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Economic woes make people 'mad as hell'
Keeble McFarlane
Saturday, October 15, 2011
It was just a movie and it was all the rage 35 years ago, but its signature punch line resonates today as vigorously as it did then. The star of Network was a washed-up news anchor who was about to be yanked off the air because his popularity ratings had plunged significantly. In his newscast that night he proclaimed: "I'm mad as hell and I'm not going to take this anymore!" His ratings soared and the movie worked its way through a convoluted plot culminating in his assassination on air.
While Network won four Oscars and accumulated a string of accolades, its lasting legacy is that defiant line. And although you probably won't hear it if you were to join the growing crowds who have been staging a demonstration in New York's celebrated Wall Street for the past month, the sentiment is central to the protest there and in many other parts of the world over the dreadful economic conditions facing all of us.
The richer countries, led by Chancellor Angela Merkel of Germany (left) and President Nicholas Sarkozy of France have come up with schemes to help the Greeks and lately, Italy, third-largest economy in the Euro zone
Before the crowds began gathering in a small park along the strip that symbolises the very heart of the capitalist system, similar protests were already in progress in places like Spain and Greece. This latter country is often held up as the epitome of living beyond your means. It is not an economic powerhouse and has had a less than favourable reputation for political instability.
The more well-off Euro-powers took advantage of low prices for real estate in Greece, Spain, Portugal and other weaker economies and pumped money in. With more money circulating - not internally generated - people in those countries began enjoying lifestyles they had hitherto only envied.
Greek governments employed more people than they had need for and provided a high level of social services. Students at university, for instance, enjoy free tuition and people both rich and not so well-off binged on the long tradition of doing everything possible to avoid paying taxes. In Athens the authorities now employ helicopters to survey wealthy suburbs to determine exactly how many swimming pools there are. That's because even those who can well afford it routinely leave the swimming-pool box un-ticked on the tax form. The government borrowed heavily to pay for all this, and now that it's time to pay the piper, it faces default.
The richer countries, led by Chancellor Angela Merkel of Germany and President Nicholas Sarkozy of France, have had no choice but to come up with schemes to help out the Greeks and lately, Italy, third-largest economy in the Euro zone. Voters in the well-off countries don't like it, asking why they should help the impractical Greeks and Italians, but to abandon them to their own fate would bring the whole Euro dolly-house crashing down.
Part of the bitter medicine is to cut back on services, shed workers, reduce salaries and cut pensions. These measures have led, naturally, to wave after wave of protests in Athens and elsewhere by people furious at their leaders for falling asleep at the controls and leaving them to bear the consequences of their lack of stewardship.
US crisis not born yesterday
In the case of the United States, the financial plight has been several decades in the making. In the 1930s, the stock market crashed because investors, brokers and bankers went on a binge resembling the board game Monopoly, in which players buy and sell properties by rolls of the dice. Businesses went bankrupt, throwing millions of people out of work. Many had to give up their houses and nature threw a spanner in the works with unprecedented drought conditions causing the infamous dust bowls. Farmers had to give up their land and try to find whatever work they could.
Along came a new president, Franklin Delano Roosevelt, who intervened quickly, extensively and decisively. He created programmes that put people to work planting trees and building roads, bridges and other public works. Of equal importance, he also put in place oversight mechanisms to rein in the excesses in the financial sector that caused the crash in the first place.
World War Two provided the greatest boon to the US economy, which now had to build factories to supply all the guns, bullets, vehicles, planes, ships, uniforms, food and medicine for the millions who went off to fight the Germans and Japanese. When those people came back home, the government subsidised their education, and industry had to provide consumer goods after years of pent-up demand. The US economy grew exponentially, providing houses for the new families now being formed, as well as assisting the defeated countries get back on their feet through imaginative programmes like the Marshall Plan.
A conservative president of the 1950s, former general Dwight Eisenhower, unleashed a new job-creating plan called the Interstate Highway System. Earthmovers ripped up stretches of farmland, tore through virgin forests and wilderness and laid thousands of kilometres of asphalt ribbons to link the nation's towns and cities in a manner never before seen.
Then the neo-conservative ideas propounded by a group of economists at the University of Chicago began taking root and culminated in widespread de-regulation championed three decades ago by Ronald Reagan. Reagan and the other true believers in unfettered capitalism and minimal government continued easing up regulation of the banking sector and the stock market. Even Democratic presidents Jimmy Carter and Bill Clinton continued this trend, which really took off under the clueless George Bush the Second.
