Can austerity cure contagion?
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I love this video from Mark Fiore:
Sovereign Transmitted Debts don’t have to be embarrassing or keep you from other financial relationships…
Contagion-Ex works by releasing a powerful dose of austerity on troublesome workers, reducing your risk of financial infection so your wealth can be preserved.
It’s easy to believe that this is what Europe’s leaders are up to — after all, Mario Draghi, Mario Monti,
and Lucas Papademos are all proud alumni of Goldman Sachs. Aren’t these exactly the kind of unelected technocrats who would shaft their putative constituents so that the 1% can continue to rake it in?
As Paul Krugman points out, though, the prescriptions coming from Europe’s unelected leaders tend to feel “more like a religious proclamation than a technocratic assessment.” For here’s the real irony: austerity will cause untold harm for hundreds of millions of European citizens — and it will harm the fat-cat bankers, too.
Look at the prices of the sovereign bonds that they’re holding, or at the share prices of their banks: austerity doesn’t seem to be helping the bankers at all. We’re in a liquidity crisis, here, and austerity doesn’t provide liquidity to anybody. Quite the opposite.
But here’s the cunning bit: the bankers don’t really have their banks’ best interests at heart. They just want to keep on getting their coupon payments until this year’s bonuses are paid. And then, once those bonus checks are cashed, they’ll start trying to get next year’s bonus payment, too.
The bankers and technocrats know full well that the longer they manage to kick the can down the road, the worse it’ll be for everybody in the long run. But in the short run, they get very wealthy. Even as crucial government services are cut to the bone, and the risk of major social unrest increases greatly.
Update: Sorry for saying that Papademos used to work for Goldman Sachs. He didn’t. But people think he did. Just like Tim Geithner!