Post Neo-Liberalism… what next?

9 02 2017

The articles coming out in what I consider mainstream media lately – the Conversation in this case – has me astounded……

While this piece is interesting, there is no mention whatever of Limits to Growth……

If Streeck is correct, then we need to anticipate what a post-capitalist world may look like. He thinks it will be terrible. He fears the emergence of a neocorporatist state and close crony-like collaboration between big capital, union leaders, government and the military as the consequence of the next major global financial crisis.

Jobs will disappear, Streeck believes. Capital will be intensely concentrated in very few hands. The privileged rich will retreat into security enclaves dripping with every luxury imaginable.


It is unfashionable, or just embarrassing, to suggest the taken-for-granted late-modern economic order – neoliberal capitalism – may be in a terminal decline. At least that’s the case in what former Australian prime minister Tony Abbott likes to call the “Anglosphere”.

What was once known as the Chicago school of economics – the neoclassical celebration of the “free market” and “small government” – still closes the minds of economic policymakers in the US and its satellite economies (although perhaps less so in contemporary Canada).

But, in Europe, there has always been a deep distrust of the Anglo-American celebration of “possessive individualism” and its repudiation of community and society. Remember Margaret Thatcher’s contempt for the idea of “society”?

So, it is unsurprising that neoliberalism’s advocates dismiss recent European analyses of local, regional and global economies as the nostalgia of “old Europe”, even as neoliberalism’s failures stack up unrelentingly.

The consequences of these failures are largely unseen or avoided by policymakers in the US and their camp followers in the UK and Australia. They are in denial of the fact that not only has neoliberalism failed to meet its claimed goals, but it has worked devastatingly to undermine the very foundations of late-modern capitalism.

The result is that the whole shambolic structure is tottering on the edge of an economic abyss.

What the consequences might be

Two outstanding European scholars who are well aware of the consequences of the neoliberal catastrophe are French economist Thomas Piketty and German economist Wolfgang Streeck.

Piketty’s 2013 book, Capital in the Twenty-First Century, charts the dangers of socioeconomic inequality in capitalism’s history. He demonstrates how this inequality can be – and has been over time – fundamentally destructive of sustained economic growth.

Most compellingly, Piketty documented in meticulous detail how contemporary neoliberal policies have constructed the worst forms of socioeconomic inequalities in history. His analysis has been underlined by the recent Oxfam report that showed a mere eight multi-billionaires own the equivalent amount of capital of half of the global population.

Despite Piketty’s scrupulous scholarship, Western neoliberal economies continue merrily down the road to nowhere. The foundations of that road were laid by the egregiously ideological policies of Thatcher and Ronald Reagan – and slavishly followed by Australian politicians on all sides ever since.

Streeck’s equally detailed scholarship has demonstrated how destructive of capitalism itself neoliberal policymaking has been. His latest book, How Will Capitalism End?, demonstrates how this neoliberal capitalism triumphed over its opponents (especially communism) by devouring its critics and opponents, obviating all possible alternatives to its predatory ways.

If Streeck is correct, then we need to anticipate what a post-capitalist world may look like. He thinks it will be terrible. He fears the emergence of a neocorporatist state and close crony-like collaboration between big capital, union leaders, government and the military as the consequence of the next major global financial crisis.

Jobs will disappear, Streeck believes. Capital will be intensely concentrated in very few hands. The privileged rich will retreat into security enclaves dripping with every luxury imaginable.

Meanwhile, the masses will be cast adrift in a polluted and miserable world where life – as Hobbes put it – will be solitary, poor, nasty, brutish and short.

What comes next is up to us

The extraordinary thing is how little is known or understood of the work of thinkers like Piketty and Streeck in Australia today.

There have been very fine local scholars, precursors of the Europeans, who have warned about the hollow promises of “economic rationalism” in Australia.

But, like the Europeans, their wisdom has been sidelined, even as inequality has been deepening exponentially and its populist consequences have begun to poison our politics, tearing down the last shreds of our ramshackle democracy.

The time is ripe for some creative imagining of a new post-neoliberal world that will repair neoliberalism’s vast and catastrophic failures while laying the groundwork for an Australia that can play a leading role in the making of a cosmopolitan and co-operative world.

Three immediate steps can be taken to start on this great journey.

First, we need to see the revival of what American scholar Richard Falk called “globalisation from below”. This is the enlivening of international civil society to balance the power of the self-serving elites (multinational managers and their political and military puppets) now in power.

Second, we need to come up with new forms of democratic governance that reject the fiction that the current politics of representative government constitute the highest form of democracy. There is nothing about representative government that is democratic. All it amounts to is what Vilfredo Pareto described as “the circulation of elites” who have become remote from – and haughtily contemptuous of – the people they rule.

Third, we need to see states intervening comprehensively in the so-called “free market”. Apart from re-regulating economic activity, this means positioning public enterprises in strategic parts of the economy, to compete with the private sector, not on their terms but exclusively in the interests of all citizens.

As Piketty and Streeck are pointing out to us, the post-neoliberal era has started to self-destruct. Either a post-capitalist, grimly neo-fascist world awaits us, or one shaped by a new and highly creative version of communitarian democracy. It’s time for some great imagining.

The end of work….

28 11 2016

Written by James Livingston, professor of history at Rutgers University in New Jersey, this essay challenges everything we think we know about employment and work… Livingston is the author of many books, the latest being No More Work: Why Full Employment is a Bad Idea (2016). As someone who hasn’t ‘worked’ since aged 42 (and I’m almost at ‘retiring age now!), I found this piece inspiring and refreshing…… my only criticism of this is that he doesn’t seem to realise all work is unsustainable.

Originally published here……

Work means everything to us Americans (and Australians. Ed). For centuries – since, say, 1650 – we’ve believed that it builds character (punctuality, initiative, honesty, self-discipline, and so forth). We’ve also believed that the market in labour, where we go to find work, has been relatively efficient in allocating opportunities and incomes. And we’ve believed that, even if it sucks, a job gives meaning, purpose and structure to our everyday lives – at any rate, we’re pretty sure that it gets us out of bed, pays the bills, makes us feel responsible, and keeps us away from daytime TV.

These beliefs are no longer plausible. In fact, they’ve become ridiculous, because there’s not enough work to go around, and what there is of it won’t pay the bills – unless of course you’ve landed a job as a drug dealer or a Wall Street banker, becoming a gangster either way.

