G20 Must Address the 'White Blue Eyed Bankers' Issue

The Brown government in the UK is doing its best to set expectations appropriately for the G20 meeting to be held in London this coming Thursday. With a backdrop of domestic dissent between two pillars of the UK financial establishment - the Treasury and the Bank of England, a deficit to GDP ratio this year of at least 11% (and a similar ratio in coming years), and with opinion surveys showing that for a sizable percentage of the UK electorate a chance to boot him out office cannot come quickly enough, Gordon Brown will be very far from presenting the persona that he wanted to at this summit.

There appears to be no emerging consensus on such vital issues, at least from Brown's perspective, as to the size of domestic stimulus packages, the creation of international regulatory structures and a clear statement from the gathered world leaders on a more widespread adoption of quantitative easing.

But there is another major issue which casts a real shadow over the financial technocracy elite - of which Mr. Brown considers himself to be a member - and seriously undermines the presumption that the current elite, having created this crisis, should count on being the group that can, and will be allowed to, fix it.

Through their poor judgment, their inability or unwillingness to see the big picture issues, both economical and ecological, and as a result of the poverty of their intellectual framework, the financial technocracy proved to be totally incapable of anticipating the magnitude and severity of the systemic risk issues that the global economy is now confronting. Why on earth should we assume that these same individuals know how to provide the necessary leadership to move beyond the current crisis?

As reported in the Observer newspaper this weekend the issue arose last week in the memorable phrase of the Brazilian president.

The attack last week by Brazil's president, Luis da Silva, on "white blue-eyed bankers" revealed a new anger among some of the world's most populous countries at being dragged into a mess not of their making - and a determination to hold the west to account.

I suspect that this kind of thinking represents a significant watershed event in shaping the longer term global and cultural ramifications of the financial meltdown. There is no going back to business as usual. For those policy makers who are principally preoccupied with tinkering with their domestic rescue packages (e.g. the PPIP scheme in the US and the Asset Protection Scheme in the UK) which are designed to preserve the status quo in the banking world there is a much larger shock coming. This is the shock that the old financial world order is disintegrating and what it will be replaced with is much less likely to be crafted by powerful Anglo-American interests in London and New York.

Not only will the white bankers and current financial technocrats have to learn some humility but also other parts of the post Bretton Woods elite will also have to be re-invent themselves. The modus operandi of such world bodies as the IMF and the UN Security Council will have to change to reflect the new power bases of the emerging world, and even the nascent discussions regarding a new global reserve currency are likely to gain traction in coming years. I say years but it would not require a febrile imagination to conjure up another new phase to the financial meltdown, precipitated perhaps by default of a major sovereign borrower, where years could turn into months.

The Observer piece contains the following rather prescient comments from the former Deputy Secretary-General of the United Nations

"There is the recognition that you are not going to go back to the world as it was before, and we must get a new balance between spending and saving and borrowing. You can't have the old model where it was the US consumer who was widely seen as driving growth through his or her spending and borrowing.

"You are going to see a situation where countries in Asia begin to spend and consume more at home and countries in the west have to move towards a more prudent lifestyle and live within their means." Consumers will also have to learn "within environmental limits", he said, which could also affect standards of living for those wedded to cars and cheap flights

The G20 meeting will be the first forum, of many similar gatherings in years to come, where it becomes increasingly apparent how a global liquidity crisis has far more serious roots and consequences than just a few financial markets getting "gummed up" as Henry Paulson was fond of saying during the latter part of 2008.

Comments

[whisperonth...:]

"Not only will the white bankers and current financial technocrats have to learn some humility but also other parts of the post Bretton Woods elite will also have to be re-invent themselves."

The comment from the Brazilian banker, regarding "white, blue-eyed bankers" was racist enough, but your comment was no better. All banking officials are not white, nor are they all bad. Good and bad do not have colors attached to them, no matter how much we may wish they did. There is no color better than, or worse than, any other, no matter the nationality. It's time we left the crayon box at home, children.

