mother earth's Journal
Member since: Wed Nov 10, 2004, 05:08 PM
Number of posts: 4,950
Number of posts: 4,950
We need a progressive movement that will serve to end the welfare state of the corporations, bring a halt to disaster capitalism, and return gov\'t representation to We The People. Campaign Finance Reform is imperative.
Published on Tuesday, April 21, 2015
by Democracy Now!
Greece’s Yanis Varoufakis: The Medicine of Austerity Is Not Working, We Need a New Treatment
'It’s a question of establishing what needs to be done in order to return Greece to a sustainable path'
With the debt clock ticking, Greece is fast running out of money. The country has ordered all state bodies to place their cash reserves in the nation’s central bank, the Bank of Greece, as it struggles to stay afloat. Greece is supposed to receive the last installment of its bailout funds from European creditors, but the country’s new leftist, anti-austerity Syriza party has expressed concerns about its terms. The creditors are reportedly pressuring the country to restructure its labor market and curtail its pension system; Syriza has instead done the opposite by increasing pension payments to lower-wage workers. On Friday, eurozone finance ministers will decide whether to release emergency funds to Greece. Without the funds, Greece may default on its debt payments in coming weeks and put its membership in the eurozone at risk. We go to Athens to speak with Greek Finance Minister Yanis Varoufakis.
The official version, until we got elected, was that Greece was on the mend, that austerity was working. Our proposition to the Greek people—on which basis we were elected, were given a mandate—was the opposite, that the medicine wasn’t working. It wasn’t just that it was bitter and we didn’t want to take it; it was that it was toxic and it was making a bad thing worse. It was worse than the disease. So, this is what’s at stake here. You asked me, "How high are the stakes?" It’s a question of establishing what needs to be done in order to return Greece to a sustainable path. — Yanis Varoufakis
Posted by mother earth | Wed Apr 22, 2015, 04:45 PM (6 replies)
Remember when in 2008 Hank Paulson’s U.S. Treasury Department decided to let Lehman Brothers go down, pour encourager les autres, and then found that it brought les autres crashing down too? Well, Germany and the other euro-zone members are now trying to repeat that brilliant trick with Greece. If you were looking for where the next big financial meltdown might begin, you need look no further. Chances are, it is about to happen in Europe.
If it does, the political consequences could be even worse than last time. Strangely enough, the political risks are easier to evaluate than the economic ones. The risk of a Greek default or exit from the euro begin in Greece: If the left-wing party that runs the new government, Syriza, is discredited, following the discrediting of the old establishment parties, this risks strengthening the fascist alternative, Golden Dawn.
Then, the political risk moves rapidly to France, which is the scariest country in Europe right now. Already, the 25 percent share of the opinion polls held by the anti-immigrant, anti-EU Front National party of Marine le Pen is scary. But imagine what a new political and economic crisis in Europe might do for Ms. le Pen: her chances of becoming France’s president in 2017 would jump from remote to conceivable.
Another risk is that Europe’s banking system remains fragile, not cleaned up and reinforced in the way America’s banking system has been since 2008. As long as the European Central Bank stands ready and able to print money in order to provide the banking system with liquidity this should remain true. But what if that were to be blocked? Which it might be, if German politics react badly and severely to a Greek default.
Then, we could be in a repeat of 1931, when the collapse of a European bank, CreditAnstalt of Vienna, brought about a sudden worsening of the depression that was taking hold in America and Europe. We are all connected now.
This isn’t the way things looked, quite recently. Back in January, when Greek voters elected Syriza on a mandate to get a better deal from its euro-zone partners and the International Monetary Fund over its vast public debts, the favored metaphor of most commentators was the game of chicken.
Greece’s photogenic prime minister, Alexis Tsipras, and especially its economics professor-turned-sex-symbol finance minister Yanis Varoufakis talked tough, and their German counterparts Angela Merkel and Wolfgang Schaueble talked tough in return. But everyone assumed that in the end there would be a compromise and not a car crash.
The euro would survive. Greece would not default, would pretend to continue to repay its public debts (now 170 percent of GDP, a colossal level), and would be stealthily given some economic life support. This would buy time for the Greek economy to start growing more rapidly, convincing the Greek public to accept reforms such as privatization.
That acceleration in growth would convince the German public that a country they previously saw as lazy good-for-nothings was willing to play by the rules. A little money would be provided to ease Greece’s transition from slothful parasite to competitive modern nation. Everyone would live happily ever after.
It was a comforting fiction. But now, three months later, reality is about to reassert itself. The car crash is looking the much likelier outcome. And the scary thing is that both sets of drivers appear as if they might even want it.