These days, everybody from Left to Right – from the economist Dean Baker to the social scientist Arthur C Brooks, from Bernie Sanders to Donald Trump – addresses this breakdown of the labour market by advocating ‘full employment’, as if having a job is self-evidently a good thing, no matter how dangerous, demanding or demeaning it is. But ‘full employment’ is not the way to restore our faith in hard work, or in playing by the rules, or in whatever else sounds good. The official unemployment rate in the United States is already below 6 per cent, which is pretty close to what economists used to call ‘full employment’, but income inequality hasn’t changed a bit. Shitty jobs for everyone won’t solve any social problems we now face.

Don’t take my word for it, look at the numbers. Already a fourth of the adultsactually employed in the US are paid wages lower than would lift them above the official poverty line – and so a fifth of American children live in poverty. Almost half of employed adults in this country are eligible for food stamps (most of those who are eligible don’t apply). The market in labour has broken down, along with most others.

Those jobs that disappeared in the Great Recession just aren’t coming back, regardless of what the unemployment rate tells you – the net gain in jobs since 2000 still stands at zero – and if they do return from the dead, they’ll be zombies, those contingent, part-time or minimum-wage jobs where the bosses shuffle your shift from week to week: welcome to Wal-Mart, where food stamps are a benefit.

And don’t tell me that raising the minimum wage to $15 an hour solves the problem. No one can doubt the moral significance of the movement. But at this rate of pay, you pass the official poverty line only after working 29 hours a week. The current federal minimum wage is $7.25. Working a 40-hour week, you would have to make $10 an hour to reach the official poverty line. What, exactly, is the point of earning a paycheck that isn’t a living wage, except to prove that you have a work ethic?

But, wait, isn’t our present dilemma just a passing phase of the business cycle? What about the job market of the future? Haven’t the doomsayers, those damn Malthusians, always been proved wrong by rising productivity, new fields of enterprise, new economic opportunities? Well, yeah – until now, these times. The measurable trends of the past half-century, and the plausible projections for the next half-century, are just too empirically grounded to dismiss as dismal science or ideological hokum. They look like the data on climate change – you can deny them if you like, but you’ll sound like a moron when you do.

For example, the Oxford economists who study employment trends tell usthat almost half of existing jobs, including those involving ‘non-routine cognitive tasks’ – you know, like thinking – are at risk of death by computerisation within 20 years. They’re elaborating on conclusions reached by two MIT economists in the book Race Against the Machine (2011). Meanwhile, the Silicon Valley types who give TED talks have started speaking of ‘surplus humans’ as a result of the same process – cybernated production. Rise of the Robots, a new book that cites these very sources, is social science, not science fiction.

So this Great Recession of ours – don’t kid yourself, it ain’t over – is a moral crisis as well as an economic catastrophe. You might even say it’s a spiritual impasse, because it makes us ask what social scaffolding other than work will permit the construction of character – or whether character itself is something we must aspire to. But that is why it’s also an intellectual opportunity: it forces us to imagine a world in which the job no longer builds our character, determines our incomes or dominates our daily lives.

What would you do if you didn’t have to work to receive an income?

In short, it lets us say: enough already. Fuck work.

Certainly this crisis makes us ask: what comes after work? What would you do without your job as the external discipline that organises your waking life – as the social imperative that gets you up and on your way to the factory, the office, the store, the warehouse, the restaurant, wherever you work and, no matter how much you hate it, keeps you coming back? What would you do if you didn’t have to work to receive an income?

And what would society and civilisation be like if we didn’t have to ‘earn’ a living – if leisure was not our choice but our lot? Would we hang out at the local Starbucks, laptops open? Or volunteer to teach children in less-developed places, such as Mississippi? Or smoke weed and watch reality TV all day?

I’m not proposing a fancy thought experiment here. By now these are practical questions because there aren’t enough jobs. So it’s time we asked even more practical questions. How do you make a living without a job – can you receive income without working for it? Is it possible, to begin with and then, the hard part, is it ethical? If you were raised to believe that work is the index of your value to society – as most of us were – would it feel like cheating to get something for nothing?

We already have some provisional answers because we’re all on the dole, more or less. The fastest growing component of household income since 1959 has been ‘transfer payments’ from government. By the turn of the 21st century, 20 per cent of all household income came from this source – from what is otherwise known as welfare or ‘entitlements’. Without this income supplement, half of the adults with full-time jobs would live below the poverty line, and most working Americans would be eligible for food stamps.

But are these transfer payments and ‘entitlements’ affordable, in either economic or moral terms? By continuing and enlarging them, do we subsidise sloth, or do we enrich a debate on the rudiments of the good life?

Transfer payments or ‘entitlements’, not to mention Wall Street bonuses (talk about getting something for nothing) have taught us how to detach the receipt of income from the production of goods, but now, in plain view of the end of work, the lesson needs rethinking. No matter how you calculate the federal budget, we can afford to be our brother’s keeper. The real question is not whether but how we choose to be.

I know what you’re thinking – we can’t afford this! But yeah, we can, very easily. We raise the arbitrary lid on the Social Security contribution, which now stands at $127,200, and we raise taxes on corporate income, reversing the Reagan Revolution. These two steps solve a fake fiscal problem and create an economic surplus where we now can measure a moral deficit.

Of course, you will say – along with every economist from Dean Baker to Greg Mankiw, Left to Right – that raising taxes on corporate income is a disincentive to investment and thus job creation. Or that it will drive corporations overseas, where taxes are lower.

But in fact raising taxes on corporate income can’t have these effects.

Let’s work backward. Corporations have been ‘multinational’ for quite some time. In the 1970s and ’80s, before Ronald Reagan’s signature tax cuts took effect, approximately 60 per cent of manufactured imported goods were produced offshore, overseas, by US companies. That percentage has risen since then, but not by much.

Chinese workers aren’t the problem – the homeless, aimless idiocy of corporate accounting is. That is why the Citizens United decision of 2010 applying freedom of speech regulations to campaign spending is hilarious. Money isn’t speech, any more than noise is. The Supreme Court has conjured a living being, a new person, from the remains of the common law, creating a real world more frightening than its cinematic equivalent: say,Frankenstein, Blade Runner or, more recently, Transformers.

But the bottom line is this. Most jobs aren’t created by private, corporate investment, so raising taxes on corporate income won’t affect employment. You heard me right. Since the 1920s, economic growth has happened even though net private investment has atrophied. What does that mean? It means that profits are pointless except as a way of announcing to your stockholders (and hostile takeover specialists) that your company is a going concern, a thriving business. You don’t need profits to ‘reinvest’, to finance the expansion of your company’s workforce or output, as the recent history of Apple and most other corporations has amply demonstrated.

I know that building my character through work is stupid because crime pays. I might as well become a gangster

So investment decisions by CEOs have only a marginal effect on employment. Taxing the profits of corporations to finance a welfare state that permits us to love our neighbours and to be our brothers’ keeper is not an economic problem. It’s something else – it’s an intellectual issue, a moral conundrum.