Mar 29 12:50 PM

[yellowhoard:]

To Luis da Silva,

Speaking on behalf of white people with blue eyes, are you sure that you are ready for an airing out of the differences between races?

Should we start with patents by race or just go straight to IQ scores?

Mar 29 12:55 PM

[svosavvy:]

whisper

That was the leader of Brazil not just any old banker. I don't know, what color are Putin's eyes? Want a screwed up afternoon, try watching Lula's interview then watch Ferguson's world at war followed by the ascent of money.

Mar 29 12:59 PM

[morph366:]

Certainly the author intended no racism in the piece - as the title of the piece suggests it is the issue and not the color of the skin that is the important takeaway from Lula's remark.
I don't know whether he (Lula) meant his comment in a racist fashion - it doesn't actually matter from my perspective - rather his comments should be seen symbolically as an attack on the cultural mindset of what is often referred to as the Anglo Saxon model of finance.
Getting sidetracked into thinking about this matter from the point of race is like getting irate about the 0.1% of the rescue monies paid out to AIG executives in bonuses while overlooking the other 99.9% that the taxpayer has shoveled into this company.
And we should all consider ourselves lucky if no more is required before this crisis is over.

Mar 29 01:03 PM

[Fabien Hug:]

Not that I am a fan of these blue-eyed bankers (Bandit anybody?) but Mr. Lula has a very short memory. Part of this mess certainly originates in the fact that BEBs bailed out brown-eyed spenders about a decade ago. Furthermore, without the western world's race to growth and the money they made by feeding it with natural resources, I doubt he would have time to worry about the world's finances.

Mar 29 03:59 PM

[socphd71:]

Article titles on "Seeking Alpha" are often a bit misleading, The point here was not to blame a particular "race" (a term without scientific meaning), nor even a particular occupation. Rather, this article was pointing away from the recently discredited methods of finance, and patterns of consumption, and toward some as yet unknown and undescribed future.

Mar 29 06:56 PM

[Speedspirit:]

When half of the world believes something very evil is attempting to take over they dare not call it by name.

Mar 29 09:11 PM

[Jim Crow Ma...:]

I'm not even going to attempt to pick apart the ignorance here about race issues and banking. Nor will I try to count the huge number of white, blue eyed people who are citizens of Brazil who should be rightly terrified. I will briefly dispute the claim that "race has no scientific basis" with a simple, "Huh?"

Luis made an insane racist statement... period. The principals of banking can not be traced to the UK or America. You think banking is a dirty business today? Italian banks of 1000 years ago make AIG look like Unicef. And BC Rome and Greece learned it all from the Egyptians.

But none of this is the point. Start learning how to think less wrong and attack the bias we are all so guilty of in almost all our reasoning.

Start here: en.wikipedia.org/wiki/...

Finish here: www.spectrum.ieee.org/...

Mar 30 02:54 AM

[donzelion:]

Blame. Is. Lame. Literally, it's a self-crippling practice, unless the purpose is to properly reallocate costs that cannot otherwise be allocated (blame, then make the guilty pay the full price).

Whether blaming "blue eyed bankers" or "subprime minority loan applicants" - or blaming the Arabs (as was common last year when oil leaped past $100), or blaming the Mexicans (as was common five years ago), or whoever else - it's almost always a stupid, pointless waste of energy: the purpose of blame is to solidify leadership that is otherwise bankrupt and needs to build up authority by attacking a victim.

Which ethno-religious group bore the brunt of the blame for the '29 crash? What was the outcome? Let us hesitate before repeating similar affronts...

Mar 30 12:00 PM

[Jason Rines...:]

1) It is easy to envision a probable outcome of the West losing the international peg to the East. The QE/Legacy Asset strategy is an all or nothing gamble. If it fails, Americans will be paying $10 for a loaf of bread by 2012 and $15 gallon gas. Our economy goes back into depression. Even if successful, the best outcome now is a Japanese lost decade were the citizens pay off the massive public debts.

