TOPIC: Political Theater Will Kill the Status Quo
Political Theater Will Kill the Status Quo 1 year, 3 months ago #347
It’s hard to miss the irony in the fact that perhaps the biggest stumbling block to the status quo financial elites in the Western world, who are attempting to kick the can a bit farther down the road, aside from the sheer impossibility of the underlying math, is democratic elections. 2012 may very well be the year where decades of political theater for the benefit of large corporations and financial consumers from sea to shining sea come back with a vengeance to bite the status quo politicians in the ass.
And let’s be clear, it is the run-up to elections and the accompanying theatrical drama that will prove to be the most difficult for the status quo, rather than the actual outcomes of these elections. There is little doubt that almost all of the politicians will end up singing the exact same tune once they are actually in office. The real problem for the perennial can-kickers is that they simply do not have enough time to wait around for the elections to finish and the winners to take office.
First and foremost, we have the elections in Greece to replace the unelected, technocratic government that was force-fed to its people late last year. Due to the increasingly large and vehement public opposition to bailouts for the banks and austerity for the poor, politicians in the "opposition" parties must be very careful not to align themselves too much with the Troika and it’s puppet PASOK party (of which former Prime Minister Georgios Papandreou was a member).
That’s why we see the leader of the New Democracy party, Antonin Samaras, who has his eyes fixated on the position of Prime Minister (I’m not really sure why anyone wants to be the leader of Greece anymore), continuously flounder and backtrack on what exactly he will agree to in the latest austerity package that all of the bailout money has been conditioned on. Last year, Samaras refused to sign any written commitment to the terms of the austerity package, which has since expanded, before finally giving in.
That was all just a prelude to the main show which is taking place now. Samaras has once again "pledged" in writing to implement the Troika’s austerity program, but is simultaneously saying that the program may have to be adjusted once he is in office, since it does not do enough to promote growth (no kidding!). Helena Smith reports on what she was told by a top adviser to Samaras for The Guardian:
How about those statements for floundering and backtracking?? Now that Germany, Finland and the Netherlands are kicking around the idea of delaying Greece’s bailout money until after the elections, Samaras will have to put on an even bigger show about how he will protect the interests of Greek workers and pensioners against the abrasive Eurocrats, and perhaps even promise not to sign off on the current plan. Otherwise, everyone will just assume he is going to do exactly what the Troika requires of him once he gets in office, like the PASOK party he is running against, which is quite a safe assumption.
Secondly, there are elections in France and incumbent President Nicolas Sarkozy has been steadily dropping in the polls against Francois Hollande of the Socialist Party. As of early February 2012, Hollande is almost running at his all-time high of 60% against Sarkozy. If you thought Samaras was being a thorn in the side of the pan-European austerity hawks, then take a look at what Hollande has been saying. Steven Erlanger for the New York Times reports:
Right, Politics 101 - keep all your plans and policies for office vague and uncertain, but stay sharply critical of the current administration. Yet, that’s exactly what the markets can’t continue to handle right now – vagueness and uncertainty about the future of fiscal and monetary policy. The French sovereign bond market has so far remained relatively quiet throughout the whole crisis, except for a brief spike upwards in the 10-year yield late last year. If all of Sarkozy’s repeated promises of implementing domestic austerity come into question, though, France's credit situation could change very fast, especially since it has already been downgraded from AAA by S&P and put on “negative outlook” by Moody’s.
We also have a Spanish regional election in Andalucía on March 25, which is a bit more trivial than those above, but it still has the potential to create some major disruption in the Spanish bond market over the next month. Spain has been one of the worst hit economies during the financial crisis, with its unemployment rate reaching 23% at the end of 2011, and it has so far failed to offer the Troika any "credible" austerity plan for reducing its budget deficit. Angela Benoit reports for Bloomberg:
There's obviously nothing Rajoy can do to achieve a "sustainable" budget deficit in Spain while the economy contracts, and implemented austerity will only make the latter worse, but he also can’t afford to not offer up any bogus policy promises. The regional election is now getting in the way of him doing so, though, because the Spanish people are simply against any Greek-style "structural reforms" (they are not senseless and can see what has happened over there). Rajoy realizes such opposition exists, and will therefore hold off on submitting a budget until after the election. It’s entirely unclear whether the credit markets will hold off on pounding Spanish bonds into the ground, though.