When we place our faith in hard work, we’re wishing for the creation of character; but we’re also hoping, or expecting, that the labour market will allocate incomes fairly and rationally. And there’s the rub, they do go together. Character can be created on the job only when we can see that there’s an intelligible, justifiable relation between past effort, learned skills and present reward. When I see that your income is completely out of proportion to your production of real value, of durable goods the rest of us can use and appreciate (and by ‘durable’ I don’t mean just material things), I begin to doubt that character is a consequence of hard work.

When I see, for example, that you’re making millions by laundering drug-cartel money (HSBC), or pushing bad paper on mutual fund managers (AIG, Bear Stearns, Morgan Stanley, Citibank), or preying on low-income borrowers (Bank of America), or buying votes in Congress (all of the above) – just business as usual on Wall Street – while I’m barely making ends meet from the earnings of my full-time job, I realise that my participation in the labour market is irrational. I know that building my character through work is stupid because crime pays. I might as well become a gangster like you.

That’s why an economic crisis such as the Great Recession is also a moral problem, a spiritual impasse – and an intellectual opportunity. We’ve placed so many bets on the social, cultural and ethical import of work that when the labour market fails, as it so spectacularly has, we’re at a loss to explain what happened, or to orient ourselves to a different set of meanings for work and for markets.

And by ‘we’ I mean pretty much all of us, Left to Right, because everybody wants to put Americans back to work, one way or another – ‘full employment’ is the goal of Right-wing politicians no less than Left-wing economists. The differences between them are over means, not ends, and those ends include intangibles such as the acquisition of character.

Which is to say that everybody has doubled down on the benefits of work just as it reaches a vanishing point. Securing ‘full employment’ has become a bipartisan goal at the very moment it has become both impossible and unnecessary. Sort of like securing slavery in the 1850s or segregation in the 1950s.


Because work means everything to us inhabitants of modern market societies – regardless of whether it still produces solid character and allocates incomes rationally, and quite apart from the need to make a living. It’s been the medium of most of our thinking about the good life since Plato correlated craftsmanship and the possibility of ideas as such. It’s been our way of defying death, by making and repairing the durable things, the significant things we know will last beyond our allotted time on earth because they teach us, as we make or repair them, that the world beyond us – the world before and after us – has its own reality principles.

Think about the scope of this idea. Work has been a way of demonstrating differences between males and females, for example by merging the meanings of fatherhood and ‘breadwinner’, and then, more recently, prying them apart. Since the 17th century, masculinity and femininity have been defined – not necessarily achieved – by their places in a moral economy, as working men who got paid wages for their production of value on the job, or as working women who got paid nothing for their production and maintenance of families. Of course, these definitions are now changing, as the meaning of ‘family’ changes, along with profound and parallel changes in the labour market – the entry of women is just one of those – and in attitudes toward sexuality.

When work disappears, the genders produced by the labour market are blurred. When socially necessary labour declines, what we once calledwomen’s work – education, healthcare, service – becomes our basic industry, not a ‘tertiary’ dimension of the measurable economy. The labour of love, caring for one another and learning how to be our brother’s keeper – socially beneficial labour – becomes not merely possible but eminently necessary, and not just within families, where affection is routinely available. No, I mean out there, in the wide, wide world.

Work has also been the American way of producing ‘racial capitalism’, as the historians now call it, by means of slave labour, convict labour, sharecropping, then segregated labour markets – in other words, a ‘free enterprise system’ built on the ruins of black bodies, an economic edifice animated, saturated and determined by racism. There never was a free market in labour in these united states. Like every other market, it was always hedged by lawful, systematic discrimination against black folk. You might even say that this hedged market produced the still-deployed stereotypes of African-American laziness, by excluding black workers from remunerative employment, confining them to the ghettos of the eight-hour day.

And yet, and yet. Though work has often entailed subjugation, obedience and hierarchy (see above), it’s also where many of us, probably most of us, have consistently expressed our deepest human desire, to be free of externally imposed authority or obligation, to be self-sufficient. We have defined ourselves for centuries by what we do, by what we produce.

But by now we must know that this definition of ourselves entails the principle of productivity – from each according to his abilities, to each according to his creation of real value through work – and commits us to the inane idea that we’re worth only as much as the labour market can register, as a price. By now we must also know that this principle plots a certain course to endless growth and its faithful attendant, environmental degradation.

How would human nature change as the aristocratic privilege of leisure becomes the birthright of all?

Until now, the principle of productivity has functioned as the reality principle that made the American Dream seem plausible. ‘Work hard, play by the rules, get ahead’, or, ‘You get what you pay for, you make your own way, you rightly receive what you’ve honestly earned’ – such homilies and exhortations used to make sense of the world. At any rate they didn’t sound delusional. By now they do.

Adherence to the principle of productivity therefore threatens public health as well as the planet (actually, these are the same thing). By committing us to what is impossible, it makes for madness. The Nobel Prize-winning economist Angus Deaton said something like this when he explained anomalous mortality rates among white people in the Bible Belt by claiming that they’ve ‘lost the narrative of their lives’ – by suggesting that they’ve lost faith in the American Dream. For them, the work ethic is a death sentence because they can’t live by it.

So the impending end of work raises the most fundamental questions about what it means to be human. To begin with, what purposes could we choose if the job – economic necessity – didn’t consume most of our waking hours and creative energies? What evident yet unknown possibilities would then appear? How would human nature itself change as the ancient, aristocratic privilege of leisure becomes the birthright of human beings as such?

Sigmund Freud insisted that love and work were the essential ingredients of healthy human being. Of course he was right. But can love survive the end of work as the willing partner of the good life? Can we let people get something for nothing and still treat them as our brothers and sisters – as members of a beloved community? Can you imagine the moment when you’ve just met an attractive stranger at a party, or you’re online looking for someone, anyone, but you don’t ask: ‘So, what do you do?’

We won’t have any answers until we acknowledge that work now means everything to us – and that hereafter it can’t.

Global Economic Red Alert

9 07 2015

I knew it.  Just as we are on the cusp of selling Mon Abri, bloggers everywhere, and some economists, are warning that we are in for a shock or major correction, this year.  Ever since I started Damn the Matrix, but especially since the 2008 GFC, I have been predicting such an event, even though such forecasts are fraught with possibilities of getting it wrong…..

Red-Alert-Button-460x306Based on information that I am bombarded with daily, I have come to the conclusion that a major financial collapse is imminent.  Therefore, I am reluctantly joining the blogosphere by issuing a RED ALERT for the last six months of 2015.

