Cyprus holds lessons for future U.S. leaders

Great news, everyone! The stock market isn’t just recovering from the economic crisis, it’s actually hitting record highs! Turns out there might be an economy once we graduate, after all! With jobs! Isn’t that awesome?

Well, it would be, if it were true. The recent achievements of the Dow Jones mean the wealthy have successfully weathered the financial storm, but the rest of us are still out there, trying to pick ourselves up. The majority struggle while the elite live in luxury, and even then, it’s never enough. They need more, and they need to trick the majority into giving them more. There will always be politicians who claim to represent us, when their actual goal is to make the economic system even more one-sided than it already is. This is what we’re talking about when we talk about austerity.

If we want to know more about the future we’re inheriting, it’s worth taking a lesson from the recent shenanigans in Cyprus. A small island nation in the Mediterranean, Cyprus doesn’t have a whole lot in the way of business diversity. A majority portion of its economy is devoted to the banking industry, and Cyprus has spent the last couple of decades advertising its banks as the ideal place to deposit money. Finance, as it was called, became the featured element of the Cypriot economy.

So the banks got fat and bloated and flushed with cash, then proceeded to make a string of horrible, high-risk investments. Being horrible and all, these investments went south in a hurry, the banks began hemorrhaging money and as the industry failed, it started to drag the rest of the economy down with it. The banks went to the government, begging for help. They were such a huge part of the economy that allowing them to simply go under would have severe consequences for the nation as a whole; the banks used that fact to demand rescue, sticking up the people of Cyprus to avoid slipping down the drain. If that doesn’t sound familiar, you haven’t been paying attention.

Now, like so many other countries in the region, the Cypriot government has turned to the IMF and the European Union for financial salvation, and once again, that salvation comes with an ideological price tag. To get a bailout from the EU and save its banking industry, Cyprus had to implement extreme economic austerity.

The original version of the deal had the banks imposing a one-time tax on all deposits of up to 10 percent; 10 percent of every single person’s life savings, stolen by the banks to get them out of their self-imposed economic ruin. If Cyprus didn’t like it, they wouldn’t get the bailout money, and if they didn’t get the money, the bankers insisted, Armageddon would sweep over the nation. Austerity measures have been tried before, including recently, but never to this extent. This is the economic equivalent of taking money from a robbery victim to pay the robber’s bail.

Fortunately, it didn’t happen. The people of Cyprus learned of the EU’s proposal and rose up, filling the streets with mass demonstrations and withdrawing their money before the bank could steal it. In the face of such defiant, unified public outrage, the plan was quickly scrapped. Since then, Cyprus has agreed to a different bailout deal, but the public isn’t happy about this one, either, and the protesters have returned. What’s more, the bailout agreement doesn’t seem to have done much good for the Cypriot economy; the crisis has only worsened.

From Cyprus to Greece to Britain to Spain, it’s become increasingly clear that radical austerity is not the solution to the global economic collapse. Yet, there are those in America who would see us embrace the extremism that Cypriots have so firmly rejected. If they are successful, the rich of this country will take everything that remains to the poor with ruthless impunity, and if that happens, we might find another lesson to be learned from Cyprus: the power of collective revolution.

Originally published in The Lumberjack (


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