Duplicitous Ethics

Enslaved

When governments do it, all is fine and dandy.  When the market does it, well then, it is evil, self-seeking, and greedy.  This is the mindset of so many today. 

It reminds us of the old saw that used to appear from time to time on car bumpers: "Don't Steal!  The Government Doesn't Like Competition."

An apt example of this double standard of duplicitous ethics is at hand courtesy of Bryan Gould, Vice-Chancellor of Waikato University, and British ex-Labour MP.
   He is bemoaning the un-democratic attempts to save the Euro-zone, putting insolvent nations such as Greece, Italy, Spain and Portugal into an even tighter vice.  The cure will be worse than the disease, he tells us.

But it is the longer-term outlook for Europe that is even more depressing. The so-called "solution" agreed in Brussels will simply make matters worse. Far from releasing member countries from an economic straitjacket, Europe's leaders have decided in their wisdom to give the lock a double turn.

If the new arrangement holds, which seems doubtful, this would simply condemn Europe to an economic policy that makes it inevitable that half the European economy will, in effect, have to close down. Without access to exchange rate and monetary policies suited to their own circumstances, many eurozone countries will collapse under the burden of policy dictated from Berlin. And just to make doubly sure, the arrangement will tighten the rules and impose severe penalties for any breaches.

So, lets get this straight.  In Gould's version of Wonderland,  creditor nations such as Germany and local and global banks  must continue to lend money to insolvent countries such as Greece.  But at the same time, Greece needs to be given control of its own currency, so that it can devalue at will.  That sounds remarkably like theft to us.  But, don't worry when governments do that sort of thing, it's OK.  Just don't you try it.

The real world of course is a bit more sophisticated and complex.  Sure, banks and other creditors are more than willing to lend to economically weak countries.  But they want a price (interest rate) that reflects the risk they are taking on.  So, the market solution to keeping the credit flowing is to demand substantially higher interest rates to compensate for the risks of default and currency devaluation.  But, no doubt Gould would have an apoplectic fit of righteous indignation against greedy banks and capitalists and Wall Street moguls if that were ever to emerge. 

All the manoeuvring within Europe is nothing other than an attempt to avoid Greece and Italy etc having to pay the full price for the risks represented in their borrowing.  Gould implies that he wants a system where Greece can continue to borrow at interest rates that reflect Germany's credit rating, whilst Greece can default, inflate its currency, or deflate its exchange rate at will. 

And if the world does not wake up and get this Wonderland "solution" in place, then, horror of horrors, there will be a Depression.  Just try that solution, Mr Gould, when you are negotiating a mortgage or credit card facility with your bank.  If it doesn't fly there, why would you think that it would fly in Europe?  Surely you can't be that foolish and unrealistic. 

The Scriptures say that the borrower becomes the lender's slave.  Just what part of that does Vice-Chancellor Gould not understand?