Twelve-step programme for those addicted to greed
It seems strange that the world's financial markets continue to look shaky, despite the trillions of dollars injected into the global banking system. The situation has become almost comical, like an episode of the US drama House in which a brilliant doctor takes his patient to the brink of death as he experiments with exotic cures for a sickness he can't identify.
Often, it turns out that Dr House has been treating the wrong disease, usually because the patient has something so obscure that only a genius could identify its cause - which, of course, Dr House does, in the end.
The world economy may not be so lucky. It's at risk of death by financial failure long before our lords and masters find a cure, even though the cause is not so hard to discover. It's just that the doctors are looking in the wrong place. Premier Wen Jiabao began to shine some light in the right direction when he recently put some of the blame for the financial meltdown on Wall Street's greed. Now we're getting somewhere, so let's make more progress by giving things their proper names.
A bad habit has developed of describing the 2008 crash as a 'financial tsunami' as if it were an act of God or nature. It was not. It was man-made and we should refer to it as 'financial manslaughter', 'cashicide' or some term that explains how huge chunks of the world's wealth have been killed off by ineptitude and dishonesty.
Worse still, Wall Street's monetary arson was committed while the perpetrators were drunk on avarice and addicted to fraud. This is not a financial crisis at all, but a moral one. Until the west addresses its moral shortcomings, the crisis will not abate.
Unfortunately, the Obama administration has been taken in by the tsunami theorists. Officials are already treating the assassination of America's economy as a natural disaster and have chosen to throw more money on the raging fire that was once the US mortgage market. This is akin to treating an alcoholic with an all-expenses-paid trip to the Munich Beer Fest.
In December 1999, Time magazine nominated jazz and Alcoholics Anonymous as America's most significant contributions to the 20th century, a good combination because both are based on introspection and self-knowledge.
AA's 12-step programme has saved millions of alcoholics and now it can help the greed addicts who caused this mess. The eighth, ninth and 10th steps require alcoholics to: make a list of people they have harmed; make amends to them where possible; and continue to take a personal inventory of where they have done wrong. This is what the tin gods of the world's financial markets should be doing now. That way, they might understand what made them so sick in the first place.
Of course, the first step is that bankers must stop hitting the bottle or, in this case, sucking down more money from central banks and taxpayers. Of course, they will scream that, if we deprive them of funds, more banks will collapse and the world will be in a prolonged depression, but that's just the ravings of an untreated alcoholic. While more banks may collapse, the world need not follow them into the abyss.
A better plan is to give the banks no money and spend these vast sums on schools, roads, hospitals, science, new technology and anything else that puts money in the pockets of ordinary people for making real things. These people can then decide to put the money they have earned into the banks which failed the world, or to look for alternatives - that is, new banks started by people who may have a stronger sense of moral values.
The alternative - and, unfortunately, the course chosen by the US and European governments - is like rewarding a murdering alcoholic with more booze and a clean gun. The outcome, one day soon, will be a further act of money murder. Sorry. I mean 'financial tsunami'.
Daniel Jeffreys was formerly the BBC's economics editor and chief economist at Cazenove and Co in London. He is now the Post's magazines editor