When I say ‘imminent’ I don’t mean that it will occur in the next couple of days…..  And I am in no way saying that our predicaments will be ‘over’ once we get to the end of 2015.  In fact, this correction will only be the beginning of worse things to come as we enter 2016.

Let’s start with some discussion about the U.S. economy.  Most of the time, when I say ‘economic collapse’ I actually mean ‘financial collapse’.  And that’s because the entire economy has been hijacked by the financial sector over the past 20 or so years, with the job almost finished.  Just because the stock markets have recently been hitting all-time record highs does not mean that the overall economy has been doing well.  The stock market is not the economy.  I contend that we are in the middle of a long-term economic collapse, and it has been ongoing for many years, and is happening right now as you read this article; the difference now is that will accelerate over the coming months.

I have already published info about the velocity of money.  When an economy is healthy, money circulates fairly rapidly.  I buy something from you, then you take that money and buy something from someone else, etc.  In a stable, healthy, and growing economy, people generally feel good about things and they are not afraid to spend.  They have confidence in the Matrix.  But during hard times, the exact opposite happens, which is why the velocity of money almost always slows down during a recession.  The chart below demonstrates how the velocity of money has indeed gone pear shaped during every recession since 1960.  Once a recession is over, the velocity of money goes back up.  But a funny thing happened after the last recession ‘ended’ (it never actually ended…).  The velocity of money continued to go down, and it has now hit an all-time record low…

Velocity Of Money M2

This is the kind of chart that you would expect from a very sick economy.  And without a doubt, the US economy is very sick.  Official government numbers paint a picture of an economy that is deeply troubled.  Corporate profits have declined for two quarters in a row, U.S. exports drpped by 7.6 percent during the first quarter of 2015, U.S. GDP shrunk by 0.7 percent during the first quarter, and manufacturing has declined year on year for six months in a row.  How long before Australia joins the club?

Were the stock market connected to reality, it too would be going down the gurgler.  But instead, it just keeps going up.  And up.  A classic case of an irrational financial bubble.  Of course, where else would any greedy capitalist invest when banks pay near zero interest?  Just about every pattern that has popped up prior to previous stock markets crashes is happening right now.

Without a doubt, financial markets are primed for a crash.

Only twice before has the S&P 500 been up by more than 200% over a six year time frame.

The first was in 1929, and the stock market subsequently crashed.

The second was in 2000, right before the dotcom bubble burst.

And by just about any measure that you care to imagine, stocks are hugely overvalued at present.

For instance, just check out the chart below.  It comes from Doug Short, and it shows that the ratio of corporate equity prices to GDP has only been higher once since 1950.  That was in 2000 just before the dotcom bubble burst…

The Buffett Indicator from Doug Short

Now look at this chart.  This one comes from Phoenix Capital Research; it shows that the CAPE ratio (cyclically adjusted price-to-earnings ratio) has rarely been higher.  The only times that it has been higher, we have seen stock market crashes immediately afterwards…..

CAPE - Phoenix Capital Research

Yale economics professor Robert Shiller is also deeply concerned about the CAPE ratio

I think that compared with history, US stocks are overvalued. One way to assess this is by looking at the CAPE (cyclically adjusted P/E) ratio that I created with John Campbell, now at Harvard, 25 years ago. The ratio is defined as the real stock price (using the S&P Composite Stock Price Index deflated by the CPI) divided by the ten-year average of real earnings per share. We have found this ratio to be a good predictor of subsequent stock market returns, especially over the long run. The CAPE ratio has recently been around 27, which is quite high by US historical standards. The only other times it has been that high or higher were in 1929, 2000, and 2007—all moments before market crashes.

But the CAPE ratio is not the only metric I watch. In my book Irrational Exuberance (3rd Ed., Princeton 2015) I discuss several metrics that help judge what’s going on in the market. These include my stock market confidence indices. One of the indicators in that series is based on a single question that I have asked individual and institutional investors over the years along the lines of, “Do you think the stock market is overvalued, undervalued, or about right?” Lately, what I call “valuation confidence” captured by this question has been on a downward trend, and for individual investors recently reached its lowest point since the stock market peak in 2000.

This next chart is another one from Doug Short.  It shows the average of four of his favorite valuation indicators.  There is only one other time when stocks have been more overvalued than they are today according to the average of his four favorite indicators, and that was just before the stock market crashed when the dotcom bubble burst…

Four Valuation Indicators - Doug Short

Another one of the things that points to a financial bubble is the level of margin debt.  This is no doubt caused by the fact the whole world now runs on nothing but debt….  Whenever margin debt has gone over 2.25% of GDP a stock market crash has always followed.  As I write, it is far above that level.  From the chart below, it can be seen that there have been three major peaks in margin debt in modern U.S. history.  The first one just before the dotcom bubble burst, the next just before the financial crisis of 2008, and the third is happening right now…

Margin Debt - Doug Short

Something else that we would expect to see just before a major financial crisis is the decoupling of high yield debt and stocks.  This happened just prior to the 2008 stock market crash, and it is happening again, right now.  The following chart comes from Zero Hedge, which demonstrates this brilliantly…


Are you starting to get the picture?

‘The smart money’ is beginning to pull their investments out of stocks while they still can.  According to USA Today, mutual fund investors have pulled more money out of stocks than they have put into stocks for 16 weeks in a row

In a sign of stock market nervousness on Main Street, mutual fund investors have yanked more money out of U.S. stock funds than they put in for 16 straight weeks.

The last time domestic stock funds had positive net cash inflows was in the week ending Feb. 25, according to data from the Investment Company Institute, a mutual fund trade group.

In the week ended June 17, the most recent data available, mutual funds that invest in U.S. stocks suffered net outflows of $3.45 billion, according to the ICI.

Since late February, U.S. stock funds have suffered estimated outflows of nearly $55 billion. Those net withdrawals come despite the fact the benchmark Standard & Poor’s 500 hit a fresh record high of 2130.82 on May 21 and the Dow Jones industrial average notched a fresh record on May 19.

But it’s not just stocks that are going to crash during the next financial crisis.  Bonds are going to crash as well.   But the real elephant in the room are derivatives.

Derivatives are going to play a starring role in the next major financial crisis.  This form of legalised gambling is going to destroy “too big to fail” banks everywhere, including Australia, during the coming downturn.  The “too big to fail” banks in the U.S. alone have 278 trillion dollars of total exposure to derivatives, but they only have 9.8 trillion dollars in total assets.  Globally, they add up to 500 trillion dollars.

For much more on the coming derivatives crisis read “Warren Buffett: Derivatives Are Still Weapons Of Mass Destruction And ‘Are Likely To Cause Big Trouble’“.

