As the stock market goes plop again (that big pile of cash to the banks hasn’t fixed anything), and I wonder why, this article catches my eye.
the larger story is that the global economy is fast popping its latest monetary bubble, the one over the last 14 months in commodity prices and non-dollar currencies.
Those bubbles are:
- housing prices (2002-2007)
- flooding the market with currency to avert the credit crunch (since August 2007)
- commodity prices (e.g. the $150/barrel oil and the riot-causing food price hikes)
So there is no “fix,” only delaying the effects. Playing pass the parcel with the nasty consequences of deregulation and free market absolutism. The banks have won the jackpot with their public funds bailout in return for token gestures of contrition. What other costs are going to be passed onto us to go with our debt, job losses, and higher food prices?
Saw an appropriate slogan the other day:
Capitalism isn’t in crisis, capitalism is crisis.
the dirty little secret of the banking industry is that it has no intention of using the money to make new loans
This from the New York Times, but the situation is the same in the UK.
Vast amounts of money handed to the banks, claims that this will be used as “leverage” (that word again…) to make the banks restart the economy. And this doesn’t happen. Never mind that “lending at 2007 levels” is just storing up trouble for later.
Call it a Jubilee or call it an Amnesty, it’s time to clear the books and write off everyone’s debts.
So there’s a financial crisis and the US government just handed over $700 billion to the people who created the mess. And it hasn’t worked.
You’re giving the money to the wrong people.These guys take home $300M, no wonder they’re not bothered. But the solution is here: Pay off the debts of everyone else.
Why? Follow these steps:
- I’m in debt too!
- Nobody gives me credit anymore.
- I’m cutting down on my spending.
- Consumer spending keeps the economy afloat
- My debt is a lot less than the banks’ and I haven’t “leveraged” it against anything
- Millions of other people in the UK are in the same boat
- There’s no point guaranteeing our savings, you need to get us spending again
If the UK government and the Bank of England are going to keep handing over chunks of £40 billion in public funds to the banks because they don’t trust each other any more, then the least they can do is pass me £20,000 to get me economically active again, no?
OK, so it might cost the GRI a new dialysis machine, but the economy will be saved!