Crisis and Lost Opportunity
Yesterday, U.S. President Barack Obama warned that investor distrust in the Washington administration to meet promissory notes could disrupt the entire financial system and provoke a new recession, worse than we already have. The warning was preceded by another, one formulated Saturday by Secretary of Treasury Timothy Geithner, with the sentiment that if Congress does not authorize a higher public debt ceiling, the U.S. could fall into a moratorium on payments, an unprecedented event in the history of that country. It would result, in turn, in putting the brakes on growth, the loss of jobs, an increase in interest rates and the expansion of the fiscal deficit.
The tone of alarm and even desperation in the alerts by both officials should not distract attention from the basic fact, which is the precariousness and uncertainty of the proclaimed American and world economic recovery after the financial collapse of 2008-2009. Indeed, the so-called overcoming of the crisis is limited to a rearrangement of macro indicators, but it does not deal with the intrinsic instability of the economic model in place, which generates social inequality, concentrates wealth and favors speculation in detriment to productive activites.
Despite Obama’s own memorable verbal remarks and those of other leaders in the U.S. and in Europe, the astronomical cost of the economic crisis was transferred to the taxpayer, to the consumers and to the wage earner — while the heads of financial institutions and their traders, responsible for starting the recession with their excessive ambition, were awarded with a multimillion dollar rescue from public coffers. In Mexico, where authorities refused to adopt preventive measures when faced with imminent world chaos and limited themselves to minimizing the risk, the population, in general, was abandoned to luck: The unemployed multiplied, and the extremely poor experienced a new growth cycle.
By concentrating only on the financial aspects of a crisis which, despite expressions of triumph, has simply not been overcome, Obama sent an unmistakable message of disdain to the social sectors affected by the recession — like those who demonstrated last Friday, in the Wall Street financial zone in New York, in repudiation of the massive lay-offs, of the attacks against labor rights and of the elimination of social programs. Although that demonstration targeted the policy of New York governor Michael Bloomberg, certainly a similar anti-crisis strategy — focused on preserving financial interests and businesses and in transferring the costs to the population in general — is shared by state and federal authorities, as it is by governments in most of the world.
Another case is of that the Spanish presidency, held by José Luis Rodríguez Zapatero, who accurately has been called the Robin Hood of the Bankers for taking from the poor to give to the rich. The anti-popular political economy of a government that proclaims itself to be a social democracy, a supporter of the distribution of wealth and a promoter of social well-being has generated a state of discontent in Spain, expressed, among other ways, in mass demonstrations, like those carried out yesterday in several cities, in repudiation of the current economic model and in demand for the end of viewing citizens as merchandise in the hands of politicians and bankers.
In the political sphere, the inconsistency of Rodríguez Zapatero has resulted in a severe discrediting of the Spanish Socialist Worker Party (PSOE), on the eve of an electoral process aiming for a historical defeat.
In short, Western governments have wasted the opportunity represented by the crisis that exploded two and a half years ago to reconstruct world and national economies on ethical bases, to step on the brakes and control the rapacious speculation that corroded rich nations, just as it did — in a more straightforward way — developing economies like our own. Instead, they have proceeded to patch the indicators in order to simulate a weak recovery in the best cases, or an imaginary one in the worst, and to take advantage of circumstance to enrich the rich even more and to make even worse the subsistence of the least favored.
The tone of alarm and even desperation in the alerts by both officials should not distract attention from the basic fact, which is the precariousness and uncertainty of the proclaimed American and world economic recovery after the financial collapse of 2008-2009. Indeed, the so-called overcoming of the crisis is limited to a rearrangement of macro indicators, but it does not deal with the intrinsic instability of the economic model in place, which generates social inequality, concentrates wealth and favors speculation in detriment to productive activites.
Despite Obama’s own memorable verbal remarks and those of other leaders in the U.S. and in Europe, the astronomical cost of the economic crisis was transferred to the taxpayer, to the consumers and to the wage earner — while the heads of financial institutions and their traders, responsible for starting the recession with their excessive ambition, were awarded with a multimillion dollar rescue from public coffers. In Mexico, where authorities refused to adopt preventive measures when faced with imminent world chaos and limited themselves to minimizing the risk, the population, in general, was abandoned to luck: The unemployed multiplied, and the extremely poor experienced a new growth cycle.
By concentrating only on the financial aspects of a crisis which, despite expressions of triumph, has simply not been overcome, Obama sent an unmistakable message of disdain to the social sectors affected by the recession — like those who demonstrated last Friday, in the Wall Street financial zone in New York, in repudiation of the massive lay-offs, of the attacks against labor rights and of the elimination of social programs. Although that demonstration targeted the policy of New York governor Michael Bloomberg, certainly a similar anti-crisis strategy — focused on preserving financial interests and businesses and in transferring the costs to the population in general — is shared by state and federal authorities, as it is by governments in most of the world.
Another case is of that the Spanish presidency, held by José Luis Rodríguez Zapatero, who accurately has been called the Robin Hood of the Bankers for taking from the poor to give to the rich. The anti-popular political economy of a government that proclaims itself to be a social democracy, a supporter of the distribution of wealth and a promoter of social well-being has generated a state of discontent in Spain, expressed, among other ways, in mass demonstrations, like those carried out yesterday in several cities, in repudiation of the current economic model and in demand for the end of viewing citizens as merchandise in the hands of politicians and bankers.
In the political sphere, the inconsistency of Rodríguez Zapatero has resulted in a severe discrediting of the Spanish Socialist Worker Party (PSOE), on the eve of an electoral process aiming for a historical defeat.
In short, Western governments have wasted the opportunity represented by the crisis that exploded two and a half years ago to reconstruct world and national economies on ethical bases, to step on the brakes and control the rapacious speculation that corroded rich nations, just as it did — in a more straightforward way — developing economies like our own. Instead, they have proceeded to patch the indicators in order to simulate a weak recovery in the best cases, or an imaginary one in the worst, and to take advantage of circumstance to enrich the rich even more and to make even worse the subsistence of the least favored.
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