“austerity” is too good for the bankers: their punishment should fit their crimes

Ever since I began writing this blog and long before that, one thing has been at the forefront of the political agenda:– “Austerity measures”. The quotation marks are ugly but essential. Those annoying little curly tadpoles hopefully raising the question: what does this phrase actually mean and what is it hiding? Perhaps a dictionary might help us:

Austere: grave, sober, or serious; self-disciplined, abstemious, or ascetic; severely simple or plain. Austerity is then, more often than not, considered ennobling; the word even carries implicitly wholesome religious connotations. The life of a monk is austere. The saints too practiced austerity. And Christ himself is said to have led an austere life. The religious justification is that obsessing about material comforts misses the bigger spiritual picture, but I am not intending to argue either for or against that opinion. My contention here being simply that the meaning of “austerity measures” relies heavily although unconsciously on these traditional ideals. In more purely secular terms, tightening the belt being very often regarded as a good thing.

There is, of course, a constantly expanding menagerie of euphemisms and doublespeak. Civilian casualties in war are now simply “collateral damage”; war itself becoming “kinetic action”; “enemy combatant” meaning a prisoner of war denied their rights; “theater” the war zone; whilst kidnap and torture have been reduced to “extraordinary rendition”. All of these are designed to hide the indefensible truth. But “austerity measures” achieves more again. It doesn’t merely hide the truth, but almost reverses it.

First, let me translate “austerity measures” into useful Standard English: “austerity measures” means enforced poverty. There are no ugly tadpoles required here, because this is quite literally the meaning of the phrase. With the proper words in place, the spell is undone and the truth becomes unavoidable and as clear as day. “Austerity” means being pushed down. Being forced to submit. In short, there is nothing edifying nor ennobling about stripping ordinary people of their very basic and essential public services and economic rights.

“Austerity measures” — what are they good for? Absolutely nothing! You cannot rescue any economy during a depression by impoverishing the people of that country. We can understand this through applying basic economics, or we can find the empirical proof in so many cases where the IMF and the World Bank have applied such “measures” in the past. By making people poorer, personal debt increases as does government debt. As people stop spending, others are forced out of work. The economy shrinks and tax revenues are driven down. Eventually the debt repayments become impossible to maintain. It is a downward death spiral, as the latest report from Greece on Democracy Now! shows all too clearly:

Click here to watch the video or read a full transcript of the same report [from Feb 14th] on the Democracy Now! website.

Greece has now been brought to its knees by imposed “austerity”, and so long as its main political parties continue taking the same course, the situation will quickly worsen. Society is already breaking down and sooner or later the whole political system will surely follow. A revolution in Greece of one kind or another is coming. We can only pray that it’s a good one.

Wherever severe “austerity” moves to next, whether it is Portugal, Ireland, Spain, Italy or here in Britain, the same results must be expected. Oh, and if you think that Greece has a more serious debt problem than anywhere else, then it’s time to think again. Japan has a far higher level of public debt than Greece (see here), and if you also include business and bank debts, then the picture looks very different again. This graphic, published on zerohedge.com [from November 2011] shows very clearly which nation is currently leading in the global debt race to the bottom (and it’s not Greece – not by a long chalk):

Owe your banker £1000 and you are at his mercy; owe him £1 million and the position is reversed. The economist John Maynard Keynes called this ‘the old saying’. So old that it seems to have been long since forgotten. These days, as Keynes would no doubt be surprised to learn, there are some banks deemed simply ‘too big to fail’. Which is, of course, precisely how we got into this mess in the first place, as well as the reason we remain stuck in it.

The ‘megabanks’ have failed, trading poorly, making bad investments and decisions, whilst influencing economic policies in ways that are now proven to be destructive and against the interests of most on the planet, and all the time conducting their operations way beyond their actual means. They are all bankrupt, having “invested” in a load of completely worthless paper which they prefer to call “toxic assets”. And here it is important to understand that in the topsy-turvy world of finance, all debts held are considered to be ‘assets’, even if those debts cannot be repaid, in which case they are regarded as ‘toxic’, whilst remaining as ‘assets’ nonetheless!

