Are we into hard times?

Most of the most influential media seem intent on re-installing the exploiters and corrupters of our financial and economic system. Those who devised and utilised ever more creative derivatives, hedge funds, Credit Default Swaps and the rest pretended to have no idea what they did. They did not know what menace they represented. Certainly, they meant no harm.

We have done nothing effective to reform, regulate or even moderate the systems which brought us to the edge of the abyss. Most of us who are not blinded by the media and policymakers who have been bought by the moneymen know that even a small push will now tip us over the edge.

Certainly, sovereign debt could tip us over. Here our policymakers show a total lack of resource. The working and middle classes are being forced to suffer the cruel injustice of "hard times" for which they have little or no responsibility.

We might recall that the Great Depression did not deliver its most intense miseries immediately after the Great Crash of 1929. For most countries, those miseries arrived only two or three years later, after those who govern our destinies had skilfully turned bad into worse. In Australia, as one example, the deepest depression hit only in 1931 and later. Sovereign debt emerged as a major source of misery.

In order to resolve the problems of debt, especially to overseas creditors, the Federal Government brought all the State Premiers together to agree on the Premiers’ Plan. That Plan cut public spending to the bone, whether on infrastructure, education, pensions, social welfare or whatever. It suspended new recruitment to public services, cut public-service salaries heavily and banned paid overtime.

Creditors in the City of London and the Bank of England wanted more. They couldn't pay their own debts and wanted those who owed them money to do "the right thing". The Labor Premier of New South Wales, Jack Lang, wouldn’t do "the right thing". The State Governor appointed by London sacked him. A more “co-operative” Premier replaced him.

The Premiers' Plan was a disaster for almost everyone. With it, the deepest of the miseries of the Australian citizens began. The country became less able to grow and pay its debts. Its miseries culminated in World War II with Australian youth staving off Japanese invasion in the Battle of the Coral Sea, on the Kokoda Track and at Milne Bay.

Many countries paid an even more terrible price for the failure of economic and financial policies in the 1930s.

Now the scenario is being played out again.

Greece has been obliged to adopt a "Premiers' Plan". Iceland was forced to agree to pay its creditors in the City of London and The Netherlands. There has been very little organised opposition effective enough to frame a more just "settlement" in either case.

The ordinary citizen in Greece or Iceland has been no more responsible for its country’s financial disaster than the average citizen in the United States was for the Ponzi fraud of Bernard Madoff.

However, the ordinary citizen must pay up. If they do not, they will be denied credit by the Eurozone, the IMF and the mighty men of finance. They will be left to rot in a wilderness to which no banker will be prepared to extend either his credit or his questionable "charity".