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G20 Confers on how to make you pay for the rich’s blunders

2010 June 27
by Ian Welsh

It’s really, really simple.  The rich crashed the world economy.  They were bailed out, with their wealth having almost entirely recovered and corporate profits likewise have pretty much recovered.  Now, at the G10, the world’s leaders are discussing how to make regular people pay for the rich’s follies.

The world’s developed countries have built extensive public health systems, promised citizens a paycheck for life and erected a welter of protections around some industries and types of jobs. Now their leaders are conferring over a singular dilemma: how to take some of it back without undermining the economies they are trying to sustain.

You notice that somehow, no one is talking about going back to 1950′s levels of progressive taxation, with a top rate around 90%. No, what they’re talking about is making the middle class and the poor pay for the sins of the rich.

The key thing here to understand is this: there is no crisis for the rich or corporations any more, therefore as far as they are concerned, there is no crisis.

Dick Durbin once said, “”And the banks — hard to believe in a time when we’re facing a banking crisis that many of the banks created — are still the most powerful lobby on Capitol Hill. And they frankly own the place.”

It’s not just the banks, of course, they are just one of the apex predators of the current court system, along with the Pentagon, pharma and various other predators.  The systems is simple enough—they take care of Congress, staffers and everyone else who matters, and those people take care of them.  Even if a congress member is not reelected, if they went down doing the bidding of monied interests they are taken care of.  If they don’t do the bidding of their masters, on the other hand, their post-Congress career will be much less pleasant.

At the G20, today, what is being discussed is how to take away what’s left of your economic future.  Ordinary Americans didn’t see a pay raise in the last decade. Not only won’t they see one this decade, they’ll take a loss, and now even the European experiment in taking care of the population is on the chopping board.

This is your future being decided, and no, they don’t think you have a say in it.

14 Responses
  1. Tom Hickey permalink
    June 27, 2010

    Michael Hudson nails it here. As usual, Hudson’s critique is devastating. It’s a must read and will make your blood boil.

    Hudson ties it all together in one neat package. This is no less than a plan for the demise of the middle class in the developing world, putting them on a par with workers in the emerging countries. Labor is now fungible, so why pay workers more just because they live in your country? Pass it on.

    Michael Hudson was economic advisor to Dennis Kucinich’s campaign. He is a professor at University of Missouri at Kansas City, the hotbed bed of “radical economics,” where William K. Black, and L Randall Wray (one of the founders of MMT and former student of Hyman Minsky) also teach. He blogs at New Economic Perspectives (link at right of page).

  2. June 27, 2010

    Repeat after me: austerity is socialism for the rich.

  3. anonymous permalink
    June 27, 2010

    I did notice no one is talking about taxing the superweathly. I also notice no one is talking about cutting back on the war machine when talk of fiscal responsibility comes up. Or real health care reform. But it looks like the shock doctrine may not be coming. Just death by 1000 cuts during the next decade of bright depression.

  4. anon2525 permalink
    June 27, 2010

    The quote from WaPo is full of disinformation.

    1)

    The world’s developed countries have built extensive public health systems…

    The U.S. has built an extensive private medical services industry (one of those around which a welter of protection has been built), not an “extensive public health system.” The distinction is that the former aims to maximize profits at the expense of customers’ health, while the latter aims to care for patients’ health.


    …promised citizens a paycheck for life…

    No ordinary citizen in the U.S. is promised a paycheck for life (ex-presidents and CEOs, excepted).


    … and erected a welter of protections around some industries and types of jobs.

    Which WaPo selectively decides to criticize or protect through disinformation.

    2)

    Now their leaders are conferring over a singular dilemma: how to take some of it back without undermining the economies they are trying to sustain.

    Only they are not “conferring over a dilemma.” Their argument is that taking “some of it back” is needed to sustain their economies. But thank you, WaPo, for describing their planned draconian cuts in terms that sounds like they are concerned about us.

  5. June 27, 2010

    There was no more effective ruler in the annals of the Roman Empire -West OR East- than Basil the II. A man of extreme contradictions – ruthless and sometimes cruel; but a much-admired champion of the “ordinary” Byzantine people – the small farmer, merchant and common soldier. He ruled the Eastern Roman Empire for near Fifty – 50 – years (976-1025 A.D.) . He avoided women altogether, never married or had children (Lord John Julius Norwich). Scholars such as Mark Pope (University of Missouri) assert that he was a Gay Man.

