It is a sad fact that the financial crisis – which was never over to begin with – is once again spreading around the world. The photos in the New York Times depicting traders and investors around the world looking incredulously at tickers recording immense losses, show how the whole economic structure in its present form is becoming unsustainable.
It’s a familiar picture of woe, sorrow and head holding. Panic easily spreads in the market and then at the first sign of hope, mostly unwarranted, it briefly rallies once again.
The most worrisome fact is that it keeps everyone distracted. Politicians are unable to provide answers and solutions because their constituents are not ready to accept the fact that what they have known until now is rapidly disappearing. Most are still longing for old solutions to new and long term problems.
Conflicting declarations only aggravate the situation. Some say we should cut taxes, while others insist that we should print more money and give the market a boost to create jobs. Others proclaim that we should cut spending drastically in the public sector and abolish all social services. Many just want to wait it out, hoping for the storm to pass.
Politicians are telling markets that their country is credible, that they can make it. They declare with an air of great certainty that there is a plan for return to growth. They tell markets and investors that they need not fear because this is just a temporary glitch. They proclaim that they are resolved to respond quickly and effectively to the systemic problems and fix them.
It’s all talk. It’s all conjecture. It’s just business as usual.
The reality, however, is quite different. The whole structure is crumbling and we are still acting like the Dutch boy plugging the hole in the dike with his finger–a fix which is perhaps heroic, but inevitably momentary.
Nobody knows where the new realities will lead, but at least Europe had begun forging a plan to environmental sustainability with targets and clear goals. It is a plan accepted by the vast majority of its citizens as the only plausible step forward. But the distraction of the fiscal problems of some of the EU members and the need to show solidarity, while reforming and rescuing these countries, is proving to be very distracting. Global financial problems are starting to wreak havoc on Europe’s decision making process and are drawing away attention from the EU’s long term goals. It is a well known fact that when money is perceived to be tight it is much harder to move forward as a group, especially if its members feel insecure and mutually suspicious.
This is the time, however, for camaraderie, not merely for symbolic reasons but for reasons of survival. Each time the global markets melt down things will be worse for the peoples of the world. It is now time for some of the key players to designate a team to forge a long term plan without the distractions of the short term turmoil, otherwise when things eventually spiral out of control there will be millions more victims due to the lack of preparedness. And this will cause not only social tension but social upheaval, especially as the gap between the rich and the middle class continues to grows precipitously and provocatively.