Greece Is Just The Beginning Of The Great Austerity Backlash - HuffPo

[WillyT]

Greece Is Just The Beginning Of The Great Austerity Backlash
Howard Fineman - HuffPo
Posted: 07/06/2015 7:44 pm EDT Updated: 1 hour ago

<snip>

WASHINGTON -- The global politics of austerity seeped into the press room of the White House on Monday, the day after the Greeks voted overwhelmingly to reject a harsh bailout deal with Europe.

Reporters pressed Josh Earnest, President Barack Obama’s spokesman, for details of what his boss thought of the vote and of the bailout deal, and whether he agreed with 2016 Democratic presidential candidate Bernie Sanders that the latter was outrageous. Earnest answered with streams of polite words that added up to ... nothing. Obama was staying out of the issue, as he apparently had promised German Chancellor Angela Merkel he would when they met at the G-7 summit recently.

Obama favors “a package of relief and reform,” was all Earnest would say.

Nevertheless, the exchange with reporters in Washington was another of the many signs that the debate over the power that should accrue to money -- and what those who wield it can fairly demand -- is spreading around the world.

It’s a new echo on a global scale of the politics of a much earlier, but in some ways remarkably similar, era in the U.S. As the U.S. became a continental economy in the late 19th century, with vast new hordes of wealth built in railroads, coal, electricity and communications, a political backlash arose. The new “money power” was judged too big and uncontrollable: an engine not of prosperity, but of inequality and corruption. The backlash launched America's Progressive movement, which among other reforms pushed laws to rein in the power of big corporations in the interests of ordinary people.

Now that the planet’s economies have essentially become one, and the world’s top dozen banks control $30 trillion in assets, the callous demands of a new and even larger “money power” is starting to spark a worldwide backlash.

<snip>

More: http://www.huffingtonpost.com/2015/07/06/austerity-politics_n_7739788.html

[EL34x4]

1. Greece, the land of massive income tax evasion...

...luxury tax evasion, property tax evasion, disability fraud, freeloading of public services, full salary retirements at age 50, pensions paid to dead people, and on and on...

The bill has come due, Plato. It was good while it lasted, I have no doubt.

[PSPS]

4. Of course, all of your accusations are hogwash.

You may be interested to know that the "bailout" engineered by the unelected Troika installed in Greece mandated that most of the loaned funds would be used to pay the same lenders. In other words, it was more of a bank bailout than anything else. If the banks were willing to take a modest "haircut," none of this would be happening. But god forbid any big money investor lose money on a speculative investment. ON NOES!!11!!

The reason they'll try to destroy Greece over this is that, if they don't, the same growing backlash that is brewing in Spain and elsewhere, all with elections this year, will follow the trend and the fat cats might not get all the money! ON NOES!!1!!

What we need is more (occupied) lamp posts and less "austerity."

[EL34x4]

5. Yes, of course. All bullshit.

Greece was a land of placid, benevolent olive farmers living off barter and working their fingers to the bone until the evil Germans came by and loaned them money.

C'mon now. Look at it. Do you want to retire with a full salary at 50? Yeah, so would I.

[JDPriestly]

17. As I understand it Goldman Sachs and a lot of rich people allegedly loaned Greece the money and

issued derivatives on the loans and then sold the debt around. At one time Carlos Sims is alleged to have owned some of the debt at one point. The IMF during the administration or employment of Domenique Strauss-Kahn (remember him) did a study and determined that austerity in Greece would further cripple the economy. I heard that Strauss-Kahn allegedly discussed the results of that study with Srakozy of France. The rest is history. At one time, I also heard, the French owned some of the debt.

So the debt is a hot potato that is making its rounds. And of course, servicing the debt is swallowing the tax revenues of Greece.

Something similar happened to I think it was Jefferson, Alabama and a city in Germany. So one of the government in Greece did commit a sort of fraud on the Euro community. But why didn't the Euro members do better diligence in looking at Greece's books? And a lot of wealthy people in Greece ran off with some of the bail-out money.

