European Neoliberals Crushed the Leftist Party in Greece

Two of the most depressing interviews I have ever seen are the Jacobin interview with Stathis Kouvelakis and the New Statesman interview with Yanis Varoufakis in the wake of the Greek referendum and the capitulation of Prime MInister Alexis Tsipras of the Syriza party. Kouvelakis is a member of the Left Platform in Syriza, Tsipras’ governing party. Until shortly after the referendum, Varoufakis was the finance minister, charged with leading the negotiations with the Troika. I thought Tsipras was trying to fulfill his promises during the elections that he would be able to get an acceptable deal from the Troika and remove the burden of austerity from the Greek economy, while rationalizing Greece’s weak governmental institutions. Varoufakis confirms this. But then came capitulation.

Varoufakis says that he prepared for the negotiations like an academic. He worked out his theoretical position and the data that supports his view that Greece would never be able to recover from under the strain of the austerity and other demands of the Troika. He claims that the Troika knows that is true, though they won’t admit it, and at least initially there was personal sympathy with the problems of Greece and the positions he was taking. This is his major point:

HL: You’ve said creditors objected to you because “I try and talk economics in the Eurogroup, which nobody does.” What happened when you did?
YV: It’s not that it didn’t go down well – it’s that there was point blank refusal to engage in economic arguments. Point blank. … You put forward an argument that you’ve really worked on – to make sure it’s logically coherent – and you’re just faced with blank stares. It is as if you haven’t spoken. What you say is independent of what they say. You might as well have sung the Swedish national anthem – you’d have got the same reply. And that’s startling, for somebody who’s used to academic debate. … The other side always engages. Well there was no engagement at all. It was not even annoyance, it was as if one had not spoken.

He says that Wolfgang Schauble, the German Finance Minister, took the position that the previous government had agreed to the austerity program, and the Greeks were stuck with it. When Varoufakis asked if debtor countries should just dispense with elections, Schauble was silent, which Varoufakis interprets to mean it would be great if that could be done. Then came the referendum, a smashing win for rejecting the austerity demands of the Troika. Varoufakis says he had a plan ready to get ready to exit the Euro, but Tsipras rejected it, and moved to capitulation.

So from this we can conclude that what we thought about Europe is true: it is a purely neoliberal state, one in which creditors cannot suffer losses. Either the debtor pays or the taxpayers pay, but the creditors do not lose money. And, of course, by taxpayers, I mean the working class and any remaining middle class. The elites use their control over governments to make sure they don’t pay.

The interview with Kouvelakis makes it clear that this was purposeful. He tells us how it looked from the standpoint of the Left Platform, the leftist element of Syriza. He thinks that in June it became clear that the Troika was not negotiating in good faith, and were out to humiliate the people of Greece. Tsipras used the referendum to get himself out of the negotiating trap. He expected the referendum to win, not, as it did, to lose. The decisive factor was the decision by the ECB to force closure of Greek banks, which panicked people.

Kouvelakis says that the rightist wing of Syriza argued that the referendum would be perceived as a serious provocation by the Troika, and they were right. Syriza lost all its leverage, and was forced into humiliating surrender. Even so, Kouvelakis doesn’t have harsh words for Tsipras.

What I think actually happened was that Tsipras honestly believed that he could get a positive outcome by putting forward an approach centered on negotiations and displaying good will, and this also why he constantly said he had no alternative plan.

In this Kouvelakis agrees with Varoufakis. He also agrees that their approach was logical and lucid, to use his words. The weakness was their belief in Left Europeanism. Tsipras and Varoufakis both thought that this was a negotiation between partners in the European project.

But what actually happened was akin to a fight between two people, where one person risks the pain and damage of losing a toe and the other their two legs.

So it is true that there was a lack of elementary realism and that this was directly connected with the major problem that the Left has to face today — namely, our own impotence.

Kouvelakis tells us that this was a class vote. The working class supported the no vote, and the wealthy supported the yes side. The age group 18-24 voted no overwhelmingly. These groups see the EU as hostile, and they are anti-European. They were betrayed by the people they elected.

