Madam, - It was interesting to see how speedily the US institutions moved to save Bear Stearns and how much taxpayers' money they pumped into the deal with JP Morgan to shore up the financial system. This was necessary to stabilise the US and global markets, but it contrasts sharply with how authorities there have dealt with those who were sold sub-prime mortgages, who got into difficulty and who lost their homes.
More than a million people in the US who were sold sub-prime mortgages that initially generated huge profits for these now troubled firms and are still not being given any bailouts or lifelines by the authorities when they get into difficulty.
By contract, the institutions and their bosses who benefited most from this market in the past decade - and who created this mess - are being sheltered from the consequences of market failure.
While the top executives of these companies are stepping down quietly with generous severance packages, those at the sharp end are relinquishing their homes and in many cases losing everything. That is the real story in this sorry episode, which to my mind has been lost in much of the reporting and commentary. - Yours, etc,
JAMES DOORLEY,
Johnswood Drive,
Ashbourne,
Co Meath.
****
Madam, - I am surprised at the reluctance of many commentators to recognise the reasons behind the current instability in global stock markets. This volatility results from the prospect of a future without the necessary economic growth required to service the huge debt burden that is an integral part of our modern consumer-based economy.
The uncertainty surrounding continued economic growth has already been well flagged by many eminent analysts, not least former World Bank economist Herman Daly. In his book Beyond Growth, Daly points out that because of the finite nature of natural resources, especially oil, continued "exponential economic growth" is unsustainable.
The question must now arise as to how global society will cope with the "non-growth" economy predicted by Daly.
On the positive side, major technological developments have been achieved, but how will these be used? Will they be employed to further the well-being of mankind, or - as is far more likely - will they be used to seize the remaining sources of energy by superpowers behaving like bullies in a school playground? Many observers suggest that this is already happening and cite the "War on Terror" as nothing more than a convenient smokescreen for the occupation of oil-rich regions of the globe.
The current economic model based on resource depletion has served the developed world well while resources were plentiful, but as we enter an era of depletion and uncertainty, wise counsel must prevail at both EU and global level, as a return to the strife and conflict of previous centuries would be unthinkable. - Yours, etc,
JOHN HENEY,
Kilfeacle,
Tipperary,
Co Tipperary.
****
Madam, - Michael Casey criticises the banks for causing the current financial crisis through excessive greed (Opinion & Analysis, March 19th). It is interesting to note that Mr Casey is a former board member of the IMF, an institution that has been one of the main catalysts in the spread of the aggressive of laissez-faire capitalism extolled by Milton Freidman and the neo-liberals of the Chicago School of Economics.
This rabid brand of capitalism shows no interest in social cohesion as long as profit growth continues. It pushes the line that the market will regulate itself and find a balance that will have wealth "trickle down" through all strands of society.
The reality is that economic growth resulting from this model relies on the massive debt of ordinary citizens who end up having to pay for the mess through high inflation, negative equity, job losses and depleted pensions. One wonders if any lessons will be learned from this latest crisis - or will the profiteers just restructure the market again to make it more palatable to the ordinary citizen? - Yours, etc,
BARRY WALSH,
Church Road,
Blackrock,
Cork.
