The BBC’s Paul Mason, fresh back from Greece, gives a report on Democracy Now of how living conditions have deteriorated as a result of the imposition of austerity measures. One of the stunners, mentioned in Atlantic Wire (hat tip Lambert), is that not only will some Greeks have to work without pay, some will have to pay for their jobs (yes, that is not a typo). The euphemism is a “negative salary.”
Mason also discusses how this program is radicalizing the public. Communists, Trotskyists and other extreme-left groups are polling at 43%. That’s a strikingly high number. This plus the level of dissent on the street suggests Greece is on its way out of the eurozone. But will the technocrats prevail? As Michael Hudson has stressed here and in other commentary, the banks are succeeding in stripping Greece of assets, an operation that used to be possible only via military force.
From Democracy Now (hat tip Philip Pilkington):
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“As Michael Hudson has stressed here and in other commentary, the banks are succeeding in stripping Greece of assets, an operation that used to be possible only via military force.”
Bailouts are “defense” spending.
Pretty good interview except Paul Mason confuses a non-monetarily-sovereign nation – Greece – with a monetarily-sovereign nation – the USA.
According to MMT, the debt of a monetarily-sovereign nation like the US is ITSELF a form of money. This implies that swapping brand new fiat for the entire national debt of say the US would actually be deflationary since fiat pays no interest.
The US Government therefore has NO national debt, practically speaking. What the US does have is a bunch of rentiers getting a risk-free return at the expense of the rest of its citizens.
National debts are a scam. The ability to service a national debt (taxation authority and power) is the ability of a nation to issue its own money without borrowing.
“If the Nation can issue a dollar bond it can issue a dollar bill. The element that makes the bond good makes the bill good also. The difference between the bond and the bill is that the bond lets the money broker collect twice the amount of the bond and an additional 20%. Whereas the currency, the honest sort provided by the Constitution pays nobody but those who contribute in some useful way. It is absurd to say our Country can issue bonds and cannot issue currency. Both are promises to pay, but one fattens the usurer and the other helps the People.” Thomas Edison from http://quotes.liberty-tree.ca/quote_blog/Thomas.Edison.Quote.6991
“What the US does have is a bunch of rentiers getting a risk-free return at the expense of the rest of its citizens.”
You say that like it’s a bad thing, FB.
Risk free is a matter of opinion. The fact that it doesn’t keep pace with inflation sound more like a certainty of loss rather than mere risk. In addition, yields are at rock bottom. They will eventually retun to normal, which will of course mean a marked reduction in the sale price of the note.
I think Buffet has it right on the one. Treasuries aren’t doing investors any favor. With negative real yields, we should borrow more!
Its touching how you feel for the rentier-plutocrats that their treasury investments are not providing them with non-negative returns when the reasons for the inflation in the first place is all the money being injected into those same plutocrats’ banks. Tell you what, how about they get the same interest rate I get when I put my money in the bank — now running about .25%… Oh but wait, the money I put in the bank I earn with the sweat of my brow, while the banksters simply borrow money for free to “purchase” treasuries to finance the debts caused by their fraud — and I’m supposed to get a lower rate of return then they? How about our nation stop selling treasuries completely, lock the usurers in jail for numerous crimes against the nation’s economic well-being, hold a debt jubilee canceling the debts of the citizenry to the criminal banksters and print fiat money for the people to use. The “money” loaned to the people by the criminal banksters at usurious rates was not earned by the banks, it was created by them out of thin air. And the trillions given to them when they tanked the world economy with their fraudulent acts is the follow-up to the greatest crime in history. The injustice of our economic system is without parallel in history, and you complain that the treasury of the people is not being emptied efficiently enough to earn you non-negative interest rates. Put the blame for your negative interest rates where it belongs.
It is refreshing to read something written by someone who understands the criminl behavior of the bankers, financiers, and the members of the poltical class. This is not going to end well for the people in the US. And our governmental officials are interested only in keeping th e CHinese happy.
It would not surprise me at all if debtors’ poor houses for the middle and lower classes come back into being, with the Chinese helping our Fat Cats supervise those of us who end up interned.
With negative real yields, we should borrow more! Ian Ollmann
We should not borrow at all! The US Government should simply create, spend and tax as needed to control price inflation its own inexpensive fiat.
