Why Everything That Needs to Be Fixed Remains Permanently Broken
Just in case you missed what’s going on in France: the status quo in Europe is doomed.
The status quo has a simple fix for every crisis and systemic problem:
1. create currency out of thin air
2. give it to super-wealthy banks, financiers and corporations to boost their wealth and income.
One way these entities increase their wealth and income is to lend this nearly free money to commoners at much higher rates of interest. I borrow from central banks at 1% and lend it to you at 4.5%, 7% or even 19% or more. What’s not to like?
If a bank is insolvent, it can borrow money at 1% from central banks. If Joe Blow is insolvent, the only loan he can get is at 23%, if he can get any credit at all.
3. China has a variant fix for every financial crisis: build tens of millions of empty flats only the wealthy can afford as second or third “investment” flats. If the empty flats start dropping in price, government entities start secretly buying flats to support the market.
4. Empty malls, bridges to nowhere and ghost cities are also a standard-issue fix in China. Built it and they will come, until they don’t. But who cares, the developers and local governments (i.e. corrupt officials) already pocketed the dough.
You see the problem: making rich people richer doesn’t actually fix what’s broken, it only makes the problems worse. So why can’t we fix what’s broken?
It’s a question that deserves an answer, and the answer has six parts:
1. Any meaningful systemic reform threatens an entrenched, self-serving interest/elite which has a tremendous incentive to squash, co-opt or water down any reform that threatens their monopoly, benefits, etc.
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