Which means that they are both assuming that the political and economic consequences of Greece either defaulting on its sovereign debts, or leaving the euro, or both, would be bearable and even worth bearing.
It would be nice if this pessimistic analysis were to be proved wrong, and that a compromise were about to be unveiled. The reason why that at present looks unlikely is not just that there is no sign of it happening: such is always the nature of bargaining, at any level. No, the reason for pessimism about a compromise is that as time has gone on, the two sides appear to have found themselves with less room for manoeuver, not more. They both look trapped.
Greece, after all, has undergone an extraordinary economic and political shock since the global financial crisis struck in 2008. Its clientelistic, extravagant political culture, which had been no secret, hit a wall: it ran out of money. The result was a slump in GDP of more than a quarter, a jump in unemployment to nearly 30 percent of the workforce (roughly, U.S. Great Depression levels), and a huge budgetary contraction. The question for the new Syriza government has been: what more could we do?
Posted by mother earth | Wed Apr 22, 2015, 02:56 PM (3 replies)
Dimitri Lascaris says debt relief is not on the table, but unnamed European government officials are indicating some modest short-term concessions might be in order - April 21, 2015
PERIES: So Dimitri, tell me, Troika and all of the European institutions are all leaning on Greece heavily. It is like trying to draw blood from a stone. What do you make of this pressure?
LASCARIS: I think that they've begun to conclude that they've pushed the Greek government as far as it's prepared to go. One line in the sand that the Greek government does not appear prepared to cross is further reductions in pensions. The Greek government also is not prepared to make any more hard, definitive commitments in respect to the privatization program. What it has said is that it won't undo privatizations that have been completed and will not disrupt those that are in progress, although there's some question as to what terms it would be prepared to accept with respect to those that are in progress but not completed. The Greek government has not committed to going ahead with uncommenced privatization processes. So that's a red line also that they seem to have drawn.
And I think that the eurozone leaders are coming to the conclusion that they've pushed Greece very far, the Greek government. It's as far as they're prepared to go. And it's time for them to begin making some modest concessions to achieve some kind of a short-term deal that in the end will not solve the long-term crisis.
The reason why I say that, that there are signs that they are prepared to make some modest concessions at this eleventh hour, is you're seeing reports in the media--for example in Bloomberg, three officials, unnamed officials of the eurozone governments have said, you know, that as long as Greece doesn't backtrack on commitments made thus far and as long as it does something, without specifying what that something may be, to implement further reforms in addition to those so-called reforms, in addition to those that have been implemented thus far, then a deal can be done.
This is, this is new. But it's extremely modest. And from my perspective what got lost very early on in the conversation and is not on the table at this stage, a critical, key component by the Greek government's own account is debt relief. That seems to have evaporated. And without any long-lasting debt relief, any substantial reduction in Greek debt, a write down of the Greek debt, you're simply engaging in the, to borrow the words of Minister Varoufakis himself, in a game of extend and pretend. And this crisis will inevitably erupt in the future.
PERIES: Now Dimitri, in the hour-long conversation we had just aired on The Real News, conversation between Yanis Varoufakis the finance minister and Joseph Stiglitz the economist, Stiglitz actually asked Varoufakis, he says within the framework that currently exists is, you know, what is it that can be done? And I was shocked at Varoufakis's answer, where he didn't ask for debt relief, as you said. This would have been his opportunity to bring on board a critical, key economist in the discussion on this very issue. Why do you think he's doing that?
LASCARIS: Well, I think that his determination to keep Greece within the eurozone is greater than his determination to effect radical reform--reform, progressive reform, within Greece. I think he does genuinely desire to do the latter, but his determination to do that is not as great as compliance with demands of the eurozone, for the purpose of keeping Greece within it.
The idea that he's continuing to advance, it's an interesting idea, is that you know, Europe is--and I'm simplifying it--but that Europe would essentially shift to a pro-growth approach to the eurozone through infrastructure investment. Through a development bank that the European Union has established. And that, that bank would borrow money at low interest rates and then inve--and create growth through infrastructure investment and other types of investment.
The problem for Greece--and that would be a positive development, to be sure. And it is one that I think is doable within the existing legal framework of the European Union. Although it may not be doable within the current political environment. Even if it were doable in the current political environment, Greece cannot grow its way out of this debt. No matter what is done. It's simply too great. It is unsustainable. It is far too high a percentage of Greece's GDP. And it has to be written down. And until that very difficult negotiation is engaged in in good faith by all parties, this crisis will not end. And the suffering of the Greek people--and others within the European periphery who, other states where the debt loads have become unsustainable, their suffering will not end either.