BTW, the goal of the gold standard pushers is to destroy national monetary sovereignty or more precisely to transfer it to the control of private hands. That, of course, is fascism.
The fact that it doesn’t keep pace with inflation sound more like a certainty of loss rather than mere risk. Ian Ollmann
The game now is return OF principal, not return ON principal.
I guess the problem for the rich is that pesky $250,000 limit for Federal deposit insurance. And for the banks, the problem is an economy they wrecked and are now afraid to lend in to.
Ian, providing a “national post office savings bank” which allows anyone to get a guaranteed low interest rate would be a very fine thing.
Instead, T-bills are actually rather hard for the ordinary person to get — they’re restricted to the wealthy. There’s something deeply wrong with that….
Well it is tempting to compare EU member nations with US states as more and more policies are dictated from Brussels.
Consider if a US state was so deep in the red it was basically a economic black hole for the overall US economy.
As people keep pointing out, the difference is labour mobility. Many greeks do move to other countries, but language and distance are a big barrier.
Is labor mobility not greatly impeded in the USA by the inability to sell ones home and relocated ?
And are there not USA states “so deep in the red” or greater than that of Greece whose ratio of debt to total Eurozone GDP is relatively small ?
Distance isn’t a barrier; distances are larger in the US than in Europe.
Language seems to be a very serious barrier to mobility in Europe.
Mississippi, New Mexico, and West Virginia would have accumulated debts of around 250% of GDP in just the last 20 years if they were independent countries borrowing from the Federal Reserve. And that’s without interest payments.
But the federal government represents 20% of the economy, and since that part of the economy doesn’t diverge much from state to state the economies of the states do not diverge from each other nearly as much as the economies of European states. So food stamps that seem stingy in New York seem generous in Mississippi (a possible reason why states that get the most government aid are more likely to have voters believe the government spends too much), but the result of having the same benefits is that, while Mississippi is poorer than New York, the difference is nowhere near the difference between Greece and Germany.
But the benefits in different states *aren’t* the same since the “block grant” changes of the Clinton years….
A country with control of its currency only has an advantage over a country with a locked exchange rate if it actually *uses* its ability to control the currency.
As long as the US does not actually use (or threaten to use) its ability to print dollars in meaningful amounts.
Or, to put it in a shorter form, MMT while interesting is only useful when put into practice – which is a political problem, not an economic one (on the other hand, “Economy is the continuation of Politik by other means” as Clausewitz might have said).
I noticed that too. I must be learning something by coming to this blog!
I thought the interview was very revealing and sensitive to conditions on the ground, which we almost never hear in the US, even about US problems of poverty and other assorted miseries.
Just another way the 1% use their lapdogs in the MSM to keep us ill-informed about the results of their activities.
If developing world status is defined by some people having to work without pay, we are already there. The chemistry profession has been devastated by the financial collapse of 2008 with close to 100,000 chemists laid off. That might not seem like a lot but there weren’t that many of us to begin with. Chemists don’t really have a profession or career path in this country anymore. A lot of us are forced to take CRO jobs that pay much, much less than our former salaries. Others of us, such as myself, are waiting for academic grants to come through, grants that are barely enough to pay for my COBRA costs this year. In the meantime, we have to work for free so we don’t lose our unemployment benefits. If we don’t keep up with the science, we’re unemployable. So, really, unless we go into another field, we have little choice.
You don’t have to go to Athens. This is America today.
This is America today. riverdaughter
Except the US has no excuse since it creates its own money.
Yet if you listen to our conservative friends, a big piece of evidence of the failure of the American education system is that we don’t graduate enough scientists.
How about a big piece of evidence of the domination of the American economy by FIRE rentiers is that we don’t produce enough jobs for scientists?
We no longer produce good jobs is what this is ALL about. We are reaping the end results of 40 years of Reaganomics.
Some irony there, Reagan may have “won” the Cold War, but Reaganomics is giving us the death of “capitalism” along with re-birth of “Communism”.
It was the desire on the part of the Soviet
Union to “outspend” the United States
militarily AND their ten year war in
Afghanistan which brought about the
dissolution of their country. Sound
familiar?
Crap: My daughter is a chemistry major. She told me that she would need more than a B.S. but I had no idea there were NO jobs. What’s the genesis of this problem? I know there is a bad economy but you seem to be saying that the chemistry field is being hurt more than the average (by far). Outsourcing?
