As I perused the major economic news stories of the last couple weeks, which have revolved around the recent dominant issues of foreign and sovereign debt, currency wars, and quantitative easing, one thing struck me. When world finance ministers, central bankers, and financial columnists try to hide what amounts to trickery and manipulation behind jargon, rhetoric, implied clairvoyance, and reassurance, we are too often predisposed to take them seriously. Perhaps we are intimidated by their imposing suits with snazzy ties. Or maybe it is the bravado and (they hope) gravitas of their tone, and their (less and less) sophisticated lingo. And I think this could be what prevents the legitimate calling into question of current national and global economic systems and structures. However, it is becoming clear to more and more people that these subjects represent cracks in the capitalist foundation, fractures developing in the areas where it is fatally flawed.
Let’s pull back the suits and the lingo. What are these people really hiding behind? What do the finance ministers of Canada, the treasury secretary of the U.S., and the European Central Bank have in common? They are all in charge of deeply indebted nations’ economic departments. The governments they are a part of currently don’t collect enough taxes to stay in the black, let alone to begin tackling that debt. They are too timid to raise taxes, or appropriate the vast unproductive piles of their nations’ private wealth sitting mostly in the hands of a miniscule part of the population (1-5%). If everybody knows this, and they should because its not like I’m an investigative journalist, then why are the markets, public finances, and the citizens of these “rich” nations continuing to listen to the garble of the elite transmitted by the MSM?
If we are to imagine states as autonomous actors, flag coloured bubbles floating around in a chamber, which is the simplest thing to do when talking about country’s inter-economic relations, then what is causing certain ones to dominate the headlines so much? Imagine the bubbles are all of equal size, just as the country’s flags are all of equal size. How does that green, white, and orange one, the same size as the rest on paper but of course representing a small country with a few million people and not much economy besides old stone buildings, a shattered real estate bubble, and booze cause so much havoc? And why is it still so damn expensive there if the economy is so bad?
It is, broadly put, a case of no nations being created equal, even if we managed to give them equally sized flags. The point of the U.N. and perhaps these flags is to give the impression that each nation is sovereign and legitimate, that each nation has a voice. But with Europe’s recent troubles, we are seeing the international community divide the continent into “productive” and “deadbeat” categories in order to call its ‘strong’ currency into question. The two smallest of the so called “PIIGS” five of countries at the heart of the issue, Ireland and Greece, have already needed bailouts. These have come from Germany, fit as a fiddle from all its “poomping eecunumic eye-yarn”. The common currency answers why Germany should care and spend its hard earned euros it earned from selling luxury cars and knives to two nations who were in hock so many euros that “default” was imminent. The “bailout”, finally, is not one for the citizens of these nations who cannot find work because there is nowhere to work (even though they still probably have way more fun and are way happier than most people in North America) but for banks to reassure investors and bondholders who hold these nations’ government issued bonds (which is a major cashflow source for all “rich country” governments). Hence why Ireland is “bailed out” but not anymore “affordable”. Because obviously affordability and standards of living are the last things on the international bond market’s minds.
All this “rescue” may be normal and expected by the international community, but you can bet the German nation is angrily gritting its teeth. That is why we are getting to the point where thei G20’s international photo-ops at summits, meetings, and press conferences all worthy of a UN-sponsored toothpaste ad turn into a wallpaper façade on top of the name-calling and acrimony, which can no longer be prevented from surfacing and dissipating into the MSM. If their scared to do it publicly we can just find out from wikileaks now what they really think. These meetings that concern only the international power brokers and are only taken seriously by them can no longer even provide an illusion of legitimacy when it is revealed that each actor is only out for itself (not that they have ever not been, but only in the 20th century when broadcasts to the whole world became commonplace did they feel the need to display this fake “one for all” attitude) . In simple terms, they are committed to a “united front” to focus on “global economic recovery” until these things called “national interests” trump those meaningless platitudes. Then, possibly to score points with its own electorate or the stock markets or some combination then therof, the gloves come off and governments accuse each other of sabotage, deceit, and selfishness. They express “frustration” and “doubt”. In other words, they start to resemble the paternal, rational “father figures” whose “cooler heads prevailed” during the fraudulent and dubious “stimulus/recovery” exercise that “saved” capitalism less, and make me think of a kindergarten classroom or schoolyard playground a lot more. With their ideas increasingly being exposed as obsolete, they resort to the ultimate childish behaviour: name calling, tattle-taleing, and squabbling. But before the mud really starts to fly, we will have to endure through another childish tendancy for some time still: endless repetition. Children can run in circles yelling the same phrase or spend hours singing the same song and quite enjoy themselves: it is a way their young minds develop. Adults, of course, must steel themselves to participate in this test very tedious to their grown minds and not show their irritation. But one loses patience when one witnesses the financial power elite and mainstream media engaged in this type of behaviour. They are reminded of a bunch of kids dancing around with different flags to Sharon, Lois and Bram’s “The Name Game”. They all took turns singing a verse out of this song, with the same mind numbing results as when you rocked out to that cassette in pre-school.
