Published: Tuesday 11 December 2012
Obama’s grassroots supporters voted for jobs and social services, not for the budget cuts that Congress is demanding. Now they’re working to make sure that message is not forgotten.

November’s election results showed strong support for progressive values, which are now being attacked in the debate about the so-called “fiscal cliff.” A better name for it would be the “grand disconnect” because, in signaling its willingness to make cuts to essential services, Congress shows that it has already forgotten the message voters sent in November.

The good news is that, across the country, the same grassroots energy that helped deliver record turnout among low-income people, especially low- READ FULL POST 4 COMMENTS

Published: Thursday 15 November 2012
As the movement for that strong social safety net grows around the world, and locally here at home, the mandate is clear: Austerity is not the answer.

Amaia Engana didn’t wait to be evicted from her home. On Nov. 9, in the town of Barakaldo, a suburb of Bilbao in Spain’s Basque Country, officials from the local judiciary were on their way to serve her eviction papers. Amaia stood on a chair and threw herself out of her fifth-floor apartment window, dying instantly on impact on the sidewalk below. She was the second person in two weeks in Spain to commit suicide as a result of an impending foreclosure action. Her suicide has added gravity to this week’s general strike radiating from the streets of Madrid across all of Europe. As resistance to so-called austerity in Europe becomes increasingly transnational and coordinated, President Barack Obama and the House Republicans begin their debate to avert the “fiscal cliff.” The fight is over fair tax rates, budget priorities and whether we as a society will sustain the social safety net built during the past 80 years.

The general strike that swept across Europe Nov. 14 had its genesis in the deepening crisis in Spain, Portugal and Greece. As a result of the global economic collapse in 2008, Spain is in a deep financial crisis. Unemployment has surpassed 25 percent, and among young people is estimated at 50 percent. Large banks have enjoyed bailouts while they enforce mortgages that an increasing number of Spaniards are unable to meet, provoking increasing numbers of foreclosures and attempted evictions. “Attempted” because, in response to the epidemic of evictions in Spain, a direct-action movement has grown to prevent them. In city after city, individuals and groups have networked, creating rapid-response teams that flood the street outside a threatened apartment. When officials arrive to deliver the ...

Published: Tuesday 13 November 2012
“Austerity opponents say the strike isn’t intended to grind down Europe’s already weakened economy, but to send a clear message to governments and the Troika that austerity cuts aren’t working to solve the debt crisis, but instead are worsening the problem.”

Austerity has spawned general strikes in individual countries across the troubled European Union. But this week may see something to add to the union’s tensions: a coordinated, multi-national mega-strike. Organized labor plans a general strike against the E.U.’s austerity policies, borderless and spanning the south of the continent. With more than 25 million people out of work, Europe’s biggest unions have vowed to lead marches and demonstrations on Nov. 14 that unite opposition parties, activist movements like Spain’s M15 and a growing sea of unemployed to challenge their national governments, banking leaders, the IMF and EU policymakers to abandon austerity cuts ahead of a high-stakes budgetmeeting in Brussels later this month.

What makes Wednesday’s strike even more threatening to Europe’s managerial elite is the strong support it is receiving from traditional labor groups that rarely send their members into the streets—foremost, among them, the European Trade Union Confederation, representing 85 labor organizations from 36 countries, and totaling some 60 million members. “We have never seen an international strike with unions across borders fighting for the same thing—it’s not just Spain, not just Portugal, it’s many countries demanding that we change our structure,” says Alberto Garzón, a Spanish congressman with the United Left party which holds 7% of seats in the Spanish Congress. “It’s important to understand this is a new form of protest.”

The strike is expected to cause near or total shutdowns of the ...

Published: Tuesday 13 November 2012
The corporate state, faced with rebellion from within and without, does not know how to define or control this rising power, from the Arab Spring to the street protests in Greece and Spain to the Occupy movement.

 

The presidential election exposed the liberal class as a corpse. It fights for nothing. It stands for nothing. It is a useless appendage to the corporate state. It exists not to make possible incremental or piecemeal reform, as it originally did in a functional capitalist democracy; instead it has devolved into an instrument of personal vanity, burnishing the hollow morality of its adherents. Liberals, by voting for Barack Obama, betrayed the core values they use to define themselves—the rule of law, the safeguarding of civil liberties, the protection of unions, the preservation of social welfare programs, environmental accords, financial regulation, a defiance of unjust war and torture, and the abolition of drone wars. The liberal class clung desperately during the long nightmare of this political campaign to one or two issues, such as protecting a woman’s right to choose and gender equality, to justify its complicity in a monstrous evil. This moral fragmentation—using an isolated act of justice to define one’s self while ignoring the vast corporate assault on the nation and the ecosystem along with the pre-emptive violence of the imperial state—is moral and political capitulation. It fails to confront the evil we have become. 

“The American Dream has run out of gas,” wrote the novelist J.G. Ballard. “The car has stopped. It no longer supplies the world with its images, its dreams, its fantasies. No more. It’s over. It supplies the world with its nightmares now. …”

Liberals have assured us that after the election they will build a movement to ...

Published: Sunday 11 November 2012
Published: Monday 5 November 2012
“The medical community already suspects that economic downturns put an increased strain on mental health — recent studies in Greece, Spain and Italy have found a trend in rising suicide rates as those European countries face recessions fueled by misguided austerity policies — but this study is the first to focus on the Great Recession’s impact on Americans.”

 

A new analysis finds that the suicide rate among Americans increased four times faster between 2008 and 2010, after the housing bubble burst and the subsequent economic downturn began to take effect, than it did in the eight years before the Great Recession.

The medical community already suspects that economic downturns put an increased strain on mental health — recent studies in Greece, Spain and Italy have found a trend in rising suicide rates as those European countries face recessions fueled by misguided austerity policies — but this study is the first to focus on the Great Recession’s impact on Americans. After analyzing state-level unemployment and suicide rate data through 2010, researchers concluded that this economic crisis may have hurt Americans’ mental health more than any other economic event:

“The magnitude of these effects is slightly larger than for those previously estimated in the United States,” the authors wrote. That might mean that this economic downturn has been harder on mental health than previous ones, the authors concluded. [...]

Every rise of 1 percent in unemployment was accompanied by an increase in the suicide rate of roughly 1 percent, it found. A similar correlation has been found in some European countries since the recession.

Researchers estimated that the U.S. suicide rate was increasing by about 0.12 deaths per 100,000 people between 1999 and 2007 — but when the recession hit in 2008, the rate began increasing by an ...

Published: Tuesday 30 October 2012
The question is, once we understand and openly recognize this truth, what are we going to do about it?

 

What is austerity? A dictionary definition will provide you with the definition of a “strict economy.” It will also provide you with an antonym: leniency. Although the current austerity practices in Europe, the U.S. and elsewhere certainly match those definitions, the implications of enforcing these measures against the will of the majority population — and imposing them as a rational solution to the socioeconomic problems we face — are far graver, dangerous and outright scary.

