Lambert Strether pointed to this video of a Real News Network interview of the very well meaning and articulate Norman Solomon. Unfortunately it also serves as a object lesson of why progressives are losing.
Read more...It is interesting to see how the popular desire for Occupy Wall Street to issue demands is leading various pundits and experts to boil down and update their views on what really needs to be done to fix the financial and political systems. (Note we are of the minority view that OWS is being shrewd in not acceding to pressure to reduce its desire for broad-based change to soundbites and an easily-to-digest program.
Bill Black give his usual forthright views on this segment on Real News Network. Enjoy!
Read more...Reader Sufferin’ Succotash asked whether Papandreou would turn out to be Pericles or Petain. We now have our answer. His finance minister, Evengelos Venizelos, went to the G20 in Cannes (going directly after being discharged from the hospital, meaning he almost certainly did not inform and therefore intended to betray Papandreou) and issued a statement arguing that the need to get the next cash dole from the bailout program and maintain “international credibility” trumped all other considerations. Papandreou backed down and canceled the referendum.
Even though everyone who is not part of the problem recognizes that an eventual Greek default (or much deeper debt restructuring) is inevitable, it seems the Greek population must be ground into the dust first to discourage any rebellion against the new order of rule by creditors. The wild card is whether the level of civil disobedience rises to the point where the government has to change course. We’ve already read of serious signs of breakdown: widespread failures to collect trash, frequent power interruption, such reduced schedules for public transportation that it becomes difficult for those who still have jobs to get to work.
Although this segment was taped before the Papandreou volte face, this discussion on Democracy Now with Michael Hudson illuminates some of the underlying dynamics behind this showdown.
Read more...I had been somewhat concerned at OccupyOakland’s call for a general strike, since failure to have a tangible impact would undermine rather than enhance the notion that the movement has power. A visible failure could easily produce a shift in the tone of ever-fickle press coverage.
But this first effort by an Occupation at flexing its muscles seems to have gone well. One indicator: the Financial Times took note of the strike, placing the story on the front page of its Web edition. Key extracts:
Read more...If you had any doubts about the intent of the Eurobailouts, the latest news should settle them. The game plan was to severely limit Greek sovereignity and assert the primacy of creditor rights, even if they came at the expense of democracy. Greece, as we described in a post earlier today, threatened to blow up the bailout by having a referendum. That measure, even if it took place before year end, would create massive uncertainty and wreak havoc with other efforts (for instance, getting China to contribute cash to the levered EFSF, the bailout funding vehicle. As we’ve detailed in earlier posts, it is unworkable in the absence either of ECB backing or substantial outside funding).
The Eurocrats have decided to try to push Greece into line, threatening expulsion from the Euro (note, not the EU) if Greece does not back down.
Read more...One of the benefits of the Occupy movement is that it is flushing out some particularly egregious behavior among the top 1%.
A writer for the Minneapolis CityPages managed to worm his way into a presentation to the annual meeting of the Minnesota Chamber of Commerce by US Bank’s CEO, Richard Davis. Even though Occupy Minnesota was protesting outside, Davis chose to ignore them. His speech made clear that the business community does not care about long-term self interest, let alone social responsibility. Housing and the foreclosure crisis were absent from the 2012 legislative priorities. But tax reform, which is code for shifting even more of the cost of government on to the small fry? Yeah, that’s a big deal.
Davis’ apparent lone comment on the public ire against the banks was dismissive:
Read more...Greek Prime Minister George Papandreou has managed to put the European crisis game of financial fakery into turmoil. Pretty much no informed commentator expected the latest gimmick-larded rescue package to work; there were simply too many points of failure. And even if this program had miraculously come to fruition, a later train wreck was still inevitable, since Germany was persisting in wanting two contradictory outcomes: running trade surpluses in Europe, and not lending more to its trade parters.
But no one anticipated that a long suffering debtor would revolt, which is what Papandreou’s announcement of a referendum on the punitive bailout amounts to.
Read more...Yves here. Das’ understated comment on the latest Eurorescue scheme, “Implementation of the plan faces significant risks,” has been proven true by the events of the day, namely, the proposal by Greek prime minister George Papandreou for a referendum on the proposed rescue plan. Even though he secured unanimous approval of his cabinet, two members of his coalition, which has a thin hold on government, defected, and he faces a vote of no confidence on Friday. Mr. Market was not happy with this news. While the fall in equity markets was what got the headline, the enthusiasm there had been considerably overdone. Far more serious was the action in the debt markets. The spread between German bunds and Italian government debt hit 450 basis points. That put Italian borrowing rates at over 6%, which is an intolerable level relative to the country’s growth prospects.
We have more detail in a related post.
