In the lastest issue of The International Economy, a leading German journalist surveys the tensions between the US and Europe on financial regulation and illuminates the role of financial elites in this dysfunctional dance.
In the lastest issue of The International Economy, a leading German journalist surveys the tensions between the US and Europe on financial regulation and illuminates the role of financial elites in this dysfunctional dance. The power punch comes in the following assessment:
"The biggest irony of all, however, is that the deeply destructive policy to shift the burden of the financial crisis resolution from current creditors to future generations of taxpayers works. It works because the globalizing capital markets have created the conditions for socializing credit losses. Absent coordination -- and who would credibly represent a transnational taxpayer? -- governments that can afford to bail out bondholders and depositors will simply do so.
Apart from a few small jurisdictions where matters are impossible to hide, they have nothing to fear from voters, who through a constant state of fear and panic are coerced to open their purses.
And despite high expectations for the newly elected U.S. president, both sides of the Atlantic have one thing in
common: The same people in key positions in the public and private sector who let financial institutions, their managements, and the markets destroy large parts of the wealth of nations are now acting as the powerful saviors of the financial system and the larger economy by doling out taxpayers billions in amounts nobody in his wildest dreams thought possible. And those so-called "wise men" who were working as advisors to the "Masters of the Universe" of global finance are now in the limelight on both sides of the Atlantic, telling the world how to get out of the worst financial crisis in generations."
Rob Johnson is a Senior Fellow and the Director of the Project on Global Finance at the Roosevelt Institute.