Where do I get all this info from?  The list is long…….

Ron Paul has just released a new video in which he warned all of us to “prepare for a bear market in bonds“.

Carl Icahn says that financial markets are “extremely overheated—especially high-yield bonds“.

Martin Armstrong says that his Economic Confidence Model predicts that the “Big Bang” is coming in “2015.75“.

Jeff Berwick of the Dollar Vigilante says that “we’re getting very, very close to the next crisis collapse” and he has specifically pointed to the month of September.

James Howard Kunstler has predicted that stocks are going to “crater in Q3 as faith in paper and pixels erodes“.  Of course, JHK has got it wrong before……

Lindsey Williams recently sent out an email alert in which he warned that his elite friend has told him that “they have a World Wide Financial Collapse scheduled between September and the end of December 2015“.

Gerald Celente has warned about “the Great Panic of 2015“, though at times I’ve regretted publishing Gerald’s dire warnings when he’s got things wrong too….

Bill Fleckenstein has said that 2015 could be the year of the “big accident“.

Ray Gano has stated that we will see a financial collapse “probably starting in the third quarter of 2015″.

Legendary investor Jim Rogers recently said that he believes that “we will see some kind of major, major problems in the world financial markets” within the next year or two.

And then we have Greece…….  where that will lead Europe, nobody knows.

The Chinese stock market is tanking big time too.  And I doubt China’s too worried about Greece, something far bigger is happening in the far East…..  now all I have to do is worry about where to park our money from selling Mon Abri.

Richard Wolff on the coming crash…….

30 05 2015

Of course, zero mention of Limits to Growth here………

“As Capitalism’s Crisis Deepens, Thoughts of Socialism Return Again”

28 05 2015

I found this totally captivating, AND educational……  he doesn’t address everything we discuss here on DTM, but this is well worth making a big jug of coffee to listen to….  enjoy!

These programs begin with 30 minutes of short updates on important economic events of the last month. Then Prof. Wolff analyzes several major economic issues. For May 13th, these will include:

  1. Socialisms Vary: Bernie Sanders to Hugo Chavez to Francois Hollande and Beyond
  2. Socialism, Communism, and the Role of the State
  3. Marxism and Socialism

Limits to growth on ‘Mainstream Media’

14 02 2015

KerrynBeach photo ed

Dr Kerryn Higgs

I know not everyone would consider the ABC ‘Mainstream Media’, but all the same, the subject of Limits to growth and that evil Club of Rome crowd appearing there feels like some sort of breakthrough…..  you can listen to the podcast at the above link, or read the transcript below if you prefer……

Australian writer Dr Kerryn Higgs (a Tasmanian no less…) has written a book called Collision Course – Endless Growth On A Finite Planet, in which she examines how society’s commitment to growth has marginalized scientific findings on the limit of growth, calling them bogus predictions of imminent doom.


Robyn Williams: Growth or no growth? You may have heard Dick Smith on Breakfast a couple of weeks ago saying that unlimited growth is impossible and we must do something else. But what? There is, of course, a way of improving what we do more efficiently and stopping waste. Peter Newman from Perth gave an example on Late Night Live late last year: If we used trains instead of trucks for freight, it would halve the costs and save many, many lives. We don’t do it because we always do what we’ve always done. Kerryn Higgs, who’s with the University of Tasmania, has just brought out a book called Collision Course – Endless Growth on a Finite Planet, published by MIT Press and she has recently been appointed a Fellow of the International Centre of the Club of Rome.

Kerryn Higgs: I came across The Limits to Growth quite by accident in 1972, just when it was published. It was commissioned by the Club of Rome and written by a team of researchers at MIT, led by Donella and Dennis Meadows. The book changed the way I thought about Nature, people, history, everything. It persuaded me that physics matters, and that the idea of ever-expanding economic growth is a delusion. Up to then, I was a mainstream humanities person, history being my main discipline, and writing my passion. I did grow up in the countryside and loved the natural world, but I had no real intuition of an impending environmental crisis. And here was this little book suggesting that if we carried on with our exponential expansion, our system would collapse at some point in the middle of the 21st century.

Although galloping economic growth already seemed normal to most younger people living in the developed world in 1972, the growth that took off after WW2 was not normal. It is absolutely unprecedented in all of history. Nothing like it has ever occurred before: large and rapidly growing populations, accelerating industrialisation, expanding production of every kind. All new. The Meadows team found that we could avoid collapse if we slowed down the physical expansion of the economy. But this would mean two very difficult changes— slowing human population growth and slowing the entire cycle of physical production from material extraction through to the disposal of waste. The book was persuasive to me and I expected its message to have an impact on human affairs. But as the years rolled by, it seemed there was very little—and then, even less. In fact, I gradually became aware that most people thought “the Club of Rome got it wrong” and scorned the book as an ignorant tract from “doomsters”, an especially common view among economists. I want to point out, though, that recent research from Melbourne University’s Graham Turner, shows that the Meadows team did not get it wrong. Their projections for what would happen if we carried on business as usual tally almost exactly with what has actually occurred in the 40 years since 1972.

But while scientists from Rachel Carson onwards sounded alarm about numerous problems associated with growth, this was not the case in our govern­ments, bureaucracies, and in public debate, where economic growth was gradually being entrenched as the central objective of collective human effort. This really puzzled me.

How come the Club of Rome got such a terrible press?

How did scientists lose credibility? When I was young, science was almost a god. A few decades later, scientists were being flippantly brushed aside.

How did economists displace scientists as the crucial policy advisers and the architects of public debate, setting the criteria for policy decisions?

How did economic growth become accepted as the only solution to virtually all social problems—unemployment, debt and even the environmental damage growth was causing?

And how did ever-increasing income and consumption become the meaning of life, at least for us in the rich world? It was not the meaning of life when I was young.

Answering these questions took me back through human history. A few developments were especially decisive.

Around 1900, the modern corporation emerged. Over just a decade or two, many of the current transnationals came into being in the US (with names like Coca Cola, Alcoa and DuPont). International Harvester amalgamated 85% of US farm machinery into one corporation in just a few years. Adam Smith’s free enterprise economy was being transformed into something very different. A process of perpetual consolidation followed and by now, frighteningly few corporations control the majority of world trade and revenue, giving them colossal power. The new corporations of the early 20th century banded together into industry associations and business councils like the immensely influential US Chamber of Commerce, which was formed out of local chambers from across the country in 1912. These organisations exploited the newly emerging Public Relations industry, launching a barrage of private enterprise propaganda, uninterrupted for more than a century, and still very healthy today. Peabody coal, for example, recently signed up one of the world’s PR giants, Burson-Marsteller, for a PR campaign to convince leaders that coal is the solution to poverty.