Let’s examine the conditions of the loans aimed at getting countries (like Greece and Spain) out of debt: they want to raise the retirement age, increase the work day and have people work for lower wages, cut funding to education, maintenance and other important public sector areas, cut Social Security, cut pensions, and even privatize the municipal water and electric systems.

But at least the measures are democratic, right? Wrong. These austerity policies have been entered into and implemented despite resounding political opposition. Almost weekly protests all over Europe have been gathering outside centers of governmental power with signs like "No Nos Representan" (They Don’t Represent Us), or scissors with a slash through it, or the European Union flag peeled away to reveal the flag of Nazi Germany, or "No es la Crisis, es el ...

Published: Wednesday 24 October 2012
Published: Thursday 18 October 2012
It is fundamental that we learn the lessons of the past, that we give our eyes memory.

The situation in Greece is reaching a point comparable to that of mid-1930s Spain. On the brink of civil war, as a lab rat in the ongoing neoliberal austerity experiment, Greek society is being pushed further and further towards the complete obliteration of democratically achieved civil and human rights and is becoming a festering sore of rightwing nationalism.

 

Last week, as the Nobel Peace Prize was awarded to the European Union, this troubling zeitgeist was clearly illustrated by further police repression and the violence of fascist gangs on the streets of Athens.

There seems to be no end to the rank hypocrisy. As hundreds of thousands of Europeans have been driven into poverty just in the past few months by austerity measures imposed by the Troika; as the gates of Europe have been slammed shut in the faces of destitute refugees overwhelmed by crises of all kinds; and as courageous, angry citizens across the continent have given democratic voice to their resentment of neoliberal policies only to be answered with clubs and teargas: Europe is being recognized for its efforts at achieving peace.

The esteemed ladies and gentlemen in Oslo are acting on false hopes, not reality. Similar to how they awarded Barack ...

Published: Sunday 14 October 2012
“Financial leaders and influential policymakers have also identified the importance of investment in infrastructure and technology transfer in order to boost sustainable growth in developing economies.”

Developing countries – ­relegated to the sidelines of the West-led postwar expansion – have emerged as the saving grace of the global economy against a backdrop of calls for a new economic model that can ease the ravages of globalization and address the lack of confidence in market-based systems.

Indeed, supporting economic growth in developing countries in a way that expands domestic productivity and stimulates global demand has been a core message at the annual meetings of the World Bank and International Monetary Fund (IMF) underway in Tokyo this week.

Financial leaders and influential policymakers have also identified the importance of investment in infrastructure and technology transfer in order to boost sustainable growth in developing economies.

“The envisaged global superhighway has not realized enough growth in the world,” said IMF Managing Director Christine Lagarde, pointing out that economic expansion is currently being recorded mostly in developing countries.

Speaking at a discussion on globalization here, Lagarde says the key economic challenge today is the trend of decreasing job opportunities for youth, suggesting that nations can help each other in meeting these challenges.

“I fear an intergenerational conflict if our financial model leaves increasing debt for the younger generation,” she warned.

Western economies in particular have been hit with massive unemployment among the younger generation. Unemployment rates are as high as 50 percent in countries such as Spain and Greece, both dealing with severe austerity plans imposed by global financial lending institutions.

But Asia, by contrast, has been recording expansion. China, Asia’s growth engine, has shown an average annual 10 percent GDP growth over the past decade and is now the world’s second largest economy.

Published: Friday 12 October 2012
Published: Thursday 4 October 2012
Republicans will blame their defeat in November on the Fed’s monetary stimulus (if not on the ineffectiveness of Mitt Romney’s blunder-filled campaign).

James Carville, Bill Clinton’s chief campaign strategist in 1992, famously expressed a bit of established insider wisdom about winning elections: “It’s the economy, stupid.” Incumbents win if the economic outlook is rosy, and are vulnerable – as George H. W. Bush was – when times are hard. Indeed, throughout Europe – in France, Greece, Ireland, Portugal, Spain, and the United Kingdom – governments have been turned out of office in the face of a crisis that they have seemed unable to address.

By this standard, President Barack Obama should now be in a hopeless situation. According to United States Census data, household income fell in 2011 for the fourth consecutive year. Unemployment remains persistently high, despite the $787 billion stimulus package in 2009, and house prices, though recovering slowly, remain far below their pre-2008 peak.

And yet Obama seems likely to be reelected in November. One reason is that there is no reliable way to render an instant judgment about ...

Published: Wednesday 19 September 2012
“The young family – who lost legal status some months ago after withdrawing their asylum application to Greek authorities in exchange for a return ticket to Afghanistan – embody the predicament faced by many migrants caught in a rising wave of xenophobia.”

Panahi Gholamhousein (22), an Afghan refugee who spends his days in a room that is barely five square metres with his wife Zarmina (18) and their 19-month-old daughter Zahra, has hardly left his place in downtown Athens since he was beaten up and robbed nearly a month ago.

The four attackers “unleashed their dogs on me”, he told IPS. The incident shook him badly, confining him to an apartment shared with many other irregular migrants living in squalid conditions.

The young family – who lost legal status some months ago after withdrawing their asylum application to Greek authorities in exchange for a return ticket to Afghanistan – embody the predicament faced by many migrants caught in a rising wave of xenophobia.

The last three years have seen racist attacks dominating the streets of Athens, spreading fast throughout the country.

Some experts blame the situation on the social stress caused by an extended period of economic austerity – unemployment rates are fast approaching 30 percent and approximately 25 percent of the Greek population now lives below the poverty line.

Last Saturday at 2 a.m. a group of three unidentified assailants used an incendiary explosive device in an attempt to burn Pakistani immigrants alive in their home while they slept.

Navit Navaz was awakened by an explosion from a flaming bottle of gasoline that landed on the edge of the bed. Navaz was subsequently brought to Thriasio Hospital and admitted to the intensive care unit with severe burns on his back and hands.

Two months ago Human Rights Watch ...

Published: Monday 10 September 2012
Published: Thursday 30 August 2012
“The coming unrest in Europe will likely include a demonstration of German dissatisfaction as well as a strong showing of French frustration and anger in addition to rioting and unrest in Spain, Greece, and other financially unstable countries.”

While widespread, violent riots over running the streets of Europe may not be in the near future, there are strong indications that Europe is in for a tumultuous autumn. The combination of the of the general feeling of helplessness brought about by the Eurozone economic crisis, the resentment felt by voters who elected anti-austerity government officials only to find their leaders are toothless, and the rise in food prices due to extreme weather patterns have the potential to bring about widespread protest in Europe. The coming unrest in Europe will likely include a demonstration of German dissatisfaction as well as a strong showing of French frustration and anger in addition to rioting and unrest in Spain, Greece, and other financially unstable countries.

