...The governor of the Bank of England said that people made unemployed and businesses bankrupted during the crisis had every reason to be resentful and voice their protest. He told the Treasury select committee that the billions spent bailing out the banks and the need for public spending cuts were the fault of the financial services sector.
"The price of this financial crisis is being borne by people who absolutely did not cause it," he said. "Now is the period when the cost is being paid, I'm surprised that the degree of public anger has not been greater than it has."
...Asked when living standards enjoyed before the crisis would return, King said: "The research makes it clear that the impact of these crises lasts for many years. It is not like an ordinary recession, where you lose output and get it back quickly. We may not get the lost output back for very many years, if ever."
King faced tough questions from Labour MPs who believe the Bank should not have supported the Treasury's cuts programme. Accused by Andy Love, the Labour MP for Edmonton, of giving George Osborne cover for spending cuts, King denied that meetings with the chancellor resulted in a cosy agreement to keep interest rates low to support austerity measures.
...In a further provocation to the financial sector, King set out plans for an overhaul of City regulation and oversight that would allow banks to fail when they get into trouble. He told MPs it was necessary to move away from rules designed to prevent banks failing, with a safety net provided by taxpayers, to a system that allowed banks to fail in an orderly way.
Now that's one governor with his back to the wall. It takes a threat to employment to make someone in that position to tell the truth. The biggest threat being, of course, that the British government just can't create money out of air fast enough to satisfy the hunger of the bank$ters. 'Merika has lots more people who can sign away the future to do that, so we aren't as desperate as the Brits are getting. Yet.
Ian Welsh on that vanishing point:
People will not ship or produce if the cost to produce+ship is higher than what they can recoup. There is a bottom on prices despite what the idiotic supply and demand curves in textbooks show. Contrary to what they tell you in economics 101 supply and demand is not a law, there are significant exceptions.
In fact, if the price of shipping increases enough to make production uneconomic, then people will be laid off. When this is occurring throughout the world, you get a ripple effect. It’s not self-reinforcing in the sense that it increases the price of oil (in fact, it decreases it), it is self-reinforcing in the sense that it does make the economy worse, because it reduces demand for a wide variety of goods, whether shipped or not.
What happens then is what we’ve seen before, the price of oil drops and you get a “recovery”, which is to say a pendulum from shitty economy to sucky economy and back again. The current economic juggling act is about making sure the economy stays sucky, and doesn’t get to shitty, and you do that by keeping the price of oil from exploding. When it does, you lose.
There can be no good global economy right now. There is not enough oil in the world to do it under current economic models. Cannot be done. You may be able to have a few places doing well, but only a few. The solution to this is to GET OFF OIL, but no one is willing to allow that to happen, because old money wants to control the new economy and isn’t sure they can do that with current technologies. That’s why you have idiots talking about shale oil, or using natural gas, or anything else which keeps an economy where a small group of people provide the energy for everyone else, and make a killing doing so.
So instead you have revolutions, you have unions being crushed and so on. At its base this is all related to the price of oil. Oil in Saudi Arabia costs about $7/barrel to produce. Think about what that means in terms of profit, especially in a country where those profits stick to the hands of a few people. Think about the fact that with all that money they could buy anything, unless the US has rich as rich as Saudi Princes and companies which are so large in terms of market capitalization that they can’t be bought. (Well, or they could do ownership controls, but strangely, they prefer to be stinking rich.)
The rich MUST be kept rich. If they aren’t, the oilarchies buy up everything. That’s not exactly true, but it is true enough because that’s the way the people at the top think. They know that they either stay so big they can’t be bought, or they’re bought...
One way to deal with this is to have the Company take advantage of the economic stressors the Company imposes (for example, Goldman-$acks buying up all the food future derivatives and releasing them at the right moment) to destabilize said oilarchies.
The trouble with that strategery is that after awhile it gets a bit transparent. People notice that if you can't force up the price of oil one way, you just knock off the strongman who's trying to play it. It's hard to pretend uninvolvement when your Secretary of State opens her mouth and your Pentagon floats carriers offshore.
The bank$ter-owned military-industrial complex wants to cash out on its n-dimensional poker game, and one way is to simply take the best cards. However, this annoys your dealer who is doing his best to unobtrusively cheat- on your side, even. It's difficult to convince everyone at the table of your impartiality when your gun is on the table.
It's hard to weave an invisible web, and to get all the orcs to ignore it, when you're as big and voracious as Shelob.