Tuesday, October 13, 2009

Europe must think our policy makers are stupid.

In reality, they are simply so greedy that no ethical or moral considerations even hit their radar.

Europe's Oil Drum node has an article posted yesterday that asks why US media, government spokespersons, and economists continually misidentify the causes of the economic crisis. Because the "official" reasons differ so much from the real reasons, the remedies being applied are worthless.

Which makes me wonder: Is it that they're not the sharpest tacks in the box, or that their agenda never was to "solve" the economic crisis in the US?

The Oil Drum: Europe
One (or two) years on - they have learned nothing
Posted by Jerome a Paris on October 12, 2009

Just over one year after it became impossible to deny that the financial crisis that had started in 2006/2007 was a major, systemic event, it is rather depressing to see that nothing has really changed and, to the contrary, if anything has, it is for the worse...

I actually began writing on this topic on my old blog at Yahoo in 2005. Some of those posts were transferred here in 2006 as new posts (with the old dates at the top for reference) when this blog was created. I was not the first person to write. Others began sounding concerns as early as 2004. It was in response to reading news and stats were not paid attention to by the media that I began doing some of my own research and writing in 2005. There are many others who began doing the same at about the same time.

...there's very little discussion of the fact that this is an income crisis namely, stagnation/lack of income, which was dissimulated for a long time by increased access to debt. All the endless debating about replacing private debt by public debt and whether that's a good thing or a sustainable one ignore the underlying problem: middle and lower class wages & incomes have been squeezed and need to be supported...

Not here. Wage stagnation was early identified as the primary cause of the economic crisis - and it's hard to believe the fat cats at the top didn't already know that before it started. The real problem is that they got rich off the debt that people had to take on due to their stagnant wages not meeting current living standards. It's like getting the ants to guard the picnic - the conflict of interest is so great that truth never had a chance.

...Instead, we get savage budget cuts in social spending, ie in the very programmes that supplement or complement most people's incomes, and yet more talk about making the labor market more "flexible" (which only ever means pushing wages down). Public spending in collective infrastructure that would support living standards (including energy-saving plans such as support to home efficiency, or public transport), backed by real income (ie taxes on those who do not spend all their wages) is not seen as something necessary like the bank bailouts were...

Well, duh. Those things would help people to not need debt.

...there's been very little talk of the profound underlying responsibility of the financial world in that drive to reduce the cost of labour. This is usually presented as an inevitable consequence of globalisation, when in fact it's been a clear policy choice to focus policy priorities on improving returns on capital (at the expense of everybody else), and to take decisions that justified these choices...

Again, not here. This blog immediately began harping on the unethical and immoral use of defacto slave labour in third world countries, and the fact that these manufacturing facilities were moved to third world countries specifically to avoid the First World wage and labour, safety, environmental, and non-discrimination laws that our Judeo-Christian society has decided are the ethical and moral ways to do business and work. It is pure greed that drives any CEO to claim they "need" tens of millions of dollars in compensation, and pure greed that drives these Boards to claim they "need" Billions-with-a-B dollars in profit when their average workers aren't even making a living wage. They never CARED that people who can't make ends meet can't buy their products. They figured people would just keep using credit cards and taking equity out of their property forever.

...the oil price increases prior to the crash are now dismissed as aberrations caused by speculators and not a signal of anything deeper happening; similarly climate change worries are often dismissed by Serious People as a "luxury" in today's tough times. As a result, we're doing even less than we could on these problems - and so much less than we should...

Not here. Every measure of oil production show decreases year to year, and regardless of what happens in the US the rest of the world is continuing to grow their middle class and those people are beginning to demand First World standards of living. Instead of accepting that we can all have a First World standard of living if we curtail the use of private automobiles and make efficient non-petroleum based mass transit available to everyone, we have rather chosen to embark on a series of t thinly disguised resource wars that will do more damage to the economy that "greening" it ever would have. But TPTB scream that mass transit is "too expensive," never asking themselves how expensive it will be to keep using gasoline.

...Thus we stay on our oil (and gas)-dependent trajectory through investment that can tie us in for decades.

...except the automobile won't be a viable option for most household in three or four or five decades. They will be lucky to make it just one more decade.

...behind all this, of course, is the agenda of large corporations - old industry incumbents, financial behemoths, not to mention the healthcare insurance juggernaut in the US - and their shareholders, and the twin overridding imperatives of return on equity and "competitive" management pay. They lobby, they run the debate and they outright buy off politicians. The grip of money over politics and policy has, if anything, tightened. But it's not seen as related to the crisis in any way - at least not by the Serious People (ie those that buy Serious People or are bought by them).

We need policies that actively promote (i) increasing incomes for the lower and middle classes, (ii) public investment (in particular on energy and healthcare) paid for by increased taxes, (iii) cutting down corporates (in particular, banks) to size. We obviously won't get any of these until the influence of money on politicians has been cut massively...


In truth, democracy is dead in the water. The entire system of parties and elections in this nation is bought and paid for by corporate interests, and there is not one shred of legitimate representation for ordinary citizens. We have become a corporate oligarchy.

...The past crisis was obviously not sufficient to shake the current system; if anything, the grip has been tightened. Pain for the masses does not matter if it has no impact on the political process; the past year suggests that the corporatists have been successful at defusing public anger and pointing it away from the real culprits; in many countries, the left is split between those that have been compromised too much within the system and those that are too seen as too shrill and neither can provide a credible alternative.

All this points, unfortunately, to a bigger crisis soon.


Agreed. Things are going to get much worse before they get better. With 40 million people either unemployed or underemployed (ie not full time and not making living wages) this economy has no chance of getting "better," and their definition of "better" is, frankly, untenable and unsustainable anyway. The corporate fat cats want you in perpetual debt slavery, with just enough income to service your debts forever and never enough to actually pay them off. That's their idea of "better." They enjoyed that for the past 20+ years, and now they're addicted to your hard-earned income.

And like most addicts, they will fight to keep access to their drug of choice. So they have no intention of "solving" the economic crisis, because solving it would mean cutting off their source of obscene profits and powermongering to implement a "non-growth" economy that respects resource limitations.

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