/jubilee-shares-and-the-american-monetary-act/
to quote
"My two “kiss a non-debtor” proposals to make debt far less attractive to borrowers are:
1. To redefine shares so that, if purchased from a company directly, they last forever (as all shares do now), but once these shares are sold by the original owner, they last another 50 years before they expire; and
2. To limit the debt that can be secured against a property to ten times the annual rental of that property.
The objective in both cases is to make unproductive debt much less attractive to borrowers."
* A concerted political effort to prevent global wage, health and safety and environmental arbitrage.
*A few of us realised it was a mirage, many subconsciously realised it was a mirage but were benefiting too much to care and of course many thought they'd discovered a free lunch – those were usually Economists.
myopia,
I have had no dealings with Caroline Lucas personally. I tend to your view of politicians but always hope to be proved wrong.
Your views on the dynamic between our debt and their wages is something I agree with you, is of vital importance. I wrote about it here
I shall take a look at Steve Keen's work. From what you describe these are the sorts of new ideas we need to return finance to working for a broad, common good and not the other way around, as it is presently.
Hello Golem,
Re Steve Keen – I'd recommend his interview with Dominic Frisby (audio available here http://commoditywatch.podbean.com/2011/01/20/predictions-for-2011-part-viii-with-steve-keen/), and on his Economic modelling his presentation here http://www.debtdeflation.com/blogs/2011/01/17/my-session-at-the-aea-2/