China china bo china banana bana bo china, un peg the yuan and let it rise china, fee fi fo china – china…
U-S U-S bo U-S bo U-S banana bana bo U.S., stop printing fake money U.S. fee fi fo U.S – U.S..
German german bo german bailout europe and stop scaring bondholders german fee fi fo german. German!
Because the inherent futility of trying to manage the “global economy” from sporadic heavily guarded closed door meetings prevents any visible solutions to economic woes from being realized, other dominant economic nations are now lashing out. The tepid growth and deadbeat account balances of most Western nations, who are still as “rich” nations absurdly counted on to fuel global growth, has created a prolonged stasis that the attendees of these name calling sessions have to pretend they are working very hard to pull us out of. A chief source of frustration is the biggest debtor nation in history, the most deadbeat nation of all, America, led by its two international financial superstars in chief, Geithner and Bernanke, still “leading” and “dominating” the discussion. China and Germany are still very dependent upon the situation in the U.S., not least by its currency representing the global reserve, so they are surely annoyed at having to accommodate this. They have to try and out-earn and out-work America with real economic productivity while the two hotshots at the treasury and the fed play their last card with as much dramatic flair as possible, printing money (referred to in the news as the QE2 experiment). Rather than boost its exports, increase its productivity, or invest in its education, America’s economic reforms are to nationalize its mortgage debt and all the rotten derivatives that stemmed out of it and put more money it doesn’t have in circulation. And as much as the world would love to tell them to go to hell, it is in too deep itself to try. So thinly veiled attacks are issued in speeches and announcements, and America is more than happy to respond in kind to a war of trash-talking and rhetoric. The thing is, America is very, very much alone in the world today believing its own hype and intellectually defending the credibility of its own machinations. But when it has resorted to naming China as a source of its economic problems, it is engaging in the worst kind of name calling - trying to divert focus off of itself in the minds of the ignorant and onto a foreign, competitive country that has only been too happy to take advantage of the mutually destructive arrangement America offered it on a silver platter – what James Howard Kunstler referred to in his last post as the “China-Walmart conveyor belt”.
America does not have to feel so pathetic yet because It is much obliged by the cheerleading, rah-rah English-speaking MSM and conservative blogosphere. All eyes are on the fed chairman for the wrong reasons, they say, who is just doing what he has to do because he doesn’t have a choice. The last two entries of York professor Fred Lazar’s blog on globalbrief.ca summed up the majority of Western media’s defences of the Fed and its head quite well for me; he lashed out at the countries criticizing America’s monetary policy as “crybabies” and he derided all those critical of Bernanke and co as “critics” who had nothing productive to contribute to the discussion. Everyone else should just shut up and wait while the grandest embezzler in the world figures out a new way to placate and pacify its impoverished and disenfrancishised population to believe in an even more crooked and warped pretzel twist of the terms “growth” and prosperity”. It has rightly been stated recently that a greater portion of the world’s population has better access to food, water, education, and government services than at any time in history. The media knows that and because reality checks and market forces are now outlawed, wishes the bankers and governments to continue on this off the rails train of borrowing, rate manipulation and bailouts because they believe and want us to believe that constant economic growth must occur by any means necessary. It is this thinking that the party can last forever and sacrifices no longer need to be made that I so deplore: if we don’t get back to understanding that we cannot expect for things to get better all the time then shocks that we could have easily prepared for will be so much more painful for everyone
It is all very complicated, isn’t it? I have a headache just thinking about it. I do admire some of what the economic paradigm of the last hundred years has been able to accomplish for certain impovershed parts of the world. But to believe that statistic and to leave it there is to ignore the greatest amount swindling, book cooking, fraud and exploitation it took to get there, and the untold future widespread practice of these sins the elite have planned. Crashes are deserved by masses who have consented to let themselves be mindlessly “led” by this black cadilllac escalade convoy of fools. There is a solution, though. A simple solution. One solution that will make dominoes fall, allow us to see the shiny suits and exaggerated smiles for what they areally are, and more importantly our economic situation for what its really is, and put an end to name calling once and for all.
NO MORE BAILOUTS NOT FOR ANYBODY NOT EVER!
For we must ask ourselves: who are we really bailing out, and what are we bailing them out of? The smug columnists who defend a bizarre and imploding status quo by appealing to people’s comfort in it while ignoring the debilitating economic conditions that necessitate bailouts tend not to specify that, only assuring us that it is absolutely vital and warning us of the perils of listening to the “doomsayers” and “collapsitarians”. They cannot face their own uncomfortableness with the flawed and perverse logic of Keynesian bailoutism, even though they know it is wrong and against their convictions. For if they did, they might see the situation through the smoke and mirrors for what it really is.