John Maynard Keynes was one of the very few not to celebrate after the Treaty of Versailles was signed. Famously, he opined that the Prime Ministers, Presidents and Generals had just signed on for the next ‘world war’. He was, of course, entirely correct. The inflation in Germany largely a result of war reparations made Hitler’s bully party attractive to the German electorate and the Second World War was soon underway.
The buy out sweetheart deal for the New York bank and investment brokers will be the Versailles of the next Great Depression. The banker collapse was a tremble in the earth’s crust, a warning signal that there is a real earthquake coming. And what did we do? Nothing but paper the tremor over. There has been no reduction in currency betting, no Tobin Tax, no banker’s reserve funds established, nothing to stop the merger manias, and false wealth accumulations.
Nothing in short to change anything and the next time the crash comes and it will, it will be much more brutal because this bail out and the trillion dollar military adventures have created an international indebtedness that will prevent another bail out. The system will just crash.
It gets worse. The ‘stimulus’ funding associated with this bail out around the world has not been used to bring about a more sustainable local and world infrastructure. We’re still standing on the end of the oil plank. The entire economy is more dependent on oil than it ever has been. People need their cars more than ever because cities have continued to sprawl and sprawl needs oil and cars, like the human needs oxygen.
The Treaty of Versailles was the great chance the world had at the end of the ‘war to end all wars’ to re-write the map for the 20th century away from the old toxic national animosities and create new, healing conditions for a more co-operative, conciliatory international environment. Instead Versailles took that chance to heal and split the moment with an axe burying it with a Treaty that sealed in steel the idea – ‘you are the bad guys (Germany and allies) and ‘we’re the good guys’. (U.K./U.S. and allies); and it spawned a hundred years of ugliness – starting with the Turkish/Greek war. The Nazis. The Second War. The Korean. The Israel/Palestine conflict right up to day.
The New York bail out will be remembered the same way. It was the great chance the nations of the world had to re-write the economic and environmental conditions which spawned the recession, the housing meltdown, the pension and wage declines. Instead governments chose to send trillions propping up the very system that caused the recession and then did nothing to change those conditions. Countries like Canada led the way in making sure that no new banker’s reserve tax was instituted, that nothing changed.
But there is no such thing as ‘no change’. The concept is foreign to all physics and philosophy. The only thing constant is change and change will happen. It will, now, just be just more explosive, more destructive and difficult when it comes.