02 February 2008



Crisis?


In the 70s the main economic fear was inflation (Inflation, that eroded purchase power day by day, was a recurrent issue in 70s music by the way).

In 1979, Paul Volker was appointed chairman of the Federeal Reserve Bank (the FED) and reappointed in 1983 by the superbad Reagan.
Paul Volker broke inflation for the first time in US and world´s economy, through a strict monetary policy, leading to low interest rates too.

This could have been a great step forward for the people...

27 years later the question is : who benefited it?
Companies and their shareholders? or the people?
On the one hand companies have outrageously increased their profits (check the S&P 500 increase since 1981).
On the other hand the middle class is worlwide stuck and didn´t see it purchase power increase in real terms, despite low inflation.
With low inflation + deregulation the financial sphere could grow protected, and distribute credit like never before.

The same happened with globalisation and free trade. Initially a good idea, it just eventually served the interests of large corporations who used it as a way to delocate and at the same time blackmail the manpower they couldn´t get rid of in their territories.

Since demand is not driven by salaries anymore, credit took over as the only way to maintain demand and feed companies. Who pays : the people, again..

Enough said : companies and their shareholders have been the only winners since these post-70s economic big bangs that were meant to change the world

VOTE
(DEMOCRATS
)

THINGS MUST CHANGE

POWER TO THE PEOPLE



1 comment:

Nicolas said...

Totally agree with your analisis, except one thing: democrats are just the other side of the same coin...
Democracy, as we know it, is just a big masquerade... The real power is in hand of non-democratic and elitist organizations : Fed, World Bank, IMF, etc.
There is indeed, very little hope for the people.

I love your blog and what you do.