EDITORIAL MONDAY 29.09.08.
I remember years ago reading about a London old age pensioner who lived in an industrial dumpster. After his death it was discovered that he owned shares worth almost 400 000 pounds, or more than a million dollars Australian. It turned out that he would read the financial pages of newspapers that other people threw away, and instead of spending his pension on rent or food, he would buy shares. Over the years he accumulated a fortune, and yet he continued to live in his dumpster, eating scraps, until his death.
More recently, I had a conversation with a doctor in which he observed the irony that the United States Government can find $1 Trillion to bail out Wall Street, but nobody can find the money to properly fund our hospitals. This I believe reflects the flawed philosophy which has created this mess in the first place. Having arrived at this point, the bailout is necessary to prevent an economic breakdown which would devastate ordinary everyday people around the world. But wouldn’t it have been cheaper to prevent the problem in the first place?
The flawed philosophy of bottom line thinking has placed cost cutting and productivity growth ahead of not only the community interest, but of the long term interests of the very companies and governments which have practiced this philosophy. It has been driven by a pyramid scheme mentality where the so called “masters of the universe” have profited handsomely by hollowing out otherwise healthy companies, and it now appears the entire economy. The Wall Street bankers who invented Sub Prime based securities have long since pocketed their enormous fees and dividends, leaving behind the wreckage for the rest of us to deal with.
So what does this have to do with that old age pensioner in London? Well, over the past dozen or so years, Australia has enjoyed unprecedented prosperity which has been directed to bigger corporate profits, bigger executive pay, bigger tax revenues, but no significant new investment into future infrastructure for health, water, or transport. We are just like the pensioner who had over a million dollars to his name, but refused to invest it in improving our circumstances. What was the point of that pensioner having all that money? And what has been the point of Australia’s prosperity if we haven’t invested it into a better way of life for all Australians?
It might look as if the credit crunch is the problem, but really it is the symptom. It is the scourge of short-sighted bottom line thinking, propelled by selfish interests who treat the rest of us as pawns in their game, which has robbed us of the benefits of prosperity.