Saturday, November 6, 2010

Austerity Anger and Kilkenomics

This blog started out trying to counter economic propaganda. It was clear to me that the bailouts were wrong morally and economically and that stimulus was nonsensical and that, given what happened to Argentina and also how the IMF had pillaged country after country (on behalf of big global corporations) in the same way, austerity would be visited on Britain bringing chaos, poverty and economic collapse.

It was clear to me that a small financial elite was attacking Britain, the US and other countries. I never bought the excuse that it was all down to business cycles and knew that 'recovery' and 'recession' were words sent to deceive us.

The reason that governments have been conned is that the banks have cultivated an economic ideology considered axiomatic by politicians and commentators.

The truth is that we don't need to bail out banks. Banks are often considered a cornerstone of capitalism but capitalism demands that those who fail fall by the way side and an entrepreneur will come along and fill the hole in a way where value to the economy is better met and so resources are better deployed.

How did we get to the point were banks are motivated to fail? If they speculate wildly and win the bankers get huge bonuses, if they lose the owners get bailed out. In economics this is called 'moral hazard'.

Governments bought into the idea that debt is as good as savings. You can borrow to spend. Total junk economics but that's modern (neo-classical) economics for you. It's what every economist gets taught, it's what politicians are led to and like to believe and the banks get to sell debt till their hearts are content.

Apparently we don't have to make things, we can just borrow and spend. The more we borrow then the better is the logic. In that case why bother regulating the banks? Let them create more and more money to lend out because debt is intrinsicly good for the economy.

In this paradigm the banks will simply speculate and speculate as wildly as possible. Why? Because both consequences are economically good - more profit if they win and more debt if they lose and debt makes the world go round.

The government then has to support such enterprise. And given that a good relationship to banks can help you get elected and your friends rich doesn't hurt.

Getting the taxpayer into debt to bail out the banks makes sense. Debt is good, the more debt the better.

Then you hit a brick wall. Credit freezes up. What's the answer? Print money and give it to the banks to lend and speculate some more. The citizens are to blame. Why? They're trying to save and that is causing a problem with consumption. How do we stop this problem? Put down interest rates so that keeping money in the bank at low interest while the currency loses value means you lose and so must speculate with your money.

You can't tax the banks, you can't put up interest rates because that discourages more debt and encourages savings and so all you can do is to punish those who cause the problem using austerity cuts. The public must be held to account because it's not the banks speculating and it's not the government not regulating that's the problem it's you for trying to save.

This economics is so ingrained that the unions are stupidly attacking from the wrong angle. It's not austerity that is the problem, it is debt. How do the unions believe we should finance public services? More debt? Total insanity! We don't attack Tory toffs and demand more debt. We should demand debt cancellation, an end to bailouts, stimulus and money printing. An end to unsound money and central banking. These are the real issues - the class war is not about the working class v the middle class, it is between a small super-elite financial oligarchy and everyone else. It is not Labour v Tory, it is people versus a financial coup d'etat - a kleptocratic cabal which has captured our political system and our media.

People, the economics is all wrong. It is badly and dangerously wrong and it is now destroying the lives of millions.

Taking our economy back is part of the Kilkenomics festival in Kilkenny city in Ireland. It is bringing alternative economic thinkers (who predicted the crisis in great detail) together with stand-up comedians in an ingenious and bold attempt at demystifying economics for the people and helping them make sense of it. The people know something has gone badly and dangerously wrong - they need now to engage because it's their money and their economic future!

This is why the Kilkenomics festival is so important. It is perhaps the start of a worldwide revolt against global Bankster governance.

Ireland is ahead of the game because of the madness and economic chaos of 'austerity'. It will be here soon and we'll need to go through a similar process. Scotland needs her own version of Kilkenomics.

Do not trust corporate politicians who tell you they will fix the problem - they are the problem. The solution will have to come from the grassroots and foisted on our political class or we will usher in a new one.

That's why Kilkenomics must succeed and why Scotland must emulate it!

Unlike the corporate baloney that is fed to us and called economic debate, here is a real debate on the subject. For your pleasure:

Courtesy of Press TV


Demetrius said...

In the mean time in the UK there is talk about "cuts" but as many have pointed out these are only reductions in the rate of increase in government debt liability. Not the same at all. Also, there are worrying signs that financial organisations are pumping up the credit (debt) levels by other means. Our only hope is that the volcanoes will get us before they do.

cynicalHighlander said...

Its not the first time that "Foundation X" has come up on my radar. Our government is either complicit or ignorant of what is going on or purely interested in power for the sake of.