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by: J. D. Heyes
March 19, 2015
Europe’s biggest economy has problems of its own, but like the other problematic economies of the European Union, they were decades in the making.
Protests in Frankfurt, Germany, over “austerity” measures called for by the EU’s Central Bank have turned violent, according to local reports which said that police cars had been set on fire, store windows have been shattered and cops have been stoned.
The protest — which authorities say is expected to draw about 10,000 people — have coincided with the opening of the European Central Bank’s (ECB) new headquarters in the city. In a nod to similar demonstrations in New York City and around the U.S. a few years ago, the protests in Germany have been dubbed #Blockupy.
And, like those in the U.S., the protests are reported to have been launched by left-wing organizers, being labeled “anti-capitalist,” by mainstream media like German news broadcaster Deutsche Welle (DW). “Around 10,000 anti-capitalist protesters, marching under the banner of leftist alliance Blockupy, are expected to attend the rally, with a march through the city planned for later in the evening,” the broadcaster’s site reported.
“Austerity” is the enemy of big-spending governments
The protests in Frankfurt also bear similarities to others that have taken place in recent austerity measures demanded by central banks. According to a separate report by DW, #Blockupy protestors, including those from heavily indebted Greece, say ECB austerity policies favor the rich over the poor, the banks over the people, and creditors over debtors — “policies that have amounted to bailing out irresponsible financiers at the expense of ordinary citizens.”
But the austerity measures are necessary, say the banks, because European governments heavily tax and then subsidize citizens’ lifestyles in the form of socialism: welfare-type handouts and pensions. And with moribund economies, these governments simply cannot maintain the status quo.
The protests are also similar in that they focus primarily on class warfare; while there is plenty of banking hypocrisy to go around, considering that central banks run deficits and pursue dubious economic policies like quantitative easing, they nonetheless control the money supplies and create money and debt from nothing — while buying off politicians to maintain their monopolies.
And, as economies continue to decline in the West, the protests are sure to increase and become even more dangerous. And spread.
The U.S. economy has some distinct advantages over its European counterparts, in that it has at least some potential for growth, thanks in large part to the shale-oil energy boom. But even during the Great Recession of the recent past, Congress and the White House did not refrain from spending. In fact, a Democratic president and Congress passed one of the most expensive new entitlement programs of the last generation: the Affordable Care Act, or Obamacare, which is now expected to cost double its initial estimates.
Frustration, protests will spread
So the problem for governments in the West is not that they have spent too little on social programs and “the poor” — they have spent too much. Their populations have become too reliant on taxpayer largesse. So when aging populations featuring fewer taxpayers combines with government-centric socialist economies prone to recession, you get huge budget deficits that cannot be sustained. Hence the need for “austerity.”
But big central banks are certainly not blameless. The U.S. Federal Reserve, for instance, has created trillions of dollars out of thin air since the Great Recession of 2008-09, via quantitative easing, but instead of that money getting to consumers, as was allegedly planned, the big banks have been keeping most of it, while the money held by private citizens is thus devalued.
And now, the ECB wants to do the same thing.
What we have in the Western world today is a near perfect-storm of angst, frustration, rising inequality, big oppressive government and economic policies that favor the monied class above even the economic health of nations. The U.S., for all its inherent wealth, will not be spared the unrest, if for no other reason than that there are political factions here which will use the frustration that their own policies have created to their advantage.