View Full Version : "Austerity Measures" or Social Genocide -Stories from around the Globe
We are experiencing a global economic crisis of historical proportions. Conditions for the poor and the working class are likely to worsen significantly over the coming months and years. We will most likely see the death of the middle class. The 99% around the world will be made to suffer unjustly for a crisis we had no hand in creating. The 1% will continue to amass huge amounts of money as well as power. As always, depending on your geographic location, suffering may be significantly more intense and disproportionate, but we will all suffer as austerity measures, a euphemism for social genocide, are implemented around the world.
Our pain and suffering can unite us. We are in a unique position at this moment in time. Because of technological advances that make communication possible and information readily available we, as one world, can begin to reach a philosophical unity and begin initiatives to create true change, global change, as we seek liberty and freedom for all.
Toward this end we must begin to discuss ideas and issues, but it is also important to be clear on the realities of our world. We are divided by artificial separations that run deeper even than borders and nationalism. And I know it is in human nature to other, to be suspicious of those outside our borders, wherever we place them. But I do think we can find a way to unite against a very real enemy, one who seeks to do us all great harm. If we do nothing our way of life will die. If we act separately we will diffuse our power, for our strength lies in our great numbers, and we will likely lose. The only way a small population can control a large one is to bring them to their knees to accept the yoke. As resources shrink, those in power have no choice but to discard the Mr. Nice Guy pretense some of us have been privy to. We will accept our fate willingly or they plan to make us. Never doubt this. Global unity of purpose is our best chance.
But it's never wise to put the cart before the horse. Empathy and shared injustice goes a long way toward uniting people. I thought I would start a thread where we can post stuff about what our sisters and brothers around the world are experiencing in this time of financial upheaval. I thought I would start by posting an article about Greece. The Greek people are going through a very difficult time and our wonderfully unbiased media has done a fantastic job of playing the blame the victim game. It’s the favorite game of the 1% and all those who are under their control. I remember when I first began to hear about the problems in Greece. All the reporters seemed to do was tell us stories about how much the Greek people had been given and how over the top their social programs were. So of course their predicament was self induced and it was understandable that they had to give into these austerity measures. This is the same approach the 1% always uses. Blame the poor for poverty. And we always fall for it. We need to wake up. These austerity measures, that we will all be made to accept, are nothing less than social genocide.
October 24, 2011
"Do you think we are the parasites of Europe?"
Fury Mounts Among Greek People
by PATRICK COCKBURN
Athens
Greece last week was paralysed by a 48-hour general strike that began Wednesday and cast doubt on the unpopular government’s ability to implement reforms demanded by the European Union in return for further bailout money.
Black-masked youths hurled chunks of marble and petrol bombs at riot police in front of the parliament building in the centre of Athens. Police responded with stun grenades and tear gas as clashes spread to neighboring streets after mass rallies, where protesters demanded an end to tax rises and salary cuts that they say are reducing them to poverty. Acrid plumes of black smoke rose from blazing bins of uncollected rubbish and mixed with the white clouds of tear gas. Chunks of rock and broken glass littered the streets around the parliament.
“We are going back to the standard of living our grandfathers had,” Eliza Giannakaromi, who was marching with municipal employees, said. “It is happening at every level of society, so the Stelios Georgiou, a garbage collector who was holding a banner near by, said: “We want to kick out this government. I used to earn €1,200 (£1,050) a month and now I get €700. They should go after the tax evaders and not us.”
About 100,000 people marched in Athens. Some of the participants tried to force anybody wearing a hood to take it off, accusing those who refused of being anarchists or undercover police agents. By evening, the street battles had spread down Ermou, a popular shopping street.
But it is dubious if a deeply distrusted government can implement reforms that people see as being dictated by foreign governments and banks.
This loss of sovereignty is deeply felt. A pensioner, who gave his name as Nikos and was waving a large blue-and-white Greek flag, said: “My son goes into the army on Monday and I don’t know whether to be pleased or sad.”
The general strike and the parliamentary vote on reforms demanded by international creditors came before a European Union leaders’ summit, when Greece should receive €8bn – without it, the country will run out of money by November. In parliament the Finance Minister Evangelos Venizelos told MPs that Greece had no choice but to accept fresh hardships. “We have to explain to all these indignant people who see their lives changing that what the country is experiencing is not the worst stage of the crisis,” he said.
“It is an anguished and necessary effort to avoid the ultimate, deepest and harshest level of the crisis. The difference between a difficult situation and a catastrophe is immense.”
But for many Greeks, the catastrophe has already happened and protests increasingly involve the well-educated middle class. The strike yesterday involved air-traffic controllers, tax officials, pharmacists and doctors – as well as taxi drivers, dock workers and garbage collectors. Schools were closed and hospitals were only open for emergency cases. Every street in Athens has a heap of rotting rubbish on it despite a court order to the public service union to end its strike.
There are increasing doubts among small business people and professionals that severe austerity will achieve anything except push Greece further into a recession. There is also a deep distrust of the political class. Nicolas Kominis, a photographer, said he did not think the government had much choice but to agree to the demands of the International Monetary Fund, the European Commission and the European Central Bank.
“The problem is that nobody trusts the government or the opposition because people blame them for starting the crisis in the first place,” he said.
The sense that those who caused the crisis are getting away with it is damaging the government. One banner carried at the march yesterday said: “When injustice prevails, then resistance is a duty.” Vasilis Zorbas, a doctor who is Mayor of the Agia Paraskevi district of Athens, said: “The Greeks are unhappy because of the impunity of those who made money at their expense.” He said he had two unemployed children, whose only option may be to emigrate.
