A new world order rising?
Published Tuesday November 18th, 2008
Alec Bruce

As the world continues to careen down the financial rabbit hole, three of Wall Street's fattest bunnies -- Lloyd Blanffein, Jon Winkelried and Gary Cohn of Goldman Sachs -- have volunteered to cut their pay packages this year to a mere $600,000 apiece.

For which, I'm certain, Joe six-pack is eternally grateful. After all, why wouldn't their late-game circumspection provide no end of comfort to the 3,200 employees they've recently fired, or to the millions of small-time investors who have lost their life savings as a result of their magnificent asset management, lo these past, several months?

In fact, I'll wager, every poor slob rusticating on the other side of the tracks now worries how Goldman's former golden boys will possibly manage without their annual performance bonuses, which, if memory serves, amounted to more than $60 million (each!) in 2007. Ah well, times are tough. And belt-tightening, it seems, is an equal-opportunity sport -- though some opportunities, in these days of woe and terrible wonder, remain more equal than others.

As the Reuters news service recently reported, "Goldman became a bank holding company regulated by the U.S. Federal Reserve in September, along with Morgan Stanley; after Lehman Brothers failed, Merrill Lynch agreed to be bought as financial markets went into turmoil."

Translation: Those corporate behemoths that were chiefly responsible for the mess, which now threatens to plunge the globe into what even President George Bush openly speculates could be a calamity equalling, perhaps exceeding, the Great Depression, got their bills paid through tax-funded, government bail-outs.

Was there any choice? Who knows? What's more interesting is the way this crisis has provoked an entirely new mood of collective self-examination, in which not merely a firm like Goldman Sachs, but the entire planet, has somehow agreed to enter a financial 12-step program, a course of fiscal and monetary rehab where faith in progress is about all that's left once the recriminations have settled into dust.

Indeed, there was something distinctly psychoanalytical about the gathering of 20 world leaders in Washington last week. The posturing, bombast, and self-important spin, which normally accompanies such international meetings, seemed largely absent. Instead, presidents and prime ministers appeared genuinely engaged, and genuinely scared, as they contemplated a future none of them, alone, were capable of directing.

Their closing manifesto promised to employ fiscal measures (government spending) to stimulate ailing economies; reform the International Monetary Fund and World Bank; lower trade barriers; improve international accounting standards; regulate financial markets; and better explain the nature and mechanisms of complicated financial products which, if abused, could again undermine global capital flows and credit markets.

But the details were less important than the spirit which forged them, and the palpable sense that a new world order was emerging.

For the first time, Russia, China and India, among other emerging economic powerhouses, were accorded equal status with western states, a fact which prompted one delegate to declare: "We are talking about the G20 because the G8 doesn't have any more reason to exist. The old system, presided over by wealthy North American and European countries has been rejected by history."

Well, not entirely. If the remark proves that at least a little bombast and self-important spin remain in the conversation between nations, it also fails to recognize the enormous wealth still collateralized by real, not imagined, assets in western economies. Otherwise, no one from any other corner of the world would spend the time and effort to unleash it.

What has changed is the certitude that unfettered self-interest always produces benefits across the broad swath of human society. Greed is not automatically "good", and accountability is not just something for politicians to fret about at election time. Work has value, and this value should never so exceed the measure of its contribution to gross domestic product that it undermines the pins of entire economies.

Is this what's dawned on the boys from Goldman Sachs? The tough times ahead will tell.

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