Back in 1910 universal suffrage threatened the customary dominance of the business classes, and PR was an excellent solution. If workers were going to vote, they’d need the right advice. No-one expressed it better than Edward Bernays, Freud’s nephew, who is credited with founding the PR industry. Bernays was candid:

The conscious and intelligent manipulation of the… masses is an important element in democratic society (he wrote). Those who manipulate this unseen mechanism … constitute an invisible government which is the true ruling power of our country… It is they who pull the wires which control the public mind.

PR became an essential tool for business to consolidate its power right through the century, culminating in the 1970s project to “litter the world with free market think tanks”. By 2013, there were nearly 7,000 of these, all over the world; the vast majority were conservative, free market advocates, many on the libertarian fringe, and financed by big business. They cultivate a studied appearance of independence, though one think tank vice-president came clean. “There is no such thing as a disinterested think tanker,” he said. “Somebody always builds the tank, and it’s usually not Santa Claus or the Tooth Fairy.” Funding think tanks is always about “shaping and reshaping the climate of public opinion”.

Nonetheless, the claim to independence has been so successful that most think tanks have tax-free charity status and their staff constantly feature in the media as if they were independent and peer-reviewed experts.

Another decisive development was the “bigger pie” strategy. Straight after World War 2, governments took on a new role of fostering growth. The emphasis increasingly fell on baking a bigger pie, so the slices could get bigger but the pie would not have to be divided up any more equitably. Growth could function as an alternative to fairness. Thorny problems like world poverty were designated growth problems and leaders in the decolonising world often embraced a growth-oriented version of development, a version that rarely helped their poor majorities. Growth allowed the privileged to maintain and even extend their opulence, while professing to be saving the world from poverty. It’s frequently claimed that growth is lifting millions out of poverty. But, apart from China, this is not really the case. China has indeed decreased the numbers of its extreme poor, though this has been achieved with disastrous environmental decline and increasing inequality.

Meanwhile, progress is patchy elsewhere. After 70 years of economic growth, with the world economy now 8 to 10 times bigger than it was in 1950, there are still 2 and a half billion people living on less than $2 a day, more than a third of the people on earth, and about the same number as in 1981. Growth has not been shared. Underlying the popularity of growth, there’s a great clash of values between mainstream economics and the physical sciences.

Economists see the human economy as the primary system—odd when you consider that the planet’s been here for about 4.6 billion years, and life for something like 3.8 billion.  The human era is less than a whisker on this timescale, but for economists Nature is just the extractive sector of their primary system, the economy. For scientists and ecological economists, the primary system is the planet – and it’s self-evidently finite. The human economy with its immense material extraction and vast waste, exists entirely within the earth system. Self-evident as these boundaries might seem, they remain invisible or contested in mainstream economics and are of little concern to politicians or citizens in most countries. Hardly a news bulletin goes by without stories of growth expected, growth threatened, or growth achieved. Growth is the watchword of both major parties here and around the world and remains the accepted solution to poverty, pollution and debt.

And yet, however necessary growth is to our current economic arrangements, and however desirable from the point of view of our expectations of material well-being and comfort, it’s hardly a practical aim if it’s based on a misperception of reality.

While we assume that a high and increasing level of material consumption is normal and desirable, we ignore the peculiarity of our times and the encroaching threats to us and our planet.

We are well into dangerous territory in three areas:

Firstly, species are going extinct 100 to 1000 times faster than the background rate.

Secondly, the nitrogen cycle is completely disrupted. In nature, nitrogen is largely inert in our atmosphere. Today, mainly through making fertiliser, nitrogen is flooding through our rivers, groundwater and continental shelves, fuelling algal blooms that lead to dead zones and fish kills.

And thirdly we are on the way to a very hot planet. Unless we change rapidly in the extremely near future, we risk an increase of 4 degrees Centigrade by 2100. So far, an increase of less than 1 degree is melting the West Antarctic icesheet, glaciers nearly everywhere and even the massive Greenland icecap.

Meanwhile, the rate of carbon dioxide and methane emissions continues to rise. In fact, right through the decade it took to write my book, I was staggered as these emissions defied all protocols and agreements, and rose faster and faster every year, setting a new record in 2013. Four degrees may be a bridge too far, and yet our culture is cheerfully crossing it.

I started out as a student of human history and ended up studying the intersection between human history and natural history. Humans have had local effects for thousands of years but on a global scale, the collision is new. Humans were a flea on the face of the earth for most of our history and it’s probably true to say this is the very first time one species—ours—has taken over the entire planetary system for its own sole use. In human-focused terms, this may seem perfectly reasonable. In planetary terms, it’s weird and completely impractical.

While our best agricultural land, last remnants of white box woodland and the Great Barrier Reef are put at risk for the extraction of gas and coal, which we should aim to stop burning anyway if we want a liveable world, it seems that only citizen revolt is left to counter it.

Let’s hope we succeed.

The ground of our being is at stake.

Robyn Williams: Kerryn Higgs. She’s with the University of Tasmania and her book, published by MIT Press, is called Collision Course – Endless Growth on a Finite Planet. Kerryn has recently been appointed a Fellow of the International Centre of the Club of Rome. Next week I shall introduce the proud Professor who’s just moved into that crumpled brown paper bag designed by Frank Gehry for the University of Technology, Sydney: Roy Green on innovation in Australia and what’s not right.  

Solidarity, not Austerity

27 01 2015

Raul and Nicole

I suppose it’s fair to assume that most of my readers already follow Nicole Foss’ old website, the Automatic Earth, which is now largely operated by as I can’t recall when was the last time Nicole wrote anything there, busy as she is speaking all over the place and moving to NZ etc….  If you’ve already read this, my apologies….. but Ilargi has written some sublime posts on the unfolding European catastrophe of late, and now that SYRIZA has in fact been elected, this gem had to be reproduced, because I see the current revolution in Greece as the very beginning of the end for the oligarchs, who apparently are even running scared about their future now!  Enjoy……

In what universe is it a good thing to have over half of the young people in entire countries without work, without prospects, without a future? And then when they stand up and complain, threaten them with worse? How can that possibly be the best we can do? And how much worse would you like to make it? If a flood of suicides and miscarriages, plummeting birth rates and doctors turning tricks is not bad enough yet, what would be?

If you live in Germany or Finland, and it were indeed true that maintaining your present lifestyle depends on squeezing the population of Greece into utter misery, what would your response be? F##k ‘em? You know what, even if that were so, your nations have entered into a union with Greece (and Spain, and Portugal et al), and that means you can’t only reap the riches on your side and leave them with the bitter fruit. That would make that union pointless, even toxic. You understand that, right?

