Friday, December 24, 2010

Schemes of the Rich and Greedy

Via Michael Hudson (H/T Phil's Stock World). 
The key to the success of the wealthy is their ability to hold the economy hostage (dependent of course on the government’s willingness to be unnecessarily held hostage). This dictates the fiscal and financial strategy of the super-rich: to create a crisis and then present their demands. Inasmuch as I expect the U.S. Congress to be plunged into this situation next spring, it is worth quoting Luke Johnson’s observation in Wednesday’s Financial Times: “The probable cost to the Irish taxpayer” of its government’s announcement on September 30, 2008, that it would fully back Ireland’s insolvent banks – a cost “running in the tens of billions of euros – helped the banks but left the country in need of a bail-out. A measured restructuring would have been far better, with domestic depositors kept whole, but all levels of bondholders forced to share plenty of pain. In a panic, the bureaucrats and lawmakers who preserved the banks in their entirety struck an ill-judged, carte-blanche deal that will haunt Ireland’s taxpayers for years.”
The key phrase above is, “In a panic …” The actions of European Central Bank and IMF (imposing domestic austerity to make sure that Casino Capitalists do not have to take a “haircut”) provide a set of experiments replete with rhetorical patter talk that Republican and Democratic plutocratic protectors are watching as an object lesson for how to maneuver this spring by creating a financial emergency – a grab-bag 9/11 for the bankers – to trot out their Financial Invasion plans into the domestic U.S. economy. Lacking a Democratic party committed to reverse the recent redistribution of wealth up the economic pyramid, we may expect Congress to shed crocodile tears as they complete the tax shift off the oligarchy onto the middle class – the constituency they are in a position to sell out.
Click Here to Read: Schemes of the Rich and Greedy 

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