Watching the mainstream media it’s easy to believe that the economic downturn is coming to an end – we’re out of the woods, it’s green shoots all round, growth across all sectors and happy times ahead – in the words of Federal Reserve Chief Ben Bernake, “The recession is very likely over”. Having dedicated considerable effort to downplaying the severity of the economic downturn as it unfolded – which involved shifting much of the blame onto consumer borrowing and absolving the banks of their role in the crisis – the media then went on to downplay or completely ignore the criminal nature of the bailouts, which in actuality amount to a brazen looting of the economy for the enrichment of private interests.
The banks, of course, measure the success of the economy in completely different ways to the rest of us – Michal Froman, Obama’s representative to the White House at the upcoming G-20 Summit, wrote in a confidential memo to the 20 heads of state that, “Global equity markets have risen 35 percent since the end of March” – the stock market is up so everything is fine. When Alistair Darling spoke of the recession ending “round the turn of the year” the BBC repeated this without any contextual analysis or counter-argument; similarly, the mainstream press has been clamouring over the Organisation for Economic Co-operation and Development’s (OECD) declaration that the global downturn is over – many disagree, but their voices are rarely featured amongst the talking heads on mainstream television.
Of course, these pronouncements are accompanied by the caveat that “conditions will remain tough” for several months, which roughly translates into the unspoken fact that job losses will continue to rise and any “growth” will occur almost exclusively in the bank balances of the bailout recipients. After all, it was only recently that a furore was caused by the announcement of Goldman Sachs profits and another round of record bonus payouts – few are under the illusion that it’s been hard times for the banks as well as the commoners. It’s a cushy gig for the banks – get your friends at the Fed to threaten martial law if the government doesn’t bail the banks out then pocket the cash, prolong the crisis, and demand more bailouts.
One of the main problems is that the banks simply aren’t issuing new loans. Unlike the Chinese, who ordered the banks to increase credit, who complied by expanding credit by 30% which surged the economy out of recession and into double-digit growth, the banks in the US, contrary to expectations, did not use the bailout money to issue new loans, but rather used the billions for mergers and acquisitions, encouraged by tax breaks put in place in late 2008 by Treasury Secretary Hank Paulson, a former CEO of Goldman Sachs. It is a clear case of class interests trumping the needs of the wider economy – the looting of public money with the full complicity of the political classes. According to Congressman Alan Grayson, the Fed secretly “stuffed” $500 billion into “foreign private pockets” and gave a further $230 billion to Citi “as a secret bailout”. Grayson went on, “They are performing a truly remarkable, surreptitious transfer of wealth from public to private hands. They are taking their ability to print money and shore up failed banks. They are simply stuffing money into the pockets of private interests.”
In a further move which comes across as a bitter twist of the knife, the banks are now talking of using the bailout money to privatise public services. Moves are being made to buy up the highways in the US, and similar proposals have been made by the Rothschilds to privatise motorways in the UK. Professor Chossudovsky explains how the bailouts, far from being intended to solve the financial crisis, are being use for the exact opposite:
The far-reaching implications of this points towards the collapse of the dollar as the global reserve currency. Max Keiser on Russia Today elucidated the implications of the bailouts, the collapse of the dollar and the social impact current trends are likely to result in; despite the cheery optimism in much of the mainstream media, the prognosis is anything but rosy.
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