THE FINANCIAL MARKET CASINO CONTROLS POLITICS
Politics has not prevented the next great crisis. It capitulates before the superpowers of the “financial markets” 
By Ernst Wolff
[This article published on October 1, 2017 is translated from the German on the Internet, www.infosperber.ch. The following section is from Ernst Wolff’s new book “Financial Tsunami – How the Global Financial System Threatens All of Us.”]
No one seriously denies that “money serves the world.” The way its power is exercised has changed considerably in the last years and decades. If Big Money was discretely in the background in the past, it has largely abandoned this reserve and basks in the limelight nowadays – in the form of the “financial markets.”
A news broadcast hardly occurs without the question what the financial markets say on this or that decision. Important political points are set on how the financial markets will react. If politicians or academics want to move suggestions or proposals into a bad light, they refer to their negative effects on the financial markets. The financial markets seem to be the measure of all things. How did this happen? What gave them so much power? Who is responsible for this development? Let us look at their history. The rise of finance capital began in the 19th century. Today’s financial markets come from the rise of finance capital. At that time, the banks lent money – granting credits – so industry could grow. Little by little, the financial markets gained ever-greater power and influence until they began guiding economic and political decision-making from the background largely unnoticed by the public at the beginning of the 20th century.
An increasingly sharp international competition arose driven by the hunger for ever higher profits. This escalated into belligerent conflicts that were used by the banks for awarding credits. After two world wars, the financial institutes of New York Wall Street rising to world power by awarding credits took global leadership. At the 1944 Bretton Woods conference, a monetary system was created by political decision-makers that was tailored entirely to the needs of Wall Street and the whole world was subjected to the rule of the US dollar.
Deregulation makes the financial sector explode
For many people, the subsequent postwar boom fomented the boom fomented the illusion that an age of peace and prosperity had now dawned on the foundation of unbroken growth. However, finance capital struck its limits when this boom ended at the start of the 1970s. Politics reacted and helped finance capital in the last third of the 20th century develop to the greatest phase of its history through “deregulation” – the annulment of different legal restrictions. This deregulation enabled the financial sector to formally explode, freed international finance capital from the real economy, and began an unparalleled life of its own in the name of “the financial markets.”
The term “financial market” is itself misleading. The classical markets were trading centers where buyers and sellers with equal rights faced each other. The prices of goods were determined by the interplay of supply and demand. Today’s financial markets do not involve either equal rights or supply and demand. They are guided, controlled and manipulated by the big investors of this world, mega international banks, hedge funds, multinational corporations and the central banks.
Often underrated influence
We all feel the effects day after day even if we often are not conscious of the cause. Interactions on the financial markets influence our living standards and decide what educational and ecological chances we have, whether we are insured in case of sickness or provided in old age. The financial markets govern us; decide when and under what circumstances our democratic freedoms can be restricted, how far the climate and the environment can be destroyed and how much future generations can be burdened with debts they cannot pay off themselves. Even the question whether we will live in peace or are threatened by social unrest, war and in the worst case by a nuclear catastrophe ultimately depends on the financial markets.
Thanks to this enormous significance, most people shrink from being occupied with the operation and laws of our financial system. Many fear not understanding the connections.
At the same time, they have an increasingly queasy feeling because of the changes starting from the financial markets.
Extreme concentration of wealth and assets
It is no wonder that the working population all over the world face several deeply alarming developments today. One of the most important may be the explosion of social inequality. The Oxfam relief organization declared that eighty-five persons in 2014, sixty-two persons in 2015 and only eight persons in 2016 have as much wealth as the poorer half of humanity. In March 2017, Forbes Magazine reported the number of multi-millionaires worldwide rose 233 to 2043 and their wealth rose to .17 trillion.
Even if these numbers can only be rough estimates, they reveal more than only a crass discrepancy. They illustrate that the income discrepancy between people who must earn their livelihood and those who can live from their wealth is not only greater than ever but
is escalating at an increasing rate.
