The above link is to a paper put out at Boston Consulting Group
(BCG). Survivors of business strategy lectures may remember their
stars, cash cows, dogs and question mark portfolio management. The
summary might read that our politicians aren't telling us the truth on
world debt and are playing for time. The big problem is facing up to
the facts. These facts have been known to some of us for a couple of
decades and in more ideological form since 1900. The US and Europe
need to cut debt other than through IMF austerity lunacy by amounts so
large most banks will be bankrupt and their shareholders left with
whatever market value left. The banks would go into temporary
nationalisation to be cleaned up and set back on truly regulated
keel. A lot of debt will just have to be written off, as in cutting
what's owed on mortgages and the rich will have to take a big haircut
through assets taxes (one off).
Names to look for if interested include Steve Keen and David Graeber.
It's been established a long time that we haven't been growing much
through work in 30 years,instead transferring investment to sweat shop
economies and speculative bubbles including housing and organised
crime banksterism. Our governments must know.
So-called 'moal hazard' is involved in any solution to the mess -
debts have to be forgiven and this raises the issue of rewarding daft
or irresponsible borrowing. This feels wrong. I had an incidence
with my grandson who put a month's allowance into buying a new guitar
(Crafter - great tone) but turned up demanding it. He got a fiver,
but should really have gone away empty handed. We could get in
discussion on moral hazard, but we really ought to consider that the
banks are duplicitous about it - they've been highly irresponsible and
don't want to face the consequences any more than a poor family facing
eviction and foreclosure.
There are a lot of moral issues like this where we can establish the
principle - but also see powerful groups evading the principle, often
with threat that national or global collapse will occur if they are
treated like everyone else. This is not capitalism under rule of law,
or democracy but oligarchy. We are generally quick to scorn the
spendthrift (as in that story on the grasshopper and ant), but what
stops us getting after it on the massive scale of global banksterism?
The facts are as clear as in the more or less neo-con BCG The only
place, other than in detail, I disagree concerns the notion that
uncompetitive countries should cut wages - we need Aa more complex
formula that puts liquid assets (more or less cash) back in the hands
of the less well off. Roughly, we have seen this decline from 14% to
1% in the bottom have-nots comprising 50% of our peoples. A return to
this through New Deal work projects is needed.
Substantial cowardice is involved in being prepared to slate peers for
indiscretions and fall for the lies told by the powerful. And this is
why I'm not a democrat. Our systems need to change away from this
form of govern-mentality in which arguments are directed at ignorance
to garner votes. But how can we do this without another form of
elitism?
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