03 May 2010

The end (of the recession) is not in sight

The end of the global recession is not in sight, and seems to be perpetually receding. It seems that we are still on the road to a full-scale depression, thanks to "casino capitalism".

Merkel Reaches Her Overdraft Limit: Greek Bailout Could Push German Debt Through the Roof - SPIEGEL ONLINE - News - International:
The end of the spiral of debts is nowhere in sight. It just continues to grow -- and soon it will grow further if Germany provides €8.4 billion ($11 billion) in financial aid to Greece. Initially, that assistance will only come in the form of credit guarantees from the federal budget for state development bank KfW, which will then provide the money in the form of loans to Greece. So they aren't technically debts. But what happens if cash-strapped Greece is unable to pay back its loan? Then Germany's deficit would grow in real terms by several billion.

While free-marketeers prescribe "hair of the dog that bit you", others take a different view: Pension Pulse: Beyond the Greek Crisis: Will Capitalism Survive?:
It is clear to me that pensions and the global economy have succumbed to Casino Capitalism - a form of capitalism which benefits the financial and corporate oligarchs, leaving the rest of the population behind. Greece is the birthplace of democracy, will it also be the birthplace of a new form of capitalism?

Some commentators seem to be moving into conspiracy theory territory, though some might attribute this to the law of unintended consequences: First of May 2010: Organize and Fight Against Capitalist Exploitation! | Mostly Water:
Information indicates that the US and UK finance capital are using speculation in other countries' economies as a weapon against competitors. Various Anglo-American financiers [intended] that a diversionary attack on the euro, starting with some of the weaker Mediterranean or Southern European economies, would be an ideal means of relieving pressure on the battered US greenback which was at a record low in November 2009.

At the time as the EU was launching its Lisbon Treaty in December 2009 there were speculative assaults or bear raids against Greek and Spanish government bonds as well as the euro itself, accompanied by a press campaign targeting the so called PIGS (Portugal, Ireland, Greece and Spain). Both the Greek and Spanish Prime Ministers reacted against these speculative attacks.

And an apparently capitalist-favouring source makes a perceptive comment: The Greek Tragedy Unfolds - Walter Russell Mead's Blog - The American Interest:
For many Greeks, capitalism still feels wrong. The substitution of market forces for traditional social relations undermines aspects of Greek life that are very dear to many people; the inequality that so often results from capitalism offends deeply held social ideas about fairness. More, since the rising powers whose policies and interventions have done so much to shape Greek history have been capitalist, Greeks associate institutions like the IMF and the ECB (European Central Bank) with foreign meddling and unjust usurpation. And the successful capitalist countries (and the foreign multinational corporations who come with it) have never scrupled to press their advantages in less developed or weaker countries like Greece.

I wonder if those social ideas about fairness ultimately spring from Orthodox theology, and church fathers like St John Chrysostom and St Basil the Great who suggest that goods that we own in excess of our needs are stolen from the poor.

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