Buddhism and Government:Venerable K.Sri Dhammananda Maha Thera

The thrust of the Buddha Dhamma is not directed to the creation of new political institutions and establishing political arrangements. Basically, it seeks to approach the problems of society by reforming the individuals constituting that society and by suggesting some general principles through which the society can be guided towards greater humanism, improved welfare of its members, and more equitable sharing of resources.

The Buddha encouraged the spirit of consultation and the democratic process. This is shown within the community of the Order in which all members have the right to decide on matters of general concern. When a serious question arose demanding attention, the issues were put before the monks and discussed in a manner similar to the democratic parliamentary system used today. This self-governing procedure may come as a surprise to many to learn that in the assemblies of Buddhists in India 2,500 years and more ago are to be found the rudiments of the parliamentary practice of the present day. A special officer similar to 'Mr. Speaker' was appointed to preserve the dignity of the Parliamentary Chief Whip, was also appointed to see if the quorum was secured. Matters were put forward in the form of a motion which was open to discussion. In some cases it was done once, in others three times, thus anticipating the practice of Parliament in requiring that a bill be read a third time before it becomes law. If the discussion showed a difference of opinion, it was to be settled by the vote of the majority through balloting.

In the Kutadanta Sutta, the Buddha suggested economic development instead of force to reduce crime. The government should use the country's resources to improve the economic conditions of the country. It could embark on agricultural and rural development, provide financial support to entrepreneurs and business, provide adequate wages for workers to maintain a decent life with human dignity.

In the Jataka, the Buddha had given to rules for Good Government, known as 'Dasa Raja Dharma'. These ten rules can be applied even today by any government which wishes to rule the country peacefully. The rules are as follows:

1) be liberal and avoid selfishness,
2) maintain a high moral character,
3) be prepared to sacrifice one's own pleasure for the well-being of the subjects,4) be honest and maintain absolute integrity,
5) be kind and gentle,
6) lead a simple life for the subjects to emulate,
7) be free from hatred of any kind,
8) exercise non-violence,
9) practice patience, and
10) respect public opinion to promote peace and harmony.

Regarding the behavior of rulers, He further advised:

- A good ruler should act impartially and should not be biased and discriminate between one particular group of subjects against another.
- A good ruler should not harbor any form of hatred against any of his subjects.
- A good ruler should show no fear whatsoever in the enforcement of the law, if it is justifiable.
- A good ruler must possess a clear understanding of the law to be enforced. It should not be enforced just because the ruler has the authority to enforce the law. It must be done in a reasonable manner and with common sense. -- (Cakkavatti Sihananda Sutta)

 Sometimes the Buddha is said to be a social reformer. Among other things, He condemned the caste system, recognized the equality of people, spoke on the need to improve socio-economic conditions, recognized the importance of a more equitable distribution of wealth among the rich and the poor, raised the status of women, recommended the incorporation of humanism in government and administration, and taught that a society should not be run by greed but with consideration and compassion for the people. Despite all these, His contribution to mankind is much greater because He took off at a point which no other social reformer before or ever since had done, that is, by going to the deepest roots of human ill which are found in the human mind. It is only in the human mind that true reform can be effected. Reforms imposed by force upon the external world have a very short life because they have no roots. But those reforms which spring as a result of the transformation of man's inner consciousness remain rooted. While their branches spread outwards, they draw their nourishment from an unfailing source -- the subconscious imperatives of the life-stream itself. So reforms come about when men's minds have prepared the way for them, and they live as long as men revitalize them out of their own love of truth, justice and their fellow men.

End This Depression Now,Stimulate the Economy Today

Paul Krugman's new book"End This Depression Now" reviews the banking system that went wild,the dismantling of the 1930 laws that protected consumers against new banking crises,the big lie the right has filtered down to the citizenship on the crises and the way to reverse the destructive austerity conditions that has been imposed by the federal,state and local governments.

Bankers gone wild is his catch phrase for the financial instruments that led to the bursting of the financial,housing bubble and the collapse of the economy. As late as 2005,Alan Greenspan stated that complex financial instruments have contributed to the development of a far more flexible,efficient, and hence resilient financial system than the one that existed just a quarter century ago. The innovations Greenspan adored brought the financial system to the brink of collapse. Asset-backed securities, collateralized loan obligations and credit default swaps all contributed to the collapse by encouraging  reckless lending, slicing bad debt(with the help of debt rating companies),and insuring bad debt(AIG) without the money to pay for losses.The bailout cost $4.6 trillion.

Step by step, the rules and regulations that had been put in place in the 1930's to protect against a banking crises were dismantled and by 2008, the capital backing for banks were only a few percent of their assets and small losses could break them.Glass-Steagall Act of 1933 limited the amount of risk a bank could take.It was repealed by the Gramm-Leach-Blilely Act in 1999 .It repealed part of the Glass-Steagall Act of 1933, removing barriers in the market among banking companies, securities companies and insurance companies that prohibited any one institution from acting as any combination of an investment bank, a commercial bank, and an insurance company. With the passage of the Gramm–Leach–Bliley Act, commercial banks, investment banks, securities firms, and insurance companies were allowed to consolidate. The legislation was signed into law by President Bill Clinton. Citicorp and Travelers merger joined investments with insurance to form Citigroup shortly after the bill was signed. Previously,the Monetary Control Act of 1980 ended the regulations preventing banks from paying interest on many kinds of deposits. Under Reagan, The Garn-St.Germain Act of 1982 relaxed restrictions on the kinds of loans banks could make and encouraged risk taking..survival of the most reckless ensued.There was no limits on interest rates or loans to customers that might not honor their promises.Banks financed their leading by borrowing from other banks. A "shadow banking" system developed that is bigger than the old-fashioned banking we knew before deregulation that was highly leveraged without regulation that could take even larger risks(Lehman Brothers).Money dominated the political system when all the deregulation began and continues to this day.

After the collapse,the right blamed the Community Reinvestment Act of 1977 on the crises.This lie blamed the poor instead of the banks with their risk taking.The bubble was widespread and the biggest booms and busts were in the suburbs and exurbs rather than the inner-city owners. There was a similar housing crises in Europe with no Reinvestment Act. Commercial real estate on both continents defaulted. The risk taking was primarily done by private lenders. Subprime loans were made overwhelmingly by private firms that were not covered by the Community Reinvestment Act,nor supervised by Fannie Mae and Freddie Mac. In fact, Fannie/Freddie were losing market share because private lenders would take on borrowers the government sponsored agencies wouldn't. Fannie and Freddie did buy subprime mortgages from loan originators but it was late in the game.

Krugman feels we have to fund state and local governments by $300 billion to bring back the half a million jobs that were lost and employ a total of 1.3 million state and local workers.The austerity measures hinder the recovery and diminishes consumer spending. There should be a restarting of all projects that were postponed or cancelled by state and federal governments. An increase in the safety net programs and unemployment insurance should also start as soon as possible.The Federal Reserve should let inflation grow modestly higher to 4% for the next five years and buy "unconventional" assets like long term bonds and private debts.The Fed could also keep interest rates on ten year bonds below 2.5% for five years while intervene on the Foreign Exchange Market to push down the value of the currency that would strengthen the export sector. He wants homeowners to have the chance to refinance their home debt to below 4% and sees the Home Affordable Refinance Program as too restrictive. The U.S should get tougher on China's manipulation of the currency and create incentives for business to upgrade their emission of greenhouse gases by announcing stricter targets.