Kouvelakis says that the yes supporters, the old guard in Greek politics, collapsed in the wake of the loss. But then Tsipras revived them with his call for a council of political leaders. These people decided to treat the referendum as a vote to continue negotiations, even for capitulation. Kouvelakis feels betrayed by this reversal. After a discussion of internal Greek procedures, Kouvelakis says that the Left Platform will leave Syriza, and that the rightist wing and the rest of the group will more or less unite with those rejected parties to form a party of national unity.

That’s so depressing it’s hard to write. One of the EU demands was replacement of the elected government of Greece. It is a direct rejection of democracy. The EU refuses to work with anyone outside the neoliberal consensus, meaning leftist parties. Syriza was never a revolutionary leftist party, more of a highly reform oriented leftist group, and that’s how Kouvelakis sees the Left Platform. So, by removing the Left Platform, Syriza is now nothing more than the Third Way Democrats: economic destruction of human beings with a nice smile. Large groups of Greeks were willing to do battle with the neoliberals, but they were betrayed, and their misery will go on indefinitely. The destruction of human lives is just the way things are in neoliberal lands. Greece’s young people and its working class are losers, the markets have spoken, and they will be sacrificed. It’s enough to gag a maggot.

Notre Dame undergrad (math); JD, Indiana University at Bloomington; 1st Lieutenant, US Army.; private practice in corporate and securities law; Assistant AG in Tennessee for consumer protection and securities; Blue Sky Securities Commissioner, Tennessee; private practice, bankruptcy and corporate law.

I have had a lifelong interest in economics. For most of my career, that interest was practical, focused on the problems in front of me. Lately I have been more interested in economics as a theory, especially its impact on the lives of people like those I met in my bankruptcy practice, and on the politics of money in the US. I also enjoy reading philosophers, starting in college and steadily expanding my reading ever since. I wrote at FireDogLake for a number of years.

Generally, I think the problem facing the US is the dominance of neoliberal discourse. I think it clouds the vision, and limits the kinds of problems that can be identified and solved. For example, the existence and danger of climate change can easily be identified in a scientific discussion. However, the problem does not fit the neoliberal discourse because science insists that the pursuit of individual and corporate self-interest will lead to devastation. In neoliberal discourse, the pursuit of self-interest always leads to Eden.

The neoliberal project has two prongs. One is the police function of crushing dissent and alternative views. The police function is provided by government agencies and private and institutional actors. The counterpart is the economic system , which is operated by government and by private and institutional actors. Some of these actors operate in both spheres. I focus on the second prong.

41 replies
  1. earlofhuntingdon says:

    Thanks for this. What the neolibs did for the US since 1945, the neolibs are now doing to the rest of the world. As the US did with Iran, Guatemala and Cuba, the neolibs are doing to Greece. Lordy, they can’t tolerate a successful, peaceful, democratic choice to adhere to any standards of living, to any notion of society and its governance, except the neoliberal standard of enriching corporate wealth. Amen. Thanks, again, Ed.

  2. bloopie2 says:

    Well put, thank you. The lenders should lose out. I’m still unclear on one thing, however. Everyone agrees that the Greek economy is a disaster. Is it correct that, even though austerity has increased that effect, there are underlying structural problems in the economy and/or government and/or country that, unless solved, will continue to drive Greece deeper and deeper into debt and other problems – even if, for example, all current debt were forgiven or deferred? What is the solution to that issue? I’m not blaming the Greeks for this current debacle but I can’t believe that creditors agreeing to take losses will make everything hunky-dory. Aren’t some very serious structural reforms needed? Is it “humiliation” to admit that?

