The Never-Ending Bailout…..

Watching Newsnight last night (as you do) it struck me, as it reported the details of yet another bail-out for the embattled Greek economy, that we are stuck in a never ending cycle of bailouts.

One of the thing’s that came out in the questioning of Christine Lagarde, head of the IMF, is that the private sector is escaping scot-free in terms of providing cash for these bailouts and this partially explains why governments are so keen to push them through. They bear the risk and therefore your not just bailing out the system, which in reality is totally knackered beyond reasonable belief, but your bailing out whichever respective governments head happens to be on the chopping block. We are told they are absolutely necessary – which they doubtless are to the governments who’s neck depends on them – but the fact is that they are not helping ordinary people who never seen any of the bailout cash.

Economically, this cycle cannot continue forever because what these bailouts are effectively doing is bleeding money out of the ‘real economy’ ie, (public sector) jobs and peoples pockets and burying it in a big hole, one that is never satisfied and demands constant refilling. This then will obviously start to effect the private sector as people spend and consume less; people their start to lose their jobs, spend and consume less (and conversely need support through welfare etc; thus increase government expenditure and debt) and that is a microcosm of why this crisis could well bring capitalism pretty much finally to its knees.

In a specifically European context, this cycle and the necessity of continuing it is having a distinct side-effect – the crisis is bringing even tighter fiscal and economic and eventual political union into a single federal entity much closer.  No doubt, the IMF, who seem extremely keen on this, will push the core European countries down this route and indeed, both George Osborne and Ed Balls are united in their approval. The left, will mistakenly, take this as an open invitation to run the other way; however, a Europe united beyond national borders would be a step-forward, even on capitalist terms, but its one that would need to be completed by through the democratisation of the European Union and it’s this that the left should divert its energies towards – not a narrow retreat into nationalism.  Rather than look back, we have to be the people who chart the way forward and break this vicious circle which is propping up a completely failed system.


About darrellgoodliffe


5 responses to “The Never-Ending Bailout…..”

  1. gillig says :

    Yates of the yard resigning over phone hacking?
    Who was in charge of the “Cash for Questions” enquiry?


  2. gillig says :

    Ordinary people who never seen any of the bailout cash.”

    Cash taken out of their private sector pay-packets to pay public sector debts.

    Cameron is throwing money away.
    Foreign investment in the EU has stopped.
    Now it has actually started pulling out!
    You often mention “bring capitalism to its knees” How do we have
    Green collar jobs without a wealth creating private sector to pay?
    The divide between the ambitions of Pro EU politicians and ordinary working Europeans is widening.
    The political idealists causing all this damage are losing their grip and calling for more “democratisation”.
    Their clear stated long term aim is less democracy and complete power to the unelected EU.
    My answer?
    Let the banks take the hit now. The first cut is the cheapest.
    Stop throwing taxpayers money at a politically created problem.


  3. darrellgoodliffe says :


    Thought this one might peak your interest, though surely the Yates of the Yard comments belong somewhere else?

    No that is not the aim of the political idealists to have less democracy but more. I am getting tempted towards your latter position though…of just letting the banks rot because I see these bailouts ad totally counterproductive.


  4. gillig says :

    Yates? who said that?

    The EU make no secret of their aims. I suspect you trust them, I don’t.
    Simply read their blurb. They rely on the fact that nobody does. You will find it’s not the benign trade organisation you dream of and you most certainly cant change it, again, you cant change it, it will not change and by the way its pointless trying to change it.

    But Gordon saved the world by making banking debts into public debts, your not saying he is a silly billy are you?


  5. darrellgoodliffe says :


    You! lol..


    gillig | July 22, 2011 at 09:48 | Reply | Edit
    Yates of the yard resigning over phone hacking?
    Who was in charge of the “Cash for Questions” enquiry?

    I don’t want it to be a benign trade organisation but a political entity, a European state. He maybe have been yes….


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