Greek Mistakes, European Misery and the Coming Decade of Suck
1) killing bankers isn’t what’s needed. The people who need to be scared are their own rich, and their own politicians, who voted for the cram down instead of deciding to end tax evasion, primarily by the rich, and which by itself is enough to close the gap and avoid austerity measures.
2) Voting in right wing governments. You get what you vote for.
When you refuse to tax the rich, the only other option is to soak the middle class and the poor.
Meanwhile the Brits have voted for cuts, cuts, cuts. They too are about to get what they asked for. Austerity.
This contagion is going to spread, because Europe is fundamentally in the same mode as the US: spare the rich, cram down the middle class. The lesson taken by the elites from the crisis was that the rich must be appeased at all costs, because if they aren’t, they will go on strike, and crash the world economy.
What happened yesterday on the stock market proves it–nearly a 1,000 points off the DOW in seconds. The stock markets are no longer free markets, their movements are controlled by a relatively small number of actors with very deep pockets, who can make them go up or down whenever they choose.
There was an opportunity to break the power of these folks—to wipe them out, but it required calling their bluff, not caving to them. That opportunity has now passed. While the world economy remains very fragile and could go into a tailspin any time if anything goes wrong, best guess is we have another really lousy recovery and economic cycle to look forward to, if austerity measures don’t crash it out entirely. Over 80% of any gains will go to corporate profits, virtually nothing to ordinary citizens, and we’ll have another lost decade in which for virtually everyone the economy sucks.
There are solutions, but it’s clear that the elites in most countries aren’t willing to do anything about it, and frankly the population keeps voting for right wing governments (whether called that or not), so they’re getting what they vote for. (Say what you will, Obama was the most right wing of the major Democratic candidates.)
So, get ready for another era during which the deep liquidity, the hot money, is completely catered to—even more than it was in the last era. And get ready for an era in which, to paraphrase George Bush “who cares what you think? is the unofficial motto of government when dealing with ordinary people.