Greece is still an utterly corrupt country. Brussels knows this, but it has kept supporting a government that supports the corrupt elite, tried to steer the Greeks away from voting SYRIZA. Why? How much does Brussels like corrupt elites, exactly? The EU, and its richer member nations, want Greece to cut even more, given the suicides, miscarriages, plummeting birth rates and doctors turning tricks. How blind is that? Again, how much worse does it have to get?

Does the EU have any moral values at all? And if not, why are you, if you live in the EU, part of it? Because you don’t have any, either? And if you do, where’s your voice? There are people suffering and dying who are part of a union that you are part of. That makes you an accomplice. You can’t hide from that just because your media choose to ignore your reality from you.

And it doesn’t stop there. It’s not just a lack of morals. The powers that be within the EU deliberately unleashed shock therapy on Greece – helped along by Goldman Sachs and the IMF, granted -. All supra-national organizations tend towards zero moral values. It’s inherent in their structures. We have NATO, IMF, World Bank, EU, and there’s many more. It’s about the lack of accountability, and the attraction that very lack has for certain characters. Flies and honey.

So that’s where I would tend to differ from people like Alexis Tsipras and Yanis Varoufakis, the man seen as SYRIZA’s new finance minister, and also the man who last night very graciously, in the midst of what must have been a wild festive night in Athens, responded to my congratulations email, saying he knows what Dr Evil Brussels is capable of. I don’t see trying to appease Brussels as a successful long term move, and I think Athens should simply say thanks, but no, thanks. But I’m a writer in a glass tower, and they have to face the music, I know.

But let’s get a proper perspective on this. And for that, first let’s get back to Steve Keen (you now he’s a personal friend of The Automatic Earth). Here’s what I think is important. His piece last week lays the foundation for SYRIZA’s negotiations with the EU better than anything could. Steve blames the EU outright for the situation Greece is in. Let’s see them break down the case he makes. And then talk.

It’s All The Greeks’ Fault

Politically paralyzed Washington talked austerity, but never actually imposed it. So who was more successful: the deliberate, policy-driven EU attempt to reduce government debt, or the “muddle through” USA? [..]muddle through was a hands-down winner: the USA’s government debt to GDP ratio has stabilized at 90% of GDP, while Spain’s has sailed past 100%. The USA’s macroeconomic performance has also been far better than Spain’s under the EU’s policy of austerity.

[..] simply on the data, the prima facie case is that all of Spain’s problems – and by inference, most of Greece’s – are due to austerity, rather than Spain’s (or Greece’s) own failings. On the data alone, the EU should “Cry Uncle”, concede Greece’s point, stop imposing austerity, and talk debt-writeoffs – especially since the Greeks can argue that at least part of its excessive public debt ratio is due to the failure of the EU’s austerity policies to reduce it.

[..] why did austerity in Europe fail to reduce the government debt ratio, while muddle-through has stabilized it in the USA? .. the key factor that I consider and mainstream economists ignore—the level and rate of change of private debt. The first clue this gives us is that the EU’s pre-crisis poster-boy, Spain, had the greatest growth in private debt of the three—far exceeding the USA’s. Its peak debt level was also much higher—225% of GDP in mid-2010 versus 170% of GDP for the USA in 2009

[..] the factor that Greece and Spain have in common is that the private sector is reducing its debt level drastically – in Spain’s case by over 20% per year. The USA, on the other hand, ended its private sector deleveraging way back in 2012. Today, Americans are increasing their private debt levels at a rate of about 5% of GDP per year—well below the peak levels prior to the crisis, but roughly in line with the rate of growth of nominal GDP.

[..] the conclusion is that Greece’s crisis is the EU’s fault, and the EU should “pay” via the debt write-offs that Syriza wants – and then some.

That’s not the attitude Berlin and Brussels go into the talks with Tsipras and Varoufakis with. They instead claim Greece owes them €240 billion, and nobody ever talks about what EU crap cost the PIIGS. But Steve is not a push-over. He made Paul Krugman look like a little girl a few years ago, when the latter chose to volunteer, and attack Steve on the issue, that – in a few words – banks have no role in credit creation.

Back to Yanis. The right wing Daily Telegraph, of all places, ran a piece today just about fully – and somewhat strangely – endorsing our left wing Greek economist. Ain’t life a party?

Yanis Varoufakis: Greece’s Future Finance Minister Is No Extremist

Syriza, a hard left party, that outrightly rejects EU-imposed austerity, has given Greek politics its greatest electoral shake-up in at least 40 years.

Hold, wait, don’t let’s ignore that 40 years ago is when Greece ended a military dictatorship. Which had been endorsed by, you know, NATO, US … So “greatest electoral shake-up” is a bit of a stretch. To say the least. There was nothing electoral about Greece pre-1975.

You might expect the frontrunner for the role of finance minister to be a radical zealot, who could throw Greece into the fire He is not. Yanis Varoufakis, the man tipped to be at the core of whatever coalition Syriza forges, is obviously a man of the left. Yet through his career, he has drawn on some of the most passionate advocates of free markets. While consulting at computer games company Valve, Mr Varoufakis cited nobel-prize winner Friedrich Hayek and classical liberal Adam Smith, in order to bring capitalism to places it had never touched.

[..] while Greece’s future minister is a fan of markets in many contexts, it is apparent that he remains a leftist, and one committed to the euro project. Speaking to the BBC on Monday, he said that it would “take an eight or nine year old” to understand the constraints which had bound Greece up since it “tragically” went bankrupt in 2010. “Europe in its infinite wisdom decided to deal with this bankruptcy by loading the largest loan in human history on the weakest of shoulders, the Greek taxpayer,” he said.

“What we’ve been having ever since is a kind of fiscal waterboarding that have turned this nation into a debt colony,” he added. Greece’s public debt to GDP now stands at an eye watering 175%, largely the result of output having fallen off a cliff in the past few years. Stringent austerity measures have not helped, but instead likely contributed.

That last line, from a right wing paper? That’s the same thing Steve Keen said. Even the Telegraph says Brussels is to blame.

It will likely be Mr Varoufakis’ job to make the best of an impossible situation. The first thing he will seek to tackle is Greece’s humanitarian crisis. “It is preposterous that in 2015 we have people that had jobs, and homes, and some of them had shops until a couple of years ago, that are now sleeping rough”, he told Channel 4. The party may now go after multinationals and wealthy individuals that it believes do not pay their way.

[..]The single currency project has fallen under heavy criticism. The economies that formed it were poorly harmonised, and no amount of cobbling together could make the end result appear coherent. Michael Cembalest, of JP Morgan, calculated in 2012 that a union made up of all countries beginning with the letter “M” would have been more workable. The same would be true of all former countries of the Ottoman Empire circa 1800, or of a reconstituted Union of Soviet Socialist Republics, he found.

