In 2008, the loss of 11 billion dollars by the world’s largest investment company, AIG, and the bankruptcy of the US investment bank Lehman Brothers, triggered a domino effect of financial consequences which brought the entire capitalist system within a hair’s breadth of total collapse.
But, as the events leading up to the financial crisis were slowly unveiled, it became ever clearer that the crisis was caused, quite knowingly, by the bankers themselves.
In the years leading up to the economic crisis in 2008, banks increased the funding for the riskiest loans (called subprime loans), from $30 billion a year to over $600 billion a year, rigged even higher interest rates on those loans, and then, while the bankers were making billions of dollars of profits off the borrowers’ high interest repayments, they made further profits betting against their customers ever being able to pay back the loans they had just been given.
The FBI warned the government about this in reports as early as 2006, the IMF’s chief economist, Raghurum Rajan, presented a paper to the men in charge of all the world’s major banks, including the Federal Reserve, warning of the potential collapse of the system due to dangerous incentives, and journalist Allan Sloan published articles in Fortune magazine and The Washington Post in 2007 – nothing was done.
Instead, the men who created the crisis were allowed to make billions of dollars of profits before their institutions hit bankruptcy, paid themselves millions of dollars more in bonuses out of the government bailout packages, and left the rest of us to deal with mass increases in unemployment and poverty, and national debts that no amount of austerity measures will ever be able to repay.
7 years later and, as you read this, home foreclosures are still on the increase in many US states, the Chinese stock market is teetering on the edge of its own financial meltdown, austerity measures are intensifying in the UK, and the European Union is not unrealistically on the verge of falling apart.
The ever more concentrated power that forms from a system based on a motive of profit before people, planet, morals and ethics is leading many, like me, to investigate new political alternatives.
New left-wing socialist parties, such as Podemos (‘we can’) in Spain and Syriza (‘from the roots’) in Greece, are rising up from the financial ruin of the hardest hit countries, and the socialist debate is picking up serious momentum in the USA, too.
Since all the bailout money is only going into paying off interest on the debt that Greece already has – whilst at the same time creating even more debt for Greece thanks to the interest charged on the bailout money itself – for the first time since the Eurozone was created in 1999, people have united en masse to stand up against the irresponsible behaviour of banks and politicians and said ‘no.’
However, this is not the first example of people power since the crisis began. The first rebellion took place in Iceland. People flocked to the streets in protest after the government let the banks borrow 10 times Iceland’s GDP and then left the people of Iceland with a debt to income ratio of 240%.
Ongoing demonstrations that included stones thrown at the parliament building led to a relatively peaceful revolution; the prime minister was indicted, Iceland’s main bank was nationalized, 200 criminal charges were made against the bankers, and debt exceeding 110% of home values was simply wiped clean.
The media has largely ignored these two events, but one event that the global media could not ignore was when thousands of people poured onto the streets in the Wall Street financial district in 2010 demanding a new, humane, sustainable system.
As demonstrations rapidly spread to some 840 cities in the US, and many cities in Europe and Asia, the media was quick to demonize the movement – until finally the demonstrating fizzled out. It therefore may seem that the efforts of Occupy Wall Street were perhaps all in vain, but this is not the case.
Oxfam recently released a report that by 2016, 1% will own more wealth than all the rest of the people on planet earth. In the UK, 1% already owns more wealth than 55% of the population, and in the USA, the top 0.01% are currently worth as much as the bottom 90%. The Occupy Movement is the reason that the idea of the 99% is now in the public debate.
Occupy Wall Street may have fizzled out, but Occupy Together was formed; global solidarity of the 99% is increasing exponentially, new radical left-wing parties are surfacing, new coalitions are forming, and an ever increasing number of demonstrations are taking place, en masse, all over the world.
It is just that the mainstream media is not talking about it – but global revolution is already taking place.
This June, for example, more than 250,000 people from all walks of life and political persuasions took part in a unified anti-austerity march that occupied the streets of London here in the UK – but there was nothing about it on the news.
As I continue to develop my project Wake Up World Education, and its aim to encourage rapid positive social change through education, I have been inspired by all of these events to create a short documentary as the third episode of my Truth Behind Politics series.
In just 30 minutes, it covers the history of the central banking system, the Eurozone, the Occupy Movement, the increasing number of coalitions and demonstrations taking place worldwide, recent events in Iceland and in Greece, and asks the audience one main question:
Was Karl Marx right? Is capitalism on the verge of collapse and a positive new community-based social system coming to fruition in its wake?
By Robert Chatwin, Collective Evolution