    Earlier in his Reign, Basil queried of a former rival and now friend, a certain General named Bardus Sclerus, how he could best guard against… “the Powerful”. “Sclerus recommended that they be kept on the tightest of reins, taxed to the hilt, financially persecuted, even deliberately and unfairly victimized; they would then be far too preoccupied to pursue any schemes of personal ambition”. (John Julius Nowich, History of Byzantium, Volume II).

    Basil remembered these words for the rest of his life.

    At the time of his death (1025 AD) the Byzantine (or Eastern Roman) Empire reached its absolute apex.

    Ian -I’ll take Basil anywhere, anytime over the whorish narcissists who slither into and out of G-20 leadership!!

  6. June 27, 2010

    jbaspen: “whorish narcissists” is, in fact, insulting to whores, who do orders of magnitude less evil than the G-20 leadership.

  7. S Brennan permalink
    June 27, 2010

    jbaspen,

    Thank you for the historical vignette of Basil the II….much appreciated.

  8. beowulf permalink
    June 28, 2010

    Instead of Basil the II, we’re governed by Basel II. I guess you have to be careful (and precise!) about what you wish for. :o )

    On September 30, 2005, the four US Federal banking agencies (the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision) announced their revised plans for the U.S. implementation of the Basel II accord.
    http://en.wikipedia.org/wiki/Basel_II

  9. June 28, 2010

    Austerity-promoting leaders are very often elected leaders. Austerity for other people has a very powerful voting bloc.

  10. Ian Welsh permalink*
    June 28, 2010

    What polls show is that the majority of Americans are more concerned with jobs than deficits, for example. This isn’t a case of “elected to be austere” this is a case of elite priorities.

    Of course, the Brits did, in fact, vote for austerity. They are going to get what they asked for, good and hard.

  11. June 28, 2010

    Voters having the ability to know full well the predilections of the elite through many years of experience still vote for those leaders. I don’t think that the distinction between “elite priorities” and what Americans are concerned about is as strong as you say, polls notwithstanding. Polls asking people about particular issues will always reflect the concerns most dear to their own environment, and for most people, that’s jobs.

    The question remains: why does that not translate to change at the ballot box. I suggest that when people vote for candidates, they are a little more concerned about how to screw others than they are when they answer polls about particular policy options in isolation.

  12. anon2525 permalink
    June 28, 2010

    Now, at the G10, the world’s leaders are discussing how to make regular people pay for the rich’s follies.

    It appears that Dean Baker did not think much of the WaPo’s “impartial” article, either:

    Are We Better Off Getting Advice from the IMF than a Drunk in the Street?

    If we look at the track record, probably not. After all, where was the IMF when the housing bubble in the United States and elsewhere was building up to ever more dangerous levels? Was it frantically yelling at governments to rein in the bubbles before they burst with disastrous consequences? No, the housing bubbles were no big deal at IMF land.

    This would have been worth noting in a Washington Post article that repeats at length IMF recommendations about reducing budget deficits, cutting back on labor market protections for workers, and rolling back pension and health care benefits. After all, any reasonable person would ask when the IMF stopped being wrong about the economy.

  13. The Forbin Project permalink
    June 29, 2010

    The question remains: why does that not translate to change at the ballot box.

    And who exactly would you have them vote for?

    In the U.S. the leaderships of both parties are implacably neoliberal.

    The Democratic Party leadership is steadfast in its resistance to progressive candidates to the point that they are willing to lose seats to the Republicans rather than admit them into the fold.

    And to top it off the actual vote counting is now largely conducted in the dark by a small number of companies, all of which are owned by Republican cronies, a situation that the Democratic Party seems to find unremarkable and unworthy of investigation; unlike, say, imaginary electoral fraud committed by Democratic organizations, which they will boisterously pass unconstitutional bills of attainder to punish. How enthusiastic can one be about the prospect of spending years to working to elect fresh blood to office knowing all your efforts can be magicked away at the touch of a button, and that if this should happen no-one of consequence would lift a finger in your defence?

  14. The Forbin Project permalink
    June 29, 2010

    “whorish narcissists” is, in fact, insulting to whores, who do orders of magnitude less evil than the G-20 leadership.

    It’s catachrestical understatement, like calling Donald Rumsfeld a butcher.

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