Money, Banking and Finance
Who Benefits from Austerity

Professor Crotty: Who Benefits from Austerity ... the total lack of effective regulation and control over risk

COMMENTARY
Professor Crotty outlines very quietly how the financial sector has taken over real economy and produced huge profit that is based on nothing by financial transactions ... it is worth listening to.

But he does not connect the dots in a practical way so that the 'issues' that resulted in the crash of 2007/8/9 will not be repeated ... like most analysts and commentators he contented himself with observations that the framework of regulation has not changed and that this is unlikely given the nature of the global economy and politics. He takes some comfort in the fact that the financial system ... at least in the United States ... seems to be healthy compared to the recent crash period.

My view is that somehow we have got to get beyond this ... if the political system cannot create a legal framework of regulation so that the financial sector limits its risks, then people have to do it for themselves. The mechanism for this is not obvious ... especially since, in the modern era, rule of law is designed to limit the capacity of people to influence the behavior of big institutions, but young people are creative, and it is going to happen.

In October, big banks decided that they would improve their profit performance by charging a $5 monthly fee to have a 'debit card'. There has been an outcry and the banks which proposed this have now chosen to back down.

Earlier, some big banks started to talk about charging bigger fees for operating small bank accounts ... again an outcry, and banks are going in this direction more slowly now.

In November ... November 5th ... many people associated with the Occupy movement closed their accounts at the very big banks and moved them to local community banks and credit unions.

People ... ordinary people now referred to as the 99% have had it, and they are going to change behavior in many different ways so that the big institutions do not routinely get their way ... and the same goes for big politicians. Interesting times are ahead. Hopefully the society and the economy can revert to one where quality of life becomes the driver, and not the prevailing profit model which is more bubble than substance
Peter Burgess

Who Benefits from Austerity ... the total lack of effective regulation and control over risk