Intense rioting has broken out in Greece as the IMF imposition of serfdom is meeting with stiff resistance. The corporate media is beating the drum that this “contagion” of debt defaults (which hasn’t happened yet) will spread to the other PIGS countries then other European countries and this will bring down the German banks closely followed the US banks and we will all be in the soup, or soup lines.
The fact is that the only real problem that Greece has, is that it must pay 18% interest to recycle its bond debt. If the US had to pay 18%, which it did briefly under Reagan we would be paying 2.5 trillion in interest which is roughly the current Federal revenue. It’s all a phony, ginned up crisis to further the transition to corporate fascism. Except for Greece who hasn’t recovered from its recent transition from a military dictatorship the rest of Europe is not in bad shape. I mean really, they were a smoking ruin 60 years ago, this isn’t that big of a deal, it‘s just Wall Street paper.
Half of Americans believe a Great Depression could happen within a year, of course the reason this belief is so widespread is that we have been in one for years. The Obama stimulus package was a block in front of the wheel to keep us from going over the cliff but this will give way soon with the Republicans pushing from behind. The fascists are tasting success in Greece and are licking their chops.
The number of Americans who have taken out loans against their 401(k) accounts has jumped from 20% to 30% in the past year. Core inflation (excluding fuel and food) jumped unexpectedly in May and the word “stagflation” is being bandied about. (that’s massive inflation with no recovery) There is no risk of runaway inflation as wages are flat or falling. Falling gas prices will reverse the inflation trend in next month’s report and deflation will again be the boogie man, well okay this monster is real and should be feared like a train wreck.
The desertion of Austin Goolsbe from Obama’s economic team is a milestone in that there are no economists left in the White House, all of the senior people now advising the President on the economy are Wall Street lawyers. In reality he doesn’t need economists since his hands are tied by Congress and he can’t do anything but threaten to veto the stupid things they might pass.
This band of “economic” advisors from Wall Street don’t have any actual power. There is one lawyer advising the President that does matter and she is Elizabeth Warren currently creating the Consumer Financial Protection Bureau. The word is that she is attracting good people to run this new agency and Republicans are desperate to shut it down, but its budget is paid directly from the Federal Reserve and the Tea Baggers can’t touch it.
When the next collapse comes the Wall Street banks won’t need to be bailed out as the CFPB has the authority to step in. They will take these behemoth banks apart, the investors will be wiped out and the cronies in charge will all fired (as required by law), then a new Progressive Age can begin. Okay that’s the theory, the cynical among us can say Obama won’t really do that but the gallows are being built over at the CFPB just the same. www.prairie2.com