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Thursday, 8 December 2011

Compassion - an Inside Job

Coran and I watched a documentary this afternoon, that we recorded from BBC2 the day before, entitled Inside Job. I was glad that it was on, since when it was shown recently at the local cinema, courtesy of the town's Transition group, we did not have the opportunity to go. The documentary, which is narrated by Matt Damon and has won several awards, was and is basically an expose of what caused the banking crisis, and how it was in effect, an Inside Job.

The reasons the film makers came to this conclusion were really quite simple. Like the average man (or in this case, woman) in the street, I have limited knowledge of the financial industry and how it works, and despite the fact that I have watched several different programs on the crisis as part of the BBC's money season, this documentary taught me more about how and why things happened than any of the other programs put together.

From my understanding, the crisis began or at least the seeds began to be sown when the way in which the funds for mortgages and loans were arranged also changed. It used to be the case that when one wanted to borrow money in order to finance a large purchase (say for arguments sake a house), you would go your local bank, who would arrange the funds, subject to status. Since the bank were loaning you the funds, and since mortgages typically have a long lifespan of up to 25 years, they were naturally extremely cautious as to who they lent to. This changed when the banks started to sell their loans en masse to investment banks, who in effect sold them on again to a team of investors. The investors could insure themselves against losses in case the loans turned sour, which they often did, but the insurance companies did not have the funds to cover these losses either. Because the banks had covered their own losses already, they did not care who they lent to, allowing those on low incomes or with insecure jobs to borrow funds when they had little or no hope of being able to pay them back. The banks though actively wanted these people to borrow money, since the more risky the loan, the more money they earned. Despite the high risk involved, these CDO's as these bulk loans beame known, were given AAA ratings, indicating a lucrative investment with little or no risk.

This type of lending became known as subprime lending and infected the whole of the banking system by virtue of the fact that most banks are international operations, if not in terms of geographical location, certainly in terms of how their investments are spread around. Thus it was that when Lehman Brothers in New York failed, it had a knock on effect on other banks and indeed other businesses and individuals around the world, a fact which one of the American bankers who was interviewed on this documentary did not seem to realise.

The Americans dealt with the crisis in the same way that we have dealt with it here -the Government stepped in and bailed out the banks that had not already been taken over. These banks then are now in effect owned by the tax payer. When most businesses fail, the first in line is usually the tax man, but in this case it seemed to be the executives, for they received in many cases, pay offs of millions of dollars, to the intense fury of the American voting populace, and I hasten to add, the British too.

When the banking crisis though hit Iceland at the end of 2008, and the country was forced to go begging for loans in order to bail themselves out, how did the Icelandic population though react? In a a totally different way. Once the dust had settled following the collapse of Icesave, the British and Dutch governments demanded that ordinary Icelandic citizens pay compensation to those who had lost out. Instead of giving in, the Icelandic government asked the I Icelandic people if they felt that this was fair, and the people unresoundingly said no, they should not be held responsible for the mistakes that bankers had made - the bankers should clear up their own mess. So, a full inquiry was launched, and arrests were made, and as I write, various bankers are being tried and sentenced. The Icelandic people then set up a consultation group of 27 ordinary Iicelandic citizens from all walks of life to draft a new constitution that was written online for all Icelandic citizens to read, putting both Britain and America to shame. Sometimes I wish that I were Icelandic.

It seems to me that we can learn a lot from the way that the Icelanders have dealt with this crisis, and watching this program it also seems to me that the Americans have a lot to learn with regard to how their actions affect others. They can no longer continue with their insular existence, pretending that the rest of the world does not exist.

I am not of course condoning what happened, but it seems to me that the World Trade Centre and what happened on that fateful day was also a wake up call with the same message. It was called the World Trade Centre for a reason, the reason being that companies from all over the world had their headquarters and offices there, and that as such people from all over the world worked there. The terrorists who flew those planes felt that it was America's fault, yet it was not only Americans who lost their lives and it was not only American families who were devastated. In the same way, it was not only Americans who lost their jobs and their homes through this crisis, but citizens throughout the world. While it would be unfair to lay the blame for either crisis purely on the Americans, they have to accept their share of resonsbility for what happened, and with the banking crisis at least, I see little sign of that.

My hope for next year is that every person on the planet in some way experience compassion, compassion for their fellow man and for the planet on which we live. For each person that will be different, but it seems to me that this the only sure fire way to make sure that something like this does not happen again. It is the attitude that needs to change, and no amount of regulation or taxes on bonusses will do that, it has be brought home to them exactly how it feels to experience a personal crisis of this magnitude and compassion is the only way in which this can really be achieved.

