Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Thursday, February 26, 2015

Greek Finance Minister Varoufakis Wants Austerity ... for the Rich

SHARMINI PERIES, EXEC. PRODUCER, TRNN: Welcome to The Real News Network. I’m Sharmini Peries, coming to you from Baltimore.

The four-month extension secured by the Greek finance minister, Yanis Varoufakis, on Friday came with the condition that Greece provide a list of measures to quell the concerns of its international lenders, especially the German banks represented by the finance ministers in Brussels, who feared that Athens might bail on the promises to cut spending and implement austerity measures. So, on Sunday, Athens provided that list.

Now joining us to discuss the tabled plan is Michael Hudson. He is a distinguished research professor of economics at the University of Missouri-Kansas City. His upcoming book is titled Killing the Host: How Financial Parasites and Debt Bondage Destroyed the Global Economy.
Thank you so much for joining us, Michael.

MICHAEL HUDSON, ECONOMICS PROF., UNIV. MISSOURI, KANSAS CITY: Thank you.

PERIES: So, Michael, these international banks represented by the finance ministers now in Brussels, when they were in crisis and we the public treasury bailed them out, they had no problem with that. Why are they now refusing to assist Greece at a time of need when in fact some politicians and even the troika is being more receptive to what Greece is saying?

HUDSON: Because what’s at issue really is a class war. It’s not so much Germany versus Greece, as the papers say. It’s really the war of the banks against labor. And it’s a continuation of Thatcherism and neoliberalism.

The problem isn’t simply that the troika wants Greece to balance the budget; it wanted Greece to balance the budget by lowering wages and by imposing austerity on the labor force. But instead, the terms in which Varoufakis has suggested balancing the budget are to impose austerity on the financial class, on the tycoons, on the tax dodgers. And he said, okay, instead of lowering pensions to the workers, instead of shrinking the domestic market, instead of pursuing a self-defeating austerity, we’re going to raise two and a half billion from the powerful Greek tycoons. We’re going to collect the back taxes that they have. We’re going to crack down on illegal smuggling of oil and the other networks and on the real estate owners that have been avoiding taxes, because the Greek upper classes have become notorious for tax dodging.

Well, this has infuriated the banks, because it turns out the finance ministers of Europe are not all in favor of balancing the budget if it has to be balanced by taxing the rich, because the banks know that whatever taxes the rich are able to avoid ends up being paid to the banks. So now the gloves are off and the class war is sort of back. Originally, Varoufakis thought he was negotiating with the troika, that is, with the IMF, the European Central Bank, and the Euro Council. But instead they said, no, no, you’re negotiating with the finance ministers. And the finance ministers in Europe are very much like Tim Geithner in the United States. They’re lobbyists for the big banks. And the finance minister said, how can we screw up this and make sure that we treat Greece as an object lesson, pretty much like America treated Cuba in 1960?

PERIES: Hold on, hold on for one second, Michael. Let’s explain that, because Yanis Varoufakis, the finance minister of Greece, is very well-briefed and very well-positioned to negotiate all of this. Now, why did he think he was negotiating with the troika when in fact he was negotiating with [crosstalk]

HUDSON: Because officially that’s who he’s negotiating with. He went and he took them at their word. And then he found out—and yesterday, Jamie Galbraith, who went with him to Europe, published in Fortune a description saying, wait a minute, the finance ministers are fighting with the troika. The troika don’t have their story straight. The troika and the finance ministers are all fighting among themselves over what exactly is to be done. And to really throw a monkey wrench in, the German finance minister, Schäuble, said, wait a minute, we’ve got to bring in the Spanish government and the Portuguese government and the Finnish government, and they’ve got to agree.

Well, all of a sudden the position of Spain, for instance, is, wait a minute, we’re in power, we’re a Thatcherite neoliberal party. If Greece ends up not going along with austerity and saving its workers, then Podemos Party in Greece, in Spain, is going to win the next election and we’ll be out of power. We have to make sure that Varoufakis and the SYRIZA Party is a failure, so that we ourselves can tell the working class, you see what happened to Greece? It got smashed, and we’re going to smash you if you try to do what they do; if you try to tax the rich, if you try to take over the banks and prevent the kleptocracy, there’s going to be a disaster.

So, obviously, Greece and Portugal want to impose austerity on—Spain and Portugal want to impose austerity on Greece. And even Ireland now has chimed in and said, my God, what have we done? We have imposed austerity for a decade in order to bail out the banks. Even the IMF has criticized us for going along with Europe and bailing out the banks and imposing austerity. If SYRIZA wins in avoiding austerity in Greece, then all of our sacrifice of our population, all of the poverty that we’ve imposed, all of the Thatcherism that we’ve imposed has been needless, and we didn’t have to do it.

