The European sovereign debt crisis is little more than a huge ‘bait and switch’ perpetrated on the publics of Europe, by their governments, on behalf of their banks. We need to remember that what we refer to today as the ‘European Sovereign Debt Crisis’ began as a private sector financial crisis back in 2008, when ‘too big to fail banks,’ writing deep out of the money options on taxpayers, quite unexpectedly (to some) blew up. Fearing a financial Armageddon, governments transformed private bank debt into public debt via bailouts, lost revenues, lower growth, higher transfers, and yawning deficits. The unavoidable result across the European continent was a massive increase in government debt. While painting this as a story of fiscal irresponsibility has some plausibility in the Greek case, it simply isn’t true for anyone else. The Irish and the Spanish, I and S in the eponymous ‘PIGS’ were, for example, considered ‘best in neoliberal class’ in terms of debts and deficits until the crisis hit. Public debt is a consequence of the financial crisis, not its cause.
More:
http://triplecrisis.com/how-to-turn-a-continent-into-a-subprime-cdo/The nations of the Eurozone have two choices here: either let their big banks fail under the weight of their leverage, or radically restructure their societies and social compacts at the expense of their people, in order to protect their banks. So far, most Eurozone nations are choosing the latter.
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But as the financial sector continues to careen further and further out of control worldwide, the challenge faced by sovereigns worldwide is this: either become subservient entities to the global financial institutions that truly govern the fates of the world's citizens, or reassert their authority and independence while allowing reckless banking institutions to fail.
Most nations are choosing the former, both because they lack the courage to do the latter, and because they lack the vision to imagine what kind of system might need to be created in a post-too-big-to-fail world. The world's economies are now massively interdependent, with most of those interdependencies lubricated by liquidity provided by the big banks.
More:
http://digbysblog.blogspot.com/2011/08/big-choice-by-david-atkins.htmlFound Thru:
http://www.dailykos.com/story/2011/08/28/1011380/-Midday-open-thread?via=blog_1:wtf:
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