  3. Evangelista says:

    Observing from the sidelines, or, rather, up in the stands, where the blood-splatter from the playing field will have to fly very high to reach, I can see this Euro-Garch play on Greece having a truly interesting effect elsewhere, predictably in Spain and Italy, undoubtedly interestingly in France, and predictably unpredictably in Ukraine, especially if the Lugansk and Donbass ‘rebels’ start laughing. I predict that Russia will do its ‘best’ to ‘keep a straight face’, necessarily, since someone is going to have to be sympathetic toward the effected Greeks, but will have difficulty, almost as much as the Ukrainian Army recruiters and the NATO-nation trainers are having, with more and more of the draftees beginning to perceive that what they really want to do is join the ‘rebel’ side in re-unifying continental Ukraine. Almost a certainty with the Greek creditors’ newest maneuver, as is now a collapse of the Euro, and Dollar, along with, and in result from, complete loss of Western Ukrainian investment, Greek investment and Italian, Spanish et Euro-domino.

    Wasn’t this what the IMF was jumping up and down and squeaking from the sideline attempting to warn against?

  4. TarheelDem says:

    When creditors are not punished for their folly, you have bubbles and busts. It’s that simple. The creditors ruined the global economy, which made it impossible for many diligent borrowers to pay back their debt. And now they come extracting what they should not have claim to.

    The heads I win, tails you lose economy is ultimately self-destructive. At some point, supply chains freeze up.

    • bloopie2 says:

      Sounds good: The creditors had lax lending standards, it was folly to lend, and they should be punished now – by being forced to write off their loans. Agreed. Unfortunately, that means that, if they want to avoid future folly (a good thing, right), they will raise their lending standards. So then what is the next country whose economy doesn’t get funded, and fails as a result, hurting the masses. Will you select that country for us, and, when it goes into a depression, stand up and say, “I am responsible for this, and I am proud of what I have done”?

    • Jonf says:

      You’re right. It was the credit bubble that resulted in the Great Recession in 2008. Here in the states Obama and the Fed engineered a bail out for the banks and even some corporations. But the Troika could not see their way clear to bail out Greece. It has been said that debts that can’t be paid, won’t be. The creditors who made those loans should take a large haircut. I understand ( Stiglitz I think) that 95% of the money is due to banks. So Greece gets to bail them out but they are using someone else’s money to do it.

  5. bevin says:

    This is a complex matter, but much of the fault here lies in the casual and dilettante manner in which Syriza handled the file from the formation of the coalition to the referendum: at no stage did they broaden the negotiations to include the masses. From the first there should have been a constant stream of information directly from the government to its supporters and the people as a whole: one of the most interesting aspects of the referendum vote was that it contradicted all the media, there was no mass media favouring the NO vote. As I understand it even the State broadcaster, closed down by PASOK for opposing austerity, has not been restored by Syriza.
    It is almost as if the referendum was called not to rally the people but to get the government off the hook. No one was more shocked or appalled by the OXI vote than Tsipras and his cronies.
    To re-iterate: Syriza could have broken the neo-liberals but they didn’t use the one weapon that they had to employ which involved mobilising the masses. The Oxi vote showed that, as one would expect where 50% of youth are unemployed, the enthusiasm was there, it was the leadership which was missing. (By which I mean that instead of urging the people to take the matter in their own hands, to make their own decisions, Syriza insisted that it be allowed to act on behalf of its clientele, the electorate. And it did- it sold them down the river.

    On another matter: it is interesting that the most determined proponents of austerity were the governments of places like Ireland, Spain and the Baltics all of which have merrily accepted every demand of the Troika of Usurers, presiding over the demolition of living standards, the emigration of generations of young people and the gifting of public wealth to financiers. They lived in fear of being exposed to their electorates as agents of the enemy.

  6. thatvisionthing says:

    Thinking of what Harlan Eliison said, “I have no mouth and I must scream.”

    Then what.

  7. galljdaj says:

    Great Lesson! in why lil obama labeled Venezuela a Threat to the US(Govt & Elites). Venezuela is a Good Example to the Masses(99%) !

    Clearly, the Peoples need to rise up and take back there Governments!

    • bloopie2 says:

      The people have been running the government into the ground for decades. Poor tax collections, early retirement, high pensions, etc., etc. That’s the sole reason that the country is in its current mess. And you want more of that? Where’s the money going to come from? Will you, personally, loan money to Greece, knowing that it will never be repaid? Will you? Get real, folks.