There is no future for science or scientists in this country. The engine that made basic science go is sputtering to a halt as NIH and NSF budgets fail to keep pace with inflation, or are cut outright, especially since the reign of Bush the Lesser. Obama has done precisely nothing to reverse the tide. Success rates for investigator-initiated grant applications to NIH and NSF are less than 10% in many fundamental disciplines: cancer research, infectious disease, basic biology and chemistry upon which all of our advances are based. This means that over 90% of the applications are not funded when the advance of science depends on at least one-third getting funded on the first try, with another third funded after a revision. The greater part, by far, of the advances made by drug companies start in university and medical school labs. The pipeline is broken. In response to this, there seems to be the idea afoot in the land that the Program Directors can pick the “winners” ahead of time. But science doesn’t work that way now, never has, and never will. As for the average chemistry major, she might get a job in a drug or chemical company. For a while. Until her position can be outsourced to China or India. Cheers!
If she’s interested, my daughter is in pharmacy and it requires a similar course background. Jobs are still in good supply. One can enter the 4 year program after their junior year, but won’t receive any degrees until finished, when get PharmD. Avg GPA of those accepted is 3.5 so its competitive. Salaries start at roughly $100K (and her cost 4 yrs pharmacy tuition in state university). Research is option, some will pursue master’s though who want to go this route. From what I’ve read, it seems a lot of the drugs coming out of research these days are coming out of Europe, Germany, Switzerland, where pharm corps are domiciled, as well as Eastern nations. Pharma is also cutting corners though and putting more focus on drugs that are merely variations of drugs already on the market, basically minor upgrades that extend patents. The upside is that the pharm sector is doing well, thanks to US health policies that ensure healthy profits (no mass purchasing for Medicare and their patent expiration workaround schemes (e.g. paying generic companies NOT to manufacture when patents expire on drugs that capture large market share or lack equivalent therapeutic options, as brand names can fetch up to 20x what generics bring). No matter where R&D is done, US consumers bear the cost for global benefit (and importation of medication is illegal, though laxly enforced). The financial industry isn’t unique when it comes to graft and sleazy practices.
First it was factory jobs that went overseas thanks to crooked Free Trade agreements started by Bush41 and Clinton. No one cared because it only effected working class men and women by the millions. Since they are bottom of the barrel social status wise, their plight was summarily ignored by political activists. The public at large wasn’t much better, they were happy buying low cost Chinese made junk or $100 tennis shoes made in some hell hole sweat shop overseas. Who cared if some American factory workers ended up bankrupt and destitute.
Now when it effects the professional class it’s a different story. But they better get used to it just like their blue collar brethren did – it’s BOHICA time people. Both of our political parties are hostile to workers in the private sector. Both are happy to sign more crooked free trade agreements and help companies set up shop in Asia or bring in foreign workers under various guest programs.
In short both political parties and their corporate owners have declared economic war on the American people and we’re too dumb to notice it.
There’s this show called Breaking Bad that shows the path to the new intellectual product economy that rewards the enterpreneurial scientist.
I thought the same thing with regard to chemists, Breaking Bad. One of the best shows on TV.
Trade magazines including the one put out by the National Association of Chemists have been explaining to readers since before the 2006 collapse of the housing bubble that chemists have serious tough times here in the USA. Once a nation puts so many of its jobs overseas, with research labs now in Shanghai, SIngapore and other Pacific Rim nations, it is hard for chemists to survive.
Perhaps combining a business degree with the chemistry degree would help any relatives you have attending university. But ligfe in this nation is not going to get better, it is only going to get worse. We are facing what Disaster Capitalism ahs in store for us. Naomi Klein has nailed in in her presentations and her books.
Greece is being reduced to third world status or, as kleptocrats would say, Mission Accomplished.
The US isn’t Greece but the kleptocrats have the same end for us as they do for the Greeks.
Kleptocrats are murderous, criminal, and evil. We need to stop pretending that they are just misguided or a little greedier than the norm. This is what Hannah Arendt was talking about when she coined the phrase the “banality of evil.” We need to look at and judge them by their deeds, not the casual, ordinary way they go about perpetrating their evil. A three-piece suit is not some talisman to ward off evil but to confuse rubes while evil is being done.