A former minister from the ruling Pasok party, who requested anonymity, said: “It is this feeling of a lack of justice that is making people very angry. Everybody knows the names of ministers who helped themselves [to money] and took bribes but nobody touches them.” It is repeatedly alleged that ministers and MPs have not cut their own salaries significantly, though the system of bonuses and allowances is so complex that this is difficult to confirm.
Leaders of the march said that stereotype of Greece’s public sector as being bloated compared to the rest of the European Union is inaccurate. Balasopoulos Themis, the head of the Pan-Hellenic Federation of Employees of Local Government Organisations, said this is propaganda and the often-quoted figure of 768,000 public employees out of a workforce of four million includes the army, the police and even the clergy.
He said that overall the income of his union members has fallen by 40 per cent because of tax increases and salary cuts.
Real reform in Greece is unlikely to come from a government distrusted as self-serving and corrupt; the ex-minister said it did not have the political strength to impose change while facing powerful special interests.Up close, the most striking feature of the reforms being forced on Greece by its international creditors is their destructiveness and futility. The pay cuts, tax rises, cuts and job losses agreed to by parliament in Athens last week will serve only to send the economy into a steeper tailspin, even if it extracted a much-needed €8bn in bailout money from the EU leaders. “Nothing but a lost war could be worse than this situation,” one left-wing ex-minister tells me. “What is worse, no party or political group in Greece is offering real solutions to our crisis.”
On the right, there are similar lamentations. Asked if there is the possibility of a revolution in response to current disasters, Simos Kedikoglou, an MP from the opposition New Democracy party, says, “I wish there could be a revolution.” He argues that a revolution might at least have a sense of purpose and direction but “we are in a state of shock, and the danger, rather, is that we will have a social eruption, because people have lost hope”.
The mass rallies and 48-hour general strike that paralysed Greece last week were a sign of how far Greeks feel the reforms insisted upon by the Troika – the IMF, European Central Bank and European Commission – are a recipe for a permanent collapse in living standards. The marches were bigger than before and socially more diverse. Smartly dressed women working for new technology companies and retired bank officials mixed uneasily with garbage and dock workers, but all had a similar complaint: their incomes are being cut past the point where they can make ends meet.
Greeks feel, probably rightly, that the extent of their calamity is not understood in the rest of Europe – or, if it is, is thought to be a richly deserved punishment for greed, laziness and corruption. “Do you think we are the parasites of Europe?” Sophia Giannaka, an MP from the ruling Pasok party asks me, the day after she reluctantly voted for the EU/IMF reforms. She says that Nicolas Sarkozy had told the Greek Prime Minister, George Papandreou, that the Greeks “are the virus that is poisoning Europe”.
Greece is certainly damaged by a perception abroad that borrowed money and EU subsidies have financed a life of self-indulgence. Articles in foreign newspapers about the Greek crisis abound in phrases such as “eye-popping waste” and “bloated workforce”. Kedikoglou reckons that the number of employees dependent on the state is 1.2 million, which should be cut to 600,000, but he is clear that this cannot be done at once.
Down at the union headquarters of the municipal employees – one of the prime targets of the reforms – their combative leader, Themis Basalopoulos, denounces these figures for public service workers as grossly inflated and propagandist. As noted above, he says the number usually quoted, of 780,000 workers, “includes soldiers, policemen and even priests”. He adds that his members’ income is being cut by 40 per cent.
Basalopoulos leads the 22,000 garbage workers in the Athens region, whose strike has left every city street with heaps of rubbish. The government is trying to end the strike by court orders and use of private contractors, but, in a sign of the authorities’ increasing inability to get their way, neither has proved effective.
Below Basalopoulos’s office marchers from every district in Athens assemble behind their banners. Few are in their twenties and many are in their forties and fifties, reflecting that not many Greeks want to be manual workers. A strain on many parents’ incomes is the money spent on extra tuition for their children, to get them to university or to gain professional qualifications. But, as the economy implodes, it is these jobs that are disappearing. “The younger generation don’t have a future,” says Kedikoglou. “They don’t even have a present. Our best minds are going abroad. If I was 25 years old and studying abroad, I would never return to Greece.”
None of these deeply rooted economic and social problems is going to be solved by the Troika’s prescriptions. These may raise taxes and broaden the tax base but, in a deepening recession, the government’s receipts are less than expected. Greece should be trying to attract more tourists, but restaurants are becoming more expensive because of a steep increase in VAT.
There is a further reason why the EU-IMF imposed reforms – tax rises, public-service salary cuts, suspension of collective bargaining, 30,000 public service workers suspended and the tax base broadened – may not herald real change. They are being imposed by the very people whom most Greeks blame for misgoverning the country and benefiting from pervasive corruption. Nobody has been arrested. Ex-ministers live lavishly in Athens’ most luxurious properties. Everybody speaks furiously of the immunity of the political elite.
“A feeling of injustice hangs over Greece and angers Greeks even more than the austerity measures,” says Ms Giannaka. She is visibly uncomfortable with the failure of her own party to punish notorious wrongdoers. She admits that the party “has not been able to create a sense of justice”.
An obvious solution to the government’s lack of legitimacy would be a general election. The opposition complains that Papandreou played down the impending crisis in the last election, in 2009. Furthermore, he is dissolving the welfare state that Pasok itself largely created over the past 30 years. “They are killing their own child,” says Kedikoglou. Ms Giannaka admits, “The socialist dream of Greece in the 1990s has been totally destroyed.”
This leaves the ruling party without much identity and highly unpopular but, with 153 seats out of 300 in parliament, it has every reason to avoid an election.