PERIES: Now Dimitri, somewhat amusingly they all played on the term "times are changing", and I think when Yanis Varoufakis referred to that in this discussion with Stiglitz he was referring to the pressure that these countries that are currently experiencing difficulties in terms of debt, like Greece, Spain, Portugal, and others could bring on some sort of change within the eurozone to address these issues that a number of them are having. Do you think that's a real possibility?
LASCARIS: I'm skeptical that it is. The governments that wield by far the greatest power within the eurozone are both politically and ideologically invested in a neoliberal vision of Europe that is fundamentally incompatible with dramatic progressive reform, in the periphery or elsewhere. And unless those governments are dislodged from power, there is really no, there's no meaningful prospect for long-term progressive reform within the current framework of the eurozone. I mean, that's just the unfortunate reality.
Now, if Greece does--interestingly, opinion polls, or current opinion polls are indicating that Syriza continues to enjoy very high public support, even roughly double, a little bit less than double of what it enjoyed at the point of the election in January. They're showing public support for Syriza in the range of 70%. And if Syriza can effect meaningful albeit modest reform, that may start a movement. That may revitalize a movement within Europe. It may give more, for example, impetus towards parties like Podemos in Spain.
And so I suppose there's a small prospect that once you start the ball rolling, so to speak, in terms of achieving some change in the conversation, some substantive change of the policies towards more pro-growth, towards more humane treatment of the more vulnerable members of European society, at that stage you may see over a longer term meaningful political change, political movements, within the eurozone.
But I think, you know, given the power, the distribution of power within the eurozone and the ideological inclinations of those who exercise it, that is unlikely to occur within this, the current framework of the eurozone. And if it does occur, it's going to occur over a very long time frame, and Europe is in, urgently in need of dramatic reform. You know, that, that approach, the incremental approach is not going to accomplish in the near term what needs to be accomplished in order to sustain the union.
PERIES: So then what options does Greece have? I mean, it really does not have the money to make these next payments. What could it possibly do under these circumstances?
LASCARIS: Well as I've, I've advocated previously and will continue to advocate, Greece needs to default on this debt and commence a negotiation with its creditors for a massive writedown. Greece needs to withdraw from the eurozone, Greece needs to regain sovereignty over its currency. It needs to engage in an external devaluation rather than continuing this vicious internal devaluation, these wage cuts, these cuts in social benefits. And it needs to rebuild its economy in accordance with certain basic humanitarian principles.
And other states within the eurozone may need to do that. For example, Spain. But short of that, given, as I say, the current ideological inclinations of those who exercise the greatest power within the eurozone, I don't see the necessary reforms occurring to achieve a stable, robust and egalitarian democracy within the eurozone.
PERIES: And in order to change the current political outlook on Europe and who Greece is negotiating with, if Podemos is actually successful in Spain, who else is in line to make a difference in that framework?
LASCARIS: Well, at the moment, you know, the party as I understand it in Italy, another country which is burdened by unsustainable debt and is suffering from the austerity quite significantly, although not as badly as Spain and Greece from the austerity policies of the Troika. That's the party of Beppe Grillo. He tends to be more of a right-wing populist persuasion, so I'm not sure that, that that would provide a viable answer on a long-term basis for Italy.
Really, the two parties that stand out within the periphery, within the countries that are most indebted and most suffering from austerity are Podemos and Greece at this stage. I'm not aware of any, you know, real, viable alternatives. But I think that there's a great hunger and an appetite amongst the European populace for parties like Syriza, like Podemos. And if they can, if they can achieve some measure of palpable success for their own constituents I think you may see the rise of progressive parties within other jurisdictions quite quickly. Things could turn quickly. Relatively quickly.
But at the end of the day, without, without debt relief, these peripheral states are not going to achieve the reforms that they need to in order to revive their economies and protect the most vulnerable members of their society.
PERIES: We'll be watching. Dimitri, thank you so much for joining us today.
Reform is going to happen, perhaps not LaGarde's version. Austerity is being rejected, as it should be.
Posted by mother earth | Tue Apr 21, 2015, 11:52 AM (3 replies)
& for a bit more on opposition:
excerpted from Dems lead charge against Obama trade deal
But Obama hasn't really split the Democrats. They are almost unanimously opposed to him on trade. The upcoming battle over fast-tracking and the Trans-Pacific Partnership shows how dramatically the center of gravity in the Democratic Party has shifted.
Twenty years ago, half of Senate Democrats and 40 percent of House Democrats voted for the North American Free Trade Agreement. This time, even if Sen. Ron Wyden of Oregon, top Democrat on the Senate Finance Committee, signs off on a fast-track deal, proponents say a best-case scenario has them winning only 10 of the 46 Democrats -- and an even smaller percentage of House Democrats, despite aggressive lobbying by the usually passive White House.
