Last Saturday, 250,000 Britons marched against Austerity -- something the newly re-elected David Cameron believes is good for the UK. Which raises the question, Who is austerity good for? Duncan Cameron writes:
Both social democratic and neoliberal market economists defend austerity, but the reasoning (do not spend more than you receive in taxes) behind the policy is not strong enough to explain why the doctrinaire approach was adopted.
Big capitalists support austerity, but cutting public spending is bad for business. Mainstream media sell austerity as if it were new and true, even while it undermines audiences and readership, and drives away advertisers.
The remarkable willingness to pursue austerity, despite its destructive consequences, originates in the people who run the bond market: investment bankers, hedge-fund operators, pension-fund managers, and wealthy rentier capitalists of all stripes.
The people who profit from austerity are behind it.
We live in a world where bond dealers are king:
The game for the bond-market dealers is to make money selling corporate debt, since that is where the bankers' fees add up the fastest.
The more government bonds dealers have to sell, the less the need for pension funds and investors to load up on corporate debt, and the lower the profits for the investment houses that sell corporate bonds.
Government deficits create the need for borrowing so the financial market "austerians" rant about the need to balance government budgets, so as to maintain the value of existing government debt, and leave room for new corporate debt.
Private companies rely on selling bonds to finance business expansion. The bond market overshadows the stock market. Stock markets, where money is raised through selling ownership shares, is limited to well-established companies with a record of profit-making.
The international bond market is huge; outstanding securities amount to a whopping $20.89 trillion; and that does not include domestic bonds.
Bond used to be the name of a man who had a license to kill. It has since become a name for financial madness.
4 comments:
I hate nit-picking, but it's 'Duncan Cameron', not 'Duncan Campbell'.
Point well taken, You keep me honest, Anon.
"Early in the 21st Century, the South American country of Argentina faced dire economic conditions. Ultimately, these conditions would culminate into one of the greatest social collapses in modern history. The result started as peaceful demonstrations and ended with looting, violence, and large scale riots.
Many factors contributed to the economic collapse of Argentina; a country still in the process of recovering from these tragic events. The fixed exchange rate between the Peso and the US dollar did not allow for fluctuations based on market conditions. During the 1990s the Argentinean President, Carlos Menem, accumulated massive debts. This debt was further exacerbated by a marked decrease in tax revenue received by the country. Although there were many other factors reaching back to the 1970s, these factors had an enormous impact on the economy and the collapse that soon followed became almost inevitable."
From: Crash Proof
How To Survive An Economic Collapse by Sarah Ratliff
http://owth.co/file/crash-proof-how-to-survive-an-economic-collapse.html
Do you see what Harper is setting us up for? Massive debt plus lowering tax revenues for the federal government why do you think he has made demonstrations illegal under C-51? He knows what he is up-to he wishes to create chaos in Canada so he can implement Martial Law.
Interesting parallels to be made here.
Mogs
Very interesting parallels, Mogs. The history of the Harper years will not be held up as a model of how to do things.
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