Everyone has played this game on the same board; banks, speculators, people but also governments.
1. Banks have their own fault; they have been playing with money that did not belong to them, like retirement money from retired people in Germany and France. The majority of these funds were invested in subprime mortgages or Greece funds. Now they need to be rescued, again, because they are not earning as much money as they used to earn. There is going to be another recapitalization, people think that it is unfair; banks are getting money from the EU’s central government while they are suffering cutbacks in the most basic services. But Europe cannot afford the fall of the banks, if governments constrain the banks it could cause a depression. As Joaquin Almunia, the EU competition commissioner, said to «Reuters»: “ […] he had planned to «disconnect the life-support machine» for Europe’s banks this month but the «exacerbation of tensions» in the debt market had forced him to drop this idea […] ”(11). Banks cannot be pushed towards the edge, countries have to walk side by side with them because they have transformed, in the past years, into the real owners of the countries. Politicians can push them towards a direction but smoothly. It is not fair, but there is not another way out so far, when things will go fine people must force a change but in the near future we should work together although we would have to cover our nose.
2. Speculators know how to take advantage of the tiniest crack of the system and that is precisely what they have done. The best phrase to illustrate speculators is one in the article: “Out of Control: The Destructive Power of the Financial Markets” in «The Spiegel» where describe them «like a pack of wolves» (12)
What is supposed to be the behavior of speculators/wolves? Governments and citizens are really mad at speculators, but they do not care a few years ago what speculators were doing. Furthermore, countries were playing with speculators, giving them tools to do their job because they were good for the economy, they moved the market and if the market is in movement, money is in movement. Taxes were higher than never. The relaxation in the rules leaded us to an uncontrolled market. The situation is well-explained in the same article where we can see how difficult is to control the market, in the second and third part, and the incapability of economists and society to control a wild economy.
What was happening with the citizens? A person who was able to become rich in a few months, without any preparation and taking advantage of others could become a king at economy, a few years ago. Everyone wanted to do the same, no matter who fell provided you rose higher than anyone. Who gave the legal tools to speculators? Who lend them money and followed their leads as they were gods? The same way it was given to them it could be taken from them, and it has to be done as soon as possible. It could be done in seconds but we run into the same problem, bureaucracy.
3. Governments have been playing a dangerous game. They have been playing with fire and now they get burnt. When governments thought they were wealthy, they gave everything to their citizens. It seemed to last forever, but then reality struck hard but not hard enough at the beginning. Governments were afraid to tell their citizens what was going to happen next. They had the figures but they decided to look aside and let the worries for the future because the “invisible hand of the market” would put everything in place sooner or later.
For some countries is late, too late. Greece is the best example in several articles in The Spiegel an image of what is happening in Greece is shown; a place where a few years ago the government was able to show a strong image, now it worth nothing. It is an example of a government which gave all to their citizens; there was no future at that time only present, because the future scenarios are “Under a worst-worst-case scenario, the country could descend into a vicious circle of misery that could last decades”. (10) Some similar situations are happening all over Europe but mostly in the Mediterranean countries. Now we realize how bad things have been done when we look back and watch what governments have done with all their mighty. They had all the tools to improve the future but they only think in four-year politics.
4. People used to think that they were rich; they owned much more money than ever, without noticing that this money must be paid back with interest. There was a job for everyone and the best thing is that you earned a lot of money. The math was simple; you were earning a lot of money, you wanted a big house, an expensive car, good clothes and a good social life. Well, you were getting much more money than ever but not enough for everything; so we went to the bank and got a loan and a mortgage for forty years or more. People thought it would be paid in the future and the future was so bright and clear. One of the best examples in Spain is a man called Paco “el pocero” who through blackmailing, corruption and bribery built an empire which fell down along with the illusions of thousands of people, while in reality he was one of the most admired and envied in Spain, everyone wanted to be like him.
Why were we so blind? Several facts blended, governments’ announcements were always promising, banks gave you as much money as you needed or wanted and people behavior changed. Home economy became into a dismiss economy. We were craving for the latest; trends were powerful and so influential in the behavior of the families which had never been such high rate of consuming.
All of these goods and services are been paid by loans right now. People should learn where their place is, we are not rich anymore and we are going to make the biggest effort never. Neither governments nor banks are going to suffer as much as families but we have to get use to it, the sooner the better.