Yes! to the Call for a Global Constitutional Convention Focused on Future Generations

Stephen M Gardiner makes “A Call for a global Constitutional Convention Focused on Future Generations” to avoid the “tyranny of the contemporary”. In general terms Gardiner bases his argument on that “current decision-makers, and indeed the current generation more generally, face a serious temptation: they can take benefits now (for themselves), but defer many of the costs of their behavior far into the future (to others), even when this seems ethically indefensible”. And as a specific example he puts forward the challenges of climate change. 

I agree very much with his arguments and would propose the following two items are put on the agenda of that convention.

First to analyze the possibility of awarding all citizens, including children, the right to vote. The fact that for instance mothers or fathers could exercise the voting rights of their children under a certain age, like 15, would presumably put some pressure on parents to consider more their children’s future... for instance with respect to climate change.

Second, to exhaustible present as clear evidence of the tyranny of the contemporary the case of current bank regulations. With these, baby-boomers concerned exclusively with the immediate safety of the banks, imposed credit risk weighted capital requirements, which de facto stop banks from financing the “risky” future and have these only refinancing the “safer” past. We do not need climate change to evidence the costs of shortsightedness, when millions of young unemployed Europeans are currently threatened to become a lost generation. It would be a good opportunity to make a call for bank capital requirements based on job creation and sustainability ratings.

It would also be a good opportunity to make clear that, were we to put the climate change challenge into the hands of something as little accountable as the Basel Committee for Banking Regulations, then most likely planet earth would be toast.

PS. And if it was for me to decide, given that so much would have to do with ethics, I would try to squeeze in a session on the need for ethic ratings, since I am fed up with banks and regulatory authorities only using credit ratings, as if financing the construction of concentrations camps would be morally permissive, as long as its credit risk has been adequately priced.

Forget the market for a while

The financial markets are continually boasting about having the best information available. They are right, but this continuous improvement in their capability to disseminate information comes at the cost of too much data too quickly. This results in an increased sense of the short term and no long-term vision.

It is only this that could possibly explain why today’s financial markets would impose interest rates on a country’s foreign debt that are so high that they can only be justified by the premise that the corresponding debt is to be repaid immediately and all at once. This is the case of Venezuela, a country with relatively little external debt.

This particular problem of disinformation in an era of information has resulted in an increasing volatility of the short-term capital market. This in turn has caused financial crises in many of the emerging markets and is being closely studied by many of the world’s monetary authorities.

In an article titled The Reform of International Financial Architecture published in Madrid’s newspaper ABC, Robert Rubin, former Secretary of the Treasury of the United States, recognizes the market’s basic responsibility, declaring that he is convinced about the need for government intervention in order to insure a better-market performance.

Mr. Rubin states that it continues to be necessary to solve the shortfalls in the risk valuation that have contributed to the worsening of the recent crisis and suggests that intervention should be made in the form of better international directives (i.e., the Basel Committee) which would increase dependency on long term loans instead of short-term financing. This type of intervention seems to me to be rather timid.

As a citizen of a country that due to internal and external causes finds itself in a bit of a mess, I wish to take advantage of the appointment of Mr. Lawrence Summers as new Secretary of the Treasury to ask him be more proactive.

For example, we would advance in leaps and bounds towards Mr. Rubin’s objectives should the United States guarantee the underwriting of a Venezuelan debt issue for US$ 25 billion with 30 year maturities with which Venezuela would repay all current debt that carries shorter maturities, which would make Venezuela one of the most solvent debtors in the world, which would make its debt instruments among the most attractive in international markets, which would insure that these could be placed at reasonable rates, which would allow the United States to free itself of any and all obligations thus obtained in a matter of minutes or hours.

Impossible, you say? Today, a firm that sells books, with no major asset base, and without immediate prospects of turning a profit is valued by the capital markets at US$ 30 billion, based primarily on its presence on the glamorous Internet. I simply cannot believe that the United States and Venezuela together cannot jointly put together an operation and negotiate the appropriate guarantees so that all parties come out smelling like roses.

I think that the majority of the authorities, government officials, professionals and individuals like Rubin, Summers and, modestly, myself, respect the free-market forces and system but also believe that it is sometimes necessary to promote government intervention. Where we may differ is in how this intervention should be enacted and how these two agents, market and government, should interact.

