However, let’s be honest; many, many, many ordinary folks everywhere were perfectly happy to participate in the system – to deposit their money in banks offering unrealistically high interest rates, to take out loans that they had no realistic hope of repaying, to take out loans in foreign currency heedless of the risk of currency fluctuations, to participate in uncapitalized credit markets. I take it this was one of points made above by Kristjan (and Paul in HK, too). For example, when someone takes out a mortgage for a house without having made any downpayment and whose payments are interest only, that person has contributed to uncapitalized credit markets. Both the person taking the loan and the bank which made the loan participated in an uncapitalized deal. It’s not just the bank’s fault; the person who took the loan is also responsible for essentially a high risk deal. Same with credit card purchases, where people buy and buy, and pay back next to nothing on each billing cycle. Yes, banks made it easy, but ordinary people have been perfectly willing to take up the terms of easy (uncapitalized, that is, unsupportable) credit. This was all based on an unwillingness or inability or both to assess the nature of risk and to have a concern for the future – both one’s own and that of others.

Of course, it is aggravating and feels very unfair to those who acted responsibly even in the face of the easy money – e.g.,those who didn’t take out unrealistic loans or run up credit card debt, those who deposited their money in a bank thinking that they were saving for their future and who didn’t understand what the banks were really up to and so on – all those who acted responsibly and didn’t take on ridiculous risks are also left holding the bag, and paying for the mistakes and irresponsible behavior of those who took the ridiculous risks. But, isn’t that part of the nature of social life? That we are all interconnected and are fates are tied up with one another. So, in a sense, everyone has to take responsibility, even if they themselves didn’t directly cause the problem, because there really is no alternative. Maybe part of taking responsibility now is participating in protests to oust from power those who have exercised their power irresponsibly. And, okay, there should be a fair distribution of blame and costs; some people are less blameworthy than others, and shouldn’t pay as high a cost as others. I think everyone agrees that it is morally offensive that the high fliers are still living high and unaccountable. My only point is, at least in a democratic society where people are free to make both political and economic choices, are there really many “pure” victims (children and those who are disabled or infirm aside)?

I take it that the point made by Eric above was that even if, for example, he didn’t vote for Bush, as a citizen in a representative democracy, he participates in that society and therefore is responsible for what his society does. Presumably, he paid his taxes which went to support the war in Iraq, even if he personally didn’t support the war or the Bush administration. In other words, he, like any citizen, at least in a democratic society, participated in the system that is his society. If a U.S. citizen who never supported Bush or the war is responsible in at least some sense for what the U.S. has done, then the same goes for citizens of other democratic societies; they, too, share some responsibility for the sins of their governments. One could be a conscientious objector; one could refuse to pay one’s taxes and end up in jail, but most people don’t do that. In a democratic society, they participate and some of them also find avenues to protest, to try to influence their politicians and representatives, to get different ones elected, and so on.

If one of the problems that is revealed by the global economic hole that we seem to be in is that globalization of corporate entities (banks, businesses, etc.) has led to an inability of governments to adequately regulate their activities, then that has to be addressed, for that would mean that even democratic societies are weak in the face of unbridled greed and powerful institutions and individuals committed to their own greed. But, do people _have_ to allow this to continue? It’s not clear to me, anyway, that they do. People, at least in democracies, can and maybe have to insist that their governments reassert control over these entities and not allow the ideology of unbridled, unregulated capitalism to operate. Whether this would mean reverting to narrow nationalisms or developing effective transnational bodies that have the authority to regulate growth and greed remains to be seen. Or, maybe there have to be new initiatives at both national and transnational levels; they aren’t necessarily mutually exclusive. Given the problems that the world faces – climate change, pollution, growing water shortages, interlocked financial systems and economies – it seems that there really is no alternative but for people at least those in democratic societies, to insist that their governments reinvent and address these transnational issues. But, in the short run, it’s going to be very, very painful for just about everyone.

I hope this will resolve in a way that is acceptable to all.

That’s a mystery to me too!!

If the town of Selfoss and a few police depts around here would put all their money into bonds in a bank, in a small country somewhere, well I don’t think they’d get much help from the government, rather a bit of scorn. They’re supposed to know better or at the least to have people work for them that know better. (a good post on the issue’s here, in Icelandic). A totally different thing is the normal people who just want to have a bank account.

I’ll be protesting in the streets tomorrow, like I’ve done for the last 4 weeks. We’ll keep going until the politicians and especially the CB leaders show any responsibility. It’s incredible that they still just sit there!

A point, I’ve seen some ppl remembering the Cod Wars, and connecting them to this time. Maybe they should try to remember just a little bit further back, when Britain basically just had one friend in Europe; this friend sacrificed a third of their fleet and quite some lives to help.

From a US perspective (I’m American), I believe that a large spectrum of people were ‘responsible’, not just an influential few. Everyone had an insatiable desire to spend, and everyone absentmindedly built a system which allowed for easy business expansion, purchase of homes, or fresh mortgages for cash. A ‘selection process’ was occurring from bottom up, and for this reason I believe most Americans share the blame. I’m well educated and have a good job, and even I have no savings (read: an average American!). Is it right to single out rich or authoritative people as those at fault, or is that just being blind to everyone else who drove the system to that point? Is there a similar arguement for Iceland?

Said another way – I’m arguing that businesses are like robots. They do what we tell them – somewhat indirectly.

Great blog. Good luck. Will donate soon.