The world condemned by neo-liberals to feed trillions to banks: the New Deal exorcised

debt.jpg

Photo by Ehud Neuhaus on Unsplash

One after the other, all the major central banks of the world follow the regrettable example of the Fed and the ECB in reversing their efforts to contain the greed of the financial mammoths. The American central bank, the Fed, and the European Central Bank will continue feeding the giant financial conglomerates with $4.5 trillion and €2.7 trillion and more respectively at zero or super low interest rates. The efforts to restore order in the western monetary system are being blocked by politicians of the kind of the US President Donald Trump. With his help today global debt is double than in 2008.

He was elected on a ticket to take care of the ‘left behind’ working millions and instead his prime worry was to make sure the New York financial mammoth banking conglomerates continue feeding on the flesh of the real economy. To recall the 2008-2010 financial meltdown was caused by the unruly ‘investments’ of the American banks.

Just ‘Lehman Brothers’

Only the super negligent and extravagantly imprudent ‘Lehman Brothers’ was left to go bankrupt. The rest of the New York banking gang was bailed out for free by the Fed with $4.5 trillion from working people’s money.

Judged from the results, this is not a monetary operation. It’s a ripping from the flesh of the real economy. Real workers and real small and medium businesses labor hard to turn out wages and profits. Real people break their backs to give real value to paper dollars. Not the New York financiers, they just ‘invest’ what they receive for free from the Fed.

The ECB follows the Fed

The same pattern was repeated in the Eurozone. The ECB has transferred €2.7 trillion at flat zero interest rates to the Eurozone banks. Unfortunately, the efforts of the euro area central bank to start charging some interest and finally call back some of this money bonanza is now almost fully reversed. Actually, the ECB has introduced a new monetary ‘instrument’ to replenish the banks with cash again at zero interest rate cost.

This is a full U-turn of monetary policy in the short interval of a few months. From the timid initiative to regain normality last December (with capping of the unseen before zero interest rate trillion refinancing of banks) back to the extraordinary measures of 2010-2017.

A global slow down

The reasoning behind this policy reversal is that this year the global economy is losing its growth momentum. Washington has crippled international trade and order as we knew it during the past thirty years. Add to that the global political volatility, including the Brexit stalemate, and the global economy is again heading to an output and employment stagnation.

In the latest developments, the American aggressiveness against Iran has driven the prices of oil above the benchmark of $70 a barrel. The negative impact from the oil hike on global economic activities and growth will be felt sooner rather than later.  This is the new reality the monetary authorities have to confront and that’s why they are again resorting to super accommodative measures willy-nilly favoring the financial sector.

What is the neo-liberal solution?

There is a problem though. During this past decade, the extravagantly accommodative monetary policy of central banks favoring exclusively the financial sector with free trillions became a new reality. As if this policy is panacea to combat weaker growth or stagnation. The neo liberal politicians have exorcised all other policy options to combat recession and fuel growth. For example, the time cherished practice during the last century of taxing the super rich people and companies, undertaking infrastructure projects and raising wages is not an option any more for policy formulators.

In short, it’s a win-win situation for the banks; the working millions are damned by the neo-liberals to sweat more to produce more and more to feed the banks with new profits at times of growth. Otherwise, the central banks have to subsidize the financial sector with free trillions at times of stagnation. If they are not fed, financiers threaten us all with more and more meltdowns. Everybody pretends the Franklin D. Roosevelt’s New Deal never existed.

 

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the European Sting Milestones

Featured Stings

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

‘Unlock opportunities’ and pave the way for sustainable development, UN chief urges on World Population Day

‘Milestones are clear’ for ‘significant progress’ in Somalia during 2019, Security Council hears

Will Europe be a different place this Monday?

Chart of the Day: These are the world’s most innovative economies

Water supply a human right but Greeks to lose their functioning utilities

The G7 should take the lead on ocean targets for 2020

The US is withdrawing from a 144-year-old treaty. Here’s the context

Draghi: printing a full extra trillion non negotiable to help all borrow cheaply

FROM THE FIELD: A mountain of indigenous knowledge in Peru

MWC 2016 LIVE: Qualcomm looks to pick up Hamilton’s winning ways

Charlotte in Ghana

Brexit Preparedness: European Commission adopts final set of “no-deal” contingency measures for Erasmus+ students, social security coordination rules and the EU budget

Celebrating Gaston Ramon – the vet who discovered vaccinology’s secret weapon

The world’s largest bus system is starting to go electric

Planes can now fly for 21 hours non-stop. But are people ready?

Who should pay for workers to be reskilled?

EU is officially in recession

The 4 types of leader who will thrive in the Fourth Industrial Revolution

Myanmar and UN agriculture agency agree framework to improve nutrition and food security

International Literacy Day: What you need to know about youth literacy

EU-U.S. trade talks – one year on, Commission presents progress report

Yemen war: UN chief urges good faith as ‘milestone’ talks get underway in Sweden

Latvian economy is thriving, but boosting productivity, improving social protection and transitioning to a low-carbon productive model are vital for sustainable and inclusive growth

Climate Change: A Healthcare Emergency

Climate change as determinant of health: the 21st Century challenge

We can’t rid Asia of natural disasters. But we can prepare for them

End racist discrimination against Afro-European people in the EU

Euro-Mediterranean Assembly fixes its permanent seat in Rome

Darfur: Inter-communal tensions still high despite improved security, Mission head tells Security Council

Boris ‘single-handed’ threatens mainland Europe; can he afford a no-deal Brexit?

State aid: France to recover €8.5 million of illegal aid to Ryanair at Montpellier airport

Eurozone: The crisis hit countries are again subsidizing the German and French banks

Phone lines open between Ethiopia and Eritrea, and people are calling strangers

These are the world’s most future-proof cities

Eurozone: Subdued inflation can lead to more recession

With a premature death every five seconds, air pollution is violation of human rights, says UN expert

Why Indian students are going abroad to become Doctors?

5 things you need to know about your microbiome

How climate change exacerbates the refugee crisis – and what can be done about it

This is the critical number that shows when housing breaks down

The latest emoji are more inclusive – but who approves them?

Draghi joined Macron in telling Germany how Eurozone must be reformed

Yes, together we can make a change! YO!Fest and EYE 2016

OK computer: why the machine age still needs humans

Dangers of poor quality health care revealed ‘in all countries’: WHO report

UN chief welcomes announcement by Emir of Qatar to allocate $50 million to support Syrian refugees, displaced persons

The Stray

25 years after population conference, women still face challenges to ‘well-being and human rights’, says UN chief

4 ways to keep the momentum rolling on mental health

Towards the Rise of the United States of the Atlantic?

Brazilian public health system and universality: a forgotten right!

‘Brutal weather’ continues as Rohingya refugee children endure devastating rainfall in Bangladesh

Germany resists Macron’s plan for closer and more cohesive Eurozone; Paris and Berlin at odds

At UN, youth activists press for bold action on climate emergency, vow to hold leaders accountable at the ballot box

Car rentals: EU action leads to clearer and more transparent pricing

Brexit: An orderly exit is in the interests of both parties

Easier Schengen Visas for non-EU holiday makers: A crucial issue for south Eurozone countries

Infrastructure around the world is failing. Here’s how to make it more resilient

Security Council gravely concerned by Ebola outbreak in DR Congo, demands immediate end to violence hampering response

UN chief calls for ‘united front’ against anti-Semitism after US synagogue mass-shooting

More Stings?

Comments

  1. You made some good points here. I did a search on the topic and found most people agree with your blog.

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s