Organization for Economic Cooperation and Development says money is ‘gone’
It is becoming more and more clear what G20 financial reform looks like – punishing cuts to the poor and middle class and obedience to the banks.
As I wrote on a few days ago, the G20 has decided to focus its energy at the Toronto summit on pressuring member nations to implement deficit cutting and fiscal austerity through deep and painful budget cuts.
This move to austerity is about maintaining investor/market confidence at all costs. The head of the Organization for Economic Cooperation and Development, Angel Gurria, warned the world’s economies to “make sure that you give signals to the markets about fiscal consolidation.”
Translation: countries need to start slashing spending and then pronounce it publicly and immediately to ensure investors hear it. This is expected to calm markets and boost growth, despite much evidence to the contrary (for example here, here, and here)
Canada, of course, was right in on the action: “We’ve pushed hard for those countries that need to fiscally consolidate in Europe to get on with it and to demonstrate their resolve” said Canadian Finance Minister Jim Flaherty. The Bank of Canada is on-board as well.
Gurria further claimed that all the (public) money is gone. Thus, all we can really do is start cutting and becoming more ‘flexible’ (ie: crushing unions, increasing temp and precarious work to fix market needs), and making the world ripe for the markets:
“Countries need flexibility in labor markets, exchange rates; they need structural adjustment policies like competition, education, innovation,” said Gurria. “These are the things that are going to make the recovery hold, because you can’t hold it up with public money any more. It’s gone.”
And where did the public money go? To bank bailouts, to housing bubbles, to tax cuts for the rich, to corporate subsidies, etc… and now we get to pay for all that.