And so it was that yesterday in supposedly "prosperous" Germany, the voters in the state of North Rhine-Westphalia dealt their austerity champion Ms. Merkel a staggering defeat. This only a week after her closest ally, Sarkozy of France, lost to a mild-mannered technician who promised merely to take another look at their austerity pledges.
The moneychangers also took the opportunity last week to show that they are even more evil than anyone could ever imagine. A trader from a bank named after the guy who literally flew the Jolly Roger from the masthead of his yacht, one J.P. Morgan, was exposed as having cost the institution at LEAST $2 billion stemming from exotic trades in derivatives. Of course, J.P. Morgan Chase being a "respectable" too-big-to-fail bank, wholly expects the long-suffering peasants to cover its losses.
No one knows what will happen next—including me. But the levels of rage are rising and at some point, governments may start to topple.
For some reason, I really enjoyed this little piece over at Counterpunch. Mr. Urie makes an excellent point—if we are aghast at the treatment being handed out by IMF etc. to Greece, why weren't we just as furious when IMF etc. was doing the same thing to Thailand or Argentina?
‘Europe on the brink of armed-revolution’13 May, 2012
The chorus of anti-austerity voices grows louder in Greece as Athens scrambles to form a coalition government. While eurocrats prepare to give Greece the boot, political analyst Alessandro Politi told RT speculators are Europe’s real enemy.
Greek President Karolos Papoulias has called on the leaders of the country’s three biggest parties in a last ditch effort to avoid new elections. With the Left Coalition SYRIZA party insisting that it will not participate in any government “that will implement the bailout,” Greece faces bankruptcy within weeks, and a likely ejection from the eurozone. But as Greece is told to suffer more austerity or say goodbye to the euro, Politi told RT there is a third way.
RT: Greece's predicament is unenviable. It could leave the Eurozone, maybe default, start from scratch – or try and stick out more than a decade of austerity. Which direction should it go?
Alessandro Politi: Well, there is a third direction, which is that Europe – which means the main European states – should show the solidarity which is incorporated in the Treaty of Lisbon, and which we have seen very little precious solidarity around in the past months. It is very clear that this financial assault [by speculators] is like an artichoke, first you start with the weaker states, and then you go to the heart – the heart is France, Germany and the other AAA [rated countries]. And all these countries have already been threatened with a downgrade – or like France, have already been downgraded to A.
'The middle class will be squeezed for the sake of these financial interests. This is something which goes against democracy, dignity and freedom.'
RT: It almost seems as though you’re describing some sort of chain reaction originating from Athens. Are you forecasting a fairly scary prospect for the entire eurozone by saying that other countries after Greece could also be in line?
AP: Well, if they march divided, and the speculators attack in a coordinated way, this is inevitable. This is precisely what European countries and the ECB [European Central Bank] should avoid. But for the moment, everyone says ‘I’m not Greece, no, I am different, no, Greece must pay and then the rest will see.’ And this isn’t a good idea.
RT: Okay, so it’s not a good idea. What might be a good idea? You’re looking at Greece, Spain, Italy, Portugal – certainly there are fundamental members of the eurozone that are flailing right now. Is there a solution?
AP: The first thing is to collectively negotiate the debt. Each country has been left alone to its own devices. This is not a good idea when you face a full-fledged financial assault; this isn’t just a crisis. And secondly, there must be a debt auditing. We are lumping together different types of debts, and we don’t know what are the serious and really guaranteed and transparent debts, and what are shadow financing operations for which I don’t know why we should pay collectively as Europeans. more
The End of the End of Austerity
We’re All Greeks Nowby ROB URIE MAY 10, 2012
One of the joys of being American is that every new day is a clean slate—no history, no memories, no experiences, a complete blank. This may help explain why our national conversations serve their intended purposes while being entirely content-free. Newsflash to self-described liberal economists: austerity works! If your goal is to loot nations while putting their populations into permanent debt servitude, austerity is a real winner.
