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John Ralston Saul: “There is no reason to save the banks”


Re-posted from: EL PAIS

The pursuit of the Holy Grail is an error growth, the economy has become a matter of fiction, the money no longer represents anything real, we must reconsider what is a debt and what role banks should play in a new world. These are some of the ideas that underpin the thinking of John Ralston Saul , writer, essayist and philosopher that Canadian magazine Time called “prophet”.

For alternative that may be his speech, Ralston is far from being, at 64, aPerroflauta . Tall, slim and elegant gait, accompanies his dandy look with a speech without half measures. He does not reject capitalism, in fact, claim to one of the leaders of liberalism, Adam Smith . But as proposed measures to rescue citizens evicted or buried by a mortgage instead of saving banks that just get the debt spiral continues to grow.

A powerful quote leads his latest book, The Collapse of Globalization and the reinvention of the world : “I still do not quite understand why it happened. Alan Greenspan, October 23, 2008 “. Quote of the former director of the U.S. Federal Reserve is a measure of the uncertainty that has created the crisis, even among those who incubated. And this confusion is what has been facing in recent years the Canadian thinker swims against.

QUESTION: We are in a black period in the economy, and it seems that things will improve substantially, or the world, or Spain, or …

ANSWER: There is a new religion absolute growth, trade, debt and sanctity of commercial contracts, in which they try to make us believe how smart they are and how stupid politicians who are the others. No matter how bad the current situation, they still apply the same recipes, doing the same. That is what is being done in Spain and elsewhere. The system proceeds in the same direction. The problems to be getting worse. No one recognizes what the real problem. The growth is not going to get from where we are, the austerity, either. We’ll see how this all democracies resist. They are putting democracy at risk.

Ralston is a man speaking quickly and fluently, without mincing words. We meet him in the restaurant of a hotel in central Barcelona. The American journal of alternative thinking Utne Reader placed him among the 100 most important thinkers and visionaries of the world. Author of 16 books (including the philosophical essay Voltaire’s Bastards. Dictatorship of Reason in the West ) and five novels that have been translated into 22 languages, Ralston Saul is also the president of PEN International , an association of writers dates back to 1921 and fight for freedom of expression worldwide.

In 2005, three years ahead of triggered the crisis, published the bookThe Collapse of Globalization and the reinvention of the world , which has sold 400,000 copies, according to data for easy publishing, RBA. It analyzed the failure of the criteria that guide the system of economic and financial relations between countries, explained the crisis of a model and anticipated collapse. In 2009, given that some of his predictions were fulfilled, reprinted with additions coming book now in its Spanish version, with a prologue that addresses issues such as the rescue of Bankia.

Q: In the book you argue that money is not real and that we have become slaves. He says that we live in a fictitious economy. And he says that in the seventies the trade was six times the value of the property and in 1995 it was 50 times. How many times is it now?

A: Nobody knows, but it should be around 150. Most embarrassing is that the numbers are not available, or at least I have not been able to find them.

Q: What does that mean?

A: The irony is that globalization has led to the opposite of what it promised. Promised competition, and caused the return to oligopolies; promised renewal of capitalism, and represents a return to mercantilism, promised the end of ugly nationalism [argues that there is also a positive nationalism], and has brought more nationalistic era from end of the Second World War.Promised growth, we have no growth; promised jobs, no job … and so we can go down the list. Nothing promised happened. They said that Keynesianism was printed much money you had to control the money supply and that would make the economy work. The fact is that throughout this period has led to further expansion in the amount of money in the history of the world, we have seen hundreds of examples of new types of money: credit cards, junk bonds, derivatives … All that is printing money, inflation pure money. The capitalist argument was that the money was what oiled machinery. But at one point said the money is real, so it’s good to have people working in the financial sector. Are mergers and major acquisitions: that’s printing money. Every time a company buys another and borrows, say, $ 700,000, that means you have just been printed $ 700,000 $ 700,000 just created that did not exist. We never had much money circulating in the world and so wrong.And so when the crisis occurs, people who are part of that lunatic inflation says: we must save the banks.

Q: What should not bail out the banks?

A: There’s no reason to save the banks, we do not need much money.The reasonable thing would have been to take the opportunity to clean up the mess. One need only take the Spanish example of Bankia. A good policy would have been, for example, the government announced that it would pay all mortgages up to a certain amount, say 300,000 euros. You give money to people who are at home and have a mortgage, and in fact saved the banks: the citizen who gives the money to the banks to pay off your mortgage. Suddenly, people do not have debt and can spend what they earn. This is how you create a class and also owns the economy is relaunched. It’s that simple.

Q: Is that possible?

A: Of course. For me the question is: is it possible to give all that money to the banks, which were the ones who created the problem, so they do not spend the money and to continue auto conceitedness huge bonus ?Is that possible? Is that legal? Come on, give me a break! There is another option: do not want to save all the banks, we do not want so much money, so pay € 150,000 of those mortgages and cancel the remaining debt, 150,000. Governments have the power to do so. Thus, 150,000 euros not returned to the banks, the banking system clean and reduce the amount of money in circulation, which is a good thing.

Q: But you should not be so easy to do. For example, people who rent would feel aggrieved.

A: It would have to study the numbers.Economic policy is to try to move things in the right direction. No means do exactly the same at each site, nor does it have to do everything at once.You solve the big problem first and then do a holiday program so that people can buy the house they are renting. You can do more things. For example, provide a minimum income to people instead of having to queue for access to benefits, subsidies and grants, rather than examining their requirements humiliate her again and again, also aids are expensive to administer … Many conservatives, liberal and social responsibility agree it would be much better a guaranteed annual income. It would free society, people return to respect for herself.People feel humiliated and marginalized section of society. It’s funny, but many people do not agree with these ideas.