      • galljdaj says:

        Amazing ‘thought process’ you have… .

        Lets see what you do with starting with ‘breaking of the Air Traffic Controllers’ Strike, how many Billionaires did the world have? and what was the ratio of billionaires to poor people? Then what is Today?

        You make me scoff a laugh, like the poorest peoples created the billionaires by demanding a fair share of whats on the World Table!

        • bloopie2 says:

          Huh? My point is that the Greek economy, even if all current debt were completely canceled (which is what everyone on this post seems to think would be fair), is still a shambles and would require both (a) more cash infusions and (2) structural reform, in order to keep going. Thus, the lenders are not completely to blame. Have you addressed that point?

          • galljdaj says:

            Sure I addressed the point, its not a point regarding whats going on! Its Grand Theft, that needs to be fought!, not honored! So, rather than being obtuse, how many billionaires… ?

          • Alan says:

            I think you make valid points. There’s lots of responsibility for the mess to be shared around. I think the big issue that remains is that the ‘solution’ doesn’t punish the creditors for their irresponsibilities, is unlikely to bring about the necessary reforms, and is likely to deepen Greece’s problems. There is a nasty scapegoat narrative of the lazy, corrupt Greeks who need to be punished for their moral failings and a remarkable lack of dispassionate pragmatism on the best route out of the mess for all involved.

      • Ed Walker says:

        I don’t agree. I don’t know the history of Greece well enough to have an opinion about how it happened, but I do know that Greece has been a frontier in the Great Game of world politics since WWII. It has been badly governed not because the Greeks themselves want that, but because of massive interference of the US and the UK. There have been horrible right-wing governments there off and on ever since.
        *
        The Greeks invented the word oligarchy, and their country has been run by oligarchs for decades. The oligarchs themselves set up the weak institutions, including weak tax institutions. They won votes by promising decent pensions and a more social safety net than is acceptable in neoliberal times. their loathing for taxes trickled down throughout the nation.
        *
        Syriza, like its predecessors, agreed to introduce structural reforms to deal with the weak institutions. Everyone knows that social changes like that won’t happen overnight, everyone, that is, but the Troika, which insisted on immediate introduction of those changes on terms defined by the EU. That in itself was an anti-democratic ploy, and was certain to fail. Changes of that magnitude require buy-in from the citizenry. One minimal requirement would be the reduction of the stress of daily life in that economically ravaged nation. Again, any fool, but not the Troika, could see that.
        *
        The debt talks have always included these reforms. The legacy parties before Syriz simply assented to the mostly neoliberal positions, including privatization of public services, and sales of public assets. Syriza had a clearer idea of the steps necessary to achieve social change. Its positions reflected that, and had the added benefit of reflecting the democratic expression of the citizens of Greece.
        *
        None of this is as simple as you make it. The outcome, however, is plain. And as Alan says, the key question is what happens next.

        • bloopie2 says:

          General response:
          .
          You’re saying that the Greeks have known for a long time what needs to be done for structural reforms, but have never done it. I agree; point proved.
          .
          Specific responses
          .
          You smear the Greeks by saying they invented the word “oligarchy”. But you don’t praise them for inventing the word “democracy”. Why not?
          .
          Tell me who should pay for those “decent pensions and a more social safety net than is acceptable in neoliberal times”? No one has paid for them to date, which is one reason the country is in crisis. Do you believe that the rich people have enough money among themselves to pay for it? Most economists would say no, that raising taxes on the rich people will help but it won’t be enough.
          .
          “Syriza, like its predecessors, agreed to introduce structural reforms to deal with the weak institutions. Everyone knows that social changes like that won’t happen overnight”. Agreed. But haven’t people been yelling at Greece to do this for the last five or ten years? What’s new, now?
          .
          “One minimal requirement would be the reduction of the stress of daily life in that economically ravaged nation.” Gee, I didn’t realize that Greece was the only place in the world with stressed people! God forbid that anyone should have stress in their life. And how should we reduce the stress? By making it less economically ravaged? If so, then we’re back to square one in this discussion.
          .
          As to my point: If all current debt were canceled, would Greece be in good shape? If not, are structural reforms still required? And would that be “humiliation” or common sense?
          .
          “Syriza had a clearer idea of the steps necessary to achieve social change. Its positions reflected that, and had the added benefit of reflecting the democratic expression of the citizens of Greece.”
          .
          Wait a minute. I thought we were talking economic change, not social change. And it seems to me that the “democratic expression of the citizens of Greece”, as exemplified by the Syriza electoral success, is to continue living beyond their means. That’s fine by me, but I personally won’t be lending (giving) them money to do that. Do you think others should?
          .
          “None of this is as simple as you make it.” I’m sure that’s the case. And sure it’s humiliating to be dragged before your creditors and be told to pay up or we’re taking away your vacations and your lattes and your ouzos. But isn’t that the way life works? What am I missing here? It may be a complicated answer, but this is one part. Why won’t people admit that?

