The End of the World?

Is this, in the immortal words of REM, "The end of the world as we know it?"

As I was heading to bed last night news was trickling through of the U.S. House of Representatives rejection of the US Treasury inspired White House plan for the bail-out of the US banking sector. It was rejected by 228 to 205 votes, despite supposed bi-partisan support for it, and in the aftermath of the vote there seems to have been a "what have we done?" moment.

The rest of the world quickly worked out what they had done... and rapidly began dumping banking stocks all across global markets. This meant that banks already under threat because of the sub-prime crisis, the overall credit crunch and the recent spate of opportunistic short selling came under even greater pressure. yesterday probably saw the single greatest reorganisation of the banking system in history with many banks being nationalised or taken over. Wachovia, the fourth-largest US bank, was bought by larger rival Citigroup in a rescue deal backed by US authorities. Benelux banking giant Fortis was partially nationalised by the Dutch, Belgian and Luxembourg governments to ensure its survival. The UK government announced it was nationalising the Bradford & Bingley bank. The Franco-Belgian Bank Dexia had to be partially nationalised because of its massive losses in the US. (However the French banking system seems more robust than elsewhere at present because of it's inherent caution and their tendency to see houses as homes rather than financial investments... although over recent years President Sarkozy and his ilk having been advocating greater allignment of France with the US system and a Thatcherite "home-owning" democracy). Even little Iceland has felt the effects with the country's third-largest bank, Glitnir, being taken over by their government after the company faced short-term funding problems (I'm amazed they have 3 banks!)

But because of increasing instability some of the recent bail-out deals may now be unsustainable. Lloyds TSB and Barclays who had previously agreed to buy HBOS and Leamans both made huge losses yesterday and today, exacerbated by the news that Gordon Brown's proposed bail-out of the British Banking system would not insulate them from their first £15 billion in losses.

It was a lack of such assurances within the US proposal that apparently led to some representatives taking cold feet over the "Pawson Plan." That and good-old American two-party electoral politics. Facing re-election in November, many of the representatives couldn't see how they could sell this enormous tax-funded bail out to ordinary voters, it being seen as a bail out of rich bankers to poorer voters and a rejection of free-market economics to ideological republicans. In a society where every public servant, from dog-warden to President is elected, the last thing that you want to tell your electorate a month before the election is that everything you have ever told them is wrong and/or that you want to take billions of dollars off them to cushion the redundancy of profligate chief executives.

In the wake of the collapse of Eastern European Communism Francis Fukuyama wrote about
the end of history, refering to the historical progression that led towards secular, free-market, democracy, which had proved triumphant over Marxism and all other socio-political worldviews... The hubris of that has been proved with the rise of radical Islamism and the attack on the twin towers 7 years ago. But the events of recent days may be the final nail in its coffin as the twin towers of the banking system and US democracy fail to deliver. Is this then the end of the end of history? What new world will we wake up to tomorrow? Probably not, as some conservative Christian commentators have suggested, the post rapture, premillenial chaos that is the final run-in to the new heaven and new earth... But the lessons of the book from which those images are so carelessly ripped, are that whatever power is at work in the world, there is a higher power, and our ultimate loyalty is to that King and that Kingdom.

The Kingdom of God is not a liberal, free-market democracy... it is not dependent upon the stock market, no matter how much church authorities or individual Christians may have bet their shirts on it... nor is it guided by what is either popular or expedient... rather by God's eternal measures of righteousness and justice... and on that scale, liberal, free-market democracy has, certainly in recent days, shown itself to be somewhat deficient. But then all forms of human socio-political organisation will be, and for the church to advocate one as exclusively "Christian" is arrogant if not idolatrous. Rather we should argue for what is right within whichever system we find ourselves to be operating... and seeking to make up for its deficiencies.

But just when I think that the world has irrevocably changed and that both the markets and politics have gone mad, I can always rely on Northern Ireland to bring me back down to earth.

I went to bed hearing of one democratic rejection, and woke up to another. This time that Limavady Council had rejected moves to give David Armstrong freedom of the Borough. Mr. Armstrong was a former Presbyterian minister who was hounded out of his pulpit and the town because, among other things, he offered a hand of friendship at Christmas to his Roman Catholic neighbour Father Kevin Mullen. When, two weeks ago I heard that this was being proposed I thought that it was a sign that things were changing in this particular corner of the world. But last night Unionist politicians refused to cooperate with the proposal, resulting in a vote of 8-6 in favour, falling short of the two thirds majority needed.

Now, just as representatives in the US had complex reasons for rejecting the Pawson plan, and that it wasn't raw party political electioneering, I am sure that Unionists in Limavady had complex reasons for voting against this proposal. Of course it wasn't raw party-political sectarianism. However, it is a salutory reminder to us all that in Northern Ireland at least, the world as we know it is alive and well... And I don't feel fine...

ps. Glenn Jordan has just posted two brief, but typically insightful blogs on recent economic developments over on Crookedshore, while Jim Wallis gives an interesting American-eyed view on the God'spolitics blog.


Anonymous said…
Read psalm 34, every day!

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