The Context and Implications of American International Group vs. Bank of America
by Leland Lehrman

Like Godzilla and King Kong in the Japanese movies, the lawsuit between AIG and Bank of America appears set in a kind of apocalyptic timeframe with cliffhanger debt ceiling negotiations happening during record heat waves, climate disruption and collapsing stock markets. Top corporate leaders, socially close and invested in the same system, nevertheless fight over the bones of a resource constrained “economy.”
Tyler Durden, the pseudonymous editor of the hotly commented and rebellious financial blog zerohedge.com called the AIG lawsuit against Bank of America “ironic.” The fight club anti-establishment trader points out that “it is AIG which takes down the financial system for the second time after its lawsuit against BAC filed last night kills Bank of America.” As gory as the details are, they are less important than the larger themes.
The Phoenix, “penciled” in by the Economist for 2018 is slated to rise from the ashes of other currencies. Following the crash of 1987, the anonymous editors in London wrote
“Thirty years from now, Americans, Japanese, Europeans, and people in many other rich countries, and some relatively poor ones will probably be paying for their shopping with the same currency. Prices will be quoted not in dollars, yen or D-marks but in, let’s say, the phoenix. The phoenix will be favoured by companies and shoppers because it will be more convenient than today’s national currencies, which by then will seem a quaint cause of much

disruption to economic life in the last twentieth century…Something will be, almost certainly in the course of 1988. And not long after the next currency agreement is signed it will go the same way as the last one. It will collapse. Governments are far from ready to subordinate their domestic objectives to the goal of international stability. Several more big exchange-rate upsets, a few more stockmarket crashes and probably a slump or two will be needed before politicians are willing to face squarely up to that choice. This points to a muddled sequence of emergency followed by a patch-up followed by emergency, stretching out far beyond 2018 – except for two things. As time passes, the damage caused by currency instability is gradually going to mount; and the very tends that will make it mount are making the utopia of monetary union feasible.”
There are other time-tested ways to handle currency instability using fixed exchange rates and asset backing for example. Were these “quaint” tools of Bretton Woods and earlier monetary regimes discarded in favor of inherently unstable hedging instruments known as derivatives because a period of systemic instability was useful to provide the appearance of the necessity of centralized global governance and currency?
Only a truly sovereign people can repudiate a debt yoke deceptively laid on its shoulders by a predatory financial class. Michael Lewis’ book Liar’s Poker offers example after example of the shark-like demeanor of bond traders and financial captains, endlessly feeding off pension funds around the world so arrogantly for so long that the eventual backlash they encounter is considered uppity.
So where can that sovereign people be found today? Increasingly in the street.
The Arab Spring, paralleled on May 25th by the rise of the European acampada culture in Spain, richly updates the flavor and genetic code of human evolution. Rather than a function of arms, evolution is now a function of the courage to assemble and live together physically and peacefully long enough to develop new, more representative social and governance forms. “Build a new model that makes the existing model obsolete,” as Buckminster Fuller once said. Manuel Castells beautifully illustrated the good news from Spain in a thought piece for Adbusters’ most recent issue, wherein he described one new model from a few angles: “Everything is worked out through functional theme-based autonomous multiple commissions, coordinated by an intercommission whose members rotated…What is transformative is the process more than the product.”

Those who have not been reading Adbusters or its constellation of authors may not be aware that the intellectual tradition of evolution, liberation and its political philosophy are alive and well. Even if not well enough informed of the historic manipulation of the revolutionary form by those it opposes, the modern evolution contains seeds of joy, primarily derived from its focus on biology, physical community, cooperation, and ecology. My heart soars as I read the words of Saul Newman on the latest iteration of the socio-political sphere:
“Democracy today consists in the invention or reinvention of spaces, movements, ways of life, economic exchanges and political practices that resist the imprint of the state and which foster relations of equal liberty. The struggles that take place today against capitalism and the state are democratic struggles. At the same time, however, we might sound a certain note of dissatisfaction with the term “democracy.” We can echo Bakunin, who finds the term democracy “not sufficient.” As Derrida himself said of democracy: “[A]s a term it’s not sacred. I can some day or other, say, ‘No, it’s not the right term. The situation allows or demands that we use another term …’” The situation is changing, and the new forms of autonomous politics that are currently emerging demand the use of another term: anarchism.”
There is a range of human political organization, from the indigenous, no-contact tribes to the power elite in their underground bunkers. I see a balance point in the networked ecovillage. Although the evolutionary discourse is sometimes scarred by the nihilistic intellectualism and desperate madness of the urban prisoner, there is a broader coalition here. Indigenous people, campesinos, environmentalists, libertarians, farmers and independent businesspeople are now coming to winnow the past together, separating that which we will take into our future, and that we will leave behind. This same process is at work in the well-known cooperation between liberal Representative and Presidential candidate Dennis Kucinich and his libertarian counterpart Ron Paul. Kucinich’s office once acknowledged to Tina Richards, campaign manager for Adam Kokesh in 2008 that Kucinich and Paul work more closely with each other than with those in their own party. Stitching together the legitimate philosophical, humanistic, and ecological impulses of both right and left will produce a populist coalition that finally overwhelms the influence of money, especially as the influence of money decays along with its value.
The importance of the Arab Spring flies far beyond the national, racial, and religious issues of its particular geographic location. The style of the modern revolution, invented by Gandhi and popularized by Martin Luther King and the student movements of the Sixties, has now penetrated all the way to Tel Aviv, where a record 250,000 people camped on Rothschild Boulevard earlier this month to demand social justice, fair access to housing and regime change. Look at the video. These are not just peace rallies, but permanent gatherings to address systemic issues widely appreciated by a broad and diverse cross section of humanity. And they are coming to a city near you. Actions in September in New York and October in Washington, DC are brewing. These US events, as much as they have in common with those of our recent and distant past, will all be of the species Tunis – Egyptus Tahriri.