All according to plan. After the invention of the A-bomb it became too dangerous to have a real “hot” war so economic invasions became the order of the day. Find an asset, get somebody to borrow against it. Make sure the loans exceed the debtor’s ability to pay. Then sieze the asset. Or get paid in other ways, like UN votes, permission to install military bases etc.
It worked a treat on banana republics. Now it’s working closer and closer to home as “nations” like Greece are finding out the hard way.
Taken to its logical extreme there will only be one single remaining creditor left standing. Reverse financial singularity. Then…Jubilee?
I realize the need for a functioning democratic system, but when the system is rigged and the people in power don’t give a damn what the people want (or what is good for the country), why not just take power through a revolution and throw the bastards in jail? The ECB and IMF has made the situation so bad that it couldn’t make the situation any worse. The end result of this savage austerity is a take over by foreign (financial) capital and a selling off of the public domain. These bastards won’t be brought to justice through the democratic system. Drag the bastards out of parliament and throw them in jail where they belong.
My perception is that over time there has been a general shift from “responsibilities” to “rights and responsibilities” to “rights”. We are too busy with our rights to pursue happiness, with our breads and circuses, for the upkeep of democracy.
Much as I’d like to blame the rentiers, the banksters, the elite, my great frustration is the sense that we’ve let down the guard ourselves. Much of the blame lies closer to home. Fool me once….(and we’re far beyond once).
Those in power have rigged the system to make it almost impervious to citizen input. The People are chained to debt and 10 hour work days, distracted with media that demonizes anyone who tries to change the system. Those who fight to change this state of affairs will endure almost unimaginable sacrifice.
Plenty of people are awake, but not everyone is able to make the sacrifice (family, health, despair).
“why not just take power through a revolution and throw the bastards in jail?”
Easier said than done. Most of the effort of any government is spent trying to find people who are interested in a revolution and kill them. This means it only happens when a huge supermajority of people can see no good alternative except revolution. We’re not there yet.
“why not just take power through a revolution and throw the bastards in jail?”
Sure, what could go wrong? I mean, look at the Bolsheviks!
Why are the Greek people putting themselves through all this heartache ? They should kick these UN-elected Banksters OUT of office and OUT of the country !!!
Default 100% on these debts which were the Bankster’s fault in the first place, and let THEM pay it !
Or just hang the greedy bastards !!!!!!!
UN elected? Huh?
Pay to have a job? Here college students take on massive debt to secure a job while our businesses offshore and outsource investing money and time in training people in India and China to replace us workers. Workers need to unite globally or forever be pitted against one another by multi national corporations that hold allegiance to no one.
I’d quibble with using the term “developing” in conjunction with Greece, since what’s happening there is the exact opposite of development.
In the early 2000s I attended an international exchange of women from Jennings (north St. Louis) women and Russian women. The Russian women told us some amazing stories, people going for months without being paid even though some were University Professors and Physicians, the drug and sex trade was burning a Sherman’s march path through the former Soviet Union. But we heard nothing about that here in the US, and now the country is privatized and being run by what was the Russian mob. The global elite are picking us (working people in first world countries) off one at a time. Will they feed off themselves when all of the blood is gone from our veins?
Greece should just roar a declaration of war on Germany, then sit back and wait for all those reconstruction dollars to start rolling in.
Greece: Totally default!!! Quit playing games with the idiot banks.
That appears to be the winning ticket for the upcoming Greece general election.
Default to follow soon after.
And possibly civil war by the sound of Paul Mason’s report, since of course Greece won’t be allowed to get away with not paying the banksters off.
God, I was sick of hearing about the IMF tearing through state medical, social and educational programs in Latin America in the 1990s; now it’s arrived on the edges of Europe (Eire, Portugal, Greece) in the 2010s. All to keep the global derivatives Ponzi scheme afloat.
Nein danke, Angela, Nicolas. Nein danke, Ben.
The EU knows that the current kleptocrats in power are all out on their asses at the next election, which is why they’re demanding escrow. I’m honestly surprised that they’re not demanding the entirety of greece as collateral.
Why should government borrow at all except for some capped amount index-linked bonds for senior’s savings who shouldn’t let’s face it have to be bothering with investment decisions with incipient 1 in 2 person’s Alzheimers and too a lesser degree dementia looming up.
Sure is true the United States is on the decline with its Parasitic Capitalism and China’s military might probably over-taking the US about 2025 and reserve currency status transferring to their country shortly thereafter. Not really a solution swopping the reserve currency country I know but human beings at this stage of their development with their multiple languages prefer to be parochial.