P: Oh, really?, and where are those conservatives and liberals who think so?

A: Everywhere! They are among the neocons, but among many conservatives. Many entrepreneurs believe in this. But as the debate is lost in the details and the dominant idea is that you reduce the weight of the state, no one puts these issues on the table.

Q: What are the chances that something like that recounts can be done?

A: There are possibilities, of course, have been possible many things in recent years. For example, the private sector managerial class has gotten, lobbying governments, regulations have become something legal fraud. There are those CEOs receiving bonuses and shares in the stock, earning millions each year: but if you only are managers! They are in the position for five years, will go to play golf when they retire, are nobody!No one knows their names, they have done nothing in particular! Should collect those bonus when the company goes wrong? That’s not the debate. The debate is: should receive bonuses ? If you have paid them!They have used their influence to change the tax system in all countries to avoid paying too much tax on those bonuses . That is fraud. Probably the two most obvious examples of fraud since the Second World War are: the change in the provisions of revenue management, fraud clear legal fact, and the transfer of private debt in recent years the public sector.

Q: The European Union is corroded by debt …

A: Some argue eurobonds as a solution to the European crisis. Are we kidding? I say: Stop the debt. They can not admit they made ​​a mistake, so I do like that bonds are something they can take all the debt, put in bonds and sell them. Are putting European civilization under the weight of debt that does not exist. If they had some imagination and some courage, convene a summit and say, yes, the Spanish have done wrong this, and the Greeks have done horrible things with it, but none of us is an innocent party, how can we reset the clock ? Basically, let’s wrap of this debt in an envelope, write on the envelope the words “This is very important,” we will put in a drawer, it will close and we will throw the key.You have to move on, get over there! Instead, they are trying again to do what they have done for years, but as if they did.

P: A surprising proposal …

A: Mine is responsible and honest. They are making a proposal delusional and incredibly complicated that it will not work and that gets us nowhere. And along the way they make people suffer. What do you think they will say the Greeks when they reduce the minimum wage by 22%?Clearly this is a religious issue. As the economy is the new religion, morals have been applied to the economy. Public debt has moral weight, but not private. How do you eat that? This is one of the failures of globalization. If the private sector can be rid of the debt, the public sector also.

Q: But then what happens, the debt does not exist?

A: Actually, no. Money is a convention. A tree is real, money is a convention. Fools, when the crisis comes, are convinced that the money is real. Henry IV was considered the Good King because France was sunk by debt and made ​​it disappear, from that time lived 250 years of prosperity, by removing the debt; Athens built its history after being rid of your debt, the rule U.S. is entirely built spare a haircut, took off amid debt five times between the Civil War and 1929, the wealth of the United States throughout the twentieth century is entirely built on the fact of not having paid their debt in 1929: borrowed money in Europe, markets, and with that built railroads, highways, skyscrapers and had an economic collapse: those who left them they lost money and they stayed with their infrastructure. U.S. spent five crashes that ultimately left him free from his debt and allowed him to become leader after 1935.

John Ralston Saul is a passionate man, a born orator. Not a capitalist. Is in favor of many of the precepts of Adam Smith, of private property, market, and public services. He says that capitalism will continue. But consider that globalization has hurt.And he points out in his book some culprits. Quote of the Sacred Congregation for the Propagation of the Faith: economists, managers, consultants and publicists, ie economics journalists: “They spread the idea that free trade, globalization and the pursuit of growth were the only way to prosperity, “he says.

The charge against the Canadian essayist call report generation. He argues that the world is in the hands of economists and managers very severe and in many cases are “functionally illiterate.” People who only considers the short term.

“Economic historians are the intellectuals are the macroeconomic semiintelectuales that shaped the ideas, and then there are the worker bees, who work in the micro, you do not think and just numbers.Removed to historians because, once you have the truth, do not want the past to be examined. Semiintelectuales promoted to the altars. And rose to only do numbers. ”

He says we’re in the hands of the latter. He explains that the heyday of globalization occurred in the mid-nineties, years lived in the days of maximum trade liberalization, tax on large fortunes were blurred, privatization and deregulation was rampant embracing Western civilization and the neoliberal religion and worshiped the global market.

Q: You’ve been warning for some time against globalization …

A: There were signs that globalization was coming to an end in 1995. Globalization is collapsing for defects containing program from the start as social-philosophical-ideological. We are still living the consequences: if Spain is broken, if Greece is no longer a democracy, if problems occur in Canada’s internal crack, all in large part, be a result of globalization. I am a big fan of Stiglitz and Krugman [referring to the two renowned Nobel economics prize], but two economists, and they can not help, you look at the details: have to do this, to do that … They do well, but they miss the main point, the nature of what is happening, the nature of the beast called globalization.

Q: You contends that globalization became religion, dogma …

A: The Vatican, in its moments of great power, was marginally religion but rather was a matter of politics and power, with globalization goes something like this: it’s inexpensive, so marginal, it is a matter of policy and control of power is a social model, as it was the Catholic Church or the British Empire. And it breaks because as social model does not work and planting the disaster down the road. Indeed, globalization is a very marginal group of people who took some old ideas of mid-nineteenth century outdated. One of them was English: free trade, and the other was the buccaneer capitalism, dating back to the late nineteenth century in England and America. Joined the two and said, this is a great idea.And not think about the consequences of the union of these two ideas. In the crisis of the seventies were with surplus production, should not solve the problem by increasing trade, because they had too many assets.That is, the solution found to the problem was the opposite of what was needed.

We have 30 years of overwhelming intellectual mediocrity, no sense of history, no imagination, no creativity, thinking we are doing and where we’re going: a great banality with tremendous results.

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