Part of the change reflects the loss of moderates in Congress, and part is because of empirical experience with NAFTA. But the shift also is indication of the ascendancy of the populist wing of the party, in numbers and, particularly, energy. Obama, not up for re-election, can afford to defy the populists, but future Democratic leaders, including Hillary Clinton, don't have that luxury.
The populist muscle was on display Wednesday at the rally, hosted by United Steelworkers President Leo Gerard, who sprinkled foul language in his introductions of the various speakers. Privately, lawmakers expressed doubts that they could block passage, but publicly they were full of fight.
Sen. Elizabeth Warren of Massachusetts, the Democrats' populist star, pumped her fist and shouted into the microphone: "No more secret trade deals! Are you ready to fight? No more special deals for multinational corporations! Are you ready to fight?"
Sen. Bernie Sanders, the Vermont independent who is planning a symbolic challenge to Clinton for the Democratic presidential nomination, warned of a Congress "totally owned by billionaires and their lobbyists." American Federation of Government Employees chief J. David Cox proposed they "open up one gigantic can of whoop-ass" on legislators who support the deal.
Cox didn't propose using whoop-ass on Obama, if only because it's "a lost battle" with him. But it stung that a Democratic president was siding with Republicans on trade and against the Democratic base. Fred Rolando, head of the letter carriers union, addressed U.S. Trade Representative Michael Froman "and the rest of you at USTR and in the White House: We don't trust you on this."
Grayson, after the rally, called Obama's position "unfortunate" and demoralizing. "We've done this experiment where we try to drift over to the other side and see whether we can win Republican votes," he said. "We've done that experiment just like we've done the NAFTA experiment, and both of them have failed."
Posted by mother earth | Thu Apr 16, 2015, 06:45 PM (14 replies)
The Nobel Prize-winning economist on why America's future prosperity depends on tax reform today.
Posted by mother earth | Thu Apr 16, 2015, 02:42 PM (2 replies)
Posted by mother earth | Thu Apr 16, 2015, 02:30 PM (6 replies)
As a federal litigator in the late 1980s, Black played a central role in prosecuting the corruption responsible for the savings and loan crisis of the late 1980s. Since then he’s become one of America's top experts on financial fraud, which he see as endemic to the modern financial system.
In this interview, Black expresses his lament that the U.S. has descended into a type of crony capitalism that makes continued fraud a virtual certainty while increasingly neutering the safeguards intended to prevent and punish such abuse. This was not the case when Black was a regulator. In the aftermath of the S&L crisis, the U.S. Office of Thrift Supervision brought 3,000 lawsuits against identified perpetrators. In a number of cases, the OTS was able to claw back the funds and profits that the convicted parties had fraudulently obtained.
Fast forward to the 2008 financial collapse, in which the losses related to the household sector alone were over 70 times greater than they were during heart of the S&L crisis. The fraud was rampant and fairly obvious. Yet how many criminal referrals did the OTS make?
What happened? Why has the OTS and other regulators allowed the same managements that crashed the mortgage market and dragged down the global financial markets with them to remain unprosecuted and free to continue looting the system?
To be sure, some of the fraudulent activity has been exposed, and the top banks have paid numerous fines for bad behavior. There have been a lot of settlements and civil cases, indicating that fraud was rampant. But in finance, you can always make more money. Prosecutions, on the other hand, get everyone’s attention.
Yet, Washington has been paralyzed. The U.S. attorney general has not begun a single investigation of criminal behavior by top management at major multinational banks. Seemingly there’s no real punishment for major misbehavior in the financial markets anymore.
In this interview, Black names names and highlights the extent of the government's complicity in extending this disgraceful state of affairs.
For more background on Bill Black:
William Kurt Black (born September 6, 1951) is an American lawyer, academic, author, and a former bank regulator. Black's expertise is in white-collar crime, public finance, regulation, and other topics in law and economics. He developed the concept of "control fraud", in which a business or national executive uses the entity he or she controls as a "weapon" to commit fraud.
