Vampire Squid Watch: 4 Scary Economic Trends for 2012
Delmar catches a medium-sized Humboldt Squid, also known as the Red Devil or Diablo Rojo.
Photo Credit: EMMANUEL RUIZ
Having been seen to twitch – ever so slightly – in 2011 as global protests erupted, the vampire squid is stirring in its evil lair. Reports of sucking noises and new tentacles sprouting in every direction tell us that the global financial monster is poised to steal yet more wealth and resources from the public in the coming year. Top economic thinkers have shared their forecasts with AlterNet, and the focus is clear: 2012 will be a year of continued – and escalating – predation by financiers. Their influence over political, financial, and economic activity will grow – along with potential for harm.
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1. Back-door Bailout of the Eurozone
Would you like more of your hard-earned money to flow to fatcats? Wish granted! Attorney Walker Todd, who spent two decades in the legal departments of the Federal Reserve Banks of New York and Cleveland, names the back-door bailout of the eurozone banking system by our very own Federal Reserve as the top economic story of the upcoming year – or, at least one of the most outrageous. In a nutshell, the Fed is helping European banks by opening up the short-term ‘emergency’ lending pipeline, which means that U.S. taxpayers are indirectly bailing out private European capitalists. This is being done through a bit of financial hocus pocus called “swaps” – essentially the trading of dollars for euros. Such a maneuver allows the Fed to prop up European banks while claiming that is not 'technically' directly lending.2. Record-breaking Political Finance
What does corporate dough buy? Newspapers and elections and presidents, oh my!
Thomas Ferguson of the University of Massachusetts, Boston and the Institute for New Economic Thinking suggested that next year’s very biggest stories could well be about corporate money influencing politics. He told AlterNet he saw a real possibility that a serious third party candidate for president might emerge; if one does, it will be bankrolled from the right while promoted in public as representing the political “center.” And it will also be designed to give corporate America many of the policies it has long sought, such a trimming Social Security and eviscerating the social safety net. "People are going to be astonished at how lethal the combination of secret money and corporate mass media will be to the public’s interest," said Ferguson.
3. Executive Pay Explosion
Since the Great Recession of 2008-2009, the prime beneficiaries of the sluggish recovery have been…you guessed it!....top corporate executives. And it looks like the good times will keep rolling – for them. William Lazonick, professor of economics at the University of Massachusetts, Lowell, predicts an escalation of the harmful practice of corporate stock buybacks, which produces the explosion in executive pay.
4. Pathological Corporate Leadership
Jamie Dimon never seems to seize an opportunity to keep his mouth shut. JP Morgan's CEO, who happens to be the highest-paid chief executive officer among the six biggest U.S. banks, has consequently regaled us with his worldview, in which bank regulations are “anti-American” and ordinary folks have no right to be mad at rich people. He has become the poster-boy for Wall Street greed and has earned the especial ire of the Occupy movement, which recently marched to his digs on Park Avenue to offer to help him pack his bags and go wreak havoc somewhere else. In his universe, defrauding investors, spreading lies to manipulate markets, and foreclosing on military families are all part of a good day’s work.
Dimon is a particularly nasty customer, but he is part of a new breed of sociopathic financiers. And his kind of distorted ‘vision’ has harmed the country’s prospects and created a gap in America between the richest and the poorest that puts us in close range of Rwanda and Serbia.
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