As you will recall, he was the president who unleashed the mightiest war machine the world has ever seen upon two countries while reducing taxes and further easing the reins on the barons of Wall Street.
Under minimal controls, these folks routinely gave mortgages to people who ordinarily couldn't qualify, using unrealistically low interest charges and deceptively easy payment terms to suck them in. After an unconscionably short period they jacked up the rates and tightened the requirements. Then people began to default on their mortgages, and in what amounted to a pyramid scheme, the robber barons packaged the fairy-tale loans into what they called derivatives and sold them off to other bankers, many of them in far-flung financial centres.
Instead of financing industry and creating jobs in the US, big companies built plants in other countries where the labour is much cheaper. The result - a hollowing out of the mighty US industrial sector.
Three years ago the Wall Street house of cards fell in on itself. Banks dubbed "Too Big To Fail" began failing and the US government was forced to bail them out with bulk-carriers full of dollars supplied by the US taxpayer. Like a high-magnitude earthquake, the Wall Street crash sent out seismic waves which shook up financial centres all around the world. The political leaders in the White House and on Capitol Hill became locked into their own versions of reality and unable to agree on bold and admittedly enormously difficult solutions to the unprecedented dilemma facing them.
And while the world looked on and the politicians continued their partisan game-playing, the people feeling the dead weight on their shoulders rose up to vent their feelings.
An organisation called Adbusters Media Foundation in July proposed a peaceful occupation of Wall Street to protest against the overweening influence of corporations on politics, call attention to the yawning and growing disparity in wealth and the absence of any serious legal action resulting from the global financial crisis. People who claimed to be representatives of the other 99 per cent of the population began occupying Zucotti Park (formerly Liberty Plaza Park) in the Wall Street district about a month ago. Similar protests have sprung up across the United States and in several other countries.
The movement still seems unfocused, but that will take care of itself as more people come aboard and over time distil their grievances into a coherent message. The Occupy Wall Street protest resembles the Tea Party movement, which also sprang up from an unfocused feeling of hopelessness and rage against the body blows to the US financial system. In endorsing Occupy Wall Street, a former US Senator, Russ Feingold, put the whole thing in context: "This is like the Tea Party - only it's real... by the time this is over, it will make the Tea Party look like... a tea party."
keeble.mack@sympatica.ca
Read more: http://www.jamaicaobserver.com/colum...#ixzz1auIvXfNR
Keeble McFarlane
Saturday, October 15, 2011
It was just a movie and it was all the rage 35 years ago, but its signature punch line resonates today as vigorously as it did then. The star of Network was a washed-up news anchor who was about to be yanked off the air because his popularity ratings had plunged significantly. In his newscast that night he proclaimed: "I'm mad as hell and I'm not going to take this anymore!" His ratings soared and the movie worked its way through a convoluted plot culminating in his assassination on air.
While Network won four Oscars and accumulated a string of accolades, its lasting legacy is that defiant line. And although you probably won't hear it if you were to join the growing crowds who have been staging a demonstration in New York's celebrated Wall Street for the past month, the sentiment is central to the protest there and in many other parts of the world over the dreadful economic conditions facing all of us.
The richer countries, led by Chancellor Angela Merkel of Germany (left) and President Nicholas Sarkozy of France have come up with schemes to help the Greeks and lately, Italy, third-largest economy in the Euro zone
Before the crowds began gathering in a small park along the strip that symbolises the very heart of the capitalist system, similar protests were already in progress in places like Spain and Greece. This latter country is often held up as the epitome of living beyond your means. It is not an economic powerhouse and has had a less than favourable reputation for political instability.
The more well-off Euro-powers took advantage of low prices for real estate in Greece, Spain, Portugal and other weaker economies and pumped money in. With more money circulating - not internally generated - people in those countries began enjoying lifestyles they had hitherto only envied.
Greek governments employed more people than they had need for and provided a high level of social services. Students at university, for instance, enjoy free tuition and people both rich and not so well-off binged on the long tradition of doing everything possible to avoid paying taxes. In Athens the authorities now employ helicopters to survey wealthy suburbs to determine exactly how many swimming pools there are. That's because even those who can well afford it routinely leave the swimming-pool box un-ticked on the tax form. The government borrowed heavily to pay for all this, and now that it's time to pay the piper, it faces default.
The richer countries, led by Chancellor Angela Merkel of Germany and President Nicholas Sarkozy of France, have had no choice but to come up with schemes to help out the Greeks and lately, Italy, third-largest economy in the Euro zone. Voters in the well-off countries don't like it, asking why they should help the impractical Greeks and Italians, but to abandon them to their own fate would bring the whole Euro dolly-house crashing down.