The IMF (International Monetary Fund) has been implementing “structural adjustment” programs, AKA austerity, for decades. It has usually “worked” for their bank clients in the sense that wealth extraction from victim nations to international banks took place. And given that victim nations tended to have both culpable leaders and “developing” nation status, the economic outcomes were rarely news in New York or Washington. Needless to say, outcomes were better for bankers than for their structurally adjusted victims.
When the ECB (European Central Bank) began discussing structural adjustment policies for Greece in 2009 there was little pretense that they would benefit the Greeks. European banks had loaded themselves to the gills with peripheral sovereign debt, in some measure to game the regulatory capital requirements in much the same way that Wall Street banks did with “AAA” rated garbage in the lead-up to the most recent financial disaster. And like their American counterparts, European banks had cynically lent money under fraudulent terms to people who could not pay it back. And European banks, like their American counterparts, require ongoing bailouts for the current economic order to stand.
Angela Merkel, Chancellor of Germany, leader of Germany’s center-right party and de facto head of the EU, faced rebellion by the German electorate over the proposed bailout of Greece before it became openly punitive. The line that austerity was the economic prescription needed to get Greece back on its feet was cynical apologia put forward by the dullard class of EU propaganda hacks. That American economists (Paul Krugman) debated the issue like it was a serious analytical dispute begs the question of where they have been for the last fifty years?
With only six decades of IMF history to draw from, the template being used in Europe (and in America) is (1) install or corrupt a political elite who will support extractive economic policies for the benefit of bankers, (2) indebt, or cause to become indebted, a naïve, oblivious or otherwise captive population who will accept, grudgingly or otherwise, the institutional convention that the debt is legitimate and must be repaid, (3) under a patina of intellectual legitimacy, implement openly extractive economic policies against entire populations for the benefit of said banks, (4) while the culpable elites retire to large houses behind high walls with their portions of the loot.
In the 1980s major New York banks (Wall Street) made loans to South American and African nations using this template. In some fair proportion the proceeds of these loans were promptly re-deposited into these same banks in the names of specific government officials. When the victim populations rebelled, arguing either that the debt was not legitimate and didn’t need to be repaid, or realized that the debt was a de facto form of slavery and couldn’t be repaid, these New York banks were bailed out by the U.S. government under the veil of “Brady Bonds” and the government took over as creditor to collect the debts.
This is the game now playing out in Europe and, in a less visible sense; the U.S. Wall Street bankers (including European banks) are conspiring with corrupt, naïve, duplicitous or powerless peripheral leaders to implement austerity policies on indebted populations. These populations are indebted because of banker duplicity and/or because of the financial bubbles and their aftermath that Wall Street created. These austerity programs are for the sole benefit of the banks. In the U.S. the Wall Street banks were bailed out without being made to write off the bad loans that never should have been made. This creates a similar dynamic where some fair proportion of Americans will now live out their remaining days in debt slavery to the banks.
In addition to multi-trillion dollar unconditional and ongoing bailouts the Obama administration recently also gave the banks retroactive and future immunity for straightforwardly criminal behavior through the mortgage “settlement” and has expanded the corrupt and usurious student loan business for the benefit of the banks. Add the looting of state, municipal and private pensions, the corporate takeover of the legislative process and full implementation of neo-liberal austerity economics at the state and local levels and the battle lines in the U.S. are clearly drawn. We are all Greeks now.
The difference between current experience and prior history is that the banks have now effectively eliminated the national borders that previously delineated the core-periphery class struggle. What we are experiencing has a long history and known outcomes. The intellectual masturbation behind the Keynesian- Austerian “debate” hides the class conflict that is driving this process. The Keynesians believe that renewed recession in Europe proves their case. But as the saying goes, tell it to someone who gives a shit. The turmoil in Europe is power politics (class struggle) hiding behind a thin veil of ideological difference. The bankers and their Austerian apologists know what they are doing. Too bad the same can’t be said for liberal economists. more