Wednesday, June 16, 2010

The Public Will Suffer So Banks and Rich Capitalists Will Have Their Cake

I love Henry Liu's analyses. Here is an excerpt from his most recently posted analysis of the EU meltdown and austerity programs:

Fiscal deficits across the eurozone are to be reduced by cutting public sector wages and social benefit and subsidy expenditures so that transnational bank creditors will be paid in full while turning a blind eye to blatant tax evasion and avoidance by the rich with non-wage income that contribute to loss of government revenue and fiscal deficits. The dysfunctional disparity of income and polarization of wealth between the waged-earning masses and the financial elite with income from profit and capital gain, are the main causes of overcapacity in the economy. In past decades, the neoliberal response to overcapacity was to shy away from the obvious solution of raising wages, turning instead to flooding the economy with huge mountains of consumer and corporate debt that eventually resulted in a tsunami of borrower defaults that turned into a global credit crisis. Yet repeating the same response to the current crisis will lead only to another global crisis down the road.

While the culprits of the global credit meltdown of 2008 have been bailed out with the public’s future tax money, the sovereign debt crisis across the globe is blamed on innocent wage earners for receiving supposedly unsustainably high wages and excessive social benefits that allegedly threaten the competitiveness of economies in a globalized trade regime designed to push wages down everywhere...."

http://www.henryckliu.com/page230.html

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