The perils of 2012 by Joseph Stiglitz
In 2012, global economic rebalancing will accelerate, inevitably leading to political tensions.
Last Modified: 21 Jan 2012 12:07
Kolkata, India - The year 2011 will be remembered as the time when many ever-optimistic US citizens began to give up hope. President John F Kennedy once said that a rising tide lifts all boats. But now, in the receding tide, those in the US are beginning to see not only that those with taller masts have been lifted far higher, but also that many of the smaller boats had been dashed to pieces in their wake.
In that brief moment when the rising tide was indeed rising, millions of people believed that they might have a fair chance of realising the "American Dream". Now those dreams, too, are receding. By 2011, the savings of those who had lost their jobs in 2008 or 2009 had been spent. Unemployment cheques had run out. Headlines announcing new hiring - still not enough to keep pace with the number of those who would normally have entered the labour force - meant little to the 50-year-olds with little hope of ever holding a job again.
Indeed, middle-aged people who thought that they would be unemployed for a few months have now realised that they were, in fact, forcibly retired. Young people who graduated from college with tens of thousands of dollars of education debt cannot find any jobs at all. People who moved in with friends and relatives have become homeless. Houses bought during the property boom are still on the market or have been sold at a loss. More than seven million families in the US have lost their homes.
The dark underbelly of the previous decade's financial boom has been fully exposed in Europe as well. Dithering over Greece and key national governments' devotion to austerity began to exact a heavy toll last year. Contagion spread to Italy. Spain's unemployment, which had been near 20 per cent since the beginning of the recession, crept even higher. The unthinkable - the end of the euro - began to seem like a real possibility.
in full: http://www.aljazeera.com/indepth/opinion/2012/01/201211416122556461.html
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