          • Jonf says:

            I will say at the outset you seem to have more knowledge of Greece than I. I am under the notion that Greece pensions are not out of line with others in the EZ as to amount or retirement age. If not true then a decent time should be allowed to get in line, such as grandfathering.
            .
            I have heard the elites there decide if they will or will not pay taxes. That is clearly reduculous.
            .
            Unemployment is in the neighborhood of 25% with youth unemployment very much higher. And poverty tracks that stat in severity. We see what happens in depression economies. Witness ISiS.

  8. bloopie2 says:

    What’s in the past is done. But even if all current debts were canceled, Greece would still need more money to run the government and pay everyone going forward. Where will that new money come from? Which one of you will you provide it? Come on now, someone here has to stand up and raise your hand and say, “Instead of giving my money to charity, I’m going to give it to Greece, knowing that I will never get it back.” Well?

  9. Rich says:

    You might as well link and continue this post with the one about HUD and Jamie Dimon. There is us no difference in the hijacking of representative elected government. Logic, rational debate, objective analysis, science, and fact spare thrown out the window. The blank stares from those people putatively in charge are expressions of disbelief that anyone could be so naive as to muster facts, laws, existing rules which disagree with or defy the marching orders they have been given by higher authority. This phenomenon was present with Elspeth Ritchie, The Uniformed Surgeon Generals, and the APA when Mitchell and Jessen were given the green light to torture while being paid a handsome $81million to do so. This mechanism was present with the too big to fail Wall Street bank bailouts of 2007-2009. And the same logic justified awarding a Nobel Peace Prize to a President who ordered the execution of a 16year old boy U.S. Citizen by predator drone.

  10. Alan says:

    I agree that what’s happening is Greece is depressing but I think we have to look beyond it to what happens next. A lot of ugly stuff has been exposed that feeds into broader European political relationships and tensions. I don’t believe the overthrow of neoliberalism is going to happen quickly but there are cracks in the edifice. One of the problems is what next? Not socialism as some on the Left seem to think. One of Mirowski’s points about the 2008 financial crisis is that little damage, at least so far, was done, to the edifice of neoliberalism because the Left is living in the past and clueless in it’s understanding of neoliberalism and how to resist it effectively. If you look at the Democrats in the US and the Labour Party in the UK, they are neoliberal parties and have been for a long time. There is, however, resistance of a sort elsewhere in Europe e.g. Scotland and Iceland, countries striving for more equitable and civil society. Iceland suffered as as a result of the 2008 crisis but, unlike Greece, seems to have survived because it was much more the master of its own financial destiny (Iceland was not part of the EU or the Euro Zone). Scotland has been stuck with an increasingly vicious neoliberalism and will be stuck with it until the conflict between London and Edinburgh that has been steadily growing since at least 1979 results in the UK coming apart.
    *
    How what happened plays out on the  relationships between the EU’s constituent members just got a lot more interesting. A lot of tensions between the different countries have now been surfaced and exacerbated, including the main partners, France and Germany, and between those countries and the ones on the periphery. What happened will also play into the up coming Brexit vote. And that in turn may play into another Scottish Independence vote and more fuel on regional independence movements. The relationship with the IMF and the US is also interesting. Both the IMF (the Troika is not of one voice) and the US seem to be of the opinion that the austerity being imposed on the Greeks is an unmitigated disaster and that the Germans and their friends have just punted the can down the road again. That is maybe just a matter of how far the can got kicked. Everyone punted the solution to the 2008 crisis down the road. At some point Charon will demand payment and there will be no return.

