What makes democratically elected leaders pursue austerity measures their citizens hate? My theory is that the world financial system is gravely ill and the plutocrats who run it are demanding austerity to salve the wounds the superrich have inflicted upon themselves.  That the superrich have the power to compel obsequious deference from even the President of the United States president is unnerving, and the implications are frightening.  My theory is that the global financial system has never recovered from the 2008 crash, that the system has never wrung out the poison but merely shifts it around ceaselessly, maintaining the illusion of a viable financial structure.

Obviously, elected politicians like Greece’s Papandreou know they are harming their citizens and committing political suicide with these grim austerity measures. So why do they persist? For that matter, why does Obama insist that the American Social Safety Net be cut even though that unpopular stance jeopardizes his own re-election chances? If the people in democratic nations are no longer in control, who is? If political accountability no longer determines the actions of elected leaders, what does?

The answer, I think, is that the world financiers, the superrich, the hedge fund managers and their ilk now have the western political world in a death grip. These economic terrorists have the power to destroy national economies on a whim or a hunch. Worse, I’ve come to conclude that the world economic system itself is a fraud that continues to exist only because everyone in power demands that everybody pretend it is viable. It is a Ponzi scheme and everyone is terrified of being left holding the empty bag so nobody allows anybody to stop pretending. The illusion must continue uninterrupted or it collapses like a house of cards.

Everyone knows that Greece can never repay its debts. Everyone also knows that the austerity measures being imposed only guarantee that the Greek economy will deteriorate ever more rapidly. You ask why Greece doesn’t just leave the EU. I think it is because German banks are the primary holder of Greek debt and they will suffer, some perhaps terminally, if Greece defaults. Greece must be kept afloat because the relatively healthy European economies will tremble and maybe crumble if Greece leaves the EU or otherwise defaults.

So why is Obama doing it? Why is Obama pursuing deeply unpopular attacks on the American Social Safety Net? Even allowing for his neoliberalism, one would think a politician like Obama would be motivated by reelection to do avoid pushing such extremely unpopular measures. What explains it? The world’s most powerful financial players — the World Bank, the IMF, the Federal Reserve — are all American either in fact or practice. The U.S. has used the IMF and World Bank to export “vicious capitalism,” often forcefully, over the past 30 years. Naomi Klein’s Shock Doctrine details the phenomenon. I believe that the Shock Doctrine has come home to the Western World and now even to the United States, like Frankenstein turning on his creator. The institutions and policies the United States elevated and forced upon the world have become more powerful than the nation that created them.

 

 

 

wbgonne

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