THE ECONOMIC CRISIS: A PRODUCT OF GREED.
VENICE, May 27, 2010 - Controlled by fear, guided by panic and suffering an abysmal imbalance of
wealth our global economy today resembles a porcelain vase vulnerable to the gentlest nudge. From
Washington to London to Beijing and New Delhi economic gurus are applying daily band aids to the cracks
while doomsday prophets already predict more chaos and discover fresh wounds.
Yet these cracks and wounds have been festering for decades, dormant until unscrupulous
financial manipulators exposed them – and on the ensuing panic made huge profits.
Fear, especially fear of the loss of one’s wealth, is a wonderful tool for totalitarian
or autocratic governments who can then impose laws and regulations, allegedly to protect their
citizen but in reality to usurp more control over them while safeguarding the privileges and
wealth of the elite, the only sector who seem to count in today’s societies.
Take the rightwing Italian government of tycoon Silvio Berlusconi. Hurriedly this month, before the
European Union cracked down on Rome’s haphazard accounting, it presented a budget to cut public
spending by 20-odd billion Euro. The victims of this belt-tightening were the reduced salaries of public
servants, pensioners, ordinary workers as well as education and health care. Yet while the administration
punished poorer members of society the Italian government offered amnesty to millions of wealthy Italians
who had built or kept second homes, often for years, without paying the compulsory taxes or building permits.
According to Italian analysts the payment of these outstanding building and land taxes would
suffice to cover the budget cuts. Instead the needed funds are to be extracted from the lowest income
earners.
Perhaps to forestall public indignation these budget cuts were coupled to a proposed law virtually
muzzling the media, outlawing the media’s reporting of telephone interceptions or the confessions of
whistleblowers, the only tools successful in past battle against the Italian mafia and in revealing the
excesses, abuses and malpractices of politicians, including the controversial figure of the current prime
minister.
Italians who have loyally supported Berlusconi, a glib-tongued vendor of economic fairytales (who
pledged only a week ago he would not touch pensions) appear to take all this injustice in their stride.
Not so the Greeks. Workers went on rampages after their government promised the European
Union a 30 percent salary cut of all Greek employees as a prerequisite for loans from the Union that enabled
Athens to service the country’s debts - instead of declaring itself bankrupt.
Again it was not the workers but successive Greek governments whose mismanagement and
corruption caused the Greek crisis - for which the innocent common man must now pay.
The predicament of the Greeks is not much different from workers and citizen of the United States
after the Obama administration bailed out financial institutions that lost fortunes by gambling on the
precarious and often fraudulent investments junkets with the money of the very taxpayers now paying to bail
them out.
The injustices of these crisis-repair systems worldwide only serve to deepen the global wealth
imbalance. They will create more poverty and add to the already existing friction between high and low
income (or unemployed) citizen. In the end this must inevitably lead to the kind of militant ‘them-and-usâ
€™ confrontations witnessed in Thailand over the last months.
Thailand is not the only Asian country where rural workers, neglected and ignored by urban-
orientated administrations, decided it was better to fight for their rights then to be economically strangled or
relegated to slave labor. (Sociologist Walden Bello writes Thai rural workers earn only one 12th of the wages
of their urban equivalent).
Only a bloodbath by the Thai military ended the months-long ‘Bangkok Barricade’ during
which rural and poor protesters demanded truly democratic elections in which all sectors of the country, and
not only the privileged classes, would be represented. Certainly not an outrageous demand though if carried
out it would hand to the great mass of marginalized Thais the power that has been wielded for generations
by an elite minority, a minority dominated by Chinese-Thais who make up only 14 per cent of the population
but control the economy, the military, politics and even, so it is said, the royal palace.
Similar rural-urban inequality has resulted in peasant revolts in China, some of them bloody, but all
motivated by the injustice of a central and provincial oligarchy flying the hammer and sickle while practicing
western-style capitalism and corporatism.
A new breed of provincial and federal party strongmen in China have absorbed most of the nationâ
€™s accumulating riches while the rural population survives on bare subsistence levels and does not share
in the nation’s fabulous consumer boom.
In India the same inequality, often coupled to the caste system, has kindled not only popular anger
but created rural guerrillas, the Naxalites, who are fighting the government on Maoist-type ideals and find
ready support among a rural population that has never participated in India’s Great Leap forward into
capitalism, shedding its last remnants of what was once a socialist-type economic system.
Both China and India have handed over public resources to private enterprises and opened their
doors to outside investors who are only interested in profits not bridging any wealth gap. These investors
still view the rural workers as a cheap labor force to be exploited for profit while local strongman want to
keep these workers at the lowest possible income level to attract and satisfy foreign manufacturing
companies – before these are tempted to transfer to other low income nations like Burma, Vietnam or
Cambodia.
It takes no clairvoyant to deduce the root of discontent in both China and India, the world’s new
economic giants, remains the vast income differences between city and countryside while in Europe and the
USA the specter of friction is the snowballing number of unemployed, under-employed or unemployable.
Sooner or later this marginalized majority will take up sticks, knives and firearms as they did in
Bangkok this year to fight for a share of what has been denied to them by the greed of a minority.
Uli Schmetzer is the author of
‘The Chinese Juggernaut – How the Chinese
Conquered South East Asia without firing a shot’
To be published by Amazon.com in July.
He is also the author of ‘Times of Terror’
- a foreign correspondent’s autobiography
And ‘Gaza’ a novel about the Middle East.
