The worldwide distress of financial meltdown is one sign of corporate disregard for the common good. CEOs, regulators, investors, and governments chose short-term self interest over long-term fairness. It did not work. A reform of the globalized economy is urgently needed. But piracy off the coast of Somalia is equally a sign of needed global reform. The gross inequity that simply writes off a majority of the world's population flows back on the affluent minority, like an offshore tide carrying the raider flotilla, with grappling hooks and grenades. Ahoy!
That is the final paragraph of a piece entitled What the pirates say Written by James Carroll, it appears in this morning's Boston Globe. And reading a piece written before word of the latest bailout, of Citi by the Fed, I began thinking about who is really ripping the world off for ransom.
Carroll's piece is provocative. Read it, and then let's argue.
Carroll reminds us of what vessels the Somali pirates have seized, always so far for ransom. They have carried things like oil and weapons.
He also reminds us how this spate of piracy began. Somalia is and has been a failed state for two decades - remember the "Blackhawk Down" incident in Mogadishu under Clinton?
And it started with Somali fishermen attempting to defend their coastal waters, where other nations were poaching in the tuna-rich waters off Somalia's coast.
And remember that when Somalia was in trouble, the US led a "humanitarian intervention" of which Carroll reminds us:
According to UN figures, of the $2 billion spent in that intervention, 90 percent went to a military effort, with the paltry rest going to economic reconstruction. Imported weapons empower the warlords to this day.
Weapons we provided empowering warlords or the equivalent. If this sounds like a cracked vinyl record repeating a worn phrase, you are not the only one hearing that sound.
Carroll acknowledges that piracy is not justified, even as he reminds us that what is now piracy did not start that way. Let me quote two paragraphs additional before I transition to what I think is the real piracy:
There is more than one kind of piracy. Drug companies, marketing cures from the flora of the tropical world, including Africa, engage in what the Nobel economist Joseph E. Stiglitz calls "bio-piracy." While the developed world exploits African resources, including oil; while government subsidies for US farmers destroy the ability of African farmers to compete; while high-tech and green revolutions pass by; while their continent is looted, the extreme poverty of Africans only grows.
Due east of Somalia, in the far Indian Ocean, are the Maldives, an island nation of more than 300,000 people. As I learned reading Stiglitz, the Maldives will be underwater in 50 years because of rising sea levels due to global warming. Who speaks for those people? Or the billions of others in vulnerable coastal regions - the soon-to-be victims of all those oil tankers, which might as well be warships. Pirates may not consciously be mounting protests to the coming catastrophe, but their actions are not unconnected to it.
Let us take Carroll's concern, for people who have no one speaking for them, and apply it economically, starting here, in the United States.
Over the weekend, our government again committed itself to pay ransom to another set of pirates. These pirates operated from pure greed, as have their compatriots who have already received ransom. They saw nothing wrong in plundering the wealth and wellbeing of others for their own short term benefit. But when they got in trouble, rather than pay the price themselves somehow they were able to blackmail a government into bailing them out. I would call that a form of ransom. And because they operated outside of any legal oversight, were not their actions equivalent to the pirates who seize vessels on the high seas?
In an earlier phase of our history, the United States at first paid tribute to Barbary pirates to leave alone American shipping in the Mediterranean, but eventually the cost exceeded the funds available. As a former Marine, I am well aware that the source of the second line of the Marine Hymn refers to that time, those "shores of Tripoli" being the expedition led by Decatur to rescue the men of the Philadelphia, being held in that city. Ironically we wound up, under Jefferson, having to pay ransom (which we clearly distinguished from tribute) in order to rescue some of the Americans captured in later hostilities during this First Barbary War.
I have always been puzzled by people who argue strenuously that we are a free market economy, but that demand that their economic endeavors have the benefit of the government, whether by high tariffs or anti-competitive regulation or restriction of lawsuits against their wrongdoing or bailouts for their bad economic decisions and poor management. FOR THEM. Not for anyone else.
And this is not a partisan issue. Remember, much of the money that has until recently funded the Democratic Party over the past few years has come from the world of Wall Street with it "Masters of the Universe" mentality. To those from that culture, it is inconceivable that we would let the financial markets fail, even as they would oppose bailouts of manufacturers, or of home owners. How quick some are to argue that they should suffer the economic consequences of their misdeeds and poor judgment.
I am no economist, macro or micro. I am a taxpayer and a citizen. I have a real problem with organs of the Federal government committing trillions - that's right, I said trillions, not billions - with no concurrence by the elected representatives of the people, with insufficient guarantee of equity for our investment, without forcing the management of these companies to accept the kinds of massive paycuts they would impose on auto workers, while in some cases continuing to pay dividends to the owners of the financial services corporations (often other financial services organizations) responsible for voting in that management, and even bonuses to the very top management that ran these corporations aground and worse.
They demand. We pay. I don't care it we call it ransom or tribute. It is more destructive of our economy than the ransom of a few Somali pirates.
Do not get me wrong. We should address the issue of piracy on the high seas. Nations needs to cooperate in order to stop such actions, which do represent a threat to the economic health of the industrialized world. Carroll is correct that piracy is not justifiable. But let us read his entire sentence:
Piracy is not justifiable, but it did not begin as such, and that matters.
For the Somalis, it began as an effort to protect their economic livelihood. They were from a weak and failed state that could not protect them, so they took matters into their own hand.
The equivalent here would NOT be our government bailing out the financials, but we the American people rising up and seizing control. Hey, didn't we just do that, in the election? Except the actions being taken now, with little if any consultation with the elected Congressional representatives, seems almost to reverse that election, because it is draining the Treasury and our financial resources so that the incoming administration will have little flexibility to address the needs of the people for which we elected it.
Under international law, any nation can punish piracy on the high seas, including executing the pirates. One side effect of globalization is that finance and industry, as it has become transnational, has gone beyond the ability of any one nation to regulate it. Money and jobs are so portable they flow to the safest harbor, which in this case means the place with the fewest regulations as to worker pay and safety, environmental regulations, and government oversight and taxes. Transnationals, including the financials, have been operating in an environment without meaningful oversight, just as have the pirates operating from the coast of the failed state of Somalia.
Now they want us to bail them out. Call it ransom, tribute, bribery. It does not matter. It is costing us far more than what the Somali pirates have obtained in their endeavors, which so far make them pikers by comparison.
In the United States, we still have food and homes. In much of the rest of the world, the financial devastation that has been caused by the misdeeds of these rogues of finance and trade has been much worse.
So who are the real pirates? And when if ever will they suffer the consequences of their piracy?