Part of the bitter medicine is to cut back on services, shed workers, reduce salaries and cut pensions. These measures have led, naturally, to wave after wave of protests in Athens and elsewhere by people furious at their leaders for falling asleep at the controls and leaving them to bear the consequences of their lack of stewardship.
US crisis not born yesterday
In the case of the United States, the financial plight has been several decades in the making. In the 1930s, the stock market crashed because investors, brokers and bankers went on a binge resembling the board game Monopoly, in which players buy and sell properties by rolls of the dice. Businesses went bankrupt, throwing millions of people out of work. Many had to give up their houses and nature threw a spanner in the works with unprecedented drought conditions causing the infamous dust bowls. Farmers had to give up their land and try to find whatever work they could.
Along came a new president, Franklin Delano Roosevelt, who intervened quickly, extensively and decisively. He created programmes that put people to work planting trees and building roads, bridges and other public works. Of equal importance, he also put in place oversight mechanisms to rein in the excesses in the financial sector that caused the crash in the first place.
World War Two provided the greatest boon to the US economy, which now had to build factories to supply all the guns, bullets, vehicles, planes, ships, uniforms, food and medicine for the millions who went off to fight the Germans and Japanese. When those people came back home, the government subsidised their education, and industry had to provide consumer goods after years of pent-up demand. The US economy grew exponentially, providing houses for the new families now being formed, as well as assisting the defeated countries get back on their feet through imaginative programmes like the Marshall Plan.
A conservative president of the 1950s, former general Dwight Eisenhower, unleashed a new job-creating plan called the Interstate Highway System. Earthmovers ripped up stretches of farmland, tore through virgin forests and wilderness and laid thousands of kilometres of asphalt ribbons to link the nation's towns and cities in a manner never before seen.
Then the neo-conservative ideas propounded by a group of economists at the University of Chicago began taking root and culminated in widespread de-regulation championed three decades ago by Ronald Reagan. Reagan and the other true believers in unfettered capitalism and minimal government continued easing up regulation of the banking sector and the stock market. Even Democratic presidents Jimmy Carter and Bill Clinton continued this trend, which really took off under the clueless George Bush the Second.
As you will recall, he was the president who unleashed the mightiest war machine the world has ever seen upon two countries while reducing taxes and further easing the reins on the barons of Wall Street.
Under minimal controls, these folks routinely gave mortgages to people who ordinarily couldn't qualify, using unrealistically low interest charges and deceptively easy payment terms to suck them in. After an unconscionably short period they jacked up the rates and tightened the requirements. Then people began to default on their mortgages, and in what amounted to a pyramid scheme, the robber barons packaged the fairy-tale loans into what they called derivatives and sold them off to other bankers, many of them in far-flung financial centres.
Instead of financing industry and creating jobs in the US, big companies built plants in other countries where the labour is much cheaper. The result - a hollowing out of the mighty US industrial sector.
Three years ago the Wall Street house of cards fell in on itself. Banks dubbed "Too Big To Fail" began failing and the US government was forced to bail them out with bulk-carriers full of dollars supplied by the US taxpayer. Like a high-magnitude earthquake, the Wall Street crash sent out seismic waves which shook up financial centres all around the world. The political leaders in the White House and on Capitol Hill became locked into their own versions of reality and unable to agree on bold and admittedly enormously difficult solutions to the unprecedented dilemma facing them.
And while the world looked on and the politicians continued their partisan game-playing, the people feeling the dead weight on their shoulders rose up to vent their feelings.
An organisation called Adbusters Media Foundation in July proposed a peaceful occupation of Wall Street to protest against the overweening influence of corporations on politics, call attention to the yawning and growing disparity in wealth and the absence of any serious legal action resulting from the global financial crisis. People who claimed to be representatives of the other 99 per cent of the population began occupying Zucotti Park (formerly Liberty Plaza Park) in the Wall Street district about a month ago. Similar protests have sprung up across the United States and in several other countries.
The movement still seems unfocused, but that will take care of itself as more people come aboard and over time distil their grievances into a coherent message. The Occupy Wall Street protest resembles the Tea Party movement, which also sprang up from an unfocused feeling of hopelessness and rage against the body blows to the US financial system. In endorsing Occupy Wall Street, a former US Senator, Russ Feingold, put the whole thing in context: "This is like the Tea Party - only it's real... by the time this is over, it will make the Tea Party look like... a tea party."
keeble.mack@sympatica.ca
Read more: http://www.jamaicaobserver.com/colum...#ixzz1auIvXfNR