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Demeter

(85,373 posts)
19. Austerity Can't Be Just for Regular People MATT TAIBBI
Thu May 10, 2012, 12:31 AM
May 2012
http://www.rollingstone.com/politics/blogs/taibblog/austerity-cant-be-a-one-way-street-20120508

It didn’t take long to crank up the backlash against European voters. This is inevitable whenever a socialist wins a major election, but particularly now, when new French president François Hollande rode to victory shouting, "Austerity can no longer be inevitable!"

This sounds like the beginning of what will be a very heated debate over who has to pay for the excesses of the financial crisis. It was previously assumed that everybody but the actual financial services sector would have to pay, but voters in Europe now are refusing to go along, sparking a wave of eye-rolling editorials in the financial press. Even David Brooks got into the act today, penning a lugubrious editorial about the errant political instincts of the populist masses here and abroad.

Markets all over the world freaked out over the prospect of having ignorant European voters meddling in the recovery process the geniuses of the high finance world had already painstakingly laid out for them. The model for economic progress in the financial bubble era, after all, is supposed to go something like this:

1. Let banks inflate massive asset bubbles with the aid of cheap or even free government cash, and tons of leverage;

2. Before it all explodes, carve out gigantic sums for bonuses and compensation for the companies that inflated those bubbles;

3. After it explodes, get the various governments to bail those companies out;

4. Pay for it all by slashing services to what’s left of the middle class.

This is the model we used in America. We had a monster asset bubble based on phony mortgages, which Wall Street was allowed to inflate to spectacular dimensions with minimal reserve capital, huge amounts of leverage, and tons of fraud for good measure. When that bubble exploded, we first rescued the banks who inflated the thing in the first place, and then our plan for paying for it mostly revolved around folks like Paul Ryan and Chris Christie, who made great political hay by trying to take an ax to "entitlements" like health care and retirement benefits....MORE...if pain’s coming, it can’t just be regular people who pay. Bankers have to find new ways of making money that don’t just involve betting the hot table and taking out instant billion-dollar profits. They have to go back to building real businesses and being content with gradual returns over time. If there’s going to be austerity, it has to be for everybody.
sorry I'm late Tansy_Gold May 2012 #1
Just relax and watch natures fireworks. Fuddnik May 2012 #2
Waiting for that cartoon was well worth it. Warpy May 2012 #5
Personally, I'm not impressed Demeter May 2012 #17
Nor am I ... like Cuomo in NY, it doesn't cost him anything for the potential gains bread_and_roses May 2012 #36
You put that so much better than I ever could Demeter May 2012 #38
And you put THAT far better than I could Tansy_Gold May 2012 #51
I remember the late great Ann Richards once saying....... AnneD May 2012 #57
I'm in mind of Alice's White Knight in "Through the Looking Glass" Demeter May 2012 #59
Yes. Tansy_Gold May 2012 #63
Musical Interlude hamerfan May 2012 #69
Oh, SHIT! I love that! Tansy_Gold May 2012 #72
off to the greatest TalkingDog May 2012 #3
Spanish government rescues fourth largest lender, Bankia Eugene May 2012 #4
Nationalize them, go through all the books with a fine toothed comb Warpy May 2012 #6
Yep. We could try that here, too ... (n/t) bread_and_roses May 2012 #37
(Chinese) ICBC gets approval to take over US bank kickysnana May 2012 #7
Will Marriage Become a Thing of the Past for All But the Wealthy? Demeter May 2012 #8
Back to the Middle Ages! or ... forward to a healthier "family?" bread_and_roses May 2012 #45
You Are Talking "Gate to Women's Country" Demeter May 2012 #47
Not exactly - perhaps more influenced by French, "War Against Women." bread_and_roses May 2012 #53
