3:AM magazine in London: Greek resistance

       Last week, there was an all out attempt – just short of military invasion but sparing little else –  by Europe and the Greek bourgeoisie to undermine democracy in Greece, overthrow the elected Syriza government, and strangle the Greek people with further austerity.  Refusing to extend credit to the Greeks – forcing an ATM limit of 60 Euros per day on ordinary people in the week before the referendum – is just a “message” from the EU to vote out a government which has asked for some relief from further “austerity.”
      My friend Tracy Mott refers to the previously mad Greek policy, forced on it by the EU,  as “fiscal anorexia”…looking at oneself in the mirror, no matter how thin, as overweight and starving oneself to death.  But of course, this is imposed anorexia – by the .0001% who have inordinate wealth…
      A huge and passionate demonstration of some 150,000 took place in Syntagma Square in front of the Parliament for a “No” vote Friday. See video here.  A smaller mainly upper class demonstration, perhaps 30,000, took place for a “yes” vote.  The New York Times and other corporate media covered them as of equal size (lying about demonstrations to the “left” is, sadly, a vocation in the Times).
     The bleeding in Greece, 60% youth unemployment, a decline of gross domestic product of 25% since 2008, needs to be stanched.  The Greek people voted 60% to 40% to turn down the EU’s latest austerity proposals.
      A very smart German philosopher, criticized an article I wrote on this crisis, saying I had not given enough shrift to the European position and had unfairly called the German finance minister racist (see the quote below on driving Greece out of the European Union).  But the insistence on austerity, when it has proven to fail over and over again, a thought solidly established by John Maynard Keynes in dealing with depressions, a core scientific understanding of modern economics (see below), and without any reassessment, had no other prospects than inflicting great suffering on ordinary people and, ultimately, expelling Greece from the Euro.
    And the refusal to recognize the responsibility of Germany – despite its traumatic experience with inflation in the 1920s – is coupled with an easy acceptance of the suffering of lesser people, the poor in Greece who are often characterized in a racist way in Germany.  And the German elite, often perhaps believing it, needs to foster this attitude in ordinary Germans in order to divide them from the Greeks – to prevent them from seeing who is being made to suffer and just how much.
     I have been previously in Mallorca teaching at the University of Palma and seen the German visitors in the summers – 2 million – some hopping up on the front walls of Mallorquin houses to take pictures of the “exotic” inhabitants.  Ordinary Germans often use derogatory expressions about Mallorquins – and of Southern Europeans more generally, including Greeks – and of course, the Mallorquins, an old culture. though they have now often grown wealthy from the Germans, return their contempt…
    As Thomas Piketty – see below – and Eduardo Porter in the New York Times here – have emphasized, the predecessor of the West German “economic miracle” was forgiveness of much of its debt in 1953 by the United States.  The EU refusal to adopt a similar plan for Greece is thus hypocritical as well as stubbornly wrongheaded, ungenerous, inhumane, and counterproductive…
      The ideological unwillingness to reconsider, to cast blame upon the Greeks, is a German problem, and one that is undermining the decency and credibility of the EU.
     3:AM magazine in London, a leading avant-garde philosophical, cultural and political journal, published my article on Greek resistance below.
Greek Resistance
By Alan Gilbert.


The election of Syriza was a great sign of hope for the Greek people and ordinary people everywhere. The European/American bankers are enforcing an austerity program in Greece, producing shocking youth unemployment – 65% – and driving many to suicide. Gnawing at Syriza, they seek at this moment to steal pensions.
The banks have long made “Social Democrats” their tools, as for example Hollande in France…Driving people to despair, they have created preconditions for the triumph of the extreme right. Paul Krugman, an economist who writes intelligently (almost alone) in the commercial press, puts it forcefully in the New York Times:
“It has been obvious for some time that the creation of the euro was a terrible