G7/IMF: What’s Going On

As we’ve discussed previously, this weekend’s meetings of the G7 and the IMF are crucial to halting the financial crisis. This weekend, we’ll be updating you on events as they happen.

Update (Friday evening): The G7 statement is pretty much a general set of principles with which it would be hard to disagree, with very little by way of specifics and really nothing that we hadn’t seen before.  Mr. Paulson’s statement today was similarly vague, although Treasury continues to signal that it will launch some sort of recapitalization program.  I know they want to exude calm and confidence, but the sense of urgency that had building in the last couple of days seems to be slipping away from them.

Update (Saturday morning): Reaction from around the world is mostly disbelief.  Could it really be the case that the G7 does not understand that trade credit is under pressure everywhere, that financing for new projects is drying up, and that Iceland’s experience sends a dangerous signal to investors?  Our piece in the Washington Post Outlook section lays out the very real dangers.  Unless the G7, separately and jointly, act more decisively by the end of Sunday (yes, tomorrow), I’m afraid that next week could be quite difficult.

Update (Sunday morning): Reliable sources indicate that the eurozone member countries, who are due to meet today at the invitation of President Sarkozy, may well be able to announce agreement on some sort of parallel bank recapitalization scheme(s).  It is also hard to imagine that the US will let the day go by without a major announcement.  But it will take a great deal of detail in order to be credible at this point.  And the question of who is and is not given a place on the Great Ark for Bankers will be much on our minds.

2 thoughts on “G7/IMF: What’s Going On

  1. You may find this article on dailykos interesting.

    It is titled The Law of Sufficiency Capitalism Model
    http://www.dailykos.com/story/2008/10/10/131554/44/63/626427

    America can lead the world with correct principles.

    Protect the savings of hard working, debt free, high credit score Americans first. Is savings being drained to cover banks bad debts? If so, isn’t that stealing?

    Reward responsibility, not irresponsibility.

    Paulson seems to be screwing up big time. This is no time for neo con principles! You need a commodity
    in order to have trickle down, otherwise it is a pantomime.

    Yes, I am really upset.

  2. Sufficiency Capitalism TM

    by War on Error DailyKos

    Sun Oct 12, 2008 at 12:48:45 PM PDT

    The Principles of Sufficiency Capitalism __In our new world, where physicists are hired to create Wall Street trading models, where lightly collateralized day traders are allowed to buy huge volumes of equity on a promise, and the internet enables loan officers to scoop as many debtors as time allows and then make small commissions on volume when they whisk their debtor bundles directly into Wall Street’s designer hedge funds, the jaundiced eyes of so-called economists will laugh and jeer at the simplicity and seeming altruism of Sufficiency Capitalism.

    Don’t be fooled, however. That laughter is really a nervous reaction to the glaring reality on the ground today. It may have taken a couple of centuries for the world to absorb the misadventures of Greed Capitalism before every nook and cranny of world economies became infected with the pie-in-the-sky philosophy that growth and expansion are somehow infinite.

    My eight (8) year old grandson could see the fallacy of this philosophy after a brief overview. He said “Nothing can grow forever if it has no where to grow to.”

    Out of the mouths of babes.

    I have been asked to state the principle of “Sufficiency Capitalism”.

    To begin, in simple terms I will define Greed Capitalism as forward looking only. Greed Capitalism’s vision is fixated on growth and expansion. Accountants are taxed with the chores of watching line item expenses and pressured to reduce costs in any way possible. Profits are golden eggs to be stored and distributed to those at the top that seem to have become insatiable. The justification is that leaders, also only looking forward to their own financial security, deserve most of the benefits. Chaos is tolerated.

    Sufficiency Capitalism is multi-visioned. Sufficiency Capitalists keep an eye on both growth and expansion; however, never at the expense of any individual contributors of the business model. The leaders insure that even the least among them are provided with an adequate roof over their heads, dependable transportation, health care, and healthy food. Leaders don’t buy their second home until each contributor has at least a modest home. The philosophy of Sufficiency Capitalism is based on a belief that a healthy, contented workforce creates a healthy, contented, and dependable business model. Chaos is avoided at all cost.

    Sufficiency Capitalism’s goal is to create a holistically healthy business model that will grow within its means while creating a rock-solid organization of contributors. Profit is still the goal; however, profits are used to provide each contributor with, at the very least, a minimum foundation of healthy, secure living, properly maintain the assets of the business model, invest in growth, expand, increase contributors, invest in equities, contribute to community services, and then reward contributors when all previous goals are met.

    Business leaders can achieve higher standards of living; however, never at the expense of the contributors. Contributors will have opportunities to progress if they are inclined to work harder and study. Rules of conduct will invite contributors to promote each other and discourage Machiavellian tendencies. Mechanisms will be designed to reward each member frequently, both individually and as groups in order to inspire the hearts and minds of all contributors that their goals are being reached. Rewards are not always monetary.

    Another foundational principle of Sufficiency Capitalism is dedication to the belief in the goodness of people and faith in their ability to work up to their full potential, coupled with the opportunities to inspire and reward them for doing the same. A belief that intrinsically people are more akin to being communal than they are to being autonomous as long as they have a private living space to enjoy their communal time outs.

    For those who just will never be able to ‘play well with others’ special models can be created to retrain their ways of experiencing their world. This is another article to be written. It is mentioned to answer the obvious doubt that Sufficiency Capitalism will not work for everyone.

    Sufficiency Capitalism is not protectionism as we now define it which is fear based.

    Sufficiency Capitalism is protectionism in its dedication to build models with strong, fiscally, and socially responsible foundations. Contributors are assets to be supported and maintained for the benefit of the model and all other contributors.

    Golden eggs can be produced without fear and greed contrary to what we have been taught for millennia by the very people whose own fear and greed have created misery and want for the majority of our world’s population. And yes, in fact, those greedy, faithless so-called leaders will end up with fewer Golden Eggs; however, they and their progeny will never have to worry about being homeless, hungry, or without health care treatment.

    Sufficiency Capitalism is the model of hope and, perhaps, the world’s last chance to get it right.

Comments are closed.