China’s “military might” overtaking us by “about 2025?” I don’t think so as long as they are spending less than 10% as much as we are. You do realize that the U.S. “defense budget” is almost as large as all other countries put together? And a couple years ago was larger? Also, what’s the big deal about having “the world’s reserve currency?” In fact, it puts us at a big disadvantage, because Japan, Germany, and China are cooperating to keep the dollar high and so keep our products uncompetitive on the world market. They all want to keep us in a perpetual current deficit to keep their own economies humming (well, OK, Japan isn’t humming, but they’re still trying to keep the yen weak compared to the dollar).
The US does spend more on its military than the entire rest of the world put together,…
…but it can’t win a war against anyone. George W. Bush proved that.
Conclusion: China has already overtaken the US in military might, because China is cleverly not losing two wars.
I made this feature documentary on the austerity agenda:
http://www.youtube.com/watch?v=fYFw3O–2R0
The nice things about real assets is they can only exist in one place at one time. And all those assets that the Eurozone laid claim to are in Greece.
Come April and the elections if they want to possess what some contract says they own their going to have to come get them.
Note that Greece has yet to reduce any military spending through all this. They just bought 100 or so refurbished M1 Abram tanks from the US last year. Those would do a pretty good job of guarding the 110 tons of Gold that was just pledged as collateral against “breach of contract”…
The game plan is to use the tanks against the people, on behalf of the banks.
Tanks, by themselves (as opposed to as part of an armored division) have proven to be relatively useless against large numbers of hostile people. Mines severely reduce the utility of tanks and indeed of armored divisons, and the modern inability to hide any movements puts the element of surprise in the hands of the defenders.
Unfortunately, aerial bombardments are quite effective against large numbers of people. Surface-to-air guided missiles aren’t *quite* cheap enough or effective enough to reverse the value of aerial bombardment for slaughtering people. They probably will be soon, honestly, but I couldn’t guess when.
Tanks are completely useless if the army won’t fire their guns. That happened in Egypt when the Egyptian Occupiers successfully overthrew Mubarak — they successfully split the authorities, and Mubarak had only the security forces to rely on. And the Occupiers did that because their strategy of non-violence won the trust of most Egyptians — including Mubarak’s conscript army.
Rush transcript of the Democracy Now piece is available at:
http://www.democracynow.org/2012/2/22/as_greece_erupts_bbcs_paul_mason
For those who don’t have time to watch a video.
What truly amazes me is witnessing Greek politicians willing to sell out their own country to satisfy banksters.
What kind of threats are these guys under to do such a thing?
I suspect a bunch of them never liked or cared much for their country in the first place — they associate themselves with their class, not their country.
Couldn’t say about the rest.
Oh my god! Really, I’m shocked, really that an american broadcast let itself been been told by someone else, how bad it is in its own land. Auerback could learn quite a lot and the bbc as well. Oh, I forgot, Anglo-American debt economy, where the Poor have to take their budge, are out of question; let’s all own houses! Nonetheless Greece is a problem, but to open this people a sufficent way of life, one has to talk of apitalism itself and not of this moral criticism of capitalist traders. The capitalist traders are part of the problem, just as Auerback.
Oh my god! Really, I’m shocked, really that an American broadcast let itself been told by someone else, how bad it is in its own land. Auerback could learn quite a lot and the bbc as well. Oh, I forgot, Anglo-American debt economy, where the poor have to take their budge, are out of question; let’s all own houses! Nonetheless, Greece is a problem, but to open these people a sufficent way of life, one has to talk of capitalism itself and not of this moral criticism of capitalist traders. The capitalist traders are part of the problem, just as Auerback.
PS: A Pity, that one cannot edit the older posts. The first one can be deleted…
In one line of the interview, Mason says, “you’re in for years, I think, of discontent”. Years of discontent is better than nothing, but I think it will take generations of discontent to bring about real change in the way things are done by the 1%. The 1% needs to be on the defensive instead of the offensive.
“Mason also discusses how this program is radicalizing the public. Communists, Trotskyists and other extreme-left groups are polling at 43%. That’s a strikingly high number.”
But not high enough. Given the presence of outside troops which will probably be used to attack the people, I think it has to hit 75% before the revolution starts.