Saturday, 3 December 2011

Strength in What Remains

I have read some interesting books this month, from various other cultures around the world including Africa and South-east Asia, but the one that stands out more than any other has been one set in the impoverished central African counnty of Burundi. The book, entitled Strength in What Remains is written by an American named Tracy Kidder, and tells the true story of a survivor of the genocide that took place in that small African country in 1993. It really made me think and question many of the things that we take for granted and which are in the scheme of life, frivulous and really quite insignificant.

Last night we had our work Christmas party, and I was fretting over what to wear. There was a lovely gold top in Sainsbury's that I have had my eye on for some time, and when I saw it was 25 percent off I was in two minds over whether to get it or not. In the end I decided not to, as I reasoned that it was not worth spending that much money even with the reduction, on something that I would in all probability wear just once for a few hours at most. I was also moaning about the standard of the vegetarian food that I was served compared to the carnivorous option, which as usual was far more substantial. Yet Burindians, and for that matter, those in many other countries worldwide, cannot afford basic clothes and have no idea as to where their next meal is coming from. The amount of money that was spent last night by some people that were there was akin to more than most Burundians make in a whole year.

The book quotes some frightening statistics about life in that country - Burundi has the lowest GDP per head of population than any other country on earth with one of the lowest literacy rates and life expectancy, particularly for women, who due to the high infant mortality rate go through pregnancy after pregnancy getting old and worn out way before their time.

The things that the main character in this book saw and experienced cannot begin to be imagined - the book describes a scene where he was fleeing from his own country into neighbouring Rwanda, and he was sheltering in a banana grove surrounded by dead bodies. It was then that he noticed the baby - a live baby trying to suckle it's dead mothers breast. He knew that there was nothing whatsoever that he could for this child and it too would die, a victim of those intent on killing those that they felt were different to them.

If I am honest, I did not really want to go last night - I like a dance as much as the next person, but prefer to do it in a quieter, less showy environment where I do not have to worry about dressing up and pretending to be something I am not in order to impress. Don't get me wrong, it is nice once in a while to be able to dress up, but it is really all about impressing others and trying to fit in and look the part. We do it for others rather than for ourselves. I had arranged to meet the rest of my work colleagues at the venue, and was so nervous on my way there and on my arrival that I drove straight past the car park and ended up having to go round the roundabout and back in again! That should really have given me a hint about what was to come.

When I entered the building, the noise of people talking hit me like a wall. I stood and waited for the boss to bring me a drink while I attempted to make small talk about how nice people looked and how much I was looking forward to the evening, all the time feeling excruciatingly uncomfortable, and wishing that I could just turn round and go back home again.

When it was time to go upstairs for our meal and the disco that followed, I found that I had been placed on a table with staff that I hardly knew, away from my friends that I had more in common with. The conversation was stilted and awkward to say the least, attempting to make yet more small talk, while at the table behind, the wine flowed and they laughed and joked among themselves. When the meal did arrive, I found that the vegetarian starter was half the size of the meaty one, and the main course, which I had been assured was gluten free, contained couscous - last time I checked, couscous is not gluten free. When I knew that I would be attending this party, I telephoned the venue to discus my dietary requirements and make sure that they could cater for them, and specifically requested that I not be given fruit salad for dessert, which seems always to be the default option at such things, what did they give me - you guessed it - fruit salad! So, while my meat eating colleagues tucked into prawn cocktail, roast turkey and chocolate mousse, I got a small salad with a few pearls of cheese, stuffed aubergine with overcooked vegetables and a fruit salad - all for the princely sum of £63 - like I said, almost the equivilant to the average Burundians annual income. Oh well, I guess it is par for the course. I may or may not bloat in a day or so's time from the couscous, but I do know that I not be returning to that venue in a hurry. At least I do know that any bloating I do experience will not be due to hunger...

For me then far from being the big night out that I was hoping for with fun and laughter, it was a bit of a damp squib. I made an excuse and left just after 10.30pm and was home before 11pm.

It left me wondering though, why do we put ourselves through all that in an effort to fit in? I could not work out whether I was more angry with myself or with my colleagues, and came to the conclusion that as always, it was about me (who else is there anyway). I should know by now that these events with their glitter and sparkle, are not me, but about glamour and falsehood, concepts which I find alien and more than a little uncomfortable. I know that this may sound like a judgement, and that I do work with those who are in their way surrounded by death, but I prefer the company of those who think about the deeper things in life, and to let my hair down in a quieter more genuine and authentic environment - the village hall rather than some glitzy racecourse with flashing lights and blaring music, where the alcohol flows freely. For some it is a chance to let their hair down, but for me it is falsehood. I will not be making the same mistake again. Real strength, like the character in the book that I mentioned at the beginning of this post, comes from being willing to face your demons and work with them, not by blotting them out with destractions, which for me at least, is what last night was really about.