 

Anti-austerity, and in some instances, anti-European Union, sentiments have swept Europe following the 2008 global financial crisis, in which loans to rescue failing economies such as Greece and Spain were dependent upon harsh budget cuts other austerity measures. Protests and riots with varying degrees of violence broke out in nations with faltering economies, largely motivated by a disdain for the policies they perceived as being forced upon them by the European Union. However, frustration concerning the state of the Eurozone is not confined to troubled nations such as Greece, Portugal, Spain, and Italy. Even Germany, generally considered the most powerful and economically stable country in the Eurozone, is faced with an increasingly stubborn public. The establishment of the European Stability Mechanism  has been ostensibly delayed until September 12th, when the German Constitutional Court will resolve a lawsuit brought by Germans who believe that the fund defies domestic laws READ FULL POST 2 COMMENTS

Published: Friday 10 August 2012
“Every American should get a mandatory minimum of three weeks paid vacation a year.”

 

Back from three weeks off grid, much of it hiking in Alaska and Australia.

When I left the U.S. economy was in a stall, Greece was on the brink of defaulting, the euro-zone couldn’t get its act together, the Fed couldn’t decide on another round of quantitative easing, congressional Democrats and Republicans were in gridlock, much of the nation was broiling, and neither Obama nor Romney had put forward a bold proposal for boosting the economy, slowing climate change, or much of anything else. 

What a difference three weeks makes. 

Here’s a bold proposal I offer free of charge to Obama or Romney: Every American should get a mandatory minimum of three weeks paid vacation a year.

Most Americans only get two weeks off right now. But many don’t even take the full two weeks out of fear of losing their jobs. One in four gets no paid vacation at all, not even holidays. Overall, Americans have less vacation time than workers in any other advanced economy.

This is absurd. A mandatory three weeks off would be good for everyone — including employers.

Studies show workers who take time off are more productive after their batteries are recharged. They have higher morale, and are less likely to mentally check out on the job.

This means more output per worker — enough to compensate employers for the cost of hiring additional workers to cover for everyone’s three weeks’ vacation time.

It’s also a win for the economy, because these additional workers would bring down the level of unemployment and put more money into more people’s pockets. This extra purchasing power would boost the economy overall.

More and longer vacations would also improve our health. A study by Wisconsin’s Marshfield Clinic shows women who take regular vacations experience less tension and depression year round. Studies also show that men who take regular ...

Published: Friday 13 July 2012
“Every American tries to find the way to get the most deductions they can.”

 

When Sen. Lindsey Graham told reporters on Tuesday that Mitt Romney's foreign investment accounts don't trouble him because "it's really American to avoid paying taxes," he must not have realized that he was calling his party's nominee-to-be a liar.

"As long as it was legal, I'm OK with it," said the South Carolina Republican. "I don't blame anybody for using the tax code to their advantage. ... It's a game we play. Every American tries to find the way to get the most deductions they can. I see nothing wrong with playing the game because we set it up to be a game."

Graham assumes — no doubt correctly — that Romney sent his money offshore to avoid taxes. But the Republican candidate and his flacks have repeatedly insisted that the Romneys' admittedly minimal tax bill was not reduced at all by their remarkable maze of holdings in Switzerland, the Cayman Islands and Bermuda. It is "the very same" as if he had kept those millions of dollars in the United States, or so they claim.

But Graham clearly doesn't buy that alibi. In fact, nobody does. And eventually Romney may be forced to realize complete information about his investments that may yet indicate the extent to which he and his family have escaped taxation.

Meanwhile, what Graham unwittingly evoked with his clumsy endorsement of tax avoidance is the specter of Greece — a nation whose fiscal drama incites endless Republican prattle about the need for austerity. Warnings that as a nation we are on "the road to Greece" have become a favorite Republican cliche, regurgitated by every politician who wants to be considered for vice president as well as by the presidential candidate himself.

"You call that forward?" Romney ...

Published: Thursday 5 July 2012
When democracy is not determined by economic power, it is possible to imagine alternatives to “growth” and “austerity.”

 

“Growth” is, once again, the buzzword of the moment among Europe’s politicians, thanks to Francoise Hollande, the milquetoast Socialist recently elected to succeed Nicolas Sarkozy as President of France. “My mission now,” Hollande told supporters on the night of his electoral victory, “is to give European construction a growth dimension.” President Obama praised Holland at Camp David, telling reporters he would urge “other G8 leaders” to adopt a “strong growth agenda.” The previous buzzword, “austerity,” is meanwhile in decline.

Considering this shift a victory for the anti-austerity movements occupying Europe’s historic plazas over the course of the last two years mistakes both what the elites mean when they say “growth” and what the dissidents want instead of austerity. It is similar to the way liberal commentators in the United States reliably recite the official line that Occupy Wall Street “changed the conversation” on “income inequality” (which we grown-ups will take care of now from our D.C. office buildings, so please shut up now).

READ FULL POST 5 COMMENTS

Published: Sunday 24 June 2012
Published: Wednesday 13 June 2012
“A what if scenario if the problems in Europe go from bad to worse.”

Consider the following scenario. After a victory by the left-wing Syriza party, Greece’s new government announces that it wants to renegotiate the terms of its agreement with the International Monetary Fund and the European Union. German Chancellor Angela Merkel sticks to her guns and says that Greece must abide by the existing conditions.

Fearing that a financial collapse is imminent, Greek depositors rush for the exit. This time, the European Central Bank refuses to come to the rescue and Greek banks are starved of cash. The Greek government institutes capital controls and is ultimately forced to issue drachmas in order to supply domestic liquidity.

With Greece out of the eurozone, all eyes turn to Spain. Germany and others are at first adamant that they will do whatever it takes to prevent a similar bank run there. The Spanish government announces additional fiscal cuts and structural reforms. Bolstered by funds from the European Stability Mechanism, Spain remains financially afloat for several months.

"Follow Project Syndicate on Facebook or Twitter. For more from Dani Rodrikclick here."

But the Spanish economy continues to deteriorate and unemployment heads towards 30%.  Violent protests against Prime Minister Mariano Rajoy’s austerity measures lead him to call for a referendum. His government fails to get the necessary support from voters and resigns, throwing the country into full-blown political chaos. Merkel cuts off further support for Spain, saying that hard-working ...

Published: Sunday 27 May 2012
Published: Thursday 24 May 2012
Published: Tuesday 22 May 2012
“The German philosopher Jürgen Habermas speaks of a ‘transformational reality’ – a complex word for a simple reality: divided we fall, whereas united, in our own complex manner, we may strive for ‘greatness’ in the best sense.”

The euro, many now believe, will not survive a failed political class in Greece or escalating levels of unemployment in Spain: just wait another few months, they say, the European Union’s irresistible collapse has started.

Dark prophecies are often wrong, but they may also become self-fulfilling. Let’s be honest: playing Cassandra nowadays is not only tempting in a media world where “good news is no news”; it actually seems more justified than ever. For the EU, the situation has never appeared more serious.

 

It is precisely at this critical moment that it is essential to re-inject hope and, above all, common sense into the equation. So here are ten good reasons to believe in Europe – ten rational arguments to convince pessimistic analysts, and worried investors alike, that it is highly premature to bury the euro and the EU altogether.

 

The first reason for hope is that statesmanship is returning to Europe, even if in homeopathic doses. It is too early to predict the impact of François Hollande’s election as President of France. But, in Italy, one man, Mario Monti, is already making a difference.

