Our fearless editor-in-chief gave his rundown on all the hot topics in the latest edition of Carnet Atlantique. Behold:
“When the financial collapse first manifest 2007-08, economists and finance ministers prescribed “rebalancing.” That is, the huge wealth flows from developed economies to China created a disequilibrium. Huge wealth flows from developed economies to oil producing economies created disequilibrium. Unless wealth flows were rebalanced in one way or another, world economic recovery would stumble and strain. Which is where we are now. And you ain’t seen nothing yet. I do not envision rioters in Athens or Rome, workers in the U.K., Occupy Wall Street, standing in line stoically for their ration of apples and bread. Things are going to be violent in this next dangerous phase.
This is what I pretty much feared. I had, along with everyone else, hoped that we could learn the lessons of the Great Depression and avoid a reprise. And we did get off to a good start. But we ran out of time. And money. And rebalancing. Today, we are unwinding the social contract that adheres our social fabric.
What surprises me is as the West has avoided the conflagration so far. I expected wide-spread worker dissatisfaction would have presented itself already. After all, the Western worker-class has seen their standard of living freeze and decline for the last 15 years. At the same time, the wealth class has seen its standard of living increase dramatically. So, it seemed in 2007 – 2008 that in order to dig our way out of the Great Recession we would reverse the order of things: taxing the advantaged to feed the disadvantaged.
But it hasn’t worked out that way. There are precedents: the Russian ruling class was blind to economic injustices so the peasantry decided “off with their heads.” As did the French. But the kings and queens have been replaced with democratically-elected governments of the people, by the people and for the people. And so it seemed perfectly obvious that those democratically-elected governments would redistribute wealth, at least in the short-term.”