“We now see herd behaviour in the (financial) markets which are wolfpack behaviours, and if we will not stop these packs, they will tear the weaker countries apart.”
These words were spoken during the EU Finance Ministers extraordinary meeting in Brussels on Sunday, not by a radical socialist but by right wing Swedish Minister, Anders Borg. These are the same finance ministers who did not lift a finger to stop the wolfish speculators in the financial markets as they plotted to make massive killings from the suffering of working people and the poor of Greece, Portugal, Spain and Ireland.
But does the €750 billion debt management package signal that the EU political establishment is about to cage the wolves, exile them to Siberia and create a democratically controlled financial system in Europe? Well, not really, not at all in fact, despite some talk about a “fightback”.
On Morning Ireland, RTE’s most listened to radio programme, the first question on Monday to Minister for Finance, Brian Lenihan, by presenter Aine Lawler was, “But will this be enough to satisfy the markets?” The reply, “Oh yes, I think it will.” That’s some fightback against the financial parasites who have been squeezing the economic lifeblood out of countries like Greece, more specifically out of workers, pensioners and the poor!
However, elsewhere, at last we are getting an acknowledgement in the establishment media in this State of the massively disproportionate power accorded the “wolfpacks” in the money markets.
On RTE One Radio’s Saturday Live, Tommie Gorman, Northern correspondent, referred to how “gamblers and speculators can force a run on a currency.” The point was taken up by presenter Dave O Connell who asked whether the role of speculators was very unhealthy. Chief Economist of Friends First, Jim Power, replied, “The way markets can force events to happen is extremely dangerous.”
While making clear he wasn’t as categorical in denouncing the baleful role of the bondholders and hedge funds as myself, Power was withering in his criticism of the rating agencies, that is those private organisations which arrogate to themselves the right to give countries as well as individual financial institutions a rating as to their financial health, in essence the equivalent of an honours, pass or fail in an exam.
There are three such agencies dominating the financial markets, Moody’s, Standard and Poor’s and Fitch. In peremptorily downgrading Spain’s financial standing ten days earlier, Power said, they added to the “whole crisis, a fresh layer of pressure.” The ratings agencies “should have no credibility… they were instrumental in creating the sub prime crisis and spreading it around the world.”
On Sunday, Senator Shane Ross stepped up the attack in his article in the Sunday Independent with the title “Unholy Trinity Play God.” He quotes internationally known economist, Joseph Stigliz, explaining how the rating agencies were key culprits in the disastrous US sub prime crisis built on a continental mountain of toxic debt. “The banks could not have done what they did without the complicity of the rating agencies.”
Astonishingly, these agencies are paid substantial fees by the very financial institutions which they are supposed to rate which also explains why they have been allowed to continue to play god.
It is one thing to be forced by glaring reality to recognise a blatant scam. It is another thing to take action for a complete end to that scam when the necessary measures would run counter to the very fundamental policies to which the establishment is wedded, including allowing the power to pass to the financial markets in the first place.
The address by EU Commission President, Manuel Barosso, to the European Parliament on Wednesday illustrates. “We need responsible behaviour from all our market players”, he said.
How credible is an appeal to wolves to behave responsibly when they taste blood and dive in for a feeding frenzy?
Mr. Barosso and governments all over Europe are flesh and blood of international capitalism which created the “wolfpacks” in the first place.
The tragedy for working people, however, is that the leadership of their organisations are for the most part acting as agents of these governments. This is especially the case in Ireland where trade union leaders after verbally attacking the speculators, the developers and the bankers, then go on to demand that their members comply with the vicious programme of cuts being demanded by the very system and the very politicians who let greed run riot.
This is “the least worst option” workers are told by right-wing trade union leaders in a perversion of language worthy of US generals as they sought to mask certain realities in their recent wars. That did not stop powerful movements of opposition and neither should it do so in the case of the current economic war.
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