Member states of the European Union find themselves in similarly constrained circumstances because they have included no mechanism to balance competing financial demands among the various member states. Now Germany finds itself leaned upon to help out the southern states, notably Greece Italy Spain and Portugal who find themselves unable to devalue their currency, the shared Euro and who are admitting to have cooked their books over recent years with the help of the ubiquitous gnomes of the evil Goldman Sachs organization which is more and more coming to represent a criminal enterprise.
While the imminent proposed bankruptcy of European states may titillate we should note that without Federal money banks states and businesses would be going bankrupt (or the political equivalent) in far greater numbers than so far seems apparent. Yet there is no general outcry and even the proximate cause of our collective unravelling seems shrouded in mystery. It's actually not mysterious at all, it's just uncomfortable because the economic destruction underway in the United States was caused by the decline of Federal regulation and oversight and no one wants to talk about that because acknowledging that state of affairs would force people to reconsider the value of forcing the federal Government to shrink. It would be harder than ever to screech about shrinking government once you acknowledge the need for stricter oversight.
So now we find the US is not simply swimming in debt, but that there are no plans to cope because no one wants to acknowledge the existence of a problem. The southern European states are considered to be in crisis because their debt as a percentage of Gross Domestic Product is well above 12%. The United States is in that ball park too, and here's a curious thing, Canada that hotbed of firm government regulation and socialized medicine has a debt to GDP ratio of less than 5% which is less than half ours. Australia's is around 4% and they haven't even gone into recession, their economy continues to grow modestly every single quarter. Their homes, like Canada's are retaining their value and they too provide their citizens with nationalized health care.
We, meanwhile, live in a country saddled with war and debt and unemployment, a growing level of inequality, failing services and growing despair mirroring unemployment levels. And now economists suggest we should expect high levels of unemployment to persist probably for years. As banksters hand themselves large bonuses for doing God's work. If I lived in Canada I would be looking south at our porous border and wondering how one would stem the flood of economic refugees to come.
12 comments:
Mr Conchscooter:
Our chartered bank system is the most regulated in the world. Credit has never been easy to get. There have always been rules when purchasing homes, such as % of down payments and % to loan based upon appraisals. Try to purchase a car with Zero down. The government has just passed a new law to increase the amount of downpayment (based on appraised value) before you can qualify for a loan or mortgage. It is the law so all lenders have to follow the same rules.
bob
bobskoot: wet coast scootin
And, amazing to relate, you didn't have to bail your banks out to the tune of 12 trillion (US) dollars and give them eternal guarantees of backing from the public treasury.
Dear Conch:
Are you telling me that CAnadian banks were prevented from buying into the credit defaut swap swindle?
Riepe
Of course the reason no one wants to talk about this is that there is no one to talk about it. The media is owned and operated by corporations. They are part of the system. There will be no honesty in public discourse until the government forces media giants to give up their media conglomerations. But they won't-- even the BBC is corrupted by corporate control. (And for those who maintain that the internet does what the media should do, I would say that the internet merely confuses things. There is so much information and so much of it untrue that a it's hard to know what the real story is.)
But the financial crisis: As Paul Krugman said recently-- We're doomed. It's just a matter of when and how fast.
Hey Danette: that entry in Krygman's blog was so true and so scary he recanted as quickly as he could but the truth slipped out.
riepe: yes. that was exactly what happened. Australia hasn't even goner into recession. Two countries with far less debt than us and everyone gets to see a doctor. weird huh?
Carley Fiona is a turd in the punch bowl, and has no right to any claim on financial matters.
Coming from IT, I watched her at the helm of HP, she orchestrated the purchase of Compaq major share holder dissent. That deal lost share holder wealth for both companies, and had many people laid off (losing their incomes). Then she left with Hundreds of $Millons in a golden parachute while having the gonads to say she was ousted b/c she was a woman.
Dear Sir:
I didn't get an answer to my question. I want to know if banks in Canada were prevented by regulation from buying into credit swap defaults? I'd be surprised if they were. Canada is the only western country on the face of the earth that has a different set of divorce laws for Muslims. I thought legislators this stupid couldn't possibly have gotten something right.
Fondest regards,
Jack
Canadian banks bought into the AIG scam but they did not suffer the implosion of US banks. Furthermore Canadian merchant bankers never got the conversion to chartered banks that US banks won because they were/are too big to fail.As far as I can tell the regulation barrier was not torn down by the Canadian government. And the government gaurentees that in the US are allowing and encouraging bankers to go this whole scam again are absent.
In Canada, as best as I can tell the bankers are as greedy as any in the US but the government does its job which is regulate. In the US we are told govenrment is useless and government regulations hold us back and now we are spinning out of control faster than any of the better regulated economies. Bobskoot, who by his own admission never travels too far from home has no idea what a knife edge middle class life in America is designed to be.
Mr Conchscooter:
Our travels usually take us to small towns in the backroads of America's NorthWest, which comprise WA, OR and BC. We avoid big cities thus cannot see the impact of beggers in the streets, or people with their Hats and Hands out looking for food or gratuities.
Our first trip OFF the continent to Hawai'i would appear to be not too crowded with tourists but we have not been there in busy times so cannot comment on lack of business or not, as nothing for us to compare. Sometimes we enter a town not knowing the circumstances and see a lot of vacant business' on the main street or other areas where there are a lot of homes for sale, but we do not know how long they have remained unsold. Ignorance is bliss. Perhaps a mont or so looking at your insulation from below, between the stilts on your air mattress could lead me to other conclusions
bob
bobskoot: wet coast scootin
Mr Conchscooter:
ps: use of the Bonnie during the day would be . . . a bonus. I'll learn to ride by the sound of the exhaust.
bob
bobskoot: wet coast scootin
I've spent a good deal of time trying to figure out what our country would be like without its national debt. So much of what we have is tied to debt, it's hard to know really.
What I do know is that at the end of this song and dance (which will be a while from now), some people are going to be left holding worthless paper-- I'm trying not to be one of 'em.
There really is a lot of pain in the US and there is no need for it. I'm going to post some stuff from the daily kos and its an article worth reading repeating horrific statistics. hunger, permanent unemployment, degradation of old age pensions, imnability to buy health insurance. In countries where social security is guarenteed ( and foreign wars aren't) these things are inconceivable. This descent into social disintegration is promoted by the anti government script that says we should, in a high tech era, be able to take care of ourselves. Ho hum.
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