For the present, the government feebly agrees to everything suggested by the Troika, but implementation is slow and episodic. The government’s own isolation grows and parliament itself was under siege for part of last week. Greeks are still going along with changes that reduce many to poverty in the hope of avoiding total ruin, but don’t see why they should pay up if personal disaster looks inevitable. Why, one politician asks, should “Greeks care if Greece goes bankrupt, if they are already bankrupt themselves?”
UK Government Wants Tax On Fat People
http://www.knowabouthealth.com/wp-content/uploads/2010/07/fat-tax-1.jpg
Oct 4th, 2011 | By Keelan Balderson | Category: Breaking News, Economy, Health & Big Pharma
In the UK Government’s latest divide & conquer scheme to raise more public money for the private bankers, Prime Minister David Cameron has suggested a nationwide fat tax should be implemented to skim money from obese citizens.
The Guardian are running with the Prime Minster’s Orwellian Doublethink, by reporting that the proposal is “to tackle Britain’s growing obesity levels.”
Cameron said drastic action was needed to prevent health costs soaring and life expectancy falling.
Of course the keyword there is “costs”, not health. This is about money not the well-being of the people.
100,000 people die each year from smoking related-illnesses brought on by commercial cigarettes. There is an equally shocking figure in regard to Alcohol related deaths. From a libertarian standpoint it’s nobody’s business what other people do to their body, but when the nanny state starts talking about health, they need a dose of reality. If they really cared that much, they would outlaw smoking and drinking, they seem to think it’s working for Marijuana. But they don’t, instead they use people’s addictions as a convenient tax revenue. And now a tax on fatty foods may join that same corrupt system.
The Government have desperately been trying to find ways to cut public services and raise money in order to pay off their £4.8 trillion debt to the private financial system. Instead of doing what’s best for the public and writing off the debt, which was built up through illegal wars, funding the undemocratic EU, and bailing out the banks & gamblers in the City, politicians have been developing ways to extract it from the people while keeping them at each other’s throats.
It becomes a circus of blame. Blame those who are out of work by labeling them lazy, rather than disabled or redundant thanks to the economic crisis. Blame struggling mums on benefits because they’re supposedly living the high life. Now it’s blame fat people because they’re related illnesses go towards hospital costs.
And it sounds somewhat reasonable, maybe fat lazy people are a burden. But we live in a nation where the Government doesn’t even acknowledge the benefits of Organic food, and the Food Standard’s Agency who advice them is full of former heads of the big agribusinesses and supermarket chains [1]. The very people responsible for selling and pushing unhealthy, unnatural and factory farmed foods.
The Government once again hopes the people get stuck blaming each other…blame the fatty, blame the chav on benefits, instead of the people collectively turning around and blaming the root cause of our financial problems. The private banking system’s monopoly over issuing currency, which they do so as an automatic debt, and the gambling through the stock exchange and mortgage system that crashed the economy in the first place, but which we had to bail out. Once again it’s about sucking the wealth from the 99% and handing it to the top 1%.
Occupy Melbourne Says Police "Inflicted Shocking Injuries" on Protesters
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Police ‘inflicted shocking injuries’ on protesters, says Occupy Melbourne
Monday, October 24, 2011 - Green Left Weekly
http://www.greenleft.org.au/node/49199
[Note: For additional information including video, see also Occupy Sydney violently evicted, Melbourne rallies.]
Occupy Melbourne released the statement below on October 24.
* * *
Occupy Melbourne will today write to the Victorian Ombudsman calling for an investigation into at least 43 documented instances of police violence against peaceful demonstrators, including children, during the morning raid of October 21.
Occupy Melbourne have welcomed Robert Doyle’s concern for public safety and have again called on the Lord Mayor to support a full inquiry into the events of Friday 21 October where riot police were deployed against peaceful demonstrators.
Occupy Melbourne’s lawyers have 43 statements detailing shocking injuries inflicted by police on peaceful protesters. These include eye-gouging, punches to the face and back of the head and the deployment of pepper spray, including on children. The Occupy Melbourne legal team is still receiving statements.
“Robert Doyle needs to have a bex and a good lie down,” said Occupy Melbourne’s Emma Kerin.
“This situation requires cool heads and mature decision making, which is why we have called for an independent inquiry into the decisions taken by Melbourne City Council, the Lord Mayor and Victoria Police.
“We will today call on the Ombudsman to investigate instances of police violence against those assembled. We will also call for answers as to whether the Lord Mayor knew in advance that riot police would be deployed against his own constituents.
“Not everyone agrees with the concerns Occupy Melbourne has around increasing inequality in Australia and around the world, but most Melbournians would agree that using riot police, pepper spray and police dogs and horses against peaceful protesters, including children, is plain wrong.
“The images seen on television of police violence were shocking. We need an investigation into how this came to happen and who permitted police to use such excessive force on those peacefully assembled.
“Councilor Doyle has questions to answer and Occupy Melbourne supports a full and independent inquiry into police violence.”
• Occupy Melbourne is currently in discussions with its lawyers and are considering legal action to redress the violence inflicted by police.
• Occupy Melbourne is still waiting for an explanation from Victoria Police as to why officers were permitted to remove name tags and identification numbers, despite being required to wear these under law.
• Melbourne City Councilor Cathy Oake has backed calls for an inquiry into the police violence & Liberty Victoria and the Australian Lawyers Association have also expressed concerns about the level of police violence.
• Occupy Melbourne will hold it’s next General Assembly on Tuesday, October 25, 6pm at the State Library to democratically discuss the next steps in the growing movement against corporate greed and inequality in Australia and around the world. All are welcome to participate.
atomiczombie
10-25-2011, 02:35 PM
I think what is happening in Greece is a symptom of a much bigger problem. Banks are extending credit to individuals/businesses/government entities who have no way to pay them back. And somehow these banks find ways to make money still. They shift these debts around to the point where governments have to bail them out.