Last, but certainly not least, we have the 2012 Congressional and Presidential elections in the U.S. I have suggested before that the Obama Administration, in its consistent attempts to present a rosy economic story before November 2, may have effectively killed the capacity of the Fed to "print money" through QE3 asset purchases [Who Killed the Money Printer?]. That in and of itself would be a HUGE blow to the status quo elites who are banking on the Fed to step in with at least a trillion dollars or so in easing to keep the markets happy.
But the electioneering syndrome certainly doesn’t stop there. We also have the Republican Presidential front-runners and those up for re-election in the Senate who will harshly criticize and block any and all attempts of Obama to launch any significant stimulus measures or help bail out Europe through additional contributions to the IMF. Since the Republicans control the House of Representatives, these full frontal blocks will not be hard to carry out. For example, The Hill reports on the opposition to Obama’s latest mortgage refinancing plan.
There are, of course, many other elections occurring around the world, but these are the "democratic" ones that could be the most disruptive to maintaining the status quo, hopium-filled market environment over upcoming months. And, as mentioned earlier, the political theater of these elections is by no means the only thing that could throw a spanner into the works. Here’s another obvious one – all of the non-existent capital that was promised to backstop the Euro periphery through the IMF, EFSF, private bondholder "haircuts", etc., doesn’t materialize! All in all, 2012 should be a very disturbing year for the extenders and the pretenders alike.
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Re: Political Theatre Will Kill the Status Quo 1 year, 3 months ago #350
NOW ... you remind me that its bad everywhere and getting worst.
Only the center is allowed to direct the flow of tributes, resources and wealth from the periphery.
The USA has been doing it for 30 years by borrowing from other countries and spending more than it raises in taxes.
For Greece to have done the same thing is not even an idea worth considering.
Those who prefer normal “economic talk” can check out the following by the market ticker.
This is elmementary mathematics, but nobody wants to deal with it.
GDP = C + I + G + (x - i)
GDP = private consumption + gross investment + government spending + (exports − imports)
Now ... what happens when “the center“ finally decides that it has been used by the periphery.
1 .Austerity is the punishment for Greece
2. The financing of the spending binge come to a stop.
Russia Dumps Treasurys For 14 Consecutive Months; China Slashes Holdings To Lowest In Over A Year
Political Theatre Will Kill the Status Quo 1 year, 3 months ago #351
your comments have been restored, sorry about that!
you shouldn't have any more spam problems in the future
Re: Political Theatre Will Kill the Status Quo 1 year, 3 months ago #354
don't forget that the "rate of inflation" is also part of the GDP calculation. I put it in quotation marks for the same reason that I would put "Global War on Terror" or "US Healthcare System" or "Compassionate Conservative" in quotation marks.
Because the words commonly used to signify the realities that are signified conceal (or not) some real bullshit that serves the interests of TPTB.
The real rate of inflation, if applied to GDP would have shown anemic growth at best over the last decade or two and would have necessitated some very serious conversations about wages, pensions, and Social Security C.O.L.A.'s.
Re: Political Theater Will Kill the Status Quo 1 year, 3 months ago #357
Brent oil price broke the july 2008 record:
we still have to wait for the oil price crash. But I do not care, I do not have a car, right?
Political Theater Will Kill the Status Quo 1 year, 3 months ago #358
If you are a proper TAEr you have a religious belief that the financial collapse will happen faster than the hydrocarbon collapse.
Since this sort of reduces to 'engineers are better at their jobs than financiers are at theirs' I remain strongly tempted to agree. However, one must recall that the engineers are dealing with Mother Nature, and the financiers with politicians. It is possible to slip something past either referee, but which one is harder?
Political Theater Will Kill the Status Quo 1 year, 3 months ago #361
Alex Jones has a rather long and interesting interview with Nigel Farage, the iconoclastic, thorn-in-the side UK representative to the European Council. Farage's take is quite interesting. Recommend you download the file as the interview is interrupted by commercials, which are more easily dealt with on a download than a stream. Can be found at:
and the interview begins at 2:33.27 into the show.
Political Theater Will Kill the Status Quo 1 year, 3 months ago #389
Fagare does put the eurocrats in their place.
He seems especially fond of mr Schulz.
There's special irony in that despondent soviet anthem, a reminder that central planning just doesn't work.
This is a good overview of Farage's foresight.
The geometry of Democracy is a function of Gravity.
Last Edit: 1 year, 3 months ago by .
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