In May, I wrote an article about the Tea Party Movement. In it I predicted that the financial outcry we were hearing from the Tea Party in our country, as well as the collapse of the Greek banking system at the time, may be preludes to further turmoil in Europe.
That turmoil is exactly what we're seeing now.
First, Germany had to dish out about 80 billion Euros to rescue the financial system of Greece. Now the weakening financial systems and austerity cuts of Spain, Portugal, France, Hungary, Italy, Romania, Poland and Belgium have given rise to widespread financial protests. The working people in these countries are furious about how their own governments are managing their lives and work. Meanwhile, across the water in the United States, the Tea Partiers continue to vocally protest against the American governance.
What is everyone so angry about?
For one, people in Europe and the United States are noticing that the gap between the rich and poor is widening and people in the middle class are working more and living more poorly. The U.S. Tea Partiers and the working people of Europe are not directly angry about the rich getting richer. They hope that some day they may also get rich. They are blaming the government that they elected to help them for helping the bankers and financiers instead of them. In the United States, money multiplies in the hands of the rich, while hard-working middle class people see the value of their work diminish with time, rather than grow. Workers in the United States get the short end of the stick as inflation and printing money makes their labor and assets worth less and less. Meanwhile bankers and financiers see their piles of money grow exponentially. Currently the top 1 percent of households in America make 25 percent of the income. That figure has increased from the 1970s when the top 1 percent made a tenth of the income.
Now this anti-government fire, as predicted, is spreading to Europe (Spain, Portugal, France, Hungary, Italy, Romania, Poland and Belgium). As these governments are defending the bankers and financiers by cutting the services and support to the working people in austerity programs, they are also cutting deficits and bailing out the banks. People are essentially saying "throw the rascals out." In the United States, Republicans ride this anger to get power and get their 2 percent of rich banker CEOs and financiers to get even more tax breaks and get richer. They cloak this in the attractive garb of "financial responsibility." Their answer is for a platonic oligarchy of a rich class which in magnanimous good will is supposed to provide "jobs" for the middle class. They would make the middle class work hard to support their yachts and castles but let the "free market," without the protection of union and the government, take care of the workers and their struggle. The free market is a free ride for the few.
What happens when banks charge exorbitant interest rates and are left to their own devices? In 1836 the American lawyer John Whipple pointed out the dangers of unbridled interest on money. He said, "If 5 English pennies... had been... at 5 per cent compound interest from the beginning of the Christian era until the present time, it would amount in gold of standard fineness to 32,366,648,157 spheres of gold each eight thousand miles in diameter, or as large as the earth." No labor necessary.
Financiers may say that they are lubricating the wheels of the economy, but in reality they are collecting money and doing almost nothing. Every time the U.S. government pays down its debt, it sells bonds to one of the privately owned federal reserve banks. These banks are the sole institutions in our country with the power to print money. They loan to the government and charge interest on the loans. Oftentimes our government takes out these loans just to pay the interest they owe to other banks. It's a viscous cycle. Obviously people have gotten tired of this. In the United States, the Tea Party is the manifestation of their anger.
We have gone from one worker per family to two, just to keep a working-class family afloat. Even then, we often are unable to make ends meet because of the virtually unlimited power and greed of the financial sector.
In the Untied States this greed has damaged not just the economy, but the political power of the American people. Democracy has been bastardized and corrupted by the fact that elections are financed with huge sums of money. Instead of our elected officials representing large masses of people, they are beholden to those whose finances brought them into power. They're caught between the devil and the deep blue sea. Mostly, they have chosen to bail out banks rather than the American middle class. Hence the anger of the average person.
This anger is not unique to our country alone. As I predicted in my May article, governments in Europe are now putting austerity plans into place to cut benefits, retirement, and social services for their middle classes. They do this in the name of saving their so-called "essentials." But what does that really mean? It means cutting their deficit and transferring more wealth from the middle class into the hands of the rich financiers.
The populations at large in Europe and the United States are slowly becoming aware of the growing injustice. That's why people are striking all over Europe. That's why people continue to speak out against the collusion between the government and the financial sector here at home.
We have to stop our elected officials from thinking that it's okay to be beholden to bankers first and the people last. They need to understand that it's the people that pay their salary and man their yachts and mansions who need help. It's the people who have to fight inflation, layoffs, and cuts in their pensions and benefits. When the housing bubble collapsed, Americans suffered hugely from the devaluation of their main assets, their homes, while the bankers filled their pockets and passed on the mortgages in the form of national debts to foreign banks. But everyone suffers when governments put financiers and bankers above the people. Now the chickens are coming home to roost in Spain, Portugal, France, Hungary, Italy and Romania, in addition to Greece.
The Supreme Court ruling that corporations are legal persons has changed the value of our vote drastically. It's no longer one man, one vote. Now that corporations are legal persons with unlimited funds for campaign contributions, CEOs and corporate fat cats can essentially buy many, many votes. Their representation is as big as their wallet.
If this is not corrected, our democracy is essentially gone.
According to Plato and Rousseau, the path in a degrading democracy is either back to oligarchy, as Republicans are pushing for, or tyranny, where a populist leader galvanizes workers' anger into a one-man dictatorship. At present our country and those of Europe are democracies in trouble. We should be aware not to fall prey to either, oligarchy or dictatorship. We should turn our anger and energy toward building institutions to support, educate and improve our democracy and make a more equitable and just society.
America has always been at the forefront of innovation and a leader in social change. I hope that this time we are not the leader in degrading our democracy, but have the wisdom to direct our outrage to produce a better government.