Welcome to our brave new post-Capitalistic world.
Today our leaders in Washington announced (all the details to come later) that the Federal Government is going to rescue the financial system from total collapse.
You can read the story as reported by The NY Times here and, of course, more details of this plan will come out in the hours and days ahead. But I want to address the very first part of The NY Times' report: the reaction of the markets around the world...
Stocks shot wildly upward Friday morning after the federal government moved to try to restore confidence in the financial markets.The Dow Jones industrial average rose more than 400 points only moments after the opening, and later settled up more than 300 points. The broader Standard & Poor's 500 was up nearly 3.5 percent. Markets in Europe and Asia also traded significantly higher, with stocks in London and Paris up more than 8 percent.
There is a celebration going on. This doesn't surprise me. But I'd like to raise the following point from the world of Systems Thinking:
Just because you stop something old that is bad, doesn't mean you will automatically start something new that's good.
Our government has stopped something it considers to be bad. It saw the collapse of the economic system coming. The action it has taken has - and this is me talking, not our government, of course - ended Capitalism here in America.
Actually, its not just me talking. Here's a report from The NY Times on what financial leaders in the rest of the world think about what we are doing here. They know America is no longer a Capitalistic society either. From this September 18th report...
"I fear the government has passed the point of no return," said Ron Chernow, a leading American financial historian. "We have the irony of a free-market administration doing things that the most liberal Democratic administration would never have been doing in its wildest dreams."The bailout package for A.I.G., on top of earlier government support for Bear Stearns, Fannie Mae and Freddie Mac, has stunned even European policy makers accustomed to government intervention -- even as they acknowledge the shock of the collapse of Lehman Brothers.
"For opponents of free markets in Europe and elsewhere, this is a wonderful opportunity to invoke the American example," said Mario Monti, the former antitrust chief at the European Commission. "They will say that even the standard-bearer of the market economy, the United States, negates its fundamental principles in its behavior."
Mr. Monti said that past financial crises in Asia, Russia and Mexico brought government to the fore, "but this is the first time it's in the heart of capitalism, which is enormously more damaging in terms of the credibility of the market economy."
We no longer have a "market economy" here in America. Capitalism is dead.
But what are the people on Wall Street and other financial centers celebrating? The end of something bad. But - I assert - not the start of something new that is good.
Our government literally sees that the Titanic is sinking. And it is using its extraordinary power to raise the Titanic out of the ocean, shake all the water out of it (literally bailing it out), and place it back in the ocean hoping it will then sail on.
But the Titanic cannot sail on.
That's because the Titanic that is our global economic system is fundamentally flawed. It is based on a belief that we are still sailing in a zero-sum world, a world of scarcity, a world where there will always be too many people chasing too few resources. The sustainability scientists... and those schooled in advance social and managerial sciences as well... know this is no longer true. They know an abundance-based world is what we live in now, from an objective reality point of view. They know that the only thing in the way of that becoming the reality we all live in is the design of our political-economic system.. because it is still a scarcity-based design.
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