Krugman; This is a Coup. -- Greece

Paul Krugman

Suppose you consider Tsipras an incompetent twerp. Suppose you dearly want to see Syriza out of power. Suppose, even, that you welcome the prospect of pushing those annoying Greeks out of the euro.

Even if all of that is true, this Eurogroup list of demands is madness. The trending hashtag ThisIsACoup is exactly right. This goes beyond harsh into pure vindictiveness, complete destruction of national sovereignty, and no hope of relief. It is, presumably, meant to be an offer Greece can’t accept; but even so, it’s a grotesque betrayal of everything the European project was supposed to stand for. 

Democracy and the Economic Crisis in Greece

Joseph Stiglitz,
The rising crescendo of bickering and acrimony within Europe might seem to outsiders to be the inevitable result of the bitter endgame playing out between Greece and its creditors. In fact, European leaders are finally beginning to reveal the true nature of the ongoing debt dispute, and the answer is not pleasant: it is about power and democracy much more than money and economics.

Of course, the economics behind the programme that the “troika” (the European Commission, the European Central Bank, and the International Monetary Fund) foisted on Greece five years ago has been abysmal, resulting in a 25% decline in the country’s GDP. I can think of no depression, ever, that has been so deliberate and had such catastrophic consequences: Greece’s rate of youth unemployment, for example, now exceeds 60%.

It is startling that the troika has refused to accept responsibility for any of this or admit how bad its forecasts and models have been. But what is even more surprising is that Europe’s leaders have not even learned. The troika is still demanding that Greece achieve a primary budget surplus (excluding interest payments) of 3.5% of GDP by 2018.

antiracismdsa: Greece- This Is What Class War Looks Like

 Greece- This Is What Class War Looks Like: Greek People to Vote July 5 on “Blackmailing Ultimatum” Anastasios Papapostolou  June 26, 2015 Greek Reporter Late Friday night Greek Prim...

Greece and California budgets

Pain without Gain.  Paul Krugman. 2/20/12. NYT.

“And this downturn is hitting nations that have never recovered from the last recession. For all America’s troubles, its gross domestic product has finally surpassed its pre-crisis peak; Europe’s has not. And some nations are suffering Great Depression-level pain: Greece and Ireland have had double-digit declines in output, Spain has 23 percent unemployment, Britain’s slump has now gone on longer than its slump in the 1930s.

Worse yet, European leaders — and quite a few influential players here — are still wedded to the economic doctrine responsible for this disaster.

For things didn’t have to be this bad. Greece would have been in deep trouble no matter what policy decisions were taken, and the same is true, to a lesser extent, of other nations around Europe’s periphery. But matters were made far worse than necessary by the way Europe’s leaders, and more broadly its policy elite, substituted moralizing for analysis, fantasies for the lessons of history.

Specifically, in early 2010 austerity economics — the insistence that governments should slash spending even in the face of high unemployment — became all the rage in European capitals. The doctrine asserted that the direct negative effects of spending cuts on employment would be offset by changes in “confidence,” that savage spending cuts would lead to a surge in consumer and business spending, while nations failing to make such cuts would see capital flight and soaring interest rates. If this sounds to you like something Herbert Hoover might have said, you’re right: It does and he did.

What is happening in Greece: Financial Crisis ?

Financial Crisis, Markets and Democracy, Climate Justice: SI Council in Costa Rica

 

23-24 JANUARY 2012

Speech by George Papandreou, President of PASOK and President of the Socialist International

at the Council meeting of the Socialist International, San José, 23 January 2012

It is a great pleasure for me to be here with you today, in San Jose, Costa Rica. It is a special honor for the Socialist International to have with us her Excellency the President of Costa Rica Ms. Laura Chinchilla. As Costa Rica's first woman President she is a symbol of women empowerment in Central America and beyond. We are looking forward to her remarks. 

Dear friends, dear comrades,

I often hear a question, even a complaint: Is our movement relevant to today's problems? Here in Central and Latin America you know very well we are relevant. It is not only the fact that we have become a strong political force for change and progress but we have shown that progressive governance does matter.

This region has experienced - as we in Greece are experiencing - deep economic crises. The rule of the IMF, the mistrust of the financial system, the austerity of the measures. Yet you know. You know more than anyone else that both Latin and Central America are rich areas. Rich with resources, rich with human capital. But these resources have often been mismanaged, squandered, usurped by the few and powerful, by dependencies and interventions.

That is why these crises are not primarily financial but they are political. They are crises because of the lack of democratic governance, because of the inequalities, because of the lack of opportunities, the lack of transparency, corruption, the clientilist and authoritarian regimes. Regimes under which our citizens were marginalized or even oppressed.

Greece, Ireland, Italy, California -Keynes was Right

By Paul Krugman

“The boom, not the slump, is the right time for austerity at the Treasury.”  So declared John Maynard Keynes in 1937. Slashing government spending in a depressed economy depresses the economy further; austerity should wait until a strong recovery is well under way.

Unfortunately, in late 2010 and early 2011, politicians and policy makers in much of the Western world believed that they knew better, that we should focus on deficits, not jobs, even though our economies had barely begun to recover from the slump that followed the financial crisis. And by acting on that anti-Keynesian belief, they ended up proving Keynes right all over again.

In declaring Keynesian economics vindicated I am, of course, at odds with conventional wisdom. In Washington, in particular, the failure of the Obama stimulus package to produce an employment boom is generally seen as having proved that government spending can’t create jobs. But those of us who did the math realized, right from the beginning, that the Recovery and Reinvestment Act of 2009 (more than a third of which, by the way, took the relatively ineffective form of tax cuts) was much too small given the depth of the slump. And we also predicted the resulting political backlash.

The Greek Debt Crisis - and California's

The so called Greek debt crisis continues to grow.  The Sacramento Bee has an editorial on Sept.12 on the editorial board’s view that the nations of Europe will need some form of consolidation. Here. http://www.sacbee.com/2011/09/12/3902163/europes-debt-crisis-will-wash.html

This view illustrates how the corporate owned media takes austerity and budget cutting  for granted.  They are presented as normal and inevitable.

    The Bee editorial, along with one side of the  European economic establishment,  propose  the need for a consolidation of government power in Europe.  The editors compare the growing debt crisis in Europe  to the Articles of Confederation .

But,  to understand the situation, you need to first ask, unified for what purpose?  The proposed solution forms a new government power to protect the financiers in Germany and France.  They want a government that can enforce austerity to repay bank debts.  The Bankers and capitalists caused the crisis.  Now, the question, as in the U.S. is – who will pay for it.

Austerity programs, whether in Greece, Spain, Italy or California, cost someone.  In addition to the loss of wages and benefits,  austerity programs take capital out of the system and thus make the recession worse.  Greece, Spain, Italy, Portugal, Ireland, and California working people will suffer more.