Financial Boom and Bust … In Cartoons!

I want to share with everyone a new CAW resource that was produced for our Constitutional Convention (which took place last month in Quebec City).

It’s a 4-page cartoon book explaining the core dynamics of financial cycles, that was illustrated and deesigned by Tony Biddle — the awesome Toronto political cartoonist who also illustrated Economics for Everyone.

The cartoon book is called How to Make a Financial Souffle, and here’s the URL link:

http://www.caw.ca/en/7754.htm

There is also a French language version of the cartoon book, which will be posted shortly (along with our other 2009 Constitutional Convention documents) at the web site of our Quebec division:

http://www.tca.qc.ca/

Anyone is welcome to download and share the resource.  It argues that while every financial crisis has its specific causes and timing, there are 3 key ingredients in each one:

  • The desire of welath-owners to speculate
  • Injections of easy credit from a financial sector eager to share in the profits of speculation
  • Lack of oversight by government regulators

Our goal with the cartoon book is to provide a more accessible way of educating union members and other folk about how financial cycles work.  If our people have a better understanding about what exactly caused the financial meltdown, they’ll be less vulnerable to being tricked into subsidizing it (by tightening our own belts, as demanded by employers and governments alike).

The crisis was not a random, bad thing that just happened one day.  It was the predictable and preventable result of a financial and economic system that operates in a particular way, following a particular set of interests.  Change the rules, and we can avoid future crises.  If we don’t change the rules, but merely try to “weather” the crisis (suffering lost jobs, lost incomes, lost homes, and lost pensions in the process), then the reward we will get for our sacrifices is another crisis some years down the road when the whole cycle repeates itself.  That should be ample reason for our members to stand up and say, “Enough is enough.”

Tony Biddle does awesome work, and can be reached at pwp@primus.ca for any other organizations who want to use his ample talents!

6 comments

  • thanks Jim

  • that’s a good cartoon, and what’s bothering me about the WTO meetings is that it looks like money is being dispursed again, eg. four hundred million dollars to Ukraine, but its being tied to ‘legal and regulatory’ changes that likely mean More rogue cookery by private financiers, rather than less.

    I heard the clips from Obama’s speech to Wall Street the other day, and while he talked about the increased ‘oversight’ committee that was needed for the Fed, it wasn’t clear if this was a reiteration of what was in the summer proposal, or something new. The summer policy announcement said the ‘oversight’ committee had no actual rights to determine Fed behaviour, just ‘advise’ while that the semi-private Federal Reserve had more real powers.

    If i had some time i’d like to check the names of committees. It seems that Obama is taking some good steps in many areas, and i hope some actual control of the casino is one of them.

  • re: last comment, the loan to Ukraine is from the IMF but its in the context of WTO rules that push private financier roguery, ie) ‘opening of investment markets’ etc.

  • The URL above works for me, but some people have reported having trouble with it. Here is another option. Either way, the file is 3.4 MB.

  • Yesterday I re-read the portions of the July US Treasury ‘White Paper’ on Financial Regulatory Reform.

    http://www.financialstability.gov/docs/regs/FinalReport_web.pdf

    The comments Obama made this past Monday, http://www.whitehouse.gov/the_press_office/Remarks-by-the-President-on-Financial-Rescue-and-Reform-at-Federal-Hall/ reflect that document.

    There are many good reform directions in the July document, and they’re outlined clearly.

    The question bothering me still is, “Why was the Treasury Dept. not given powers to regulate?” The Federal Reserve is ‘required to consult’ with a proposed new oversight committee housed at Treasury, on the kinds of regulations outlined in the White Paper, but it’s the banker-filled Federal Reserve which retains the power to actually regulate.

    Some of the 7 members of the Board of Governors of the Federal Reserve are listed here, http://www.federalreserve.gov/aboutthefed/bios/board/default.htm including those appointed under the Bush administration whose terms continue, and who had positions of responsibility during the crash, eg. ‘structuring capital markets transactions’, or at Fannie Mae. These are the people who are to have expanded powers to ‘regulate’ the financial system in future.

    Each state has a Federal Reserve Bank as well, with a Board of Directors. The New York Federal Reserve Bank has nine directors, six of which are elected by the private member banks. The other three are appointed by the Board of Governors of the Fed noted in the paragraph above. http://www.newyorkfed.org/newsevents/news/aboutthefed/2009/an090727.html .
    Governance is by a majority of people elected by private bankers.

    There are obvious questions around reliability and conflict of interest in implementation even if otherwise Obama’s financial sector regulations are sound.

    But there are other questions about an integrated Canadian-US financial sector under NAFTA, and under interprovincial deals, with investor provisions.

    Canadian banks and transnational corporations have invested in the risky financial ‘innovations’ that crashed the economy and left significantly gutted communities, families, and residents in their wake.

    They continue to trade in the same kinds of financial products, with the same players, under even more lax rules- the Harper government changed the Bank of Canada Act half a year ago so taxpayers would cover for the toxic assets and bad decisions of private bankers. Banks dumped their junk at our doorstep and we gave them good credit in exchange.

    But now the Harper government won’t use the Bank of Canada to direct fund critical public services and green power, to support employment and a strong real economy and ecology.

    Capping exec bonuses is one useful change, but there are many more needed, and we need to get rid of the investor provisions in trade deals that lock us into expanded trade in private banking products, particularly with countries where private bankers continue to run the show.

  • [Further to the comment i made on this thread this afternoon, which may show up later;]

    I’m elaborating on these issues around control by financiers because I think they’re at the rotten core of problems in this country and globally.

    I’ve been an activist for almost three decades, and its easy to get burnt out running from issue to issue with protest. And protest in each case is needed. But unless and until we get clear in our own minds, and clear political expression of, the needed changes in control of finance, we’re going to have rogues destroying our environment and our lives for a long time to come.

    I read Thomas Walkom’s item in the Star yesterday, and some of the other commentary on propping up Harper in the context of the EI changes, or significant lack thereof.

    Each policy item can be, and needs to be, gone over carefully, but I’m concerned that politicians are missing, or avoiding, talking about the core issue of control of finance- how it happens, the elements that retain undemocratic control of money. It is this undemocratic control of money, of investment in whatever resource, at whoever’s expense, the bankers and investment traders want. Its not democratic, it’s destroying our individual and collective economic lives and its destroying our environment.

    Every issue, from the tar sands to health care to employment is dependent upon public control of those who are left free to run the investment show in the interest of their own private pocketbooks. Public control of investment does not currently exist and we need it to exist if we are to see significant progress in any of our issue areas of concern.

    Talking about the core issue of control of money/ investment is what separates the sheep from the goats in my mind, when it comes to politicians.

    So far there have been too many sheep.

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