Follow Project Syndicate on Twitter and FacebookClick here to see more from Dominique Moisi.

Of course, no one elected Monti, and his position is fragile and already ...

Published: Wednesday 16 May 2012
Published: Sunday 13 May 2012
Published: Friday 11 May 2012
“On the anti-austerity side, a left-wing coalition came in second with around 17 percent of the vote. More ominously, a far right anti-immigrant party, which is also anti-austerity, received almost 7 percent of the vote.”

Austerity was the big loser in the Greek elections on Sunday. The two main Greek parties, who endorsed the austerity pact signed last year, together got just over one-third of the vote. This is an extraordinary rebuke given that between them, these parties have governed Greece since the end of the dictatorship in 1976.

On the anti-austerity side, a left-wing coalition came in second with around 17 percent of the vote. More ominously, a far right anti-immigrant party, which is also anti-austerity, received almost 7 percent of the vote.

It is important for people elsewhere in the world, and especially in Europe, to understand that the Greek voters were not just being cranky kids who refuse to take their medicine. There is no doubt that Greece’s government and economy were poorly managed in the years leading up to the crisis.

However the current path of austerity does not offer the country a path to a better future. The current path of austerity is simply a path of pain as end in itself. This can be seen from examining the official projections.

The IMF now projects that 2012 will be Greece’s fifth successive year of economic contraction, with 2013 being a year of stagnation. Even with growth projected to resume again in 2014, Greece’s per capita income is still projected to be more than 8.0 percent lower than it was a decade earlier. Its unemployment rate, which is currently hovering near 20 percent, is still projected to be almost 15 percent in 2017. And, its debt to GDP ratio is projected to be 137 percent in five years, far higher than it was at the onset of the crisis.

This is not a path to a healthy economy. ...

Published: Thursday 10 May 2012
Published: Wednesday 9 May 2012
Published: Monday 7 May 2012
“The proper sequence is for government to keep spending until jobs and growth are restored, and only then to take out the budget axe.”

Who’s an economy for? Voters in France and Greece have made it clear it’s not for the bond traders.

Referring to his own electoral woes, Prime Minister David Cameron wrote Monday in an article in the conservative Daily Telegraph: “When people think about the economy they don’t see it through the dry numbers of the deficit figures, trade balances or inflation forecasts — but instead the things that make the difference between a life that’s worth living and a daily grind that drags them down.”

Cameron, whose own economic policies have worsened the daily grind dragging down most Brits, may be sobered by what happened over the weekend in France and Greece – as well as his own poll numbers. Britain’s conservatives have been taking a beating.

In truth, the choice isn’t simply between budget-cutting austerity, on the one hand, and growth and jobs on the other.

It’s really a question of timing. And it’s the same issue on this side of the pond. If government slices spending too early, when unemployment is high and growth is slowing, it makes the debt situation far worse.

That’s because public spending is a critical component of total demand. If demand is already lagging, spending cuts further slow the economy – and thereby increase the size of the public debt relative to the size of the overall economy.

You end up with the worst of both worlds – a growing ratio of debt to the gross domestic product, coupled with high unemployment and a public that’s furious about losing safety nets when they’re most needed.

The proper sequence is for government to keep spending until jobs and growth are restored, and only then to take out the budget axe.

If Hollande’s new government pushes Angela Merkel in this direction, he’ll end up saving the euro and, ironically, the jobs of many conservative leaders throughout Europe ...

Published: Monday 7 May 2012
Published: Tuesday 1 May 2012
Published: Sunday 8 April 2012
“On average, 25 percent of European’s youth labor force is unemployed and yet another 25 percent only has a precarious, low paid job, even though most of unemployed young people possess high educational qualifications, including university diplomas.”

According to official figures, the unemployment rate affecting people under 25 years of age has reached 50 percent in Spain, 48 percent in Greece, 35 percent in Portugal, and 31 percent in Italy. Youth unemployment is also high in Ireland (30 percent), France (23 per cent), and Britain (22 percent). 



On average, 25 percent of European's youth labor force is unemployed and yet another 25 percent only has a precarious, low paid job, even though most of unemployed young people possess high educational qualifications, including university diplomas. 


In all these countries affected by high sovereign debt and economic recession, conservative governments have imposed drastic cuts in public spending, reduced social welfare programs and pensions and increased taxes, especially those paid by consumers, among other austerity measures. 


These programs have deepened economic slumps and fiscal difficulties across Europe. 


As the Organization for Economic Cooperation and Development (OECD) announced on Mar. 29 in its more recent economic assessment for the G7, the seven most industrialized countries of the world, "Our forecast for the first half of 2012 points to robust growth in the United States and Canada, but much weaker activity in Europe, where the outlook remains fragile." 


"We may have stepped back from the edge of the cliff," the OECD’s chief economist Pier Carlo Padoan cautioned, "but there’s still no room for complacency." 


Padoan also warned that the Eurozone’s three largest economies - Germany, France, and Italy – might have shrunk by an average of 0.4 percent during the first quarter of the year. 


The German economy already suffered a slowdown of 0.2 percent during the last quarter of 2011. Given the OECD ...

Published: Monday 2 April 2012
Published: Wednesday 29 February 2012
“It’s about $170 billion worth of loans to keep Greece from defaulting on its debts.”

As Greece continues to try and arrest its economic decline, Germany OK'd another $170 billion worth of bailout funds to keep the government operating, to prevent the country from going bankrupt and to keep Greece in the eurozone.

On Monday the German Parliament approved the latest round of bailout funds for Greece.

It’s about $170 billion worth of loans to keep Greece from defaulting on its debts. Germany’s expected to come up with most of the cash.

Until now, German politicians have presented a pretty united front when it came to keeping Greece in the eurozone. That’s despite the fact that many Germans are fed up with giving the Greeks any more money.

But on Monday, the German tabloid Bild had this headline message for German politicians: “STOP!”

“Don’t go down this crazy path any longer," the tabloid wrote.

Meanwhile, other German papers recently carried a full page ad taken out by Greek businessmen that said, “Give Greece a Chance.”

Chancellor Angela Merkel expressed her support for the bailout Monday morning ahead of the parliamentary debate on the next tranche of German bailout money.

“I know there are people asking whether Greece was a bottomless pit, a hopeless case, whether it would be better for all if Greece went back to the Drachma, whether — to sum it up — the eurozone wouldn’t be better off without Greece than with Greece,” she said. “These questions are valid. After weighing up all pros and cons I, however, come to the conclusion that the opportunities lying within this new package outweigh its risks.”

For two years now, Merkel and her party faithful have stuck to the idea that the eurozone is better off with Greece in it. But cracks are now showing.

This past weekend, Merkel’s own Interior Minister suggested that Greece’s chances of recovery might be better outside ...

Published: Thursday 23 February 2012
“Greece is bracing for protests after eurozone finance ministers concluded a deal that will provide a $170 billion bailout in return for another round of deep austerity cuts.”

