Chris Hedges on the coming collapse

Chris Hedges wrote last week about the next financial crash.

Wall Street banks have been handed $16 trillion in bailouts and other subsidies by the Federal Reserve and Congress at nearly zero percent interest since the 2008 financial collapse.

They have used this money, as well as the money saved through the huge tax cuts imposed last year, to buy back their own stock, raising the compensation and bonuses of their managers and thrusting the society deeper into untenable debt peonage.

Chris Hedges

Sheldon Adelson’s casino operations alone got a $670 million tax break under the 2017 legislation.  The ratio of CEO to worker pay now averages 339 to 1, with the highest gap approaching 5,000 to 1.  This circular use of money to make and hoard money is what Karl Marx called “fictitious capital.”

The steady increase in public debt, corporate debt, credit card debt and student loan debt will ultimately lead, as Nomi Prins writes, to “a tipping point—when money coming in to furnish that debt, or available to borrow, simply won’t cover the interest payments.  Then debt bubbles will pop, beginning with higher yielding bonds.”

An economy reliant on debt for its growth causes our interest rate to jump to 28 percent when we are late on a credit card payment.  It is why our wages are stagnant or have declined in real terms—if we earned a sustainable income we would not have to borrow money to survive.

It is why a university education, houses, medical bills and utilities cost so much. The system is designed so we can never free ourselves from debt.

However, the next financial crash, as Prins points out in her book Collusion: How Central Bankers Rigged the World, won’t be like the last one.  This is because, as she says, “there is no Plan B.”

Interest rates can’t go any lower. There has been no growth in the real economy. The next time, there will be no way out. Once the economy crashes and the rage across the country explodes into a firestorm, the political freaks will appear, ones that will make Trump look sagacious and benign.

Source: Truthdig

Hedges thinks things could get very bad very quickly.

The elites in a time of distress will retreat to their gated compounds and leave us to fend for ourselves.

Basic services, from garbage collection to public transportation, food distribution and health care, will collapse.

Massive unemployment and underemployment, triggering social unrest, will be dealt with not through government job creation but the brutality of militarized police and a complete suspension of civil liberties.

Critics of the system, already pushed to the margins, will be silenced and attacked as enemies of the state.

The last vestiges of labor unions will be targeted for abolition, a process that will soon be accelerated given the expected ruling in a case before the Supreme Court that will cripple the ability of public-sector unions to represent workers.

The dollar will stop being the world’s reserve currency, causing a steep devaluation.  Banks will close.

Global warming will extract heavier and heavier costs, especially on the coastal populations, farming and the infrastructure, costs that the depleted state will be unable to address.

The corporate press, like the ruling elites, will go from burlesque to absurdism, its rhetoric so patently fictitious it will, as in all totalitarian states, be unmoored from reality.  The media outlets will all sound as fatuous as Trump.

And, to quote W.H. Auden, “the little children will die in the streets.”

Source: Truthdig

I think the turning point will be when the dollar ceases to be the world’s reserve currency.  The power of the almighty dollar is what has shielded us Americans from the worst consequences of our trade deficit and debt-based economy.

The fact that the world does business in dollars means that the international transactions have to go through American banks.  This is what gives the U.S. Treasury Department the power to impose crippling sanctions on nations whose governments oppose U.S. objectives.

The misuse of this power will cause the rest of the world will revolt against the dollar.  We Americans will find ourselves in the same position as the people of Argentina and other nations that don’t have control of their own economic destiny.

If the United States had a sounder economy and if the U.S. government had a more realistic foreign policy, we Americans could avoid this.  Our nation might even have the world’s consent to be a leader as first among equals, based on respect for international law and basic human rights. But that’s not the direction we’re headed.

LINKS

The Coming Collapse by Chris Hedges for Truthdig.  (Hat tip to Steve Badrich)

Collusion: How Central Bankers Rigged the World by Nomi Prins for The Daily Reckoning.

Donald Trump and the Next Crash by Nomi Prins for TomDispatch.

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One Response to “Chris Hedges on the coming collapse”

  1. Edward Says:

    Our government is our worst enemy.

    Like

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