Posted on 17/01/09 in Economy
While banks get a bailout, the poor are ignored
Many people foresaw that the greed and uncontrolled, as well as non-transparent, methods of many banks would sooner or later lead to a global financial mess. Many of those were Greens, globalisation critics and environmental NGOs.
Another one of those early birds was the ex-president of the World Bank and now German Federal President Horst Köhler, who claimed as early as in 2006 that many global financial institutions were creating a Frankenstein- like monster which would grow out of control.
But with all the rescue packages, countermeasures and the nervous swarming around of European “top” politicians, it seems as if those who survived the sinking Titanic are now in the lifeboats and waiting to be picked up by some good Samaritans. But what about those who sank, those unfortunates who were living in degrading circumstances already before that? It is a certainty that the crisis is moving south and is spreading out to the east and it will dramatically widen the gap between rich and poor, especially in developing countries.
And here comes the hypocrisy: on the one hand, we have golden parachutes, billions spent on bailouts and managers being celebrated like heroes for renouncing a 13th and 14th month paycheck. On the other hand, we have bleeding continents such as Africa with a 103 billion euro debt, which no European government seems to want to revoke.
However, if a bank “X” speculates and loses billions of euros, the same European politicians who bicker about development aid budgets are suddenly very keen on giving bailouts to exactly these banks.
Some interesting figures I found on the blog of Duncan Green from Oxfam Great Britain: in 2007, the US government spent $23.2 billon on development aid, whereas the bailout of the American Bear Stearns Financial Group cost $ 29 billon.
Furthermore, the bailout of AIG Insurance was higher than the global amount of US and European development aid spent in 2007 ($ 152.2 billion bailout versus $ 90 billion dollar development “efforts”).
Last but not least, the $700 billion Wall Street bailout: for the same amount of money, one could clear twice the accumulated debts of the world’s 50 poorest countries or extinguish poverty in the world for over two years. But hey, imagine what would happen if we didn’t give this taxpayers money to the Wall Street – hundreds of bankers in Italian silk suits starving in Manhattan and pumping their drinking water from the New York sewer.
This is the hypocrisy I’m talking about, the uncountable cases of distress and misery that Africa and many other third world countries endure. Countries we turn our backs on. Skyrocketing food prices are most of all affecting those most vulnerable people. If we had a transatlantic coalition fighting poverty, AIDS and misery in the third world on the same magnitude than saving a corrupt and unfair financial system, then we could indeed be talking about “change” in the world.
Of course, we cannot let the banks rot either, but we politicians finally must learn a lesson from this crisis: while nat ional ising some of the biggest banks in Europe and around the globe, we now must understand to set up stronger regulations to prevent future fluctuations. Another danger we Greens must keep in mind in these troubled times is falling oil prices. With the barrel around $40, renewable energies suddenly become totally unfashionable.
With cheaper crude oil and gas prices, explaining the urgency to save the climate and go for more ambitious climate goals is getting harder and harder. Nevertheless, we should all remind those who are shouting in our faces and calling us “idealists” that, apart from Indonesia and Saudi Arabia, every other oil and gas producing country in the world, has already reached its oil peak (the point where the maximum oil extradition is reached and the oil production reaches its terminal stage).
So it’s a fact we slowly move towards the day were the last oil rigs close. So why still clutch ourselves to fossils? Now it’s time for a ‘Green New Deal’, an energy revolution to move towards renewables. We do have the technology and we do have the projections of what will happen if we don’t.