Swiss Bankers Banned from Travel?

Although I am as frightened as the next person by the instability that this financial crisis has already inflicted and threatens to intensify, it’s sometimes difficult to contain my delight when something both unexpected and completely out of the ordinary occurs, especially when it is an event that would have been considered outside the realm of possibility one year ago. Imagine my reaction to a Financial Times headline announcing that “Swiss Banks Ban Overseas Travel Amid Global Crackdown on Secrecy”. Priceless. The article goes on to describe how Swiss bankers have been forbidden to travel to the United States, the bastion of freedom and democracy, because of, and I quote, “fear you will be taken in for questioning. I am thinking twice about going to America.” And there’s more! The article goes on to describe how a handful of Swiss banks are preventing their executives from traveling anywhere outside of Geneva, including other European countries such as France. Travel back in time about one year, and seriously just try to imagine how completely insane you would find anyone who seriously thought that Swiss bankers should be quaking in fear at the prospect of traveling through western Europe or into the United States. It would sound utterly ridiculous; yet today, it is no more than another story, quickly skimmed and passed over by countless readers. Although what piqued my interest was the prospect of Swiss bankers fearing the United States in a manner similar to how political activists fear authoritarian dictatorships, or terrorists fear leaving their hideaways in protective countries, it is relevant to note that this is a sign of the emergence of a bottom-up social force that is tired of what appears to be a system that rewards irresponsibility to the detriment of the majority. Large-scale social unrest and fear of the government is in the end no laughing matter, especially in developed, prosperous, democratic societies. Governments and citizens alike must remember the ideological foundations of our free and open societies, even when tempted to overstep boundaries or to act as vigilantes, respectively. I’m not in favor of physically attacking or detaining bankers, regardless of the magnitude of their crimes against society. As a citizen in a democracy, I trust that the rule of law will bring about justice. But that won’t stop me from smirking with repressed enjoyment at the thought of dozens of bankers unable to leave Switzerland for fear of detainment.

Economic Crisis: The Fragility of “Normalcy”

Although this past week screaming headlines about executive bonuses, plummeting markets, and massive job losses have graced the the front pages of the Financial Times, this Tuesday a smaller article below the fold caught my attention. This article described the resurgence of international bartering between governments of countries who are unable to secure credit. The article lists Russia, Malaysia, Vietnam, Morocco, North Korea, Cuba, Jordan, Syria, and Iran as involved in or discussing bartering deals for commodities and food, including rice, palm oil, machinery, and oil. The resurgence of this antiquated practice struck me more than any of the recent devastating financial news because to me, it demonstrates a large-scale departure from what we consider civilized international economic practices. Bartering represents the failure of money – a tangible concept that touches everyone, not just Wall Street Banks or savings accounts. It illustrates the possible failure of the entire system at its core, and highlights the very real uncertainty of what sort of international economic future we will face. As a student of international economics, I have been following the news about the crisis and have been struck by the superficiality of much of the coverage. While experts from every sphere of the economic world have been putting forth policy suggestions and describing the best ways to handle potential scenarios, I have been struck by the political unfeasibility of many of these plans. Each warns harshly against US protectionism, yet it already appears to be growing. It seems to me true attempts to make policy prescriptions for addressing the crisis should include this growing protectionist tendency rather than simply warn against it, because to do otherwise fails to take into account the political atmosphere. While experts debate the minutia of ideal economic stimuli, American citizens are closing their doors to free trade and governments are abandoning the foundation of commerce: currency. This strikes me as a dangerous disconnect and leaves me considering a single, nagging question. How fragile is the economy as we know it, and how quickly could basic foundations like currency wither away?