The fact is that the austerity imposed by the Troika did not help. It simply shrank the GDP and therefore the tax base of Greece making it even more difficult for Greece to pull itself up and out of debt.

Someone suggested having a debt meeting like the one that gave so much of Germany's debt and the debts of some other countries following WWII. I think that dealing with the issue of debt that is common to a number of countries in the world would be a good idea.

In the US, our Constitution authorizes Congress to establish a system of bankruptcy laws. Many of the people who came to the US, some as indentured servants, in the early days, even in the colonial days, were the losers in the debt-collection game that is played and was played in Europe.

American values permit bankruptcies under certain circumstances.

If Greece is excluded from the economy of Europe and punished for its "bad behavior," it will never be able to pay off the debt. Might as well forgive some of the debt, make a payment plan for a reasonable amount of it and then change world banking and lending laws to help prevent a replay of the excessive debt situation that is troubling much of the world.

The role of hedge funds and very wealthy people in the Greek debt crisis. Who made the profit from the original loans?

https://video.search.yahoo.com/video/play;_ylt=A2KIo9TNuJxVPCoANyT7w8QF;_ylu=X3oDMTByZWc0dGJtBHNlYwNzcgRzbGsDdmlkBHZ0aWQDBGdwb3MDMQ--?p=William+Black+Greek+Debt+Real+News+Network&vid=2681e5ff1105d22e79c790aa922a3cfc&turl=http%3A%2F%2Fts3.mm.bing.net%2Fth%3Fid%3DWN.vvgJ%252f4wSAjv%252f6gUk0V8NWw%26pid%3D15.1%26h%3D255%26w%3D450%26c%3D7%26rs%3D1&rurl=http%3A%2F%2Fon.aol.com%2Fvideo%2Fus-hedge-funds-get-bailed-out-if-greeks-pass-bailout-referendum--1-2--518916806&tit=US+Hedge+Funds+Get+Bailed+Out+If+Greeks+Pass+Bailout+Referendum+%281%2F2%29&c=0&h=255&w=450&l=502&sigr=1373n5pbj&sigt=1258fg8n9&sigi=12onu0ja7&age=1435734000&fr2=p%3As%2Cv%3Av&fr=tightropetb&tt=b
Here are some sources that I am relying on in my post.

About Strauss-Kahn and the Greek crisis:

http://www.huffingtonpost.com/2011/05/16/strauss-kahn-imf-greece-recovery_n_862335.html

We take for granted our legal system, our tradition of recording and transferring title to property. Greece was a part of the Ottoman Empire until 1821.

From 1453 with the fall of Constantinople until the revolution in 1821 Greece is under the rule of the Ottoman Turks who control the entire middle east, and the Balkans as far as the gates of Vienna.

http://www.ahistoryofgreece.com/turkish.htm

Greece is included in the Euro community, but does not have the same kinds of legal traditions and well regulated economy that is the rule in Northern Europe.

As recently as 1973- (if I recall correctly) 1974, Greece was ruled by a military junta that prohibited the importation of news magazines and newspapers. It does not have the long, liberal, well organized democratic traditions that we have or that the United Kingdom has. Yet Northern Europe took it into the Euro on faith. They did not do due diligence, and now everyone is shocked, shocked, shocked that things did not work out.

Democracy and good government must be fought for, sacrificed for. They are always a work in progress. They are that here too.

So don't be too harsh on Greece. Germany and the other members of the Troika should have entered into the loans to Greece with open eyes.

This is a situation very similar to the subprime loans. Lenders are responsible for the money they lend. They are responsible for making sure that when they lend other people's money, they make a good assessment of the borrowers' ability to pay.

This is the continuation of the irresponsibility of lenders that led to the 2008 crisis. In fact, it is part of that crisis. Yes. Germany is as much at fault as every other person involved in this crisis.

I agree that a debt meeting that forgives certain debts and sets enforceable conditions on that forgiveness is the answer.

