2012 Vampire Squid Watch

SUBHEAD: Top economic thinkers explain why 2012 will be a year of continued, escalating predation by financiers.  

By Lynne Parramore on 29 December 2011 for Alternet.org - (http://www.alternet.org/story/153604/vampire_squid_watch%3A_4_scary_economic_trends_for_2012)

Image above: Cthulhu the Great Vampire Squid. From (http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x66737#66740).
Having been seen to twitch – ever so slightly – in the 2011 tidal wave of global protests, the vampire squid is stirring in its evil lair. Reports of sucking noises and new tentacles sprouting in every direction tell us that the global financial monster is poised to steal yet more wealth and resources from the public in the coming year. Top economic thinkers have shared their forecasts with AlterNet, and the focus is clear: 2012 will be a year of continued – and escalating – predation by financiers. Their influence over political, financial, and economic activity is likely to grow – along with potential for harm.

1. Back-door Bailout of the Eurozone
Would you like more of your hard-earned money to flow to fatcats? Wish granted! Attorney Walker Todd, who spent two decades in the legal departments of the Federal Reserve Banks of New York and Cleveland, names the back-door bailout of the eurozone banking system by our very own Federal Reserve as the top economic story of the upcoming year – or, at least one of the most outrageous. 

In a nutshell, the Fed is helping European banks by opening up the short-term ‘emergency’ lending pipeline, which means that U.S. taxpayers are indirectly bailing out private European capitalists. This is being done through a bit of financial hocus pocus called “swaps” – essentially the trading of dollars for euros. Such a maneuver allows the Fed to prop up European banks while claiming that it is not 'technically' directly lending. In other words, swaps are an attempt to hide the truth from the public.

As Gerald O’Driscoll put it in the Wall Street Journal: “This Byzantine financial arrangement could hardly be better designed to confuse observers, and it has largely succeeded on this side of the Atlantic, where press coverage has been light.” O'Driscoll observes that the Fed has no authority to bail out European banks and warns of what economists call “moral hazard” – the nasty habit of banks to engage in even riskier behavior when they get bailed out.

Why is this happening? Well, because the squid is strangling morality, democracy, and the rule of law. We pay, they play. “This is an attempt by our own governing elites to maintain a false vision of how the world works, or how ‘we’ think it should work,” Todd told AlterNet. “This comes at the expense of many people who never will go to Europe, who know no European bankers, and who have no European bank accounts.”

You may not know a European banker, but you can be sure that one is just now raising a glass of bubbly in your honor. After all, you paid for it.

2. Record-breaking Political Finance
What does corporate dough buy? Newspapers and elections and presidents, oh my!

Thomas Ferguson of the University of Massachusetts, Boston and the Institute for New Economic Thinking suggested that next year’s very biggest stories could well be about corporate money influencing politics. He told AlterNet he saw a real possibility that a serious third party candidate for president might emerge; if one does, it will be bankrolled from the right while promoted in public as representing the political “center.” And it will also be designed to give corporate America many of the policies it has long sought, such a trimming Social Security and eviscerating the social safety net. "People are going to be astonished at how lethal the combination of secret money and corporate mass media will be to the public’s interest," said Ferguson.

Ferguson was confident that the 2012 elections would break all records for political finance, but he did add a sobering qualification. He thought there was an outside chance that the world economic slowdown would provoke really serious unrest in China or Europe on a scale that would put American developments in the shade.


No comments :

Post a Comment