When Necker, the then finance minister, asked Louis XVI to share his power, the king’s answer was that one could not share what is absolute. His later demise proved he was right, revolutionaries, who had at first tried to share their power with the crown, were being consistently denied true equality.
The changes required to fix the system were too radical for the kings system of governance just as they are today; God had granted kings the right to rule absolutely, money distributed to politicians of all sides by finance oligarchs is buying absolute power. It is not only unsupportable but actively destructive.
The dominant thought in governing bodies in the US and Europe remains that more liquidity – easy money and/or tax cuts – to the rich will solve our current problems, the so-called job creators just need a little incentive to start creating work again. It is absolutely untrue, 10 years of tax breaks for the wealthy have created near zero jobs.
Back in his campaigning shoes, Obama is once again promising what he has come nowhere near fixing in his first term; in Kansas a few days ago, inequalities and wealth distribution were back on the table, after four years of a bankers feast worth $16 trillion and feeding turd sandwiches to the rest, salaries are deflating and unemployment is hopelessly high – real unemployment that is, not the pretty numbers presented as U3, U6 matters.
But we are still presented with the same cure; just like the charlatans who made up most the medical field years ago and who would always practice bloodletting to no avail; our current charlatans are bankers who practice quantitative easing; more money for them is more money for everyone, not true; after all this printing the Dollar velocity is actually lowering, not a sign of renewed economic activity. Banks are taking out loans at the FED at record low rates and parking the sums at the same FED or exchanging real money for the huge collection of toxic assets they have on their books.
This whole song and dance about countries debt isn’t about reimbursing it, countries creditors are quite happy just collecting the interests which represent $450 billion a year for the US alone; It is about consolidating a system of privileges for a select few, who have created the crisis by gambling enormous amounts of money in order to froth up their salaries and bonuses, and socializing the losses.
Bankers have managed to install themselves as heads of governments in Italy and Greece, without elections, they are now coming to the rescue of politicians after having effectively destroyed their own sector; it could be funny but it really isn’t. The way they will want to have it, is through austerity for populations while keeping their casinos opened and unregulated; the longer this system survives, the happier they are, but it won’t last this time.
The illusion of a consumer lead economy is fading fast, inequalities over the years have been masked by offering easy credit, now the system is saturated by this credit, the savings rate has declined drastically while debt at every level of society has grown, salaries have been stagnant – for the majority of the population, 1% of the country is doing quite well – and the sacred consumer is broke and not coming for a second helping.
Cruelly, no amount of money in rich people pockets will re-create a consuming system with no consumers, consumers were the job creators.
While it can be argued that those jobs have been outsourced to China and other cheap labor playgrounds, robots are also replacing a now obsolete work force.
The great depression was an expression of its time; farming jobs were disappearing giving way to industry, machinery meant less need for men and higher productivity made prices and salaries deflate. Robots are now making man obsolete, a third of the working population was in manufacturing just 60 years ago, it is now below a tenth.
The industrial age is now dying and nothing is being drawn up to level the real losses in the economy, if we are to live in a service economy, some thoughts must be spared to reconstruct the wealth of the masses and salaries have to be re-evaluated; a giant tribe of Walmart workers and shoppers is not an alternative…well it is for bankers.
We should not accept this new austerity nor should we accept to be told repeatedly that we are living beyond our means, it is simply untrue.