Now the EU is bailing out Greece and it comes at a terrible price for the greek people. The question is, how did Greece get into so much debt in the first place? The greek government horribly mismanaged it's programs and spending, that is the easy answer and it is true. However, huge American corporate banks had a hand in this too. They helped Greece hide the true magnitude of it's debt from the EU until it hit catastrophic proportions. Now the austerity measures mean that the greek people have to pay for their government's mistakes. And guess what? The people in the government who wrecked the Greek economy, along with the banks who helped them do it, will never even go on trial, let alone see the inside of a jail cell for this horrific crime.
This is a symptom of a much larger problem. The global economy is in the hands of a few very powerful corporations and banks, and they are bleeding the economies and people of the world dry. Governments are bought and paid for by these corporations and banks, so the people have no one representing them. Democracy is dead.
I think what is happening in Greece is a symptom of a much bigger problem. Banks are extending credit to individuals/businesses/government entities who have no way to pay them back. And somehow these banks find ways to make money still. They shift these debts around to the point where governments have to bail them out.
Now the EU is bailing out Greece and it comes at a terrible price for the greek people. The question is, how did Greece get into so much debt in the first place? The greek government horribly mismanaged it's programs and spending, that is the easy answer and it is true. However, huge American corporate banks had a hand in this too. They helped Greece hide the true magnitude of it's debt from the EU until it hit catastrophic proportions. Now the austerity measures mean that the greek people have to pay for their government's mistakes. And guess what? The people in the government who wrecked the Greek economy, along with the banks who helped them do it, will never even go on trial, let alone see the inside of a jail cell for this horrific crime.
This is a symptom of a much larger problem. The global economy is in the hands of a few very powerful corporations and banks, and they are bleeding the economies and people of the world dry. Governments are bought and paid for by these corporations and banks, so the people have no one representing them. Democracy is dead.
I agree with some of what you have said, although every country pretty much hides its debt with the help of the corporate banking elite. It's just good business for the financial mafia, but not so good for the rest of us. And it is in the interest of the 1% that we understand what is happening as being caused in part by mismanaged social programs. Regardless of the truth. But again, much like here, it's not about the extravagant lifestyle of those on public assistance or the benefits for those nearing retirement or crazy social programs and perks galore for the working class, instead it is a problem of who pays taxes, who doesn't...or some version there of.
Here's a pretty good article.
October 24, 2011
Destroying the Livelihoods of Thirteen Million People
The Myth of Greek Profligacy
by MARSHALL AUERBACK
Historically, Greeks are very good at constructing myths. The rest of the world? Not so much. Reading the press, one gets the impression of a bunch of lazy Mediterranean scroungers, enjoying one of the highest standards of living in Europe while making the frugal Germans pick up the tab. This is nonsensical propaganda, designing to justify the continued collective execution being inflicted on Athens for the sins of its fathers and grandfathers. As if Greece is the only country ever to cook its books in the European Union! The heart of the problem is in the antiquated revenue system that supports that state, which results in a budget shortfall consistently about 10 per cent of GDP. The top 20 per cent of the income distribution in Greece pay virtually no taxes at all, the product of a corrupt bargain reached during the days of the junta between the military and Greece’s wealthiest plutocrats. No wonder there is a fiscal crisis.
So it’s not a problem of Greek profligates, or an overly generous welfare state, both of which suggest that the standard IMF style remedies being proposed here are bound to fail, as they are doing right now. In fact, given the non-stop austerity being imposed on Athens (which simply has the effect of deflating the economy further and thereby exacerbating the very problem the Greeks are trying to eliminate), the Greeks really are getting close to the point where they should just default and shift the problem back to those imposing the austerity. It can’t be worse than the slow execution they are facing today.
In reality, the Greeks have one of the lowest per capita incomes in Europe (€21,100), much lower than the Eurozone 12 (€27,600) or the German level (€29,400). Further, the Greek social safety nets might seem very generous by US standards but are truly modest compared to the rest of the Europe. On average, for 1998-2007 Greece spent only €3530.47 per capita on social protection benefits–slightly less than Spain’s spending and about €700 more than Portugal’s, which has one of the lowest levels in all of the Eurozone. By contrast, Germany and France spent more than double the Greek level, while the original Eurozone 12 level averaged €6251.78. Even Ireland, which has one of the most neoliberal economies in the euro area, spent more on social protection than the supposedly profligate Greeks.
One would think that if the Greek welfare system was as generous and inefficient as it is usually described, then administrative costs would be higher than that of more disciplined governments such as the German and French. But this is obviously not the case, according to Eurostat. Even spending on pensions, which is the main target of the neoliberals, is lower than in other European countries.
Furthermore, if one looks at total social spending of select Eurozone countries as a per cent of GDP through 2005 (based on OECD statistics), Greece’s spending lagged behind that of all euro countries except for Ireland, and was below the OECD average. Note also that in spite of all the commentary on early retirement in Greece, its spending on old age programs was in line with the spending in Germany and France.
In fact, Greece has one of the most unequal distributions of income in Europe, and a very high level of poverty, as the following table shows. Again, the evidence is not consistent with the picture presented in the media of an overly generous welfare state—unless the comparison is made against the situation in the US.
Of course, these facts don’t matter. The prevailing myth is that Greece is in the words of the FT’s John Authers, “a country that was truly profligate”, with little in the way of data to support that assertion. The country, however, is truly stuck: they can’t devalue, they can’t pay their way, at current prices, and nobody will voluntarily finance them. So they must exit and devalue or drop their domestic prices. The massive default, though inevitable, is just a step along the way.