The question now being asked is will the latest 130 billion euro bailout save the Greek economy, and the answer to that question is a resounding no. It will no more save the Greek economy than the 110 billion euro bailout did less than two years ago, back in May 2010. Greece will default eventually. Meanwhile the Greek people will have received no benefit from any of these huge bailouts, since the money is only ever used to pay off the bankers’ losses. And yet, when we trace back those losses, what we discover is that they were a product of unquestionably criminal practices. William Black, a highly respected former financial regulator, has explained more than once how the whole financial system became a Ponzi Scheme — and Black is far from a lone voice. Click here to read an earlier post on William Black.

Yet the bankers have so far remained immune from any prosecution. Instead of prison they are receiving continued bailouts, whilst also picking up private perks in the form of bonuses. So how do they get away with it? Simple – they run the show. And evidence of this banker occupation is all around. Goldman Sacks, for instance, are everywhere.

They have not only ‘conquered Europe’, as an extraordinary article in the Independent put it, but long since embedded themselves in other positions of power and influence including, perhaps most significantly, the White House. More recently, they have openly installed unelected puppets to run Greece and Italy. Which is how the Ponzi Scheme that Black and others have uncovered remains officially unchallenged, unhampered and unabated. The bailouts keeping the crooked casino afloat a little longer, whilst the debt contagion spreads far and wide, generating renewed opportunity for asset-stripping along the way. The Greeks are the scapegoats, and also the first victims.

Two years ago, speaking on Al Jazeera, Max Keiser pointed out [7:30 minutes in] that Goldman Sacks had illegally colluded with the Greek government in order to hide debts in their bid for entry into the Eurozone:

The same collusion was more recently picked over in this detailed BBC report from Nick Dunbar, author of “The Devil’s Derivatives”. According to Dunbar’s version of events, however, the secret deal that had been fraudulently cooked up to conceal the true level of Greek government debt was “perfectly legal”:

In his latest book Vultures’ Picnic, investigative journalist, Greg Palast, also delves into Goldman Sacks chicanery. Hidden within documents that he took great pains to authenticate, he discovers evidence that the dodgy deal was a deliberate plan to force the Greek nation into bankruptcy and a fire-sale:

Greece’s economy blew apart because a bunch of olive-spitting, ouzo-guzzling, lazy-ass Greeks refuse to put in a full day’s work, retire while they’re still teenagers, pocket pensions fit for a pasha; and they’ve gone on a social-services spending spree using borrowed money. Now that the bill has come due and the Greeks have to pay with higher taxes and cuts in their big fat welfare state, they run riot, screaming in the streets, busting windows and burning banks.

I don’t buy it. I don’t buy it because of the document in my hand marked, “RESTRICTED DISTRIBUTION.”

I’ll cut to the indictment: Greece is a crime scene. The people are victims of a fraud, a scam, a hustle and a flim-flam. And––cover the children’s ears when I say this––a bank named Goldman Sachs is holding the smoking gun.

You can read a little more about Palast’s investigation, and what it reveals about the Greek crisis here and also on page 27 of chapter one.

There has been a loud call (one that I have also joined in) for the bankers to pay their way in the form of Toban Taxes and so forth, but frankly this is not enough. “Austerity” is too good for bankers. Nothing short of a full criminal investigation is actually needed, with a debt moratorium imposed for as long as that investigation takes. A cancellation of all odious debts should then follow.

Until that time, and as the people of Greece and elsewhere continue to suffer, we would be wise to stand shoulder to shoulder with them. They are the unfortunate recent victims in an ever-expanding and increasingly merciless financial war. For “bailouts” read “more debt”, whilst “austerity measures” means nothing other than economic “shock and awe”.

On the positive side, even parts of the mainstream media are finally beginning to awaken to the crisis now taking hold in Greece and elsewhere. Here, for instance, is Paul Mason, the economics editor for BBC‘s Newsnight, taking a break from his usual duties to speak on Democracy Now! (and to plug his book, obviously) last Wednesday [Feb 22nd]:

Paul Mason appears to be under the unfortunate delusion that only he and Glenn Beck (of all people) are making the connection between the deepening financial crisis and the rise of popular movements across Europe, North Africa and America. If only Mason had figured out how to navigate the internet, he’d be so much better informed.

Click here to watch the video or read a full transcript on the Democracy Now! website.

