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Markets drop following anti-austerity votes in Europe

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Europe is finally realizing austerity is a failure, that the last time it "worked" the economic conditions were radically different. Back when it worked (post WWII) the economy was growing, not shrinking. We are not in a high growth phase so austerity only strangles an already weak economy. It's highly destructive. Did voters realize that austerity doesn't work?

Perhaps Europe has had the benefit of watching the US go through this economy so they knew that the bailouts and the easy money post-crisis was all about Wall Street. The bailouts of the banks had to happen but there was no reason whatsoever that we had to bailout the bankers. There's a big difference.

We're four years past the collapse of Bear Stearns and the collapse of the economy yet the only ones who have seen benefits have been the guys - and they were mostly guys - who caused the crisis. Their annual bonuses have come down somewhat but their overall pay is still much more than any other industry and it's not even close. Between the no-strings-attached bailout to the quantitative easing, everything has been about the precious bankers.

Europe has had it pretty easy so far during the crisis (with a few notable exceptions such as Spain, Greece, Ireland) but the next few years stand to be ugly and very economically painful. If the markets today and in the coming months drop because the misbehaving banks and bondholders have their lousy deals renegotiated, so be it.

Brace yourself for plenty of excitement by the right wing Wall Street worshipers who may try to scare Americans into showing how bad the anti-austerity votes are. Then remember just how much the recent Wall Street rise has really impacted your retirement or your life in general. The 1% has done well during the rise but the results are much more limited for the rest of us. Maybe if the 99% saw tangible results to the rise it might matter, but we don't.

Will the new anti-austerity politicians put the bankers back in their place and take control? Probably not. As we all know on the Democratic side, there's always going to be gap between the big promises given during the election cycle and then what happens once in power. In Europe, we can only hope that the victorious politicians don't hire architects of the failed economy as we witnessed in 2008.

The political elite in Europe is not so different from the US and "the left" of 2012 is quite different from "the left" of a few decades ago. Tony Blair ran Labour in the UK and Obama is a Democrat. Neither could ever be confused with an old school socialist or liberal Democrat. In France, François Hollande is a far cry from François Mitterand so it's best to ignore the right wing hyperventilation about socialism taking over. It probably wouldn't hurt to be cautious about believing in radical change as well from the other side.

(Follow me on Twitter at @ChrisInParis)

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