Greece is bracing for protests after eurozone finance ministers concluded a deal that will provide a $170 billion bailout in return for another round of deep austerity cuts. The bailout is opposed by several unions and left-wing groups in Greece over new cuts and layoffs imposed on public sector workers. We’re joined by Paul Mason, economics editor at BBC Newsnight and author of the new book, "Why It’s Kicking Off Everywhere: The New Global Revolutions." He has just returned from Greece. "What makes the headlines are, of course, the riots," Mason says. "What doesn’t make so many headlines is what is happening to real people... We are living in a time where the world has, in the last couple of years, erupted in a way that many people thought they would never see again since the 1960s... The underpinnings of this new global unrest are that...people are sick of seeing the rich get richer during a crisis."

Transcript:

NERMEEN SHAIKH: We turn now to ...

Published: Thursday 23 February 2012
“It’s not entirely too late to try again: but it requires the currently unimaginable: a political will that is population – rather than bank – oriented.”

Greece has been the most pillaged country in Europe this Depression, among other reasons, because no one in any leadership position seems to have learned lessons from the 1930s. Plus, banks have more power now than they did then to call the shots.

Despite no signs of the first bailout working – certainly not in growing the Greek economy or helping its population - but not even in being sufficient to cover speculative losses, Euro elites finalized another 130 billion Euro, ($170 billion) bailout today. This is ostensibly to avoid banks’ and credit default swap players’ wrath over the possibility of Greece defaulting on 14.5 billion Euros in bonds.

Bailout promoters seem to believe (or pretend) that: bank bailout debt + more bank bailout debt + selling national assets at discount prices + oppressive unemployment = economic health. They fail to grasp that severe austerity hasn’t, and won’t, turn Greece (or any country) around. Banks, of course, just  want to protect their bets and not wait around for Greece to really stabilize for repayment.

Prior to the Great Depression, the Greek economy experienced years of growth, a healthy commercial activity spree, and like today, a stark increase in (less-leveraged) bank loans to finance it. When the Depression struck, banks and local businesses faced unpayable loans and ...

Published: Wednesday 22 February 2012
“The Houses of Morgan, Goldman and the other Big Five are justifiably worried right now, because an ‘event of default’ declared on European sovereign debt could jeopardize their $32 trillion derivatives scheme.”

In an article titled “Still No End to ‘Too Big to Fail,’” William Greider wrote in The Nation on February 15th:

Financial market cynics have assumed all along that Dodd-Frank did not end "too big to fail" but instead created a charmed circle of protected banks labeled "systemically important" that will not be allowed to fail, no matter how badly they behave.

That may be, but there is one bit of bad behavior that Uncle Sam himself does not have the funds to underwrite: the $32 trillion market in credit default swaps (CDS).  Thirty-two trillion dollars is more than twice the U.S. GDP and more than twice the national debt. 

CDS are a form of derivative taken out by investors as insurance against default.  According to the Comptroller of the Currency, nearly 95% of the banking industry’s total exposure to derivatives contracts is held by the nation’s five largest banks: JPMorgan Chase, Citigroup, Bank of America, HSBC, and Goldman Sachs.  The CDS market is unregulated, and there is no requirement that the “insurer” actually have the funds to pay up.  CDS are more like bets, and a massive loss at the casino could bring the house down.

It could, at least, unless the casino is rigged.  Whether a “credit event” is a “default” triggering a payout is determined by the International Swaps and Derivatives Association (ISDA), and it seems that the ISDA is owned by the world’s largest banks and hedge funds.  That means the house determines whether the house has to pay. 

The Houses of Morgan, Goldman and the other Big Five are justifiably worried right now, because an “event of default” declared on European sovereign debt could jeopardize their $32 ...

Published: Friday 17 February 2012
On Feb. 8, Eurostat published a report estimating that 27.7 percent of the active workforce, aged 18-64 years old, currently lives on the poverty line.

According to European mainstream economists and politicians, the solution to the Greek debt crisis, and the only option for returning the country to a path of progress, is 'fiscal consolidation'.

But for the Greek masses, the word ‘austerity’ has meant the demise of labor, economic and human rights and the dismantling of an inefficient yet crucial social welfare system.

In a last ditch attempt to secure an additional bailout loan of 130 billion dollars from the Troika (a mechanism comprised of the International Monetary Fund, the European Central Bank and the European Commission), Greece has capitulated to the austerity plan forced upon it by the international community, hoping to escape bankruptcy.

The latest phase of the plan included cutting 150,000 public sector jobs, overturning existing labor laws, slashing pensions and reducing monthly minimum wages by 20 percent, from 751 euros to 600 euros.

Workers under 25 years of age have been asked to take a bigger – 30 percent – salary cut.

Parliament ushered in the fresh ‘bout of austerity’ on Feb. 12 amid increasing violence across the city. Mobs of newly impoverished Greeks took to the streets, setting Athens ablaze and offering yet another spectacle to the international media.

Meropi Andriopoulou, a medical officer involved in the national health system since 1989, who often joins the demonstrators, believes that ordinary Greeks only stand to lose more from the neoliberal structural adjustment policies (SAPs) imposed on the country.

"Greece was a country with universal healthcare. Now, many of the people who show up in public hospitals can’t even afford the five-euro general admission fee introduced two years ago. Ten percent of patients don’t even have insurance," she said.

"Spending your days in a public hospital (highlights the degree of) social exclusion. Our healthcare system has ...

Published: Wednesday 15 February 2012
“It’s no surprise that Greeks aren’t backing the new measures, even though without the bailout, Greece faced a disorderly default that interim Prime Minister Lucas Papademos warned would likely drive Greece from the eurozone.”

Greeks began cleaning up their battered and scorched capital Monday after violent anti-austerity riots broke out this weekend.

But whether they can clean up what's left of a badly damaged psyche remains to be seen.

The physical damage was clear: At least 120 people injured and 45 torched buildings, including a beloved historic cinema housed in a neoclassical building.

Giorgos Constantinidis, a 62-year-old retired salesman, said the psychological damage is much worse, however.

"It shows just how fragile and volatile the situation is here right now," he said. "We don't know if we can survive austerity measures. We don't know if we can survive the drachma. People feel trapped, but they don't know where to look for guidance. We don't trust our leaders, we don't trust the Europeans, and sometimes we don't even trust each other."

On Sunday, Greece's Parliament approved tough new austerity measures, including cuts in the minimum wage and pensions and new tax hikes. The measures were required by international bankers before they would agree to a bailout package totaling $172 billion that Greece needs to pay off bonds that come due March 20.

But two years of earlier austerity have worsened a recession that is now in its fourth year. The general unemployment rate is at more than 20 percent, and about 48 percent of young Greeks do not have jobs. A recent poll showed that half of homeowners said they couldn't pay their mortgages.

So it's no surprise that Greeks aren't backing the new measures, even though without the bailout, Greece faced a disorderly default that interim Prime Minister Lucas Papademos warned would likely drive Greece from the eurozone.

Despite the warning, Papademos, a former central banker and Harvard professor, spent days negotiating with other members of his coalition government to make sure they would agree to the measures. Opposition ...