Additional:

As for the truth about just how lazy the Greek’s really are, here’s a BBC news article from Feb 26th:

But the statistics suggest the country has not lost its way due to laziness. If you look at the average annual hours worked by each worker, the Greeks seem very hard-working.

Figures from the Organisation for Economic Co-operation and Development (OECD) show that the average Greek worker toils away for 2,017 hours per year which is more than any other European country.

Out of the 34 members of the OECD, that is just two places behind the board leaders, South Korea.

On the other hand, the average German worker – normally thought of as the very epitome of industriousness – only manages 1,408 hours a year. Germany is 33rd out of 34 on the OECD list (or 24th out of 25 looking at the European countries alone).

Europe’s top 10 and bottom 10

Most hours worked Most productive Least hours worked Least productive
1 Greece Luxembourg Netherlands Poland
2 Hungary Norway Germany Hungary
3 Poland Ireland Norway Turkey
4 Estonia Belgium France Estonia
5 Turkey Netherlands Denmark Czech Rep
6 Czech Rep France Ireland Portugal
7 Italy Germany Belgium Slovakia
8 Slovakia Denmark Austria Greece
9 Portugal Sweden Luxembourg Slovenia
10 Iceland Austria Sweden Iceland

Looking though the table above, you might notice a negative correlation between long working hours and increased productivity. This exposes another pernicious myth, as we can clearly see that it’s far better to work clever than to work hard.

Click here to read the full article which is entitled “Are Greeks the hardest workers in Europe”, written by Charlotte McDonald.

*

Click here to add your signature to the statement of solidarity with the people of Greece backed by trade union leaders, members of Parliament and campaigners published in the Guardian.

The people of Greece face an unprecedented economic and political crisis. They are being driven to poverty and mass unemployment by the demands of the so-called Troika – the European Union, the European Central Bank, and the International Monetary Fund which has imposed Lucas Papademos, formerly of Vice-President of the ECB, as Prime Minister.

Hospitals in Greece are running out of basic medicines, nearly half of all young people are unemployed, workers in some sectors have not been paid for months, and many are forced to resort to soup kitchens or scavenge from rubbish dumps.

Now the Troika demands a cut of 23% to the minimum wage, the sacking of tens of thousands of public sector workers and the decimation of pensions which have already lost nearly 50% of their value. International capital is asset stripping an entire country and ripping apart its social fabric.

Greece is at the cutting edge of the austerity measures that are being introduced across Europe. All the evidence shows that while these measures may protect the interests of the rich, they just make matters worse for the majority of the population. What happens in Greece today we will see in Portugal tomorrow and in Ireland the day after. In Britain, the Coalition government is pursuing similar measures which will see workers earnings cut, working longer for a smaller pension, and the dismantling of the NHS along with other public services.

Mikis Theodorakis, famous Greek composer of Zorba’s Dance, and Manolis Glezos, veteran resistance fighter against the Nazi occupation who took down the swastika from the Acropolis during the 2nd World War and replaced it with the Greek flag, have issued a statement calling for a European Front to defend the people of Greece and all those facing austerity.

The Coalition of Resistance and the People’s Charter have decided to support this call and agreed to work with trades unions, campaigns and parties across Europe to establish a European Solidarity Campaign to defend the people of Greece. The campaign aims to organise solidarity and raise practical support for the people of Greece; they cannot be made to pay for a crisis for which they are not responsible.

 

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1 Comment

Filed under analysis & opinion, austerity measures, financial derivatives, Greece, Greg Palast, Japan, Max Keiser, Uncategorized

One response to ““austerity” is too good for the bankers: their punishment should fit their crimes

  1. Marta

    Excellent post. We’re surrounded by such a web of misinformation that a clear-sighted analysis like yours is most welcome. Here in Catalonia and in Spain the propaganda for so-called “austerity” is certainly appalling, and although the cuts to our meagre welfare state and workers’ rights are sometimes more neutrally sold to us as mere “economic readjustment” (you see we have our own brand of Newspeak here), the idea that we must suffer for our sins is also pushed by politicians and the media. But luckily not everyone is fooled, and discontent grows –did you hear about the secondary school kids’ protest against education cuts in Valencia and the way they were treated by the police? http://www.guardian.co.uk/world/2012/feb/21/valencia-police-students-standoff-spain-protests

    Like

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