By Satyajit Das, derivatives expert and the author of Extreme Money: The Masters of the Universe and the Cult of Risk Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives – Revised Edition (2006 and 2010)
Without Wings, Sans Prayers…
The initial market response to the EU proposal was positive, with major stock markets and bank shares rising sharply. Unlike equity markets, debt traders were cautious. On Friday 29 October, an Italian debt auction met with lack lustre demand falling short of the full amount offered for sale. The debt markets registered their doubts by pushing up 10 year interest rates on the bonds of both Italy (up 0.14% per annum to 6.01% per annum) and Spain (up 0.18% per cent to 5.49%). Greek rates remained high at 22.35% for 10 years while comparable Portuguese rates were 11.48% and Irish rates were 7.98%.
Implementation of the plan faces significant risks.
Read more...Yves here. Note the comment at the end, that Sarkozy’s sales pitch to China on the levered up EFSF did not go so well. If the Chinese don’t relent, this greatly reduces of this scheme working, even in the short term. And further note that the flagging European growth is the result of the austerity hairshirt being imposed on highly indebted economies. Ambrose Evans-Pritchard has a pointed article on the consequences of the beggar-thy-neighbor German stance.
By Delusional Economics, who is horrified at the state of economic commentary in Australia and is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness
Angela Merkel has been warning for quite some time that Europe’s economic woes will take up to a decade to fix and that it is time for Europe to rethink its economic strategy after years of living “beyond its means”. It seems fairly obvious from those statements that the rest of the world is going to have to get use to Europe moving into a slow growth phase while it attempts to adjust away from what it considers to be unsustainable debt.
In an attempt support the transition while keeping Europe together the European leaders have put together 3 part package to save Greece, re-capitalise the banks and provide a stability mechanism for countries that run into trouble. The problem is that once you understand the technicalities behind what they have come up with you come to realise that real economic growth is the only thing that actually matters. The latest news out of Europe for many of the 17 member nations is not good at all in that regard.
Read more...I suppose there is no point in being part of the 1% unless you can throw your weight around.
Greg Palast writes in the Guardian of how Goldman took a wee bit of revenge on Occupy Wall Street via the itty bitty credit union ($30 million in assets) that OWS chose for its bank account, Peoples Bank.
Read more...Most readers by now no doubt have heard about the aggressive police crackdown at Occupy Oakland on Tuesday, in which police critically wounded Iraq war vet Scott Olsen while using tear gas, rubber bullets, and flash grenades to clear Frank H. Ogawa Plaza. The footage right before the tear gassing began does not show any signs of provocation by the protestors, but other reports say that a small group which most believe were anarchists rather than OWS members, had engaged in aggressive actions earlier.
Like many of the police efforts to rein in Occupations, this one seems to have backfired.
Read more...By Marshall Auerback, a portfolio strategist and hedge fund manager, and Rob Parenteau, CFA, sole proprietor of MacroStrategy Edge and a research associate of The Levy Economics Institute
Historically, Greeks have been very good at constructing myths. The rest of the world? Not so great, if the current burst of commentary on the country is anything to go by. 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 a nonsensical propaganda. As if Greece is the only country ever to cook its books in the European Union! Rather, the heart of the problem is in the antiquated revenue system that supports that state, which results in a budget shortfall consistently about 10% of GDP. The top 20% 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 reducing the ability of the Greeks to hit the fiscal targets imposed on them), the Greeks really are getting close to the point where they may well default and shift the problem back to those imposing the austerity.
Read more...By Philip Pilkington, a journalist and writer living in Dublin, Ireland
The infernal hurricane that never rests
Hurtles the spirits onward in its rapine;
Whirling them round, and smiting, it molests them.
– Dante, The Divine Comedy
Every now and then a terrible thought enters my mind. It runs like this: what if the theatre of the Eurocrisis is really and truly a political power-game being cynically played by politicians from the core while the periphery burns?
Yes, of course, we can engage in polemic and say that such is the case. But in doing so we are trying to stoke emotion and generally allowing our rhetorical flourish to carry the argument. At least, that is what I thought. I had heard this rhetoric; I had engaged in it to some extent myself; but I had never really believed it. Only once or twice, in my nightmares, I had thought that, maybe, just maybe, it might have some truth.
And then the Financial Times published this ‘strictly confidential’ document leaked to them from within the Eurostructure. That is when my nightmare started becoming increasingly real.
Read more...By Bill Black, Associate Professor of Economics and Law at the University of Missouri-Kansas City, a former senior financial regulator, and the author of The Best Way to Rob a Bank is to Own One. Cross posted from New Economic Perspectives.
The new mantra of the Republican Party is the old mantra – regulation is a “job killer.” It is certainly possible to have regulations kill jobs, and when I was a financial regulator I was a leader in cutting away many dumb requirements. We have just experienced the epic ability of the anti-regulators to kill well over ten million jobs. Why then is there not a single word from the new House leadership about investigations to determine how the anti-regulators did their damage? Why is there no plan to investigate the fields in which inadequate regulation most endangers jobs?
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