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archer10 (Dennis) SLOW
The Greeks are not going to cop this, they'll be up in arms. Germany is pushing Greece to give up control over how it frames its budgets as part of the newest terms of its second bailout. In other words, other countries like Germany will run Greece.
According to this exclusive Reuters report, there's a proposal that EU institutions already operating in Greece should be given "certain decision-making powers" in handling the country's finances, adding that reforms "could be carried out even more stringently through external expertise."
Greece has balked at the unending austerity measures that Europe has imposed in exchange for the bailout, yet with a sharply contracting economy it mightn't have a choice.
The Financial Times has obtained a document proposing that a new commissioner, appointed by Eurozone finance ministers, would have the power to veto budget decisions taken by the Greek government if they were not in line with targets set by international lenders and would take responsibility for overseeing "all major blocks of expenditure" by the Greek government. "Budget consolidation has to be put under a strict steering and control system," the proposal reads. "Given the disappointing compliance so far, Greece has to accept shifting budgetary sovereignty to the European level for a certain period of time."
If that happens, Greece's sovereignty is likely to be lost for a long time, perhaps forever. As The Independent reports, the chairman of eurozone finance ministers, Jean-Claude Juncker, is warning that eurozone member states will probably have to increase their financial support for Greece if a deal between Athens and the private sector is concluded, putting Greece even more under the control of other nations.
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Images_of_Money
Anyone who doesn't think Wall Street has much impact on US government decisions and democracy, should check out the amount of money that's pouring in from banks, insurance companies and stock broking firms into the pockets of politicians.
The latest figures reveal that donations from , finance, insurance, and real estate companies soared by a whopping 405 per cent over the last two decades.
The sick part is that the system in the US actually allows this to happen. Under the US Supreme Court's Citizens United ruling, corporations are allowed to give unlimited donations to political campaigns under the First Amendment. It's all based on the assumption that corporations have the same legal rights as people. Yeah, that makes sense. Not.
In other words, corporations have the legal right in the US to hijack democracy. If you want to see how bad it is, check out this appalling graph here showing how much corporate donations have increased by. Frankly, the banks own the US government.
Most Americans know exactly what's going on and they're sick of it. As reported here, American voters widely reject the notion that corporations have the same constitutional rights as people, and there's a 3-to-1 opposition to unlimited corporate spending in campaigns.
They will have to put pressure on the US government to change it.
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Mike Licht, NotionsCapital.com
Alan Greenspan, the architect of the meltdown in financial markets, says capitalism isn't to blame for all this income inequality. No way, he says, it's all about globalisation.
Writing in the Financial Times, Greenspan says: "The often-assailed greed and avarice associated with capitalism are in fact characteristics of human nature, not of market capitalism, and affect all economic regimes. The legitimate concern of increasing inequality of incomes reflects globalisation and innovation, not capitalism."
Most investors don't agree. Bloomberg reports that international investors say capitalism is in crisis, with almost one in three backing radical changes to the system and claiming that the big problem is the income inequality. To put it bluntly, there can be no economic growth if all the wealth is concentrated in the hands of the very rich because it's the middle class that drives demand. " 'Capitalism is in crisis because there is a huge and growing disparity in income/wealth distribution in Western economies, and an equally divisive generational disparity,' poll participant Michael Derks, chief strategist for FXPro Financial Services broker in London, said in an e-mail. 'It requires government intervention on an enormous scale, because an economy cannot survive if it does not invest in the younger generation,' Derks said. More than 70 percent of those polled believe the system is in trouble, with 32 percent saying it needs a "radical reworking of the rules and regulations." The other 39 percent think the turbulence will ebb on its own, according to the quarterly poll conducted Jan. 23-24 of 1,209 investors, analysts and traders who are Bloomberg subscribers. Fewer than one in four say free enterprise is working as it should."
US income inequality now stands at its highest rate since the Great Depression. An economy that relies on consumer spending can't function when earners cluster at the poles with poor people buying very little, and wealthy people spending only a small fraction of their income on goods and services. America's middle class – the people who fuel the retail economy – has been stagnant for three decades. Their income has barely risen.
Greenspan is wrong. Income inequality is the result of capitalism that has gone unchecked. It's what happens when you let the markets rip without any regulation.