To make the problem worse, export earnings also seem to face their own structural cap that is consistently exceeded by import spending, which means that the debt that finances the government shortfall is increasingly held abroad. The debt is issued under Greek law, but now it is payable in Euros which Greece is powerless to print. In this sense, ironically, the fiscal crisis is a consequence of Greece’s success, after a long preparation, in joining the European Union, and hence giving up its own currency.
The point is that, if this analysis of the source of the problem is correct, then standard IMF austerity policy is unlikely to do much to help. If the problem is not the level of wages, or the size of the welfare state, then pushing wages down and shrinking the welfare state is not going to do much. Greece, after all, is still a democracy and if one is to judge from the intensifying riots in the country, it is far from clear whether Greece (or any other euro zone member for that matter) is really willing to cut spending and raise taxes rates enough to make a difference. This much is implicitly being conceded by the “Troika” – European Commission (EC), the International Monetary Fund (IMF), and the European Central Bank (ECB), which was submitted to the EU Summit yesterday, and will no doubt be a part of the deliberations in the Greek debt restructuring proposals to be hammered out by Oct. 26th.
On the first page of the document is not only a pretty open and blatant admission that expansionary fiscal consolidation (EFC) has proven to be a contradiction in terms, at least in Greece, but there is also a serious policy incompatibility problem, at least over the intermediate term horizon, with efforts at internal devaluation (ID) – that is, attempting nominal domestic private income deflation in order to improve trade prospects when one has a fixed exchange rate constraint.
While they stop short of recognizing that their demands and the actions they have imposed on Greek policymakers are setting off a debt deflation implosion of the Greek economy (never mind rupturing any semblance of a social contract, and ripping the social fabric to shreds as well – this is, after all, the jackboot version of neoliberal “reform” designed to stamp out any last vestige of social democracy and organized labor in the eurozone) this is a very large concession for the Troika to have taken.
To admit that EFC is not working, and that pursuing ID will aggravate matters further, including the ability of Greece to hit fiscal targets, is a fairly large step in the recognition of the reality of the situation. This is not something the faith based neoliberal economists in the Troika organizations are often prone to do. It is not what their incentive structures, formal and informal, tend to encourage them to do.
So why pursue it? Well, let’s face it: this has far less at this stage to do with Greece (even as the prevailing mainstream myth continues to perpetuate the picture of a lazy, unproductive country full of profligates and scroungers), than punishing other potential fiscal recalcitrants. They are scapegoating the Greeks – in order to make sure that should Greece take the rumored “hair cut” on its debt and restructure, the other peripheral countries – especially Italy – won’t get any ideas and be tempted down the same path. This is the strategy to prevent what is euphemistically called the “contagion impact”. In reality, it is also called the principle of collective guilt, destroying the livelihoods of thirteen million people for political reasons. Given their own history, the Germans above all other nations, should understand this phenomenon.
If the prevailing mix of fiscal austerity policies continue, there will be spill-over effects to nations that export to Greece. To be sure, Greece is a tiny market in Euroland, but its fiscal problems are by no means unique. As the bigger economies like Spain and Italy also adopt austerity measures, the entire continent can find government revenue collapsing – even Germany, where economic deceleration has become markedly more noticeable in the past few months. Worse, exports to neighbors will be hurt by reduction of demand. Finally, if austerity succeeds in lowering wages and prices in one nation it can lead to competitive deflation, only compounding the problem as each country tries to gain advantage in order to promote growth through exports. What is most remarkable to us is that the largest net exporter, Germany, does not appear to recognize that its insistence on fiscal austerity for all of its neighbors will cook its own golden egg-laying goose.
Angela Merkel likes to say that no real economic union is possible if one party to the union (Greece) works shorter hours and takes longer holidays than another (Germany). What she should say is that no real economic union is possible if the governing plutocrats of ALL nations (not just the billionaire Greek shipowners who probably have already moved their money offshore, but also wealthy bankers who have suffered no consequence of their own fraudulent and willfully destructive lending practices) consistently evade their fair share of the cost of that party’s own state expenditure, expecting the union either to pay the bill itself, or to force the bottom 80 per cent to pay it.
Greece is not a special case, but rather a case in point of what happens when you impose fiscal consolidation on countries with high private debt to GDP ratios, high desired private net saving rates, and large, stubborn current account deficits. What is needed is a way to redistribute demand toward the trade deficit nations—for example, by having the trade surplus nations spending euros on direct investment in the trade deficit nations. Germany did this with East Germany. Such a mechanism could be set up under the aegis of the European Investment Bank very quickly. Effective incentives to “recycle” current account surpluses in this manner via foreign direct investment, equity flows, foreign aid, or purchases of imports could be easily crafted. If it could be accomplished, it will be a way Greece and the others could become competitive enough to secure their future through higher exports.
Failure to embrace this kind of growth option will ultimately give the Greeks little alternative but to default, leaving the euro zone’s policy makers with an even bigger and costlier mess on their hands. Admittedly, this will not fully solve Greece’s problems as they would like have to leave the euro zone as well and reintroduce the drachma. This would entail capital controls, which will cause people to head for the exits (this is, after all, a country with lots of boats). If they default, it would be more akin to a “Samson moment” for the entire euro zone. Like Samson in his last days, blinded and beaten by the Philistines, Greece is weakened, blind and bound. Default would represent one last defiant burst of strength with which it “pulls down the temple” (in this case the euro zone) via default and takes down everybody. Myth-making at the expense of the Greeks does not serve anybody’s interests, as there will be a cascade of defaults everywhere, and a Soviet style collapse in incomes, hardly an enticing prospect for the global economy. Not an attractive ending, but this is the kind of outcome which the troika’s self-surviving, immoral and cruel policies could lead to. The Greeks, and the vast majority of Europe’s citizens, deserve better.