Black is the author of, among others, The Best Way to Rob a Bank is to Own One: How Corporate Executives and Politicians Looted the S&L Industry
Posted by mother earth | Thu Apr 16, 2015, 02:25 PM (5 replies)
Full article at link above, just an excerpt:
The Democratic nominee in 2016 has to propose a specific populism that recognizes the failure of free-trade deals such as NAFTA and join Elizabeth Warren in rejecting proposals to “Fast Track” a Trans-Pacific Partnership agreement that critics warns will be “NAFTA on steroids.” The Democratic nominee has to recognize that the Dodd-Frank reforms were insufficient and that Ohio Senator Sherrod Brown is right when he proposes to break up “too-big-to-fail” banks. The Democratic nominee must recognize the need to raise new revenues, as Congressman Keith Ellison has with his proposal for a “Robin Hood Tax” on financial speculation. The Democratic nominee must, as Congresswoman Barbara Lee does, recognize the need to steer money away from bloated Pentagon budgets and toward meeting human needs. The Democratic nominee must, as Bernie Sanders does, recognize the absolute necessity of massive federal investments in infrastructure and programs that create and sustain living-wage jobs.
How about it, HRC? We want progressive values & action, let's start on TPP this week. The American people need a champion.
Posted by mother earth | Tue Apr 14, 2015, 05:52 PM (35 replies)
(Above video from Jan. 19th to explain TPP in a nutshell, action this week laid out in article (4/14/15) below.)
Breaking: Leading House Democrat Will Oppose TPP Fast Track
As legislation to fast-track Congressional approval of the Trans-Pacific Partnership gets ready to finally make its debut in Congress this week, a top Democratic member of the House announced he would oppose the bill.
Representative Chris Van Hollen, the ranking member of the House Budget Committee, wrote in a letter Representative Sandy Levin, the ranking member of the House Ways & Means Committee, that he would oppose fast-track authority, also known as Trade Promotion Authority or TPA. The letter was obtained by The Nation and its authenticity was confirmed by an aide to Van Hollen.
Van Hollen opposed a previous iteration of fast-track legislation last year, as did most other top Democrats, including Minority Leader Nancy Pelosi. But so far, many of those Democrats (including Van Hollen) had not yet announced a position on the new TPA legislation being hammered out by Senators Ron Wyden, Orrin Hatch, and Representative Paul Ryan. (Levin opted out of those talks, and believes Congress should see at least the outline of a trade deal before taking up legislation to fast-track its approval.) Pelosi still remains publicly undecided.
If Van Hollen—a visible member of the Democratic caucus and ranking member of a major committee—ultimately supported the Wyden-Hatch-Ryan bill, it would have been a signal that House Democrats were ready to go along with the Obama administration’s trade agenda. But in his letter, Van Hollen wrote “it is clear that many will not be included in a revised TPA.”
While the legislation remains behind closed doors for now, Van Hollen said continuing public opposition from Republicans made it clear that the TPA legislation wouldn’t include additional currency, labor, and environmental provisions. Moreover, he wrote that since TPA was being unveiled so close to the conclusion of the overall trade talks, “it is clearly too late for TPA to have any meaningful impact on the shape of TPP negotiations.”
Like virtually all Democrats, Van Hollen cited concerns that enforceable currency manipulation obligations would not be included in the trade deal.
He also said he objects to further entrenching the investor-state dispute settlement process, which according to negotiating documents leaked last month by Wikileaks will be included in the TPP deal. Those provisions set up a process of international tribunals where foreign companies can challenge regulatory actions by sovereign governments, and seek financial damages for any lost profit as a result of regulation. Van Hollen wrote that “a TPP that allows for increased investor lawsuits could undermine a government’s right to regulate in the public interest and involve the US in costly and detrimental lawsuits covered by American taxpayers.”
Van Hollen further cited concerns over labor standards in some of the signatory countries, particularly Vietnam, and said he insists on an agreement that includes “strong and enforceable labor protections as well as an action plan to ensure that countries are complying with internationally recognized labor rights.”
The next several days will be crucial for the fate of TPA. Many Democrats have so far remained neutral or muted on the ongoing talks, but as the legislation finally proceeds towards a vote, several leading and visible Democrats like Van Hollen will start to take positions. Activists were heartened that Van Hollen dropped an early marker in the fight. “This letter lists some good reasons why fast track is in trouble—including investor lawsuits, currency manipulation, and workers rights—but this will come down to the growing realization that fast track will make it easier to send American jobs overseas,” said Jason Stanford of the Coalition to Stop Fast Track.
Posted by mother earth | Tue Apr 14, 2015, 05:39 PM (5 replies)
The Middle Class Prosperity Project is a collaborative effort by Senator Elizabeth Warren, Ranking Member of the Subcommittee on Economic Policy, and Rep. Elijah E. Cummings, Ranking Member of the House Committee on Oversight and Government Reform, to focus greater congressional and public attention on the challenges facing the middle class, and to formulate and implement concrete policy changes in order to address these challenges.
Posted by mother earth | Tue Apr 14, 2015, 05:14 PM (4 replies)