    • galljdaj says:

      I’m wondering if the US Picture of all the same ‘tactics’ has escaped you, Alan.

      I remember ‘jobs’ kids had and I had earning good monies at age of 12. Now I see whole families employed at the same job(s) just trying to exist! I also remember lil bush exclaiming how ‘things’ were getting better with 200000 new jobs, but clearly they were 12 year old’s jobs!

      The jobs markets Today are crap! On Purpose! Everyday we new stories about reduction and austerity for US Workers! Increased Health Care Costs while benefits are being reduced. Education costs are out of reach for most ‘Citizens’, real People! And, the wealthy don’t have to follow the law or regulations! The City of Detroit just got Robbed by ‘Lenders’, the Courts, and the Administrations!

      What makes you think your not in the ‘sights’ as a target?

      • Alan says:

        The US picture has not escaped me. As I said, some countries kicked the can further down the road. Everyone will have to put a coin in the mouth of the dead and rotting body of neoliberalism to pay the ferryman eventually.

    • Ed Walker says:

      I agree that neoliberalism will not die quickly or easily. The broader perspective you describe seems at least as important. It has clearly endangered the Euro, which had recovered off it’s lows and now is trickling back down. It has exposed the economic reasons for the success of Germany to public view, contradicting their claims of moral rectitude in a very direct way. Politics is still real in Europe, unlike this country where we have the forms but not the essence (who knows, maybe that is changing too. Elizabeth Warren, Bernie Sanders and Martin O’Malley are at Netroots Nation, and I’m not hearing any HRC talk here.) Political parties play a real role in government, and are much closer to the citizenry than here. All of these people are asking themselves how to deal with German hegemony.
      *
      As my economic theory posts show, the roots of economic neoliberalism are deep in our society, perhaps somewhat less so in Europe outside of Germany and its adherents, where ordoliberalism is dominant. FDR’s success was in large part due to fears of communism. In the US, we have nothing even remotely like serious leftists. Bernie Sanders is about as far left as we go, and as we are constantly told by the legacy parties, he cannot be elected. The process of social change will not come quickly or easily here. The elites are not afraid of anyone or anything. They believe they are impregnable, and that they can buy off the citizens forever. I hope they are wrong, but right now I don’t see why they won’t succeed.

      • Alan says:

        Agreed. I suspect German Ordoliberalism isn’t half as scary as the neoliberalism that has been practiced in the UK since 1979. Thatcher was a groupie of Hayek, Friedman, et al. After she was gone, Major, Blair, and Cameron just carried on down the same trail. The results are downright ugly. They’ve filled the pockets of the wealthy by robbing everyone else. The economy they’ve created is a house of cards disguised as a real economy by the use of smoke and mirrors.

  11. orionATL says:

    the mess that is the greek affair of the european union has little or nothing to do with economics as an intellectual discipline. it, like the american banking collapse of the 1980’s and 2000’s, has to do with politics and with govetnment policy.

    in particular the leaders of the current german goverment and the governments of its allies feared for their continuation in power if they behaved reasonably and fairly toward greece by forgiving much of its past debt. there was no vountervailing pklitical power constraining these leaders so they had nothing to fear by forcing tsipras and company to accept their terms.

    in general i thought tsipras behaved admirably and effectively under the enormous pressure placed on him by the corporate media amplifying european union anti-greece propaganda.

    unfortunately for europe, tsipras either blinked at the harm that would be done his people or he failed to realize that he held the last ace in the game. what tsipras should have done is lead greece in a permanent exit from the european union and then stand back and watch that union and its currency and stock markets begin to crumble – just as greece was being forced into crumbling.