Both are available on Amazon.com
VENICE, May 27, 2010 - Controlled by fear, guided by panic and suffering an abysmal imbalance of
wealth our global economy today resembles a porcelain vase vulnerable to the gentlest nudge. From
Washington to London to Beijing and New Delhi economic gurus are applying daily band aids to the cracks
while doomsday prophets already predict more chaos and discover fresh wounds.
Yet these cracks and wounds have been festering for decades, dormant until unscrupulous
financial manipulators exposed them – and on the ensuing panic made huge profits.
Fear, especially fear of the loss of one’s wealth, is a wonderful tool for totalitarian
or autocratic governments who can then impose laws and regulations, allegedly to protect their
citizen but in reality to usurp more control over them while safeguarding the privileges and
wealth of the elite, the only sector who seem to count in today’s societies.
Take the rightwing Italian government of tycoon Silvio Berlusconi. Hurriedly this month, before the
European Union cracked down on Rome’s haphazard accounting, it presented a budget to cut public
spending by 20-odd billion Euro. The victims of this belt-tightening were the reduced salaries of public
servants, pensioners, ordinary workers as well as education and health care. Yet while the administration
punished poorer members of society the Italian government offered amnesty to millions of wealthy Italians
who had built or kept second homes, often for years, without paying the compulsory taxes or building permits.
According to Italian analysts the payment of these outstanding building and land taxes would
suffice to cover the budget cuts. Instead the needed funds are to be extracted from the lowest income
earners.
Perhaps to forestall public indignation these budget cuts were coupled to a proposed law virtually
muzzling the media, outlawing the media’s reporting of telephone interceptions or the confessions of
whistleblowers, the only tools successful in past battle against the Italian mafia and in revealing the
excesses, abuses and malpractices of politicians, including the controversial figure of the current prime
minister.
Italians who have loyally supported Berlusconi, a glib-tongued vendor of economic fairytales (who
pledged only a week ago he would not touch pensions) appear to take all this injustice in their stride.
Not so the Greeks. Workers went on rampages after their government promised the European
Union a 30 percent salary cut of all Greek employees as a prerequisite for loans from the Union that enabled
Athens to service the country’s debts - instead of declaring itself bankrupt.
Again it was not the workers but successive Greek governments whose mismanagement and
corruption caused the Greek crisis - for which the innocent common man must now pay.
The predicament of the Greeks is not much different from workers and citizen of the United States
after the Obama administration bailed out financial institutions that lost fortunes by gambling on the
precarious and often fraudulent investments junkets with the money of the very taxpayers now paying to bail
them out.
The injustices of these crisis-repair systems worldwide only serve to deepen the global wealth
imbalance. They will create more poverty and add to the already existing friction between high and low
income (or unemployed) citizen. In the end this must inevitably lead to the kind of militant ‘them-and-usâ
€™ confrontations witnessed in Thailand over the last months.
Thailand is not the only Asian country where rural workers, neglected and ignored by urban-
orientated administrations, decided it was better to fight for their rights then to be economically strangled or
relegated to slave labor. (Sociologist Walden Bello writes Thai rural workers earn only one 12th of the wages
of their urban equivalent).
Only a bloodbath by the Thai military ended the months-long ‘Bangkok Barricade’ during
which rural and poor protesters demanded truly democratic elections in which all sectors of the country, and
not only the privileged classes, would be represented. Certainly not an outrageous demand though if carried
out it would hand to the great mass of marginalized Thais the power that has been wielded for generations
by an elite minority, a minority dominated by Chinese-Thais who make up only 14 per cent of the population
but control the economy, the military, politics and even, so it is said, the royal palace.
Similar rural-urban inequality has resulted in peasant revolts in China, some of them bloody, but all
motivated by the injustice of a central and provincial oligarchy flying the hammer and sickle while practicing
western-style capitalism and corporatism.
A new breed of provincial and federal party strongmen in China have absorbed most of the nationâ
€™s accumulating riches while the rural population survives on bare subsistence levels and does not share
in the nation’s fabulous consumer boom.
In India the same inequality, often coupled to the caste system, has kindled not only popular anger
but created rural guerrillas, the Naxalites, who are fighting the government on Maoist-type ideals and find
ready support among a rural population that has never participated in India’s Great Leap forward into
capitalism, shedding its last remnants of what was once a socialist-type economic system.
Both China and India have handed over public resources to private enterprises and opened their
doors to outside investors who are only interested in profits not bridging any wealth gap. These investors
still view the rural workers as a cheap labor force to be exploited for profit while local strongman want to
keep these workers at the lowest possible income level to attract and satisfy foreign manufacturing
companies – before these are tempted to transfer to other low income nations like Burma, Vietnam or
Cambodia.
It takes no clairvoyant to deduce the root of discontent in both China and India, the world’s new
economic giants, remains the vast income differences between city and countryside while in Europe and the
USA the specter of friction is the snowballing number of unemployed, under-employed or unemployable.
Sooner or later this marginalized majority will take up sticks, knives and firearms as they did in
Bangkok this year to fight for a share of what has been denied to them by the greed of a minority.
Uli Schmetzer is the author of
‘The Chinese Juggernaut – How the Chinese
Conquered South East Asia without firing a shot’
To be published by Amazon.com in July.
He is also the author of ‘Times of Terror’
- a foreign correspondent’s autobiography
And ‘Gaza’ a novel about the Middle East.
Both are available on Amazon.com
