The popular perception is that the ordinary people have been living "beyond their means", a false and invidious conventional wisdom which masks the real nature of the crisis. For it is the elites across Europe and the Americas who have benefited most from the European Union, built on Reaganite neoliberalism, which in turn was fashioned to meet the needs of business. The neoliberal policies of all Western governments, "left" or "right" during the past three decades are the direct cause of the current highly skewed income distribution -- by some accounts, worse than in any previous era of human history.
The supposed generous patriarch of this big happy family is Germany , with its hard workers and tidy streets. But while the Aesopian Greek hares are told they must tighten their belts and make do with less health and education, the fact that the Greek arms imports continue to grow -- importing German weapons and "defence" systems (against what threat?) -- is not mentioned. And it is not only weapons, but consumer goods from Germany that have displaced Greek products in the anonymous Euro-market, as Greece increasingly becomes northern Europeans' decadent playground, albeit with more than its fair share of un- and under-employed.
As long as banks were lending freely to governments to finance this fool's paradise, the lower classes were not made to feel the pinch, and the system kept chugging along. Now that government debts and bank reserves have approached their limit and reckless banks are going bankrupt, the struggle is on over who should pay for the untenable system. Since the economic elites are also the political elites, naturally they want the broad people to pay with social service cuts, reduced and delayed pensions, regressive sales taxes and the like. The intense propaganda campaign now underway is to convince the poor in the Euro-laggards that they are the guilty ones, not their own elites or the Euro-elites in Frankfurt or Berlin or wherever.
The EU was a project to end the prospect of war in Europe and to gather the broken pieces of shattered empires into a workable collective economic-political force in the world. To a surprising extent it succeeded, but without facing hard choices and a frank debate about who benefits. As the problems sharpen, any sense of collective goodwill evaporates, and chauvinist, even racist parties gain rapidly in popularity, hearkening back to faux-halcyon days of distant imperial privilege. But as history shows, the ability of individual European countries to extract surplus from colonies is not guaranteed indefinitely. The same goes for the ability of Germany to lord it over its Euro-partners. As the knives come out, the very existence of the European project comes into question.
The rich standard of living that Europe has enjoyed over the past few decades is directly a result of first the import of Third World workers (to a large extent Muslim) and then the incorporation of the ex-Socialist bloc after the collapse of the Soviet Union in 1991. As the financial crisis plays itself out, these immigrant workers, the very ones who have served Europeans so well, are now targeted and racially profiled, as the elites try to deflect attention from their own hidden role in the ongoing crisis. This is the First World/ Third World extension of the above argument about Euro-laggards, with the victims no longer the Greek hares, but Nigerian and Egyptian immigrants.
A similar tale can be told for the US , with its large immigrant population, its Tea Partiers and Islamophobes, unable or unwilling to face the underlying problems resulting from decades of neoliberal policies. In the Americas , it is China that provides the manufactured goods which are paid for by US treasury bonds piling up in Chinese bank vaults, and no one in particular is accused of being the carefree Aesopian hare -- state governments merely use their deficits as the deus ex machina -- but the pattern is the same.
As the people who have woken up to the reality are arrested and booted out of Trafalgar Square, Zuccotti Park, Chapman Square (Oakland) and dozens of other city commons around the world, the long cold winter of discontent sets in. However, the problems are going nowhere and the people are just waiting for the next opportunity to express their outrage.
The toppling of governments means nothing in this scenario. Italy's Silvio Berlusconi and Greece's George Papandreou only handed over power on the explicit understanding that the "fresh faces" would carry out the austerity plans imposed by the EU heavyweights. Berlusconi's replacement is 68-year-old ex-EU commissioner Mario Monti, an economics professor steeped in the dogmas that brought Italy to its current impasse. Papandreou's replacement is ex-European Central Bank vice president Lucas Papademos who immediately announced, "Our membership of the euro is our only choice." Not much thinking outside the box from these folks, the very ones who got their people in their present fix.
Some Americans at the top are already awake. The 138 members of "Patriotic Millionaires for Fiscal Strength" (0.005% of all US millionaires) have been lobbying President Barack Obama and congressional leaders for a year now pleading with them: "Please do the right thing, raise our taxes." Not surprisingly, no response from a president and Congress beholden to the 3.1 million other millionaires -- the proverbial 1%.
Occupy Washington DC published their no-brainer proposals 17 November: redistribute income through progressive taxation, end the wars, expand health care, democratise business. This will end the budget deficit overnight, create full employment through stimulating local demand, eventually ending the foreign trade deficit, making America strong and once again the envy of the world. But of course Congress is captive of the current military industrial complex, and can and will do nothing.
The slow-motion drift into oblivion is surreal. Clearly momentous changes are in store for both Europe and America, and the sooner thinkers and actors get to work coming to grips with hard, cold reality, the better for the people -- and for the elites, who are living on borrowed time, too. How long before the revolution?