    there are many lessons to be learned from greece’s failed rebellion against german efonomic hegemony. one of the small but important ones for every small country within in the union – ireland, portugal, cyprus, and, yes, the baltics, finland, slovakia – is that it is necessary to have an alternative national currency printed and minted, stored in vaults and ready to go, rather like a nuclear arsenal, should germany and its allies lean on that country.

    i would guess that the greek affair will, at the least, force germany and france into a reworking of the financial rules of the union. at worst it will result in its slow disdolution.

    oh, and a relevant factoid i believe i read, wolfgang schable is a chief of a german bank. like i said, the greek affair had almost nothing to do with economics as an intellectual tradition.

    • Alan says:

      Yes, but of course it has to do with economics. There is no discipline of economics living in some ivory tower. Nearly all the people who call themselves economists are revolving in and out of university departments, financial institutions, think tanks, and government. The pig trough overflows for them and their friends. Economics is what keeps the neoliberal swill flowing.

      • orionATL says:

        what has happened between greece and its european union breathern has nothing to do with economics as a discipline. nothing.

        generally speaking, economics is always trumped by politics and to the extent it is used at all in political decisions is simply exploited as cover or a rationalization for political decisions. to the extent economists are recruited into political circles they too are exploited, cf the report of working-level imf economists’ on the sustainability of greek debt in the near future (not at all sustainable) vs the decision of european leaders to force greece into yet another straite jacket of debt.

        wolfgang schable responded as a banker, not as an economist, as did his boss, merkel. similarly for hollande, renzi, et al. and their advisors.

        economic neo-liberalism’s sins are factual, scientific, and humanitarian, not political.

  12. wayoutwest says:

    I have to laugh when some Amerikan rants about another country’s weak or corrupt institutions , see the HUD/Jamie Dimon post, or their inability to collect taxes, the US loses $500 Billion each year from tax fraud and evasion from the same Professional Class as Greece does.

    The attack on retirees is more sinister and a cowardly attempt at generational warfare we have seen deployed here in the US recently to deflect the blame for problems caused by corruption and Capitalist greed onto scapegoats just as the Troika is doing in Greece.

    The MOTUs are clever in their attempt to divide the generations and fool the younger generations into assisting them in destroying their own retirement security by depicting the current retirees as receiving undeserved entitlements.

    • Ed Walker says:

      There is no doubt that the US operates uner a two-tier system of government, a specific and ugly form of corruption, and we say so regularly. See Marcy’s recent post comparing Mexico and Guzman with the US and Jamie Dimon: at least Mexico arrested and tried Guzman. We’re so corrupt we don’t even try.

      • wayoutwest says:

        I didn’t mean to criticize you or Marcy but some commenters here and elsewhere who continue to look down their nose at countries such as Greece and demand they adopt our faux high standards as if they were anything but warped lies.

  13. Jonf says:

    Thanks for this post Ed. It is an important issue facing all of us and especially those on the left.
    .
    Mike Norman had a post the other day pondering why MMT has never been able to gain traction. Turns out he thinks it is not ignorance. It is willful.
    .
    In Greece the Troika had zero interest in economics or the suffering of the people. They were not ignorant of it, nor of what it would take to fix it. But fixing it was not in the interest of the elites or their money or power. In fact they view any help as a threat. It is so: the left is impotent in economic policy. That gives rise to the “me too” of the Third Way.

  14. Jonf says:

    The real root of the problem in Greece is simply they are using a foreign currency called the euro. Hence they are at risk of going bankrupt unlike the U.S. As you know it is utterly impossible to drive us to bankruptcy. Greece is effectively bankrupt since they do not issue,their own currency, as we do.
    .
    For now it is said to be ” too late” for Greece to use the drachma. Conditions there will very likely get much worse. It is also possible that Russia or China will play in these troubled waters.

