2008 All Over Again
Posted on Jun 24, 2016
By Chris Hedges
Great Britain’s decision to leave the European Union has wiped out many bankers and global speculators. They will turn, as they did in 2008, to governments to rescue them from default. Most governments, including ours, will probably comply.
Will the American public passively permit another massive bailout of the banks? Will it accept more punishing programs of austerity to pay for this bailout? Will a viable socialism rise out of the economic chaos to halt further looting of the U.S. Treasury and the continued reconfiguration of the economy into neofeudalism? Or will a right-wing populism, with heavy undertones of fascism, ascend to power because of a failure on the part of the left to defend a population once again betrayed?
Whatever happens next will be chaotic. Global financial markets, which lost heavily on derivatives, are already in free fall. The value of the British pound has dropped by over 9 percent and British bank stock prices by over 25 percent. This decline has wiped out the net worth of many Wall Street brokerage houses and banks, leaving them with negative equity. The Brexit vote severely cripples and perhaps kills the eurozone and, happily, stymies trade agreements such as the Trans-Pacific Partnership. It throws the viability of NATO and American imperial designs in Eastern Europe and the Middle East into question. The British public’s repudiation of neoliberal economics also has the potential to upend the presidential elections. The Democratic Party will orchestrate a rescue of Wall Street if there is a call for a bailout. Donald Trump and the Republicans, by opposing a bailout, can ride popular revulsion to power.
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“A lot of banks in America and Europe that held their money in Great Britain just lost 9 percent at current exchange rates,” said economist Michael Hudsonwhen I reached him in New York by phone. “They have probably not hedged it. There have probably been large Wall Street institutions that made bets believing that Britain would remain in the European Union. There are firms and banks, I suspect, which have lost hundreds of billions of dollars. There is talk of another Lehman Brothers. We don’t yet know who it will be.”
The Democratic Party, by rescuing Wall Street, will be unmasked as the handmaidens of the financial elite.
“I expect Obama to do whatever he is told to do by Wall Street,” Hudson said. “He has turned over management of the economy to his campaign contributors from Goldman Sachs and Chase Manhattan. He does not have views of his own, other than self-promotion. He wants his presidential library. He wants to have a big foundation like the Clintons. Most of the population will oppose a bailout, of course, and he will cry all the way to the bank.”
Economies built on scaffolds of debt eventually collapse. There comes a moment when the service of the debt, as we see in Greece, becomes unsustainable. More and more draconian austerity measures are imposed on a captive public to pay banks and bondholders until these measures reach an intolerable level. The people revolt. The system crashes. This is what happened in Britain.
The war against international finance, and the array of intergovernmental systems and institutions used to enforce the predatory beast of global speculation, has begun. The question is, who will win? Will it be the banks, which intend to continue to pillage economies? Or will it be popular movements that will rise up to cancel debt and reinstate economic and political sovereignty?
Hudson sees the crisis in Europe as, in part, spawned by the U.S. intervention in the Middle East and the Ukraine.
“If there is anyone who is responsible for the Brexit, it is Hillary Clinton and Barack Obama,” he said. “They destroyed Libya. They turned over Libyan weapons to [Islamic State], al-Qaida and [Nusra Front]. It was their war in Syria, where many of these weapons ended up, which created the massive exodus of refugees into Europe. This exodus exacerbated nationalism and anti-immigrant sentiment. Clinton and Obama are also responsible for a huge exodus of Ukrainians. This is all a response to American war policy in the Middle East and the Ukraine. In central Europe, with the expansion of NATO, Washington is meanwhile demanding that governments spend billions on weapons rather than on recovering the economy.”
Financial markets in the United States and worldwide face uncertainty and potential crisis after Britain voted to leave the European Union. (Sparkx 11)
Great Britain’s decision to leave the European Union has wiped out many bankers and global speculators. They will turn, as they did in 2008, to governments to rescue them from default. Most governments, including ours, will probably comply.
Will the American public passively permit another massive bailout of the banks? Will it accept more punishing programs of austerity to pay for this bailout? Will a viable socialism rise out of the economic chaos to halt further looting of the U.S. Treasury and the continued reconfiguration of the economy into neofeudalism? Or will a right-wing populism, with heavy undertones of fascism, ascend to power because of a failure on the part of the left to defend a population once again betrayed?
Whatever happens next will be chaotic. Global financial markets, which lost heavily on derivatives, are already in free fall. The value of the British pound has dropped by over 9 percent and British bank stock prices by over 25 percent. This decline has wiped out the net worth of many Wall Street brokerage houses and banks, leaving them with negative equity. The Brexit vote severely cripples and perhaps kills the eurozone and, happily, stymies trade agreements such as the Trans-Pacific Partnership. It throws the viability of NATO and American imperial designs in Eastern Europe and the Middle East into question. The British public’s repudiation of neoliberal economics also has the potential to upend the presidential elections. The Democratic Party will orchestrate a rescue of Wall Street if there is a call for a bailout. Donald Trump and the Republicans, by opposing a bailout, can ride popular revulsion to power.
The Democratic Party, by rescuing Wall Street, will be unmasked as the handmaidens of the financial elite.
“I expect Obama to do whatever he is told to do by Wall Street,” Hudson said. “He has turned over management of the economy to his campaign contributors from Goldman Sachs and Chase Manhattan. He does not have views of his own, other than self-promotion. He wants his presidential library. He wants to have a big foundation like the Clintons. Most of the population will oppose a bailout, of course, and he will cry all the way to the bank.”
Economies built on scaffolds of debt eventually collapse. There comes a moment when the service of the debt, as we see in Greece, becomes unsustainable. More and more draconian austerity measures are imposed on a captive public to pay banks and bondholders until these measures reach an intolerable level. The people revolt. The system crashes. This is what happened in Britain.
The war against international finance, and the array of intergovernmental systems and institutions used to enforce the predatory beast of global speculation, has begun. The question is, who will win? Will it be the banks, which intend to continue to pillage economies? Or will it be popular movements that will rise up to cancel debt and reinstate economic and political sovereignty?
Hudson sees the crisis in Europe as, in part, spawned by the U.S. intervention in the Middle East and the Ukraine.
“If there is anyone who is responsible for the Brexit, it is Hillary Clinton and Barack Obama,” he said. “They destroyed Libya. They turned over Libyan weapons to [Islamic State], al-Qaida and [Nusra Front]. It was their war in Syria, where many of these weapons ended up, which created the massive exodus of refugees into Europe. This exodus exacerbated nationalism and anti-immigrant sentiment. Clinton and Obama are also responsible for a huge exodus of Ukrainians. This is all a response to American war policy in the Middle East and the Ukraine. In central Europe, with the expansion of NATO, Washington is meanwhile demanding that governments spend billions on weapons rather than on recovering the economy.”
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