Wednesday, June 29, 2011

Austerity for thee, but not for me. or Greece, a reflection of our future.

Not Long after Barak Obama’s election Newsweek magazine emblazoned its cover with the open declaration “We’re All Socialists Now.” What they meant of course was that the election had put us firmly and irrevocably on the path to European Socialism in America and that the capitalist system as we had known it was dead and buried.

It seems however that intervening events have raised some question about that irrevocable course. The administration’s right from the start crawling in bed with the very forces that brought us to the brink of disaster in 2008, its unwillingness and/or inability to delineate never mind address the problems that created the disaster, this policy of embracing the status quo and extend and pretend had almost immediate repercussions on the political front. If the President doesn’t like this reversal of fortune or the Tea Party, maybe he should look in the mirror. Both action and inaction have consequences; it’s a beast of his own making.

Any questions about European Socialism aside I have to agree with Newsweek on one thing, capitalism as we once knew it is dead. It has been replaced with a system of crony capitalism, the government and corporate partnership, a neo-fascism or more succinctly; a kleptocracy. This is the Rosemary’s Baby born of decades of deregulation and the revolving door between the Treasury Department and the banks, particularly the Federal Reserve Bank and the Wall Street investment banks like Goldman Sachs, J.P. Morgan, HSBC and others. We now live in a system where the insiders prosper greatly and divide their pocket change between the politicians they buy through campaign contributions and the growing legions of government employees who reap salaries and benefits far beyond anything the working and taxpaying public could ever hope to earn in the private sector.

The inevitable result of what the United States has become in the macrocosm, we can see being played out in microcosm in Greece. (And soon Spain and the rest of the PIIGS.) These 1/10 of 1%ers have leached off the wealth of the nation through insider corruption, embezzlement and outright fraud. They have done so with virtual impunity as it’s their fellow kleptocrats who hold the civil and financial reins of authority.

They have taken their profits from the creation of massive piles of debt based money knowing full well that the as long as they maintained control the loans would never have be paid off. With each passing year the lender of last resort, the Federal Reserve, and the spender of last resort, the Federal government must create more debt and interest payments in excess of what was created in the previous year or deflation sets in. So make no mistake, whether it’s called QE3 or some euphemism for it, more money will be printed at an ever accelerating pace. On one end the profit statements of the FEDs primary dealers will continue to grow, the annual bonuses will be paid, and on the other end real unemployment will rise, wages will stagnate, real estate values, and home sales will continue to fall. The middle class, the self-reliant and privately employed worker, the small businesses of this world are being wiped out, and by design, to be replaced with the welfare recipient, the unionized government employee and a new Walmart on every block.

If you want to know what will happen in Congress as the day of reckoning draws closer on a debt ceiling vote, cast your eyes to Greece. Just as our banksters and politicians are desperate to maintain the illusion of American capitalism and reserve currency status, the Europeans are desperate to maintain the façade of the Euro and European unity around it. The Parliament in Athens has passed a new “austerity plan” in exchange for a new infusion of Euros. Nobody really thinks that this plan will actually be put in place or that any of the fiscal target will be met. The government will delay and put every obstacle in place to prevent privatization. Meanwhile the same government and financial elites will skim off a fat share of the proffered cash, nothing will change and there will be talk of bailout round 3 (or is it 4, I’ve lost count) before winter sets in.

It should be no surprise then that the populations are showing up in the streets. Between 30% and 40% of workers hold government jobs, at the national, provincial or local level. For decades they have selfishly bought into the false promise of ever expanding wages and benefits paid at the public’s expense. They have been played for suckers and now, to paraphrase Margret Thatcher, socialism has run out of other people’s money. Well at least other Greek’s money. The game now is to keep playing with other European’s and American’s money.

Take a look at this picture. Just last week this fat pig, I’m sorry there is no more fitting term, Greece’s Deputy Prime Minister issued a warning that if the austerity plan was not passed there would be tanks in the streets. It sounds like he is channeling Hank Paulson’s desperate pleading for the TARP package.

I could think of no better caption than “Austerity for thee, but not for me.”

These elites, these politicians and bankers are but 1/10 of 1% of the population, if that. They are busily engaged in selling us the fraud that the other 99.9% of us must sacrifice ourselves for their survival. Whether we buy it, and if we do, for how long, remains to be seen. As I write this the Finance Ministry building in downtown Athens is ablaze. Do we really want Syntagma Square in Athens to be coming to a town near us? If we don’t send the clear message to our politicians in the next elections that the game has to stop, the banks have to be broken up and the corrupt must be tried, convicted and jailed (can you hear me Ben Bernanke, and Lloyd Blankfein, and tax cheat Tim?) then our last chance for a peaceful resolution may well be gone and the beginnings of George Orwell’s “jackboot stomping on a human face forever” in his novel “1984” may well be upon us. Finding courage is difficult, failing to find it may be disastrous.

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