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	Democracy & the Great Recession by John Keane Centre for the Study of Democracy   Eighteen months into the deepest economic slump since the Great Depression of the 1930s, one thing is abundantly clear: the world economy is once more suffering the incalculable shock effects of a massive market failure.   The bursting of the global credit bubble, predictably, is paralysing virtually all market sectors in most countries, even those (like Japan) that took earlier measures to fit "bank proof" shock absorbers to their economies.   Governments have been dazed by the scale of corporate debt issuance and "securitisation" - the risky bundling of debts on such things as mortgages and credit cards. Panicked reactions and contradictory stopgap measures are multiplying.   Trying to calm jitters, the International Monetary Fund"s Dominique Strauss-Kahn has recently pronounced that the world faces a "great recession".   Suddenly, as if through overnight conversion, politicians rail against "greedy" bankers and corporate fat cats. Moralists are out in force. Scapegoats such as Bernard Madoff have become household names. So have words like "bail out", "toxic debt" and "rescue packages".   Of significance - Obama"s 2009 budget points in this direction - is the appearance of first-stab efforts to formulate redistributive policies that protect citizens against unemployment, loss of savings, deteriorating public infrastructure and other effects of the bursting bubble.   Such moves against the old free market consensus resemble slamming shut the gates after the horse called Equality has bolted. Among the documented effects of the credit bubble is that most democracies experienced a 30-year widening of income and wealth inequality.   The whole trend - toward hour-glass shaped societies - has been bad for democracy. It has spawned an underclass. Middle-class people were deluded into thinking they were growing richer by the day. The spirit of solidarity so necessary for citizenship was corroded by market selfishness.   The present bursting bubble is deepening these undemocratic trends. In poor countries, according to the World Bank, only a quarter of governments have the resources to cushion their citizens against the great recession; net capital flows in their direction have fallen to less than a fifth of the level two years ago.   In richer countries, where "de-leveraging" is rife, mortgage defaults among the poor are rising. Private wealth levels are plummeting (the Asian Development Bank has estimated that the equivalent of a year"s global economic output has so far been lost in financial assets alone).   Pension funds are threatened; in Britain alone an estimated 90 per cent of final-salary schemes are technically now under-funded. As companies slash dividends, preserve cash and reduce employment, trade unions find themselves challenged. Bank bailouts and other mega-forms of government intervention have sharpened the sense of many citizens that while the rich get billions the people get pennies.   Then there is the most worrying threat to equality posed by the bust: that when the huge rescue package bills are finally presented, governments will try to rebalance public finances through spending cuts and increased taxes that have further socially regressive effects.   Hence the searching question posed recently by Richard Bruton, the Finance spokesperson for Ireland"s opposition Fine Gael party: "The banks bailed out the developers, the government then bailed out the banks, today the taxpayer is being asked to bail out the government once again. The question I ask is: who is going to bail out the taxpayer?"   To the extent that democratic institutions have failed to live up to their own standards of citizen equity we can speak of democracy failure.
	The employee-owned company is the company of the future by Spiegel Online Germany   A Share of Future Profits: German Employees exchange wage cuts for Equity.   German trade unions are discovering part-ownership as a tool against the financial crisis. They hope that accepting wage cuts in return for a share of the profits will give their members more power and money in the future.   The recent power struggle between Porsche and the Volkswagen Group produced one loser, dismissed Porsche CEO Wendelin Wiedeking, and one winner, VW patriarch Ferdinand Piech. But a labor union leader who acted behind the scenes, Berthold Huber, the chairman of the powerful IG Metall metalworkers union, also wants to be counted among the victors.   While the two adversaries fought openly, Huber prepared his coup, quietly and in secret. His plan is to enable the more than 380,000 employees of the combined VW-Porsche Group to hold shares in Europe"s largest automaker. In addition to the Porsche and Piech families, the State of Lower Saxony and the Emirate of Qatar, Huber wants employees to "hold a significant share" of the company. He is aiming for 10 percent, and he wants to see employees share in the profits of the group"s many brands, from Audi to Skoda.   Much of Huber"s plan is still up in the air. Where will the shares come from? Why should the remaining shareholders give up a portion of their shares for the benefit of employees? Or should employees, in return for receiving shares, work longer hours for the same pay.   Union officials concede that it may be unrealistic to expect to achieve their goal of a 10-percent share of VW for employees, but they believe that 2 or 3 percent is within the realm of possibility. In any case, the proposal signals that Germany"s most important trade union is rethinking its strategy on a core issue of the market economy.   Until now, the majority of IG Metall members believed that shareholding was a ploy used by the class enemy to undermine proletarian consciousness. But now that the financial crisis has forced some company owners to beg for help from the government and unions, IG Metall has discovered that the issue could work in its favor, and not just at VW.   Huber has already received a commitment from Maria-Elisabeth Schaeffler, the owner of troubled auto parts company Schaeffler. The union supported the firm in its efforts to receive government bailout funds. In return, the owners promised, among other things, to distribute shares in the company to employees. This, she said, would enable them to "have a share in the subsequent recovery."   At Daimler, the works council is considering the conversion of employee bonus payments, worth a total of €280 million ($400 million), into Daimler shares. Meanwhile, in return for accepting wage cuts, the employees at Opel want 10 percent of the entire company.
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