Published: Sunday 15 January 2012
Short- and medium-term economic policies should aim at stimulating the economy, rather than throttling it with austerity measures.

Bolstered by Germany’s strong economy, Berlin has become the unofficial capital of the battered European monetary union.

However the German government’s proposals to solve the sovereign debt crisis, by imposing severe austerity programs to reduce state deficits and rejecting the distribution of Eurobonds, are coming up against increasing opposition across most of the 17 countries that comprise the Eurozone.

On Jan 9, French president Nicolas Sarkozy was in Berlin to meet German chancellor Angela Merkel and discuss fresh new solutions to the European sovereign debt crisis.

On Jan 11, Italian Prime Minister Mario Monti, in office since November, visited the German capital for the very same purpose but made no secret of his wish to modify the austerity program, which successive governments have hurled at the crisis with little to no success.

In an interview with the German daily newspaper Die Welt, Monti said that his government has imposed "severe burdens" upon the Italian citizenry by following Berlin’s austerity model, but so far "the European Union has made no concession towards Italy, by way of lower interest rates" for the country’s state bonds.

"If Italian citizens do not see (the immediate) fruits of their austerity efforts, there will be protests against the EU, against Germany, and against the European Central Bank," Monti warned. "There are already signs of these protests."

Although almost all 17 members of the Eurozone currently suffer from sovereign debt, financial markets sanction each of them differently by imposing different interest rates for new state debt bonds.

For instance, Germany, which has a sovereign debt of some 2.1 trillion Euros, pays extremely low interest rates for new debt bonds. Earlier in January, the interest rates for new German debt bonds were negative, meaning that investors were willing to pay Germany for taking out ...

Published: Friday 30 December 2011
“There is no safety net as we make the transition to a potentially new life, new identity, new community.”

Poised on the threshold of a new year, I’m again drawn to a metaphor for the challenges and opportunities we face in this urgent time of ours: the crossroads.

Two roads intersect, and now we confront an unavoidable choice. Do we carry on as we always have—or do we, with courage and imagination and verve, make a dramatic course correction?

While it may be too early to definitively rank 2011 as the year of the Great Nonviolent Turning (even greater things may be coming in the new year or in the years that will follow it; or, on the contrary, the passage of time may reframe this period entirely), the events of the past twelve months—from Tunisia to Egypt, from Greece to Spain, from Chile to Jeju Island, from China and Russia to a more or less Occupied America—have signaled a growing determination for a qualitative shift.

Here the symbol of the crossroads is especially apt. Traditionally it signifies, not an arbitrary or simplistic decision (Coke or Pepsi?), but a momentous choice: a turning point, a decisive situation, or a set of life-altering options. The worldwide movement for nonviolent change that has been gathering momentum this year seems to be placing before us such immense choices: Radical economic disparity or sustainable equality? Oligarchy or democracy? Militarized culture or a more nonviolent civil society?

These are not minor alternatives. Real change of this magnitude will require profound structural metamorphosis. This will not appear out of the blue. Nor will it happen merely because we wish it so. Instead, it will depend on movements that derive their power from a deep transformation of personal and social consciousness and identities; a willingness to let go of certain reliable (if debilitating) assumptions about how the world is ordered; and a commitment to face the consequences for taking these still as yet unclear steps for change.

The crossroads in its deepest sense may also be useful ...

Published: Saturday 3 December 2011
“Crisis is often invoked as the midwife of revolutionary change, and here are Greece, Italy, Spain and even France at various levels of crisis, with political orthodoxy and the normal order of things increasingly discredited.”

It looks as though the eurozone may be in a decisive meltdown, which is just fine in my book. The sooner we get back to francs, lire, punts, drachmas and the rest of the old sovereign currencies, the better.

It used to be as much a part of going to France to change money and be handed a bundle of notes featuring the devious Cardinal Richelieu as choking on Gauloise smoke. Instead, those francs are now replaced by the characterless but somehow always expensive euros.

The argument against the eurozone is that hard-faced Euro-bankers — their killer instincts honed at Goldman Sachs, Wall Street's School of the Americas — have the power to act as the bully-boys of international capital and impose austerity regimes from Dublin to Athens, scalping the poor to bail out the rich.

Now the end of the eurozone does not mean the end of the European Union. They're different. There are 17 nations in the former, 27 in the latter. Britain, for example, has never been in the eurozone, which is why the currency exchange in London will, in return for your worthless dollars, hand you bank notes with the Queen's portrait on them.

At the moment, the European Union has virtually no tax collecting powers. Its annual haul is about 1 percent of the EUs gross domestic product. By comparison, the U.S. government collects about 20 to 24 percent of GDP.

Throughout the entire Eurocrisis, there has been a basso profundo chorus from the Eurocrats that what's needed is a lot more centralizing. In the words of Wolfgang Munchau at the Financial Times on Nov. 28, the EU needs "a fiscal union": "This would involve a partial loss of national sovereignty, and the creation of a credible institutional framework to deal with fiscal policy, and hopefully wider economic policy issues as well."

I've read many editorial paragraphs with this same bullying timbre — that what the whole European enterprise needs is an ...

Published: Sunday 27 November 2011
“Reforming social-welfare benefits is the only permanent solution to Europe’s crisis”

The resignations of Greek Prime Minister George Papandreou and Italian Prime Minister Silvio Berlusconi have highlighted how Greece, Italy, and many other countries obscured for too long their bloated public sectors’ long-standing problems with unsustainable social-welfare benefits. Indeed, for many of these countries, meaningful reform has now become unavoidable.

The social-insurance systems in Europe, as in the United States, Japan, and elsewhere, were designed under vastly different economic and demographic circumstances – more rapid economic growth, rising populations, and lower life expectancy – from those prevailing today. Governments (the focus is on Greece and Italy at the moment, but they are not alone) have promised too much, to too many, for too long. My 1986 book Too Many Promises pointed to the same problem with America’s social-welfare system.

This fundamental problem has now manifested itself in these countries’ unsustainable debt dynamics. Euro membership, which temporarily enabled massive borrowing at low ...

Published: Wednesday 16 November 2011
“The euro is at risk of collapse, and some European politicians are waxing apocalyptic.”

Europe has always been a rather tenuous concept. A rump continent, Europe represented the barbarous hinterlands for the Greeks and Romans. The first use of the term "European" occurred in a chronicle describing the forces of Charles the Hammer that turned back the northward advance of Islam at the battle of Tours in 732. Long celebrated in Europe as a victory of civilization over barbarism, the Battle of Tours was, as historian David Levering Lewis reminds us in God's Crucible, actually the opposite: "the victory of Charles the Hammer must be seen as greatly contributing to the creation of an economically retarded, balkanized, fratricidal Europe that, in defining itself in opposition to Islam made virtues out of religious persecution, cultural particularism, and hereditary aristocracy."

For most of its existence, Europe has been just that: a continent divided against itself. From the conquests of Charlemagne to the unprecedented bloodletting of two world wars in the 20th century, Europe saw only brief stretches of unity, and that only by virtue of imperial force.