An Ideal Target
Occupy the European Central Bank
by DEAN BAKER
In the last month, people from around the country and around the world have picked up on the Occupy Wall Street theme of retaking the country from the wealthy. Insofar as this sentiment gathers force in Europe, there is probably no place better for people to plant themselves than on the steps of the European Central Bank (ECB).
More than any other institution the ECB is responsible for the economic wreckage that has overtaken the European economy. In the years when housing bubbles were building across the much of the eurozone and the United States, the ECB looked the other way. Its position at the time was that these bubbles and the huge imbalances they created were not its concern. Its concern was keeping the inflation rate at 2.0 percent.
This single-minded obsession with the inflation rate at a time when the economies of the eurozone and the world were on the edge of disaster is akin to Kodak insisting that its business line was photographic film at a time when digital photography was exploding. Competent business people adjust their business plans when the world changes. In the same vein, competent central bankers reorder their priorities when the economic situation requires changes.
But the ECB ignored the housing bubbles and the economy came crashing down around them. This may have been due to incompetence or it may have something to do with the fact that many of their friends in the banking industry were making lots of money financing the bubbles. Either way the consequences for the European people are the same.
However, this was only the beginning point for the ECB’s attack on the European people. With the European economy badly depressed, just like the U.S. economy, the responsibility of the central bank is to do whatever it can to reflate the economy to get growth up and unemployment down. The Federal Reserve Board has to some extent picked up this charge, pushing its overnight lending rate to zero and engaging in multiple rounds of quantitative easing.
The ECB has been much less ambitious. It never lowered its lending rate below 1.0 percent. Remarkably, it actually began to raise rates last spring, apparently out of concern for inflation, even as the eurozone economies remain far below any measure of potential GDP.
But this is not the worst of the ECB’s plans for the people of the eurozone. The ECB, along with the European Commission and IMF (often referred to as the “troika”), has been taking advantage of the fiscal crises created by its own mismanagement to take away gains that Europe’s workers have won over the last four decades.
They have done this piecemeal; imposing harsh demands on one country after another as a condition of getting the support that they need to finance their deficits. This is especially pernicious because the ECB’s relatively tight monetary policy has directly contributed to the budget crises by slowing growth and leading to higher interest rates on government debt. Furthermore, the government cutbacks demanded by the ECB also slow growth, making the deficit problems even worse.
And the cutbacks instituted in one country invariably feedback on its trading partners. In other words, if Greece and Spain buy fewer imports, because the ECB has demanded that they cut back their budgets, then France and Italy will have fewer exports. In this way, the growth slowdown becomes self-perpetuating and the crisis becomes ever deeper.
Rather than reversing course and encouraging policies that will promote growth and employment, the ECB and its troika partners are taking advantage of the situation to demand that countries make changes such as raising the retirement age, lowering the minimum wage, and reduce employment protections for workers. Insofar as the ECB gets its way, most of Europe’s population will be much worse off. Of course, European business leaders might still be happy, since higher unemployment rates and weaker protections will give employers much more power over their workers.
It is important that the European people recognize that the ECB is not operating as a neutral institution that is trying to foster growth and economic stability. It is pushing an agenda that seeks to bolster the interests of the wealthy to the detriment of the rest of the population. And it has the ability to impose its will over the objections of democratically elected governments through the enormous economic power that it has been given.
For this reason, the ECB is an ideal target for a popular movement. If the people of Europe want to have control over their destiny they cannot allow a small clique to run the central bank for their interests. This is a problem that we also face in the United States, but the Federal Reserve is a bastion of democratically accountability compared with the ECB. If there was ever a place that needs to be occupied by people looking to retake control over their lives, it is the ECB.
Venus007
11-02-2011, 06:13 AM
These austerity measures, that we will all be made to accept, are nothing less than social genocide.
Would you be so kind as to clarify the use of the term "social genocide"?
Are you truly suggesting that the 1% of people who theoretically are holding the majority of the wealth are actively perusing a conscious plan to exterminate the people who are less than them financially?
Genocide is a very strong term and one that is crisscrossed with a lot of painful history. Please help me understand what you mean.
Would you be so kind as to clarify the use of the term "social genocide"?
Are you truly suggesting that the 1% of people who theoretically are holding the majority of the wealth are actively perusing a conscious plan to exterminate the people who are less than them financially?
Genocide is a very strong term and one that is crisscrossed with a lot of painful history. Please help me understand what you mean.
Yes, in Europe through the EU they are forcing governments in order to get help to pass devastating life altering austerity measures. Who is effected first when this stuff goes down. The poor. Especially children. Yes, they have crippled the world's economy for their own gain.
In Greece for example society as the Greeks have experienced it will die. Social genocide.
Sorry this is so short but I have to run.
Would you be so kind as to clarify the use of the term "social genocide"?
Are you truly suggesting that the 1% of people who theoretically are holding the majority of the wealth are actively perusing a conscious plan to exterminate the people who are less than them financially?
Genocide is a very strong term and one that is crisscrossed with a lot of painful history. Please help me understand what you mean.
Okay I have a few minutes break to try and explain this better. The first time I heard the term social genocide was a movie by Argentinian film maker Fernando E. Solanas. The title of the film actually is Social Genocide - Memoria del saqueo
"After the fall of the military dictatorship in 1983, successive democratic governments launched a series of reforms purporting to turn Argentina into the world's most liberal and prosperous economy. Less than twenty years later, the Argentinians have lost literally everything: major national companies have been sold well below value to foreign corporations; the proceeds of privatizations have been diverted into the pockets of corrupt officials; revised labour laws have taken away all rights from employees; in a country that is traditionally an important exporter of foodstuffs, malnutrition is widespread; millions of people are unemployed and sinking into poverty; and their savings have disappeared in a final banking collapse. The film highlights numerous political, financial, social and judicial aspects that mark out Argentina's road to ruin."
