Economic Dangers Repeated

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Now is the time to take action to avoid a descent into violence

Once again the difference between political rhetoric and reality could not be greater.

BSD

Firetrench Directory

Since the present global economic disaster began to unfold more than a decade ago, politicians have tried to cover up the real situation in the hope that if they can delay the final crash ‘something will turn up’ to solve the problems for them.

Over the period it has seemed that they might have got away with it – several times. The EuroZone has been on the point of melt down so many times commentators have become numb.

The great difficulty is that modern global trading is based on speculators who are driven by the amount of red on their computer screens. Robots analyze market trends and trading performance faster than the commodity and stock speculators can follow. That results in them being driven by the red on the screen rather than be the detail in each line of the forecasts and trading returns.

That situation may be bad enough, but it has been overlaid by a political elite in many major economies who understand very little of the real world and could care less. They depend heavily on information overload and propaganda. They also come to believe their own lies. They are a professional political class that mostly goes straight from school into politics at university and then in research jobs for politicians, local government, national government and super-national government. The result is that they have no understanding of the ‘little’ people who lead ordinary practical lives, juggling the money left over after they have paid the excessive taxes. For them, the smallest increase in the cost of food, heating, transport and medical care is immediately recognized. For the professional politicians, they might understand an increase in a $2000 bottle of fine wine taken with their generous taxpayer-funded lunch and they might fulminate about being asked to account for the expenses they have claimed, that might be more than the average wage for the period, but they have no conception of how ordinary people have to live in the shadow of the wealth that they routinely and carelessly squander.

As professional politicians could to consider themselves above the law and above the norms of society, they have been joined by a corporate elite and a banking community that has come to believe that anything the politicians can abuse, they can abuse better. Out of control bonus payments are an insult to ordinary people.

It was therefore only to be expected that the combination of fat cat executives in mega corporations, public service employment, and politics, would result in a major global economic disaster and the destruction of accountable law-abiding society.

Ordinary people have been corrupted by the example of the fat cats and that is disappointing, but only to be expected. When a politician can stand up and tell one obvious lie after another, ordinary people begin to think that they are unable to change the situation and might just as well join the party and ignore regulations.

At the turn of the new millennium, all of the elements for disaster were present but it was still possible to bring the world back to accountable politics and business. For every mega corporation that fiddled its accounts by counting empty boxes as containing high priced stock, or following one of the many criminal acts of the corporate world, there was still one large corporation that was reasonably honest, and thousands of medium and small companies that were completely honest. The failure was not the failure of capitalism, but the failure of regulation, both self-regulation and imposed legal controls.

Professional politicians realized that they could become very rich by ruthlessly abusing their own privileges and selling their souls to corrupt businessmen. Tony Blair was one example of how a politician could become a war criminal and personally profit to the extent of becoming a exceptionally rich man, hiding the full extent of his gains in a spider’s web of companies in known tax havens. He has not been alone. The only members of the Blair Brown Regime not to follow him to great personal riches were the really incompetent professional politicians. They contented themselves with minor frauds and abuses of a few tens of thousands of pounds. It is hard to decide which were the most reprehensible, those who sold their souls for millions, or those grubby little individuals who sold their souls cheaply.

In this environment it became not only common practice, but commendable behaviour, for the banking community to build a mountain of junk debt as politicians earned their pay offs by turning a very blind eye and avoiding the introduction of necessary regulatory controls. They only became aware of the depth of the risks they had allowed when the banking crisis burst onto the scene. Their response was to dig deeply into tax payers pockets to bail out the banks. They were privatizing the profits for their cronies in banking and nationalizing the losses. The problem was not solved, only hidden away. Even four years on, banks still follow the same path to disaster and continue to pay obscene bonuses, often directly rewarding incompetence. The only way to have corrected the system was to accept initial economic pain and allow the fraudulent banks to fail. As it was, professional politicians were afraid to take that necessary action and some undoubtedly saw bank regulation hitting them in the pocket as well as hitting the fat cat bankers. Instead, they dipped deeply into the pockets of even the most vulnerable members of society. Bank bonus payments have been propped up by robbing pensioners.

In several countries, the mess has spread across public services to the point where, in Britain, the much vaunted National Health Service, the model for ObamaCare, has killed thousands of vulnerable patients both deliberately, often to win bonus payments, and unintentionally by appalling lack of care and nursing standards.

In the food supply industry, it is becoming clear that mislabeling of products has not only been widespread across Europe, but is a practice that has been going on for years. This is simple fraud by providing cheaper ingredients and describing them as very different and higher priced materials. Politicians have been warned about these serious dangers for several years but ignored the threat to ordinary people who have to buy lower priced super market products because the politicians have already robbed them with exorbitantly high taxes.

Simple economic measures alone are not enough to correct the many problems and something of a political revolution is required. There are signs of this beginning to be possible as new political parties are being founded and gathering support because ordinary people have had enough of all the crime and incompetence in society.

In the meantime, economic problems are deepening.

Officially, the G8 nations are committed to avoiding currency wars that was the final straw in the 1930s that created the great crash and led to the most destructive global conflict in history. Unfortunately, the G8 nations are already engaged in currency warfare. We know that this creates stagflation, where something powerful and new is necessary to break the cycle of disasters. The chilling fact is that last time the powerful new factor proved to be an arms race and global war.

This time round, there is an alternative solution to embarking on a path to war. Voters have it in their power to create a revolution and throw out the professional political elite. In Europe, that would lead to the complete failure of the Euro. The EuroZone members would then be free to return to self rule with the ability to adopt economic policies that suit their individual need. From that point, recovery is possible, but only if democracies are re-established, freedom is given to the people and with it responsibility. Fair but effective regulation of commerce is necessary and the start has to be made to rebuilding nations on the format that once made them good places to live and work. It is no easy task but the alternative is too dire to contemplate.

Editor

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