Europe as a unified, democratic, relatively peaceful, and economically prosperous order has so far only enjoyed a brief lifespan. This conception of Europe dates to the early days of the Cold War and the perceived need to create a bulwark against the Soviet Union to the east. Centuries of Franco-German enmity vanished after World War II, as these two key European countries united against a common enemy at the urging of a common friend (the United States). The resulting economic alliance would expand and deepen over the decades into the current European Union of 27 countries. The EU now boasts a parliament, a council of ministers, a common currency (for 17 of the 27), the largest economy in the world, and even, somewhat ominously, a military force that has intervened overseas a dozen times or so.

Thanks to a difficult-to-contain economic ...

Published: Saturday 12 November 2011
“Just as healthy domestic economies are the best guarantor of an open world economy, healthy domestic policies are the best guarantor of a stable international order.”

As if the economic ramifications of a full-blown Greek default were not terrifying enough, the political consequences could be far worse. A chaotic eurozone breakup would cause irreparable damage to the European integration project, the central pillar of Europe’s political stability since World War II. It would destabilize not only the highly-indebted European periphery, but also core countries like France and Germany, which have been the architects of that project.

The nightmare scenario would also be a 1930’s-style victory for political extremism. Fascism, Nazism, and communism were children of a backlash against globalization that had been building since the end of the nineteenth century, feeding on the anxieties of groups that felt disenfranchised and threatened by expanding market forces and cosmopolitan elites.

Free trade and the gold standard had required downplaying domestic priorities such as social reform, nation-building, and cultural reassertion. Economic crisis and the failure of international cooperation undermined not only globalization, but also the ...

Published: Wednesday 9 November 2011
“People will want to hold onto ocean-front property in the Greek islands or at the foot of the Acropolis, so there will be demand for the currency.”

Greek Prime Minister George Papandreou touched off a firestorm last week when he proposed putting the austerity package designed by the “troika” (the I.M.F, the European Central Bank and the European Union) up for a popular vote. The idea that the Greek people might directly be able to decide their future terrified leaders across Europe and around the world. Financial markets panicked, sending stocks plummeting and bond yields soaring.

However, by the end of the week things were back under control. The leaders of France and Germany apparently laid down the law to Papandreou and he backed off plans for the referendum. While the government is in the process of collapsing in Greece, the world can now rest assured that the Greek people will not have an opportunity to vote on their future.

This is unfortunate since it means that Greece’s future will likely be decided by politicians who may not have the interests of the Greek people foremost in their minds. By their own projections, the austerity package designed by the troika promises a decade of austerity, with high unemployment, falling real wages and sharp reductions in public services and pensions. And, their projections have consistently proven to be overly optimistic.

If given the opportunity would the Greek people endorse this sort of austerity package? The answer obviously depends on the alternative.

READ FULL POST 6 COMMENTS

Published: Sunday 6 November 2011
“And what was most striking was the assumption the elite - the 1%, if you will - have veto power over the democratic process.”

Congress' "supercommittee" of the 1% is preparing an austerity plan for the 99%. Will We, the People be allowed to vote on this plan, or, like Greece, will the elites just tell us how it is going to be? Our deficits were caused by tax cuts for the rich and huge increases in military spending. But instead of addressing these causes the elite supercommittee is said to be preparing to take money out of the economy by cutting the things We, the People do for each other. That's right, at the very time when 99% of us need more we will get less so that the 1% can enjoy record-low tax rates -- and it looks like We, the People will have no say in it.

Last week Greek Prime Minister George Papandreou proposed a referendum on the austerity plan that European governments are preparing for the country. "The markets" -- another name for the 1% -- went berserk in reaction. Pressure was applied, and now the Greek people will not be allowed to vote on their austerity plan after all, they ...

Published: Saturday 5 November 2011
“And what was most striking was the assumption the elite - the 1%, if you will - have veto power over the democratic process.”

This week was a sharp reminder that the ancient ideal of democracy is just as threatened - and to some, just as threatening - as it's ever been. In government offices in Athens, G20 meeting rooms in Cannes, and "Super Committee" chambers in Washington, we learned that there are still places where the will of the people can be overruled by the whims of the powerful.

From the Parthenon to the Potomac, it was the same story: Elites still hold veto power over the democratic process, and they're not afraid to use it.

Democracy: 'Radical,' 'Irrational,' 'Dangerous'

Ironically, this week's ferment began in the country that's usually credited with creating democracy. In many ways the Greek economy couldn't be more different from our own. The government's fiscal problems there are due in large part to widespread corruption and massive tax evasion - not ...

Published: Saturday 5 November 2011
There was still no agreement on how to fund the European Financial Stability Facility, which is designed to prevent debt problems in Greece or any of the other 27 EU nations from spilling over to neighboring countries or the global economy.

Leaders of the world’s most-industrialized nations ended two days of turbulence here, unable to finalize a bailout plan for struggling European Union economies but inching forward on steps designed to prevent a financial crisis from spreading.

“Here at Cannes, we moved the ball forward,” said President Barack Obama, who sought to spur European leaders to act but nonetheless was forced to the sidelines as the United States grapples with its own financial woes.

The two-day G-20 summit was overshadowed by drama in Greece, which at the start of the week looked headed for a public vote on, and rejection of, an EU plan to restructure the country's debts. A “no” vote would have meant expulsion from the EU, something that’s never happened, but by week’s end Greek opposition leaders had agreed to honor the tough austerity measures that will be required in exchange for banks voluntarily taking a 50 percent cut in the value of the Greek bonds they hold.

“That’s the right recipe,” Obama said. “It just has to be carried out.”

While concerns about Greek resistance to the plan eased, European leaders made little progress on the size and composition of what was supposed to be a muscular version of their current bailout fund, known as the European Financial Stability Facility. Europe had hoped to have big emerging economies such as Brazil and China ...

Published: Saturday 5 November 2011
“Here, as elsewhere, people are outraged at what feels like a rigged game – an economy that won’t respond, a democracy that won’t listen, and a financial sector that holds all the cards.”

The biggest question in America these days is how to revive the economy.

The biggest question among activists now occupying Wall Street and dozens of other cities is how to strike back against the nation’s almost unprecedented concentration of income, wealth, and political power in the top 1 percent.

The two questions are related. With so much income and wealth concentrated at the top, the vast middle class no longer has the purchasing power to buy what the economy is capable of producing. (People could pretend otherwise as long as they could treat their homes as ATMs, but those days are now gone.) The result is prolonged stagnation and high unemployment as far as the eye can see.

Until we reverse the trend toward inequality, the economy can’t be revived.

But the biggest question in our nation’s capital right now has nothing to do with any of this. It’s whether Congress’s so-called “Supercommittee” – six Democrats and six Republicans charged with coming up with $1.2 trillion in budget savings — will reach agreement in time for the Congressional Budget Office to score its proposal, which must then be approved by Congress before Christmas recess in order to avoid an automatic $1.5 trillion in budget savings requiring major across-the-board cuts starting in 2013.

Have your eyes already glazed over?

Diffident Democrats on the Supercommittee have already signaled a willingness to cut Medicare, Social Security, and much else that Americans depend on. The deal is being held up by Regressive Republicans who won’t raise taxes on the rich – not even a tiny bit.