That’s just brilliant, great comparisons. Got to love that. And again, it reinforces my idea that the EU should simply be demolished, and Greece should not try and stay within eurozone parameters. It may look useful now, but down the line the euro has no future. There’s too much debt to go around. But for SYRIZA, I know, that is not the most practical stance to take right now. The demise of the euro will come in and of itself, and their immediate attention needs to go to Greece, not to some toxic politics game. Good on ‘em. But the fact remains. The euro’s done. And SYRIZA, whether it likes it or not, is very much an early warning sign of that.

[..] A disorderly break up would almost certainly result in a merciless devaluation of whatever currency Greece launched, and in turn a default on debt obligations. The country would likely be locked out of the capital markets, unable to raise new funds. As an economy, Greece has only just begun to see output growth return. GDP still remains more than 26% below the country’s pre-crisis peak. A fresh default is not the lifeline that Greece needs.

Instead, it will be up to a Syriza-led government to negotiate some sort of debt relief, whether that be in the form of a restructuring, a deal to provide leeway on repayment timings, or all out forgiveness. It will be up to Mr Varoufakis – if he is selected as finance minister – and newly sworn in Prime Minister Alex Tspiras to ensure that this can be achieved without Greece getting pushed out of the currency bloc in the process.

And whaddaya know, Steve Keen finishes it off too. Complete with history lessons, a take-and-shake down of failed economic policies, and a condemnation of the neo-liberal politics that wrecked Greek society so much they voted SYRIZA. It’s not rocket politics…

Dawn Of A New Politics In Europe?

About 40 years ago, one of Maggie Thatcher’s chief advisors remarked that he wouldn’t be satisfied when the Conservative Party was in government: he would only be happy when there were two conservative parties vying for office. He got his wish of course. The UK Labour Party of the 1950s that espoused socialism gave way to Tony Blair’s New Labour, and the same shift occurred worldwide, as justified disillusionment about socialism as it was actually practised—as opposed to the fantasies about socialism dreamed up by 19th century revolutionaries—set in.

Parties to the left of the political centre—the Democrats in the USA, Labour in the UK, even the Socialist Party that currently governs France—followed essentially the same economic theories and policies as their conservative rivals.

Differences in economic policy, which were once sharp Left-anti-market/Right-pro-market divides, became shades of grey on the pro-market side. Both sides of politics accepted the empirical fact that market systems worked better than state-run systems. The differences came down to assertions over who was better at conducting a pro-market economic agenda, plus disputes over the extent of the government’s role in the cases where a market failure could be identified.

So how do we interpret the success of Syriza in the Greek elections on Sunday, when this avowedly anti-austerity, left-wing party toppled the left-Neoliberal Pasok and right-Neoliberal New Democracy parties that, between them, had ruled Greece for the previous 4 decades? Is it a return to the pro-market/anti-market divides of the 1950s? No—or rather, it doesn’t have to be.

It can instead be a realisation that, though an actual market economy is indeed superior to an actual centrally planned one, the model of the market that both sides of politics accepted was wrong. That model—known as Neoliberalism in political circles, and Neoclassical Economics in the economic ones in which I move—exalts capitalism for a range of characteristics it doesn’t actually have, while ignoring characteristics that it does have which are the real sources of both capitalism’s vitality and its problems.

Capitalism’s paramount virtues, as espoused by the Neoliberal model of capitalism, are stability and efficiency. But ironically, the real virtue of capitalism is its creative instability—and that necessarily involves waste rather than efficiency. This creative instability is the real reason it defeated socialism, while simultaneously one of the key reasons socialism failed was because of its emphasis upon stability and efficiency.

[..] real-world capitalism trounced real-world socialism because of its real-world strength—the creative instability of the market that means to survive, firms must innovate—and not because of the Neoliberal model that politicians of both the Left and the Right fell for after the collapse of socialism.

Neoliberalism prospered in politics for the next 40 years, not because of what it got right about the economy (which is very little), but because of what it ignored—the capacity of the finance sector to blow a bubble that expanded for almost 40 years, until it burst in 2007. The Neoliberal model’s emphasis on making the government sector as small as possible could work while an expanding finance sector generated the money needed to fuel economic prosperity. When that bubble burst, leaving a huge overhang of private debt in its wake, Neoliberalism led not to prosperity but to a second Great Depression.

The Greeks rejected that false model of capitalism on Sunday—not capitalism itself. The new Syriza-led Government will have to contend with countries where politicians are still beholden to that false model, which will make their task more difficult than it is already. But Syriza’s victory may show that the days of Neoliberalism are numbered. Until Sunday, any party espousing anything other than Neoliberalism as its core economic policy could be slaughtered in campaigning by pointing out that its policies were rejected by economic authorities like the IMF and the OECD.

Syriza’s opponents did precisely that in Greece—and Syriza’s lead over them increased. This is the real takeaway from the Greek elections: a new politics that supports capitalism but rejects Neoliberalism is possible.

All Europeans, and Americans too, must now support SYRIZA. It’s not only the only hope for Greece, it is that for the entire EU. SYRIZA breaks the mold. Greeks themselves would be terribly stupid to start taking their money out of their accounts and precipitating bank runs. That’s what the EU wants you to do, create mayhem and discredit the younger generation that took over this weekend.

It’s going to be a bitter fight. The entrenched powers, guaranteed, won’t give up without bloodshed. SYRIZA stands for defeating a model, not just a government. Most of Europe today is in the hands of technocrats and their ilk, it’s all technocrats and their little helpers. And it’s no just that, it’s that the neo-liberal Brussels crowd used Athens as a test case, in the exact same way Milton Friedman and his Chicago School used the likes of Videla and Pinochet to make their point, and tens of thousands got murdered in the process.

It’s important that we all, European or not, grasp how lacking in morality the entire system prevalent in the west, including the EU, has become. This shows in East Ukraine, where sheer propaganda has shaped opinions for at least a full year now. It’s not about what is real, it’s about what ‘leaders’ would like you to think and believe. And this same immorality has conquered Greece too; there may be no guns, but there are plenty victims.

The EU is a disgrace, a predatory beast unleashed upon all corners of Europe that resist central control and, well, debt slavery really, if you live on the wrong side of the tracks.

SYRIZA may be the last chance Europe has to right its wrongs, before fighting in the streets becomes an everyday reality. Before we get there, and I don’t know that we can prevent it, hear Steve Keen: it’s not the Greeks that screwed up, it’s the EU. But they would never ever admit to that.