For example, over the last decades, the perception has been that a country like Venezuela should be very attuned to the requirements of a sophisticated financial international market. Attaining this markets approval would theoretically ensure that this country is on the right road to development and prosperity.

I believe this has been exaggerated. A country like Venezuela, which banks basically on one exportable product, has certain internal advantages and strategic strengths.

There is no reason why this country should bow to market forces. It has the right, and even the duty, to develop other options to ensure development that don’t necessarily include the markets.

Perhaps our problem today is not Venezuela’s external debt per se, perhaps our problem is the market. Faced with this reality, let us go out and negotiate options, government to government. This does not have to include subsidies or hand-outs. These options can very well be developed in an economically more reasonable atmosphere than that present in today’s market.

Let's, all whakapohane!

I remember having read a few years back about one particular method used by the Maori of New Zealand to protest about something that bothered them. This method consists of lining up a group of Maori tribesmen, turning their backs towards the person or persons that are the target of the protest, dropping their trousers and showing them their naked backsides. This rite is named Whakapohane. 

Without delving further into this tradition, and in spite of the fact that it seems primitive and is most certainly an ugly spectacle, I think it could be also classified as a civilized and most efficient way to protest. Civilized because it does no damage to anyone or anything (except to those people with a well-developed sense of esthetics) and efficient because it manages to consolidate into one single act and gesture all the sense we could possibly assign to a real social sanction.

There is no doubt that we are often frustrated at not being able to find a way to vehemently protest about the stupid, naive and criminal behavior that negatively affects our country on a daily basis.

The idea of putting together a group of citizens, family men, professionals and white-collar workers with briefcases and ties and heading out to the street to shamelessly whakapohane any deserving person is appealing. Consider the following:

What has been demonstrated without doubt over the past decades in Venezuela is an utter incapacity by government to manage its resources. The International Monetary Fund, for example, predicates that the solution to Venezuela's problems can be found by giving government even more resources to squander by way of increased taxes (as if our oil income wasn't enough taxation).

Clearly, the IMF deserves an act of Whakapohane from our citizens. 

Banking charters are usually awarded in order for them to participate actively in the development of the country's economy.

It is not enough for them to simply return the funds they have received on deposit, since if this were so, it would be better to simply buy a good mattress and put it into a large safe.

There are still many who think it is best to be puritan and to simply continue to tighten the screws on financial solvency of banks without paying attention to the real purpose of banking institutions These people deserve a solid Whakapohane.

There are many national authorities that evidently are aware of the damage to economies that short-term capital flows can cause, and also know that other countries have put workable legislation into place to limit these damages.

They cannot be bothered to take the 48 hours required to simply copy this legislation and enact it in Venezuela. There is no doubt that these authorities deserve to be Whakapohaned.

Those people related to the oil sector that have not been able to either see or warn the country about the possibility of a fall in world oil prices, who, in spite of arguing in favor of conquering new markets, run for cover behind OPEC's skirts when confronted with adverse situations, and who continue to invest scarce resources in projects of low significance such as the expansion of our gasoline stations' capacity to sell snacks, should certainly be offered a great Whakapohane.

Many illustrious representatives of the private sector applauded the privatization of CANTV, without realizing that it was all an elaborate trick perpetrated by the government to collect taxes in advance which we now have to cover through exaggerated service charges. These guys are due a good Whakapohane.

Those die-hard defenders of free trade who simply do not understand that in a globalized world economy each country must, when the chips are down, defend itself and guarantee a minimum internal level of employment should be urgently Whakapohaned.

The entire political and economic system is based on centralized income and decentralized personal apparatchiks.

Members of this system have not been able to come up with a real solution to our problems and should be considered traitors.

They should all be paraded to La Carlota Airport and given the Mother of all Whakapohanes .

We have heard that one of the people most clearly and widely questioned in our recent history is due to return to Venezuela after statutes of limitations have expired.

Just imagine what a marvelous message a small delegation of our "notables" dispatched down to Maiquetía to receive that person with a mini-Whakapohane would send. 

We should definitely not lightly discard the possibility of introducing an ancestral aboriginal custom from New Zealand in to the Venezuelan political scheme . 

Whakapohaners of the world, unite! The alternative are much worse.

Spanish translation

The first version was a blue one

Then, I don't know when... some applied the original concept