President Obama, meanwhile, is out on the stump trying to sell his “jobs bill” – which would, by the White House’s own estimate, create fewer than 2 million jobs. Yet 14 million people are out of work, and another 10 million are working part-time who’d rather have full-time ...

Published: Thursday 3 November 2011
Political turmoil in Greece may cause the Euro Crisis to worsen.

The political turmoil in Greece deepened Thursday as Prime Minister George Papandreou faced a serious revolt within his party over his plan to call a referendum on the country's membership in the Eurozone, pushing his government close to collapse.

Papandreou's finance minister, Evangelos Venizelos, broke ranks and declared his opposition to the plebiscite.

"Greece's position within the Euro area is a historic conquest of the country that cannot be put in doubt," Venizelos said in a statement early Thursday after returning from the G-20 summit in Cannes, France.

Other ministers are also beginning to voice their opposition to the referendum, barely more than 24 hours after Papandreou's Cabinet was said to have given him its "full backing" on the issue. And a handful of senior members of his ruling Socialist Party have openly urged him to resign.

Papandreou has called an emergency Cabinet meeting for Thursday morning in Athens upon his own return from Cannes, where other European leaders starkly warned him that the referendum, if it goes ahead, could mean Greece's departure from the 17-nation Eurozone.

A vote of confidence in Papandreou is scheduled for Friday. He commands only a razor-thin majority in Parliament, and there is a real prospect now that he ...

Published: Thursday 3 November 2011
“States and cities have been slashing public services for the past three years.”

Which do you trust more: democracy or financial markets?

Greek Prime Minister George Papandreou decided in favor of democracy yesterday when he announced a national referendum on the draconian budget cuts Europe and the IMF are demanding from Greece in return for bailing it out.

(Or, more accurately, the cuts Europe and the IMF are demanding for bailing out big European banks that have lent Greece lots of money and stand to lose big if Greece defaults on those loans – not to mention Wall Street banks that will also suffer because of their intertwined financial connections with European banks.)

If Greek voters accept the bailout terms, unemployment will rise even further in Greece, public services will be cut more than they have already, the Greek economy will contract, and the standard of living of most Greeks will deteriorate further.

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Published: Thursday 3 November 2011
“G20 opens as Greek PM pushes for referendum on EU bailout plan”

World leaders are gathering in Cannes for the opening of the Group of 20 summit today. On the top of the agenda is the Greece bailout and the European debt crisis. On Monday, Greek Prime Minister George Papandreou angered many European leaders by announcing his support for a popular referendum—allowing the Greek people to decide if they want to accept the conditions of the $179 billion European Union bailout. After days of increasing criticism from European leaders, Greek Prime Minister George Papandreou is now facing calls from within his party to resign. The Greek debt scandal has also pitted U.S. banking interests against France, Germany and other European powers. "The Americans are putting immense pressure on Europe, saying, 'We will wreck your economy, if you don't wreck Greece’s economy,’" says economic analyst Michael Hudson. President Obama is "basically telling Europe, ’Don’t go the democratic route. Support Wall Street.’"

Transcript: 

AMY GOODMAN: World leaders are gathering in Cannes for the opening of the Group of 20 summit today. That’s the G20 summit. On the top of the agenda is Greece and the European debt crisis. The Greek prime minister, George Papandreou, is coming under intense criticism from European leaders for allowing the Greek people to decide if they want to accept the conditions of a $179 billion E.U. bailout. Papandreou has announced the referendum will take place in early December, but it now looks like his government is in danger of collapsing before then. He faces a vote of no confidence tomorrow. According to polls, most Greeks are opposed to the bailout plan, and there have been protests across the country against deepening ...

Published: Wednesday 2 November 2011
"The economic disaster would be nearly instantaneous, but the political process would be probably lengthy and messy. But legally, I believe, it would end with Greece compelled to leave both the European Union and the euro," Kierkegaard said.

Global stocks skidded Tuesday after a stunning about-face by Greece on a deal agreed to last week to quell the European Union's debt crisis, as investors and analysts scrambled to understand the impact on the U.S. and global economies.

U.S. stocks plunged as investors fretted that Europe's problems, thought largely resolved, now appear far from settled and threaten a weak U.S. economic recovery. Blue chips on the Dow Jones industrial average traded down more than 300 points for most of the day before closing off 297.05 points to 11, 675.96. The S&P 500 closed down 35.02 points to 1218.28 and the NASDAQ lost 77.45 points to finish at 2606.96.

The spectacular collapse of U.S. investment bank MF Global, and allegations of missing funds and irregularities within it, added to the volatility. The financial giant, which held large amounts of Italian debt, is considered the first significant U.S. victim of Europe's widening debt crisis.

Greek Prime Minister George Papandreou shocked fellow European Union heads of state late Monday by announcing that he'd put to a referendum the debt deal negotiated last week at a marathon EU summit. French Prime Minister Nicolas Sarkozy and German Chancellor Angela Merkel on Tuesday summoned Papandreou to a hastily called meeting Wednesday.

Turmoil looks certain to continue this week.

Papandreou held a Cabinet meeting late into the night and said he'd stick to his plans for a referendum. He also called for a parliamentary confidence vote Friday. Several leaders of Papandreou's Socialist Party, called Pasok, threatened to leave the government in protest over the surprise referendum. If there are enough deserters from his own party, the Greek government could collapse while President Barack Obama and leaders of 19 other industrialized nations meet in France on Thursday and Friday.

 

This is exactly the sort of turmoil that U.S. government officials had warned ...

Published: Wednesday 17 August 2011
“The analogy to Greece is a farce from the word go.”

“What’s the difference between the United States and Greece?” should be the setup line for a joke. Unfortunately, it’s a question that seems to be stumping many of the people involved in Washington policy debates. Now that Standard & Poor’s has downgraded the US government’s credit rating (along with that of government-controlled mortgage behemoths Fannie Mae and Freddie Mac, and other entities), the policy-wonk community is likely to find this question even trickier.

The analogy to Greece is a farce from the word go. Greece had chronic deficits even in the good years. Its debt-to-GDP ratio was rising in the years before the crash, when its economy was experiencing strong growth. It now has a debt-to-GDP ratio approaching 150 percent. By contrast, in the United States, even with the Bush tax cuts, the wars in Iraq and Afghanistan, and the Medicare prescription drug benefit, the debt-to-GDP ratio was stable during the housing bubble years. It is now just above 60 percent.The problems faced by the Greek economy—and now, through contagion, perhaps the entire eurozone—are nothing like the problems facing the US economy. However, people with a clear political agenda are doing their best to confuse the public and claim that a crisis created by the collapse of the housing bubble is really a crisis of excessive government spending. Their goal is to gut Social Security, Medicare and Medicaid, and they are prepared to use their money and their influence over the media to achieve it.

The second key difference between Greece and the United States is that we borrow in our own currency. At the end of the day, if we cannot tax or borrow the money needed to pay our bills, we can print it. That may ...

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