Monday, June 27, 2016
Those who think a little disruption can be a good thing — or a lot of it, for that matter — now have an opportunity to test their hypothesis. The most notable outcome of the Brexit vote so far is the disruption of British politics. Both the Conservatives and Labour are split, and the British are not especially enthusiastic about either party.
In response, ECB President Mario Draghi is suggesting that the time has come to move away from the austerity policies that have crippled Europe since the financial crisis and emphasize growth. Draghi knows that what underlies working class discontent across Europe is not immigration.
European workers have suffered with wages that buy less every year, along with the erosion of the social programs that make limited incomes acceptable. In the UK, unemployment is low, but wages have been stagnant or slipping. In southern Europe, any work at all is very hard to find. The problem has been austerity.
It is in the interests of banks, private equity and sovereign wealth funds, and other global capitalists to continue austerity, cutting government services to free up money that will be used to pay back risky loans. It is in the interests of everybody else to renegotiate that debt and restore public services, shifting wealth from those who have accumulated entirely too much to those they robbed.
That will not be done by the current crop of disruptors — Farange, Johnson, LePen, Orban, Tr*mp, et al. — but sadly will not be done by the ruling Establishment either. Mario Draghi offers some hope, and with backing from Christine Lagarde, Mark Carney, Janet Yellen, and others whose financial power does not depend on private capital, it is conceivable that something positive yet may be done.