Showing posts with label Why Pay for the Rich's Recession?. Show all posts
Showing posts with label Why Pay for the Rich's Recession?. Show all posts
Tuesday, May 25, 2010
The heresy of the Greeks offers hope by John Pilger
In his latest column for the New Statesman, John Pilger inverts the perception of Greece as a "junk country" and sees hope in the uprising of ordinary Greeks protesting against the "bailout" of an economy plunged into debt by the tax-evading rich. Greece, he writes, is a microcosm for the developed world, where class war are the words seldom used because they are the truth.
As Britain’s political class pretends that its arranged marriage of Tweedledee to Tweedledum is democracy, the inspiration for the rest of us is Greece. It is hardly surprising that Greece is presented not as a beacon but as a “junk country” getting its comeuppance for its “bloated public sector” and “culture of cutting corners” (the Observer). The heresy of Greece is that the uprising of its ordinary people provides an authentic hope unlike that lavished upon the warlord in the White House.
The crisis that has led to the “rescue” of Greece by the European banks and the International Monetary Fund is the product of a grotesque financial system which itself is in crisis. Greece is a microcosm of a modern class war that is rarely reported as such and is waged with all the urgency of panic among the imperial rich.
What makes Greece different is that within its living memory is invasion, foreign occupation, betrayal by the West, military dictatorship and popular resistance. Ordinary people are not cowed by the corrupt corporatism that dominates the European Union. The right-wing government of Kostas Karamanlis, which preceded the present Pasok (Labour) government of George Papandreou, was described by the French sociologist Jean Ziegler as “a machine for systematic pillaging the country’s resources”.
The machine had infamous friends. The US Federal reserve Board is investigating the role of Goldman Sachs and other American hedge fund operators which gambled on the bankruptcy of Greece as public assets were sold off and its tax-evading rich deposited 360 billion euros in Swiss banks. The largest Greek ship-owners transferred their companies abroad. This haemorrhage of capital continues with the approval of the European central banks and governments.
At 11 per cent, Greece’s deficit is no higher than America’s. However, when the Papandreou government tried to borrow on the international capital market, it was effectively blocked by the American corporate ratings agencies, which “downgraded” Greece to “junk”. These same agencies gave triple-A ratings to billions of dollars in so-called sub-prime mortgage securities and so precipitated the economic collapse in 2008.
What has happened in Greece is theft on an epic, though not unfamiliar scale. In Britain, the “rescue” of banks like Northern Rock and the Royal Bank of Scotland has cost billions of pounds. Thanks to the former prime minister, Gordon Brown, and his passion for the avaricious instincts of the City of London, these gifts of public money were unconditional, and the bankers have continued to pay each other the booty they call bonuses. Under Britain’s political monoculture, they can do as they wish. In the United States, the situation is even more remarkable, reports investigative journalist David DeGraw, “[as the principal Wall Street banks] that destroyed the economy pay zero in taxes and get $33 billion in refunds”.
In Greece, as in America and Britain, the ordinary people have been told they must repay the debts of the rich and powerful who incurred the debts. Jobs, pensions and public services are to be slashed and burned, with privateers in charge. For the European Union and the IMF, the opportunity presents to “change the culture” and dismantle the social welfare of Greece, just as the IMF and the World Bank have “structurally adjusted” (impoverished and controlled) countries across the developing world.
Greece is hated for the same reason Yugoslavia had to be physically destroyed behind a pretence of protecting the people of Kosovo. Most Greeks are employed by the state, and the young and the unions comprise a popular alliance that has not been pacified; the colonels’ tanks on the campus of Athens University remain a political spectre. Such resistance is anathema to Europe’s central bankers and regarded as an obstruction to German capital’s need to capture markets in the aftermath of Germany’s troubled reunification.
In Britain, such has been the 30-year propaganda of an extreme economic theory known first as monetarism then as neo-liberalism, that the new prime minister can, like his predecessor, describe his demands that ordinary people pay the debts of crooks as “fiscally responsible”. The unmentionables are poverty and class. Almost a third of British children remain below the breadline. In working class Kentish Town in London, male life expectancy is 70. Two miles away, in Hampstead, it is 80. When Russia was subjected to similar “shock therapy” in the 1990s, life expectancy nosedived. A record 40 million impoverished Americans are currently receiving food stamps: that is, they cannot afford to feed themselves.
In the developing world, a system of triage imposed by the World Bank and the IMF has long determined whether people live or die. Whenever tariffs and food and fuel subsidies are eliminated by IMF diktat, small farmers know they have been declared expendable. The World Resources Institute estimates that the toll reaches 13-18 million child deaths every year. “This,” wrote the economist Lester C. Thurow, “is neither metaphor nor simile of war, but war itself.”