2) America should not ignore or attempt to deflect the blame game of the world (minus the UK they are being blamed too) for this mess. A) Fire the management in banking, it is very obvious to the global citizen what is going on in terms of looting. B) Begin distributing pamphlets about the flaws and dangers of Central Banking to the citizenships around the world. This requires politicians globally to decide between there personal vested interests with banking elite and there own countrymen. Realistically in America, some of the bad or inept eggs will go in 2010, many more in 2012. But these men had best consider the risks of not doing what is right considering mob justice. I am not an advocate, just stating fact. 1820 there was a hanging party for some of America's banking elite tied into Central Banking model. Some of these politicians should either step down, retire to an island ans smoke a cigar or decide to do what is right on behalf of there citizens. The G20 leadership cannot preserve status quo without serious geopolitical consequences including large scale military misadventures. We in the U.S. are going to have to eat *hit sandwiches for a time.

Apr 01 12:35 PM

[MaxWeber:]

Whether you agree with the politics of statements made here, the fact of the matter is that the risk of our fragile peace shattering before our very eyes is real. Ethnic, racial, class and national differences are surfacing, and the agonizing process of coming to consensus will require from all parties that differences be put aside to save the peace. Those who are from disprivileged backgrounds will look to those who come from a historical background of privilege and opportunity as the "Elite," and blame them for their suffering. Those who hail from privilege will frequently miscategorize the inability of the disprivileged to create financial security for themselves as a "fault," and blame them for their own suffering. These misperceptions are fundamental human flaws of the mind. Unless we can agree upon a common agenda, peace will be broken and rhetoric like this will become violent action. The Institutions which have stabilized much of the globe are faltering under the strain of mistrust, fear and blame. To avert violent global catastrophe, the Institutions which support peace must be revised, and in some cases abolished to create room for newer, more appropriate institutions. Rather than play Tit-for-Tat, it is critical today to see through the differences to recognize the common agenda. If we cannot agree on anything common, then political discord will shatter the markets, governments, nations, people rendering most of these selfish disagreements moot. "Elites" will be petty lords of a deflated fiefdom. "Underprivileged" will become starving, desperate masses. Compared to the racially, nationally and class - charged rhetoric I see here, I would rather see a list of agreements at this point and build on them. Honestly, what can we say as a species that we agree on in a nearly universal way? Figure those out and we can form/reform our next generation Institutions to serve those universal needs best.

Apr 01 02:36 PM

[user344210:]

Isn't part of the reason the US consumer was so significant a part of the growth in countries like Brazil the fact that those countries' elites don't really WANT a middle-class to develop because that would mean more competition for the top dogs in those societies, as people started to feel like they wanted their voices heard and actions on their behalf taken? In addition, isn't part of the reason the workers in those countries save so much of their money, rather than consume, the fact that those countries tend to be less stable and if you need to move quickly, it's better to have money than stuff?

Apr 01 03:16 PM

[d.t.:]

Putin's eyes are very blue indeed...8)))


On Mar 29 12:59 PM svosavvy wrote:

> whisper
>
> That was the leader of Brazil not just any old banker. I don't know,
> what color are Putin's eyes? Want a screwed up afternoon, try watching
> Lula's interview then watch Ferguson's world at war followed by the
> ascent of money.

Apr 01 04:56 PM

[doubleguns:]

I have blue eyes but I am not a banker. Am I safe?

Apr 01 08:58 PM

[abeoman:]

The article is pegged at changing a banking system predominantly dominated by the West. It is strange that the "US" of South America has adopted a US system, realized incredible growth in GDP, increased fortunes for very few and not sufficiently changed the opportunity for the majority of it's population. So you have a left populist comment created by a political piper preaching to his constituents back home, not the US.

Who else is he going to blame politically if the Brazilian economy is shrinking? Lula is a politician and corruption is alive and well in Sambaville.

Apr 02 02:02 PM

[tdiaz:]

look at this conspiracy theory!
www.globalresearch.ca/...

Apr 07 11:12 PM