If we're struggling financially is because bad decisions (or no decisions) have been made for us. That's why we can blame the banks and governments (left and right) for mismanaging our resources. Financial crisis, it turns out, don't often happen for natural causes.
Argentina has been one of the strongest economies for 200 years but in 2001 it went bankrupt. The landscape there hasn't changed so surely someone took it upon themselves to ignore shifts in culture and trade. Botswana and Sierra Leone both have diamonds galore but Botswana is a success story while Sierra Leone a total disaster, why? Botswana kept ownership of the mines while only allowing foreign investors to run them; Sierra Leone went for the quick bucks and sold theirs. Once that money run out, shock and horror, there were no more resources to profit from.
Examples are aplenty: setting up the Euro, for instance, with parameters which went largely ignored; letting banks recklessly speculate without the real ability to look into the future or without due care for their customers' liquidity.
All of a sudden every government seems to have no money to spend for its citizens. Especially for the ones who have paid their duties and taxes at source. Managers and politicians have grown richer and greedier, unchecked for years... we let them, we even elected them! Now we complain as if we hadn't known. Perhaps we didn't know the extent, which is now out in the open thanks to well reported scandals and failures.
The Arab Spring is a projection of how far people go before they snap. Most dictators or pseudo-dictators have lasted in some of those countries for decades. So what's motivating people now to finally say enough is enough? Money. People have come to realise something is terribly wrong in how things are managed, their salaries are losing purchasing power, duties go up, incomes down, inflation and debt up.
At the heart of it all is the bond market, that's what makes the world go round. From the American Civil War, to both World Wars, and every other major world event, it all relied on the bond markets. Without them countries would not have raised the necessary money to keep the wheels of politics in motion. But with bad decisions we inherited bad inflation, with bad inflation the bonds lost their influence, governments lost money, power, stability.
For instance, if inflation is at 5% and bonds interests at 4%, these bonds fall behind, therefore they're devaluing. With bonds in less demand, governments simply have less money. As Milton Friedman put it, inflation is a monetary phenomenon (more money is printed than spent), but hyperinflation is always and everywhere a political phenomenon. Basically you can go wrong a bit because of several external circumstances but when it goes seriously wrong is when problems have been politically and economically ignored or mismanaged.
John Maynard Keynes said: "By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens....while the process impoverishes many, it actually enriches some....all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless..." ...sounds familiar?
So, the quick solutions so far from our various governments are more or less the same, cut benefits to the many (who actually need them) and make it easier for financial institutions to work, therefore giving them benefits regardless of the fact that they caused the damage in the first place.
The constant miscalculations of targets, like government's growth forecasts, makes a mockery of the power we entrust in institutions with our money and wellbeing. No business manager would have kept their job with the amount of forecast miscalculations we've witnessed from our politicians.
When growth stalls, borrowing increases and unemployment rises as companies feel the pinch. Therefore, less tax revenue while more benefits handouts are needed. Clearly we should concentrate in getting the growth to rise more than cutting? This is not a Right-wing or Left-wing problem. Both sides have made mistakes in almost every country. It's about the long term vision as opposed to the short term solutions. It's about the type of people we entrust with the running of our economies, bacause that's what countries ultimately are.
But what's the alternative? We keep giving power to people who are either good at speaking or have good connections, who are either popular or very influential. We vote for politicians like we vote for celebs programmes, we vote for who entertains us. We have to make the choices based on getting out there and understand for ourselves what and who can benefit us. We need to vote and that's not happening. We cannot be angry at greedy politicians if we don't stand up for alternatives. Do we need to wait 40 years before we wake up and pluck up the courage to say enough is enough?
Change starts from democracy, democracy starts with voting. Voting should be done with a bit of research, not a rushed trip to the polling station on the day and only if we're bothered. Saying "I don't understand" is no longer excusable. The information is out there.
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