[EL34x4]

6. What we need are people paying their income tax.

Odd point to be arguing on a Democratic forum.

Or do you reside in some fantasyland where everything should be free?

Full disclosure: I like that fantasyland.

[hill2016]

12. you

are factually wrong.

Private sector holders of Greek debt had their bonds written down by 75% of market value in 2012.

Do you want to adjust your outrage in light of the facts?

[truebluegreen]

7. Your concern is noted.

Enjoy your stay.

[cemaphonic]

9. Yeah, I know that Americans (and DUers especially) love to root for an underdog

but I feel like people here are drunk on Syriza's rhetoric.

The Greek economy looks like if you took a libertarian's parody of a welfare state, and a socialist's parody of a Tea Party utopia, and said "yes, please" to both.

I think it will probably be for the best for Greece in the long run to default and go back on the drachma, but it's kind of horrifying to see all of the celebrating when Greece is almost certainly due for at least a few years (probably more) of economic pain that will make the previous austerity look like a golden age.

[JCMach1]

10. So, EU banks didn't hand out loans like candy across the Southern EU before the 2007 meltdown...

In Greece, those loans were greased by Right-wing governments...

The extreme austerity measures have been pushed because the Northern European governments refuse to force Dutch and German banks to face their bad Greek government debt.

[madville]

13. Greece owes France and Italy a bunch as well

I think somewhere around 80 billion.

At this point another few billion injected into Greece is just kicking the can, they have to default at some point and start over, it's going to hurt. They have to decide if they want to rip the bandaid off (default) or pull it slowly (austerity). One thing is certain, no one is going to loan them any more substantial amounts of money.

[The2ndWheel]

14. Someone was accepting that candy without asking any questions

Where were the people of Greece standing up to their leaders who weren't acting in their best interests? Home of democracy and all that. They weren't voting against borrowing money, that's for sure. They were happy to take it.

Everyone takes advantage of a situation until it stops working, and then nobody on either side wants to lose money. Then it's a blame game of you're a bad borrower, and no, you're a bad lender.

[JCMach1]

15. Seems like there is blame on both sides... So, why don't the European banks also have

to make good on their bad loans.

In addition to the Greek people...

[jwirr]

16. Much of our distrust of the bankers comes from the history of banks throughout the years and

illustrated in Naomi Klein's book "Shock Doctrine". And for many of us we suspect that is what is happening in Greece. The dishonesty of the governing party that made the loans is all part of it. The leaving the little people to pay for it is to. And the selling off of the countries assets fit the picture exactly.

For me it is not so much rooting for the underdog as objecting to whole Milton Freidman scheme.

[JDPriestly]

18. Remember. Greece was a part of the Ottoman Empire until 1821.

It does not have the benefit of the long, Democratic and well organized legal traditions we and the British have.

As recently as 1973 or 1974, Greece was ruled by a junta of military men and did not permit the importation of foreign news media.

These are historical facts that lenders should have thought about when lending money to Greece.

The situation in Greece is relevant to our political conversation in the US. So many on the right blast government as an intrusive, unnecessary pest. Well, if you do not have a well organized government that regulates transactions among citizens, records deeds, makes rules about the collection of bills and taxes, etc., you end up in the situation that Greece is in.

Good government is about avoiding the disorder in Greece. It is party about encouraging economic development. Rightfully so. Greece is an example of a country with an ineffective system of government.

And our country, in the hands of right-wing extremists called Republicans, is headed in the same direction. Talk about debt? Bush II fought two wars on the credit card of America. Two wars, at least one of which should never, never have been fought and was fought on what turned out to be, shall we say, untruths.

Let Greece's situation be a warning to the American right.

[marmar]

2. Yep. Spain, Portugal ............

........ the greatest fear of the ECB and the rest of the global finance gangsters is that this will spread.

[WillyT]

3. Yep... And It Is Spreading...

[truebluegreen]

8. Good.

[raouldukelives]

11. Kickin this.