And thus we come to the most important question of all. As Kalle Lasn puts it, what is our one demand? Let us not be bound by the soundbite and twitter feed. Our power to do good derives from our ability to slow down, and make time for the important things in life. Let us take the time to think on this question – ruminating upon it – as even the best answers are usually fleeting and temporary by contrast to the eternal questions.
Before imagining an answer today, let me describe my assumptions. If we are to accept, as I believe we can, that there is a place for the rational, technological civilization with its comforts and culture in brotherhood alongside the indigenous way, we must examine it carefully to determine the heredity of its inherent flaws, so manifestly apparent today. If I were to name the flaw in this civilization’s design from which so many other ills derive, I might point to the money issuance methodology by which collective decision-making is accomplished. No other intellectual tradition has served so effectively to ensnare more and more of the Earth in the compounding growth of its “interest.”
But interest in what?
The inherent mathematical impossibility of long term compound growth in a physical world was revealed by silverback asset manager Jeremy Grantham in his April 2011 newsletter:

“Failure to Appreciate the Impossibility of Sustained Compound Growth:
I briefly referred to our lack of numeracy as a species, and I would like to look at one aspect of this in greater detail: our inability to understand and internalize the effects of compound growth. This incapacity has played a large role in our willingness to ignore the effects of our compounding growth in demand on limited resources. Four years ago I was talking to a group of super quants, mostly PhDs in mathematics, about finance and the environment. I used the growth rate of the global economy back then – 4.5% for two years, back to back – and I argued that it was the growth rate to which we now aspired. To point to the ludicrous unsustainability of this compound growth I suggested that we imagine the Ancient Egyptians (an example I had offered in my July 2008 Letter) whose gods, pharaohs, language, and general culture lasted for well over 3,000 years. Starting with only a cubic meter of physical possessions (to make calculations easy), I asked how much physical wealth they would have had 3,000 years later at 4.5% compounded growth. Now, these were trained mathematicians, so I teased them: “Come on, make a guess. Internalize the general idea. You know it’s a very big number.” And the answers came back: “Miles deep around the planet,” “No, it’s much bigger than that, from here to the moon.” Big quantities to be sure, but no one came close. In fact, not one of these potential experts came within one billionth of 1% of the actual number, which is approximately 1057, a number so vast that it could not be squeezed into a billion of our Solar Systems.”
Juxtaposing the logical impossibility of compound growth to the unfazed obsession with it by almost the entirety of the financial, business and political class reveals that the primary decision-making capacity of the originators of currency is faulty at best.
Money, like mathematics and music, is largely based on abstractions and assumptions, some of which bother to harmonize with Nature, some of which do not. Like a bad organist in a crumbling church playing the discordant music of the malcontent, today’s arbiters of issuance have succeeded even in raising doubt about the capacity of the global mind to deviate from an increasingly disastrous course, and thus have thrown doubt upon the value of mind itself.

Abstraction falls into an even larger and older category: the tool. Some tools are associated more with creation, some with destruction. Can we say with certainty that money is a tool more like a spade than a sword? After years of reflection on the subject, I cannot say for certain. But if we can answer this fairly yes, then shall we not simply commission a new composer and organist? Perhaps we might rebuild the church and its garden, a LEED certified organic CSA, with solar panels and a biomass combined heat and power unit to keep it warm and well-lit for the needy citizens we welcome to sanctuary during the stormy months ahead – as Godzilla and King Kong fight over the bones of the “economy.”