  15. Ed Walker says:

    1. There’s no smear. The Greeks understood the differences and talked about them. You can see I approve of democracy, and disapprove of oligarchy, whether it’s here or there.
    *
    2. You apparently don’t understand how pensions work. Governments pay them as a form of deferred compensation. They are paid from the same sources that fund other governmental obligations. In the case of Greece, which doesn’t control its own currency, they are paid from taxes or other kinds of revenue. One source is to collect the taxes due. Please check the google for articles describing the gap between statutory taxes and actual receipts. The oligarchs don’t pay what they owe, and what they owe is too low. I won’t deal with discussions of proper levels of taxation, which are too low in every nation-state. See Piketty-Saez, which I have linked in other posts.
    *
    3. I don’t think you have a clue about the levels of misery in Greece. Please use google. The depression there has far exceeded the Great Depression in the US, and will not ease up under austerity.
    *
    4. Debt relief is a crucial element of the overall plan. Even the IMF has publicly said so, and it was and probably remains a major supporter of the Washington Consensus. As Evangelista points out, these lessons spread in all directions, with a central point at Ukraine.
    *
    5. Economic change is social change. Economic justice is social justice. There are no lines.
    *
    6. Please see 3. You are quite wrong. And more to the point, the wrong people are suffering, as you have already agreed. The rich are fine. The rest of the nation is miserable and has no hope of change, now that it’s clear elections don’t matter there.

    • earlofhuntingdon says:

      Well said. This IMF and EU Commission and Central Bank troika is, to rephrase Smedley Butler, about protecting western creditors, regardless of the risks they knowingly incurred in their lending. The prime directive is that lenders never take a haircut, any more than the skim from Vegas gets cut because the cost of bribes goes up.

      This threesome is also in the front line of assuring the world that there is no place for alternative social (and, hence, economic and political) arrangements than the narrow band they tolerate. These institutions are, of course, instruments of their controlling states, which includes the US and its controlling interests. (Does one imagine the US spies on Angela Merkel and her peers to learn a foreign language?)

      The controlling interests in such matters are overwhelmingly large US banks and corporations (the ones admitted “to own” the US Congress). This is not a new phenomenon; it’s an updated, improved version of an old one. John Foster Dulles was managing partner of the world’s then most powerful Wall Street law firm. He had a crucial role in establishing the UN and its financial counterparts, the IMF and World Bank. He also negotiated the peace treaty with Japan in 1951. That was before he became Sec’y of State.

      As could also be said of partners at large law and lobbying firms, the KGB/FSB, the PLA, the CIA, and the Hotel California, it’s a membership one can join but rarely leave. Like his peers, Mr. Dulles rarely distinguished among his, God’s, his clients’ and US interests. Neither do his successors.

  16. earlofhuntingdon says:

    I agree with Seumas Milne at the Guardian: the most recent negotiations with Greece were not about economics, though that was the back drop; as with other neolib programs, they were about politics. Other mid-size countries have economies as bad or worse than Greece’s and they, too, will have to be bailed out, not just refinanced. This snake oil imposed on Greece as a cure was political. It was imposed, in part, to bring about regime change. It was also about standard, garden variety resource extraction. In this case, 50 billion Euros in Greek assets that will have to be exchanged or sold off to creditors, presumably at fire sale values. The Brits will soon own the rest of the Parthenon and the Acropolis, not just the bits stolen by Elgin. And that’s for starters.

    • Jonf says:

      Got that right. I might suggest it is power politics,with a huge helping of elite money. ( you know the kind of money that votes and really counts.)

  17. jo6pac says:

    http://www.washingtonsblog.com/2015/07/little-known-history-of-the-euro-crisis-was-baked-in-from-the-start.html#disqus_thread

    Yes Ed the wrong people are suffering in Greece and the rest of the liberal neo-con world. This has been performed on Amerika on a light measure. Then again the eu the game begins. Uncle milton freidmen comes home. I wonder is the when we say let the games begin?

    http://www.washingtonsblog.com/2015/07/little-known-history-of-the-euro-crisis-was-baked-in-from-the-start.html#disqus_thread

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