The "Authoritarisanism" is Far More "Authoritative", and there is a difference Demeter May 2012 #58
All I know is: Half of all marriages end in divorce, . . . and the other half end in death. tclambert May 2012 #70
touche! TalkingDog May 2012 #71
European People Have Rejected Austerity Madness: Will the U.S. Get the Message? By Marshall Auerback Demeter May 2012 #9
"Waiting for Copernicus: On the Slow-Death of Neoliberalism" bread_and_roses May 2012 #46
(You have to get on the right distribution lists) Demeter May 2012 #49
Corporate Profits Hit New Records: Still Hoarding Gobs of Cash, Still Barely Hiring Demeter May 2012 #10
The New Wall Street Racket Looting Your City, One Block at a Time Demeter May 2012 #11
Chomsky: Do We Have the Makings of a Real Revolution? Demeter May 2012 #12
"...just a step before taking over the factory." Tansy_Gold May 2012 #13
I would not characterize it as hopeless ...... AnneD May 2012 #64
Postal Service: Will keep rural post offices open Demeter May 2012 #14
Indian Court Blocks Exxon Valdez From Entering Scrap Yard Demeter May 2012 #15
Spain set to take big stake in Bankia Demeter May 2012 #16
Vermont poised to be first state to outlaw fracking Demeter May 2012 #18
Austerity Can't Be Just for Regular People MATT TAIBBI Demeter May 2012 #19
Austerity, the Euro Crisis and the US Demeter May 2012 #20
How Europe's Austerity Backlash Might Change U.S. Politics Demeter May 2012 #22
The percentage of people that actually realize Po_d Mainiac May 2012 #29
Captured? Demeter May 2012 #34
You don't 'kill' those captured Po_d Mainiac May 2012 #42
There's no ransom going to be paid, though Demeter May 2012 #50
What's the 'Headline' on the front page of your local newspaper? Po_d Mainiac May 2012 #52
We don't HAVE a local newspaper Demeter May 2012 #60
Why Are Student Loan Interest Rates Set to Double? Thank These Lobbyists Who Helped Kill the Bill Demeter May 2012 #21
Trade Alert! Is Another Job-Killing Trade Agreement Heading Our Way? By Dave Johnson Demeter May 2012 #23
Bundesbank signals softening on inflation Demeter May 2012 #24
Chevron and Shell to win Ukraine gas deals Demeter May 2012 #25
China surplus jumps on weak imports Demeter May 2012 #26
Stephen King - Ghosts from the 1930s have returned to haunt us Demeter May 2012 #27
King should write a new version of "It Can't Happen Here." n/t Tansy_Gold May 2012 #28
The Haves always want to blame/repress the Have Nots Roland99 May 2012 #35
after a day of thunderstorms yesterday - in more ways than 1 - it's lovely today xchrom May 2012 #30
China's exports and imports see slower growth xchrom May 2012 #31
Bank of France predicts zero growth for first half xchrom May 2012 #32
Today's Reports (a slew of them...jobless claims, import prices, trade gap) Roland99 May 2012 #33
Thanks, Roland Demeter May 2012 #39
.... Roland99 May 2012 #43
New Emails Reveal Banks' Pre-Recession Arrogance, But Admin Fails at Prosecuting Financial Misdeeds Demeter May 2012 #40
Noam Chomsky on America's Economic Suicide INTERVIEW Demeter May 2012 #41
A Question of Timing: What America Can Learn From the Revolt in Europe By Robert Reich Demeter May 2012 #44
Trade Gap in U.S. Widens More Than Forecast as Imports Jump xchrom May 2012 #48
Michael Hudson: Firing Alan Greenspan DemReadingDU May 2012 #54
+99%! Demeter May 2012 #56
As Gas Prices Fall, a Sigh of Relief Demeter May 2012 #55
"bottlenecks in the supply of crude oil are becoming unclogged" Roland99 May 2012 #66
Gotta Go Demeter May 2012 #61
The London Olympics Are Looking Like A Financial And Organizational Disaster xchrom May 2012 #62
Waiting for Copernicus By John Feffer xchrom May 2012 #65
Anti-Bailout Coalition Soars In Popularity Ahead Of Second Greek Election Roland99 May 2012 #67
As New Greek Bonds Tumble To All Time Lows, Is Greece About To Re-Default In 5 Days? Roland99 May 2012 #68
JPM Crashing After It Convenes Emergency Call To Advise Of "Significant Mark-To-Market" Losses DemReadingDU May 2012 #73
WTF is a "synthetic credit portfolio"??? Tansy_Gold May 2012 #74
Fake! DemReadingDU May 2012 #75
Karl Denninger: Now They're F*d (JPM And Probably Others) DemReadingDU May 2012 #76
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