The same imperial forces have used horrific military weapons against stricken countries whose majorities are children, and approved torture as an instrument of foreign policy. It is a phenomenon of denial that none of these assaults on humanity, in which Britain is actively engaged, was allowed to intrude on the British election.
The people on the streets of Athens do not suffer this malaise. They are clear who the enemy is and they regard themselves as once again under foreign occupation. And once again, they are rising up, with courage. When David Cameron begins to cleave £6 billion from public services in Britain, he will be bargaining that Greece will not happen in Britain. We should prove him wrong
Sunday, September 13, 2009
Can we survive the ‘recovery’? by Graham Matthews
Business economists and their paid media scribblers are frantically keen to announce the end of the financial crisis. Their aim is to return confidence in the market and to encourage working people to take on more debt.
The message is clear. If you’re still in trouble — unable to find work or get enough hours — it’s your problem. It’s not the market’s fault — because that’s in “recovery”.
However, the economy, particularly the world economy, is not always so simple to tame. Certain economic indicators (for Australia) are pointing to a slow renewal of growth, but this doesn’t mean that the economic crisis — in Australia or elsewhere — is over.
National accounts figures released by the Australian Bureau of Statistics (ABS) on September 2, showed that the Australian economy grew by 0.6% in the three months ending in June.
The biggest contributors to this growth were spending on new business machinery and equipment, and household consumption, which together made up 1% of national growth.
Neither factor should be seen as heralding a renewal of sustainable growth in the economy. Both are largely due to the federal government’s stimulus spending.
In December, the federal government introduced the “business tax break”, which means businesses “can claim an additional tax deduction when they buy certain assets, and when they spend money to improve existing assets, for a limited time”, said the Australian Taxation Office website.
For small businesses (with a turnover of less than $2 million a year) this means a tax-dodge of 50% for that new company car, forklift or backhoe.
It’s hardly a wonder that, as the end of the financial year approached, these businesses boosted their spending on such things.
As for the household consumption figures, this also can be explained by the government’s $900 tax-free handout in April and May.
The ABS said retail turnover increased by $160 million in the June quarter on the back of this handout.
Another group of businesses to do well out of the federal government’s response to the international financial meltdown is Australia’s big four banks.
The September 2 Sydney Morning Herald reported that, using the government’s loan guarantee (which allows the banks to use the government’s AAA credit rating when accessing overseas loans), the banks have forced smaller lenders out of the domestic home loans market.
The big four stand to make $15 billion profit this year.
Some sections of business are prospering on the back of the Rudd government’s stimulus payments, but for working people the story is less rosy.
The ANZ job ads series, which measures changes in the number of jobs advertised in newspapers and on the internet every month, has reported declining job advertisements throughout the year.
Its data for July, released on August 3, showed that there were 51.9% fewer jobs advertised than a year before.
ANZ argues that the pace of the decline in advertised jobs may be slowing, but it says: “The data provides further evidence that demand for labour in the Australian economy is still wallowing at recessionary levels.”
More than 45 million fewer hours were worked in Australia between July 2008 and July 2009, the ABS said. This is a decrease of 2.9%, meaning lost wages for thousands of workers.
In a statement explaining the Reserve Bank of Australia’s decision to leave its official interest rate unchanged at 3% on September 1, the bank’s governor, Glen Stevens, was upbeat.
“With considerable economic policy stimulus in train around the world, the global economy is resuming growth”, he said. “Growth in China has been very strong, which is having a significant impact on other economies in the region and on commodity markets. The major economies appear to be approaching a turning point”, he said.
Stevens’ confidence in strong and renewed growth seems bold. In the US, where dodgy mortgage practices sparked the global financial crisis in 2007, the number of banks threatened with failure is growing.
“Eighty-four banks have failed already this year and today’s Wall Street Journal reported the Federal Deposit Insurance Corporation, which guarantees deposits, has 416 banks on its problem list — an increase of 109 troubled banks from three months earlier”, ABC radio’s AM reporter John Shovelan said on September 2.
Only US$1.5 trillion of the US$4 trillion estimated in “toxic assets” created by the sub-prime crisis had been accounted for in the world’s bank balance sheets, the August 31 7.30 Report said. A further $2.5 trillion remains unaccounted for.
Bank shares fell heavily in the US and Australia on September 1 and 2 as speculators digested the new threat to the shaky finance industry, failing to heed the hype about recovery.
Talk of a “recovery” for working people who are being asked to pay for the crisis with fewer hours and smaller wage rises, is simply a smokescreen. For the big end of town, however, the party has already begun — but it may not last.
From: Comment & Analysis, Green Left Weekly issue #809 9 September 2009.
Subscribe to:
Posts (Atom)