Archive for June 17th, 2007


Bears Stearns subprime unit tanking

vultures

They could lose $6 billion. Gosh, weren’t the investment banks (who spawned the subprime mess in the first place) saying just a few months ago that everything was fine, that the subprime thing was just a tempest in a teapot?

Now Bear Stearns is being “attacked” by other hedge funds, carrion-feeders all.

They are also the largest firm being attacked by the hedge funds, who are protesting their renegotiation of mortgages with homeowners who default. These attempts to renegotiate are not due to “humanitarian instinct,” but to the fact that Bear Sterns faces paying up to 100 times the value of each defaulted mortgage, in lost derivatives bets to the hedge funds!

Translation: Bear Stearns made huge leveraged bets on subprime mortgages using borrowed money, and now other vultures are gathering to feast on the soon-to-be corpse of their hedge funds. Capitalism is SUCH an inspiring system. (And no one, to my knowledge, has ever accused a hedge fund of having a humanitarian impulse.)

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In war, someone always benefits

Observation #2: In war, there’s always someone on all sides who benefits.

In politics, they say “Follow the money.” In analyzing a conflict, the concept is similar: look for who benefits. There’s almost always some group or person that benefits from the conflict— and they have a vested interest in keeping the fighting going.

Once again, Sri Lanka is a good example. On the one hand, the LTTE was founded by and is primarily supported by low caste Tamils who are a minority within the Sri Lankan Tamil community. They are fighting not only against the Sinhala-dominated government, but against the Tamil elite that used to hold power among the Tamils. Since the LTTE represents a minority even within its own ethnic community, it would have great difficulty in winning a (peaceful and fair) democratic election. So, it has a vested interest in avoiding that eventuality.

On the Sinhala side, the major political division is between the traditional ruling class of village headmen, and the new merchant class that arose under British rule. Two groups of elites claim to represent these two major groups. Each of these elite leaderships has used the war to try to claim more power for itself. (One of Chandrika’s electoral promises in 1994 was to abolish the office of Executive President because it was too powerful and prone to abuse. Once in that office, she suddenly decided that abolishing it didn’t seem like such a good idea.)

But there is another group that has used the war to its advantage: the JVP, a so-called Marxist-Buddhist party that in reality has little to do with either Marxism or Buddhism. JVP represents mainly the interests of the poor Sinhalese in the South, where little development money has gone. They have used the war as a focus to bring a Sinhala chauvinist view from a small segment of the Sinhala lower class population into mainstream politics, advancing from a banned party in 1989 to a partner in government in 2004. For a fringe group like JVP to become one of the most powerful parties in Sri Lanka was quite a feat, and if the war ended, JVP would lose a major political advantage.

In my travels through the countryside in Sri Lanka, Sinhala and Tamil people, especially those on conflict areas, have both told me, “We don’t want to fight.” Yet when so many powerful people would stand to lose their power if the war ended, it’s no wonder the Sri Lanka conflict has been so difficult to diffuse.

This principle holds true in most conflicts around the world: someone on both sides has a vested interest in not ending the war. To fully understand a conflict, it’s essential to identify who gains from the violence and what exactly they gain.

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One million blogs for peace

One million blogs for peace

Sign yours up now.

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Ecosocialism and open source

The generalization of ecological production under socialist conditions can provide the ground for the overcoming of the present crises. A society of freely associated producers does not stop at its own democratization. It must, rather, insist on the freeing of all beings as its ground and goal. It overcomes thereby the imperialist impulse both subjectively and objectively.

Sounds like the open source movement, doesn’t it. “Freely associated” groups come together to learn and share with each other, adopting the common core for their own needs, then giving it back to all without undue concern for the narrow self-interest of the profit motive. Would this not be a vastly saner and more sustainable economic system?

Before you say, well, that’s unworkable, consider this. The vast bulk of web servers on the planet already run open source software (Apache, MySQL, php, etc.) as does this blog (WordPress,) and I’d say they do a far better job of it than proprietary for-profit software.

Imagine if open source became the model for all business. You bet we could solve global warming quickly.

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