Less than twenty four hours after explaining to my colleague what created the credit crunch and the subsequent economic turmoil, my own job was swept away by the rolling tide. There is very little to tell; the processes involved were not transparent, all I know is that there was a meeting of senior shareholders, most of them looking grave and grey, and hours later, I was packing my bag and leaving my work laptop behind. I don’t believe I was alone; I went into London on Tuesday in my hunt for a new job and to my surprise, a former co-worker (who worked at a similar level of management) boarded the same train as I did. We didn’t speak to each other, and we barely acknowledged each other with a glance. He was dressed to the nines and was looking sheepish; the scene would not have been out of place in a film entitled “Middle Management of the Damned”. I’ve heard a lot of nonsense about the “dignity of work”; nevertheless to be unemployed does feel like one has a giant pimple right in the middle of one’s face. I’d rather not see my friends or colleagues in this “condition”.
I am better equipped than most to ride out this situation; I had a notice period payment, and I have a skillset which is still in demand. I’m also not the only income in this household. All may yet be well. However, the situation is not helped by the turmoil on the stock market. As I look at my handy stock ticker, the Dow was down yesterday by nearly 200 points, and, yesterday the FTSE closed down over 200 points. This is after massive intervention by the Federal Reserve, the Bank of England, and the European Central Bank to stabilise the situation. Indeed, the British government is now injecting capital into the banks directly and has made a Â£500 billion credit line available.
Despite all of this government cash, all of the bailouts, all the promises of buying toxic debt and basically begging the markets to behave themselves, here we are. Governments are obviously determined to continue molly-coddling the investors and bankers which got us into this trouble in the first place: everything hinges upon what precisely they think about the future. If they think things will improve, the market will rise. If they think things will remain in the doldrums, they will continue to hammer the economy. Creating this level of assurance is now so important that governments are falling over each other in order to make it happen, and in the process, creating an absurd form of socialism which hits the average person in order to prop up the rich.
I’ve tried to calculate the amount of money that has been thrown away so far in this pursuit; it is already in the trillions, most of it is in the form of new debt, which will be passed on to European and American taxpayers. All of this debt will have to be repaid, and mostly, it will be repaid to the Chinese and governments in the Middle East. And yet, if the stock market is any indication, they want more.
If at this point, you feel like you’re being robbed it is because that’s precisely what’s happening. Let’s be clear: the banks loaned money to people who could not pay it back. We all make mistakes in purchases: I wish I hadn’t bought the used car that I did, for example: it’s temperamental, and keeping it in good nick is a pain. However, as most of us are not banks, we accept and simply learn from mistakes, and write off the losses involved. Yes, there is a difference in scale, but if there is one emotional quality that is lacking in the banks it is maturity; though wisdom runs a close second.
What’s truly horrible is that the heist will get more expensive, the longer the situation lasts: the commitment is open ended. Furthermore, simply handing over the money is not going to help the poor and unemployed. There is no bailout for me, or for my sheepish colleague hiding on the train. Rather, we are simply expected to find work, even if the paralysis in the economy makes this very difficult. If I go down to the unemployment office, I will be faced with a government which is going to try and stop me from claiming any cash, in spite of the taxes I have paid into the system over the years.
If there is any good to come out of this, it should be the realisation that capitalism has reached a point of crisis. It was nice to believe that somehow it could be the quickest means by which poverty was alleviated: there was a point where one could offer it as a magic bullet and not be laughed at. Furthermore, it required little intellectual rigour in its application: politicians can be lazy, and just “leaving things to the market” sounds like a labour saving device. We should have known better: setting loose the market may have let many good entrepreneurs come to the fore, but it also unchained forces of greed and stupidity. Now that the government and business are so intertwined by necessity, we now have a choice: we can either continue to be subject to further muggings by big business, or the balance can be shifted in favour of stability, security and the environment. Favouring the latter would likely mean economic growth is not as sprightly, or that we don’t produce as many Bill Gateses or Steve Jobses as some would like, however perhaps it’s time to recalibrate our expectations. What’s better, being able to have the absolute latest in every gadget and the indulgence of every whim, or knowing that your home won’t be repossessed, and that your employment won’t go up in smoke?
I admit I’m writing as someone whose vice is spending money on my education; as such, I don’t have far to go in changing what I want out of life. A transition of this type would likely hurt others far more than me. However, there is a world of pain out there anyway; returning to the train carriage of several days ago, I saw no smiling faces, heard no laughter. This may not seem unusual in a train in the middle of a big city; however the overriding tension was new, not something I’d seen since the early 90’s. Back then, I hoped we’d never witness this again; this time, I hope we have the wisdom to make the choices to ensure that it doesn’t.