So there’s a whole demonstration effect, which is why they’re treating Greece almost as a symbol for—the class war as a symbol for labor saying, wait a minute, we don’t have to impose austerity, we can collect taxes from the tax dodgers.

Remember a few years ago when Europe said, Greece owes 50 billion euros in foreign debt? Well, it turned out that the central bank had given to the Greek parties a list called the Lagarde list (for Christine Lagarde, head of the IMF) of all of the tax dodgers, Greek tax dodgers who had Swiss bank accounts. Well, the Swiss bank accounts that the tax dodgers had ended up to about 50 billion euros. So Greece could pay off the debt that it’s borrowed simply by moving against the tax dodgers.

But, of course, this would be at the expense of the Swiss banks and the other banks. So in effect the banks would be paying themselves. And they don’t want to pay themselves. They want to squeeze it out of labor and let the tax dodgers and the Greek tycoons succeed in stealing the money from the government. So, in effect, the troika—not the troika, the finance ministers, really, are backing the tax dodgers and the crooks in Greece that SYRIZA is trying to move against, whereas the IMF is actually, for once, taking a softer position towards the whole thing. And even President Obama has chimed in by apparently calling German Prime Minister Merkel and saying, look, you can’t just push austerity beyond the point, because you’re going to push them out of the euro, and you’ll push them out of the euro on SYRIZA’s terms, where SYRIZA can then turn to the Greek population and say, wait a minute, we did what we promised here. We stopped the austerity. We didn’t withdraw from the euro; we were driven out as part of the class war.

PERIES: Michael, earlier you were also making an analogy between what’s going on in Greece and what happened to Cuba [crosstalk]

HUDSON: Cuba under Castro had an alternative social system. He wanted to spread the wealth around (it was a Marxist system) in his way. He wanted to get rid of really the crooks around Batista who were running the country, the rich who didn’t pay taxes, and he wanted to have a social revolution there. So the American government said, wait a minute, if Cuba succeeds, then they’re going to be a revolution all throughout Latin America. Latin Americans can realize, wait a minute, we can take over the American sugar companies there, we can take over the American banana companies there, we can make the rich pay the taxes and the corporations pay the taxes and the exporters pay the taxes, not simply the labor. We can unionize labor, we can educate it, and if Cuba can educate labor, that would be a disaster for the neoliberal plan, because if labor’s educated and has a program, then it’ll realize that there is an alternative to Thatcherism.

Well, this is the problem that Varoufakis wrote about in an article earlier this month in The Guardian on how he came out of the Marxist movement. He said, the whole problem that we’re facing in Greece is that if we withdraw from the euro, if we’re forced out, there’s going to be an economic trauma, and the left wing throughout Europe, as in America, doesn’t really have an economic program. It has a political program, but not really an economic program. And the only alternative to SYRIZA with an economic program are the New Dawn movement and the neo-Nazis. And what Varoufakis is worried about is he’s not only contending with the European finance ministers on one front, but he’s contending on the Greek front with the right-wing parties that are the nationalist parties, like Marie Le Pen in France, the parties that are saying, yes, we have an alternative: withdraw from the euro. But it’s not the kind of withdrawal and alternative that the left wing would have, because there really isn’t much of a left wing in Greece, apart from the small SYRIZA party, certainly not Papandreou’s socialist party, and certainly not the socialist parties nominally socialist party in Spain, which is a Thatcherite party, and it’s certainly not the British Labour Party, which has gone the way of Tony Blair.

So the problem is that Varoufakis has about four months to educate the Greek public in the fact that, yes, there is alternative, here’s what it is. The alternative to neoliberalism doesn’t have to be right-wing nationalism. There is a socialist alternative, and we’re trying to work out as many arrangements we can, so if we’re driven out of the euro and if the banks go under, we have a fallback plan. He can’t come right out and say this is the plan right now, because it has to be made very clear that it’s the finance ministers of Germany, Spain, Portugal, Ireland, and Finland that are driving Greece out, not the IMF, not the European Central Bank, and not even centrist governments.

PERIES: Michael, thank you so much for joining us on The Real News Network today, and we’ll be following this story at The Real News. So do join us very soon again.

HUDSON: It’s always good to be here. Thank you.

PERIES: Thank you very much for joining us on The Real News Network.

Original Article
Source: truthdig.com/
Author: Alexander Reed Kelly

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