Hereditary title and tax havens as accelerating
This trend is promoted and accelerated and not diminished by existing laws. Hereditary title favors wealthy heirs over citizens in simple income conditions. Tax law worldwide demands more from work incomes than from accumulated or inherited wealth. Many legal tax havens are available to the well-to-do and their businesses around the globe while savers who invest their hard-earned money in their own countries receive ever lower interests and must even expect part of their money being taken from them through negative interests.
The increase of military conflicts, the resulting streams of refugees, worldwide armaments and frequent terrorist acts frighten people. The conduct of politics and the media is deeply alarming. While the media fluctuate between euphoria and scare tactics in their sales promotion, politicians fell in appeasement, easing and trivialization. Politics and the media are often overstrained in economic and financial questions, poorly informed or largely unsuspecting and have learned little from the recent past.
Failure of politics
After the 2008 near-crash of the global financial system and during the flickering Euro-crisis, politicians made many announcements and promises but did not take a single effective measure to contain the excesses on the financial markets and stop dangerous abnormal developments. Rather, they declare the causal agents of the crisis beyond all national borders as “too big to jail” and save them from bankruptcy by compensating private losses with public money (taxes).
Since 2008, the financial markets have been encouraged under the pretext of reviving the paralyzed economy. Vast amounts of money are made available by central banks. These sums mainly flow to speculation in the financial sector. The system has become more and more unstable, crisis-susceptible and antisocial. These sums are not offered as credits in the real economy. After 1929, central banks and governments with a glut of money successfully prevented a collapse. However, they have had to abandon this risky policy since then.
For its justification, politics appeals to the same arguments: the measures are necessary since the financial markets otherwise could be damaged or even collapse. According to the logic of official policy, the financial markets are a power evading the will of people to which we all must submit – like the weather or other natural phenomena.
Is this really true? Do we really have no influence on the financial markets and must accept their pranks and disastrous consequences without protest? Are we forced to watch inactively as the world around us becomes ever more unstable, insecure and antisocial? Or are we only told this to make us passive and prevent our rebelling? Are we hiding behind the picture handed down to us for years by the financial markets? Is there something we don’t know or should not know?
Nomi Prins, “In Depth with Nomi Prins,” CSpan, BookTV, April 7, 2019, 2 hours,
Ernst Wolff, “Game Over,” December 10, 2018,
Ernst Wolff, “The US, the Dollar, IS and Saudi Arabia,” February 2017,
Ernst Wolff, “The World Dependent on Central Banks, April 12, 2018,
CORPORATIONS RULE THE WORLD
By the editors of Infosperber.ch
[This article published on October 11, 2017 is translated abridged from the German on the Internet, www.infosperber.ch.]
Corporations are subsidized with trillions. In their “competition,” small and medium-size businesses are the fools.
Too little money for the socially weak? Too little money for pensions? No debt relief for Greece? No money for Africa because of immigration? “No money or too little money” is the common refrain. Still, trillions obviously exist. The lobby politicians only give them to big corporations.
Corporations depend on subsidies
A complex subsidy jungle exists in nearly all the states of the earth through which private corporations were continuously promoted with tax funds in the last decades. This subsidy net has become a kind of heart-lung machine. Most of the largest corporations on earth would have great problems without their massive support through tax funds.
0 Billion for the Oil-, Gas-, and Coal Industries
Fossil fuel corporations are subsidized every year with around 0 billion according to estimates of the conservative International Energy Agency IEA. Through climate change, fossil fuel corporations cause tremendous damage and paid practically nothing for that in the past. The costs for the wars around crude oil and the military security of pipelines and tanker routes that are also defrayed by tax funds are also not considered…
The subsidies for corporations, their shareholders and managers are part of a larger structure that is sometimes called “socialism for the rich” or “neo-feudalism.” The top sectors successfully ensure an “unconditional maximum income” largely uncoupled from their accomplishments and offenses.