Now in terms of what is happening in Europe when it comes to austerity measures and exactly what happened I think this will explain it better than I could in the limited time I have right now.
"With the global economic crisis rampaging throughout the world in 2008, Greece experienced major protests and riots at government reactions to the crisis. The unpopularity of the government led to an election in which a Socialist government came to power in October of 2009 under the premise of promising an injection of 3 billion euros in order to revive the Greek economy.[1] When the government came to power, they inherited a debt that was double that which the previous government had disclosed. This prompted Greece’s entry into a major debt crisis, as the debt was roughly 127% of Greece’s GDP in 2009, and thus, the costs of borrowing rose exponentially.
In April of 2010, Greece had to seek a bailout by the EU and the IMF in order to pay the interest on its debt. However, by taking such a bailout from the EU and IMF, Greece ultimately incurred a larger long-term debt, as the money from these institutions simply added to the overall debt, and thus, actually increased eventual interest payments on that debt. Thus, we see the true nature of debt: a financial form of slavery. Debt is designed in such a way that, like a fly caught in a spider’s web, the more it struggles, the more entangled it gets; the more it struggles to break free, the more it arouses the attention of the spider, which quickly moves in to strike its prey – paralyzed – with its venom, so that it may wrap the fly in its silk and eat it alive. Debt is the silk, the people are the fly, and the spider is the large financial institutions – from the banks to the IMF. The nature of debt is that one is never meant to be able to escape it. Hence, the “solution” for Greece’s debt problem – according to those who decide policy – is for Greece to acquire more debt. Of course, this new debt is used to pay the interest on the old debt (note: it is not used to pay OFF the old debt, just the interest on it). However, the effect this has is that it increases the over-all debt of the nation, which leads to higher interest payments and thus a greater cost of borrowing. This, ultimately, leads to a need to continue borrowing in order to pay off the higher interest payments, and thus, the cycle continues. For all the “bail outs” and aims at addressing Greece’s debt, this prescription inevitably results in greater debt levels than those which induced the debt crisis in the first place.
So why is this the prescription?
Not only does this prescription incur more debt to pay interest on old debt, but the process of borrowing and “consolidating” debt has devastating social and political consequences. For example, in the case of Greece, in order to receive loans from the IMF and EU, Greece was forced to impose “fiscal austerity measures.” This blatantly ambiguous economic nomenclature of “fiscal austerity” is in fact more accurately described in real human terms as “social genocide.” Why is this so?
‘Fiscal Austerity’ means that the state – in this case, Greece – must engage in “fiscal consolidation.” In economic parlance, this implies that the state must cut spending and increase taxes in order to “service” its debt by reducing its annual deficit. Thus, the ‘conditions’ for receiving a loan demand “fiscal austerity” measures being implemented by the debtor nation. This is supposedly a way for the lender to ensure that their loans are met with appropriate measures to deal with the debt. The objective, purportedly, is to reduce expenditure (spending) and increase revenue (income), allowing for more money to pay off the debt. However, as with most economic concepts, the reality is far different than the theoretical implications of “fiscal austerity.”
In fact, ‘fiscal austerity’ is a state-implemented program of social destruction, or ‘social genocide’. Such austerity measures include cutting social spending, which means no more health care, education, social services, welfare, pensions, etc. This directly implies a massive wave of layoffs from the public sector, as those who worked in health care, education, social services, etc., have their jobs eliminated. This, naturally, creates a massive growth in poverty rates, with the jobless and homeless rates climbing dramatically. Simultaneously, of course, taxes are raised drastically, so that in a social situation in which the middle and lower classes are increasingly impoverished, they are then over-taxed. This creates a further drain of wealth, and consumption levels go down, further driving production levels downward, and (local) private businesses cannot compete with foreign multinational conglomerates, and so businesses close and more lay-offs take place. After all, without a market for consumption, there is no demand for production. In a country such as Greece, where the percentage of people in the employ of the state is roughly 25%, these measures are particularly devastating.
Naturally, in such situations, the masses of people – those who are doomed to suffer most – are left greatly impoverished and the middle classes essentially vanish, and are absorbed into the lower class. As social services vanish when they are needed most, life expectancy rates decrease. With few jobs and massive unemployment, many are left to choose between buying food or medicine, if those are even options. Crime rates naturally increase in such situations, as desperate conditions breed desperate actions. This creates, especially among the educated youth who graduate into a jobless market, a ‘poverty of expectations,’ having grown up with particular expectations of what they would have in terms of opportunities, which then vanish quite suddenly. This results in enormous social stress, and often, social unrest: protests, riots, rebellion, and even revolution in extreme circumstances. These are exactly the conditions that led to the uprising in Egypt.
The reflexive action of states, therefore, is to move in to repress – most often quite violently – protests and demonstrations. The aim here is to break the will of the people. Thus, the more violent and brutal the repression, the more likely it is that the people may succumb to the state and consent – even if passively – to their social conditions. However, as the state becomes more repressive, this often breeds a more reactive and radical resistance. When the state oppresses 500 people one day, 5,000 may show up the next. This requires, from the view of the state, an exponentially increased rate of oppression. The risk in this strategy is that the state may overstep itself and the people may become massively mobilized and intensely radicalized and overthrow – or at least overcome – the power of the state. In such situations, the political leadership is often either urged by a foreign power to leave (such as in the case of Egypt’s Mubarak), or flees of their own will (such as in Argentina), in order to prevent a true revolution from taking place. So, while the strategy holds enormous risk, it is often employed because it also contains possible reward: that the state may succeed in destroying the will of the people to resist, and they may subside to the will of the state and thereby consent to their new conditions of social genocide.
Social genocide is a slow, drawn-out and incremental process. Its effects are felt by poor children first, as they are those who need health care and social services more than any other, and are left hungry and unable to go to school or work. They are the ‘forgotten’ of society, and they suffer deeply as such. The reverberations, however, echo throughout the whole of society. The rich get richer and the poor get poorer, while the middle class is absorbed into poverty.
The rich get richer because through economic crises, they consolidate their businesses and receive tax breaks and incentives from the state (as well as often direct infusions of cash investments – bailouts – from the state), purportedly to increase private capital and production. This aspect of “fiscal austerity” is undertaken in the wider context of what is referred to as “Structural Adjustment.”
This term refers to the loans from the World Bank and IMF that began in the late 1970s and early 1980s in their lending to ‘Third World’ nations in the midst of the 1980s debt crisis. Referred to as “Structural Adjustment Programs,” (SAPs) any nation wanting a loan from the World Bank or IMF needed to sign a SAP, which set out a long list of ‘conditionalities’ for the loan. These conditions included, principally, “fiscal austerity measures” – cutting social spending and raising taxes – but also a variety of other measures: liberalization of markets (eliminating any trade barriers, subsidies, tariffs, etc.), supposedly to encourage foreign investment which it was theorized would increase revenue to pay off the debt and revive the economy; privatization (privatizing all state-owned industries), in order to cut state spending and encourage foreign direct investment (FDI), which again – in theory – would create revenue and reduce debt; currency devaluation (which would make foreign dollars buy more for less), again, under the aegis of encouraging investment by making it cheaper for foreign companies to buy assets within the country.
However, the effects that these ‘structural adjustment programs’ had were devastating. Liberalizing markets would eliminate subsidies and protections which were desperately needed in order for these ‘developing’ nations to compete with the industrialized powers of America and Europe (who, in a twisted irony, heavily subsidize their agriculture in order to make it cheaper to foreign markets). For example, a small country in Africa which was dependent upon a particular agricultural export had heavily subsidized this commodity, (which keeps the price low and thus increases its demand as an exported commodity), then was ordered by the IMF and World Bank to eliminate the subsidy. The effect was that foreign agricultural imports, say from the United States or Europe, were cheaper not only in the international market, but also in the nation’s domestic market. Thus, grains imported from America would be cheaper than those grown in neighbouring fields. The effect this had in an increasingly-impoverished nation was that they would become dependent upon foreign imports for food and agriculture (as well as other commodities), while the domestic industries would suffer and be bought out by foreign multinational corporations, thus increasing poverty, as many of these nations were heavily dependent upon their agricultural sectors as they were often still largely rural societies in some respects. This would accelerate urbanization and urban poverty, as people leave the countryside and head to the cities looking for work, where there was none.
Privatization, for its part, would eliminate state-owned industries, which in many developing nations of the post-World War II era, were the major employers of the population. Thus, massive unemployment would result. As foreign multinational corporations – largely American or European – would come in and buy up the domestic industries, they would often cooperate with the dominant domestic corporations and banks – or create domestic subsidiaries of their own – and consolidate the markets and industries. Thus, the effect would be to strengthen a domestic elite and entrench an oligarchy in the nation. The rich would get richer, profiting off of their cooperation and integration with the international economic system, and they would then come to rely ever-more on the state for protection from the masses.
The devaluation of currencies would, while making commodities and investments cheaper for foreign multinationals and banks, simultaneously make it so that for the domestic population, it would require more money to buy less products than before. This is called inflation, and is particularly brutal in the case of buying food and fuel. For a population whose wages are frozen (as a requirement of ‘fiscal austerity’), their income (for those that have an income) does not adjust to the rate of inflation, hence, they make the same dollar amount even though the dollar is worth much less than before. The result is that their income purchases much less than it used to, increasing poverty."
This is ‘Structural Adjustment.’ This is ‘fiscal austerity.’ This is social genocide.
You can see the beginnings of these types of austerity measures in the U.S.
The attacks on labor are telltale. Years of progress made by labor unions are being erased.
Venus007
11-03-2011, 06:01 AM
Thank you so much for taking the time to clarify for me, Miss Tick.
I appreciate the detailed explanation.
Although I am still not comfortable with the term genocide as used by the source material you are quoting I can see how they are using the term.
After reading all this I am thinking Chuck Palahniuk and "Fight Club" are looking less like interesting reading and more like a plan for rebellion.
What price the new democracy?
Goldman Sachs conquers Europe
http://www.independent.co.uk/incoming/article6264098.ece/ALTERNATES/w620/Pg-12-eurozone-graphic.jpg
While ordinary people fret about austerity and jobs, the eurozone's corridors of power have been undergoing a remarkable transformation
The ascension of Mario Monti to the Italian prime ministership is remarkable for more reasons than it is possible to count. By replacing the scandal-surfing Silvio Berlusconi, Italy has dislodged the undislodgeable. By imposing rule by unelected technocrats, it has suspended the normal rules of democracy, and maybe democracy itself. And by putting a senior adviser at Goldman Sachs in charge of a Western nation, it has taken to new heights the political power of an investment bank that you might have thought was prohibitively politically toxic.
This is the most remarkable thing of all: a giant leap forward for, or perhaps even the successful culmination of, the Goldman Sachs Project.
http://www.independent.co.uk/news/business/analysis-and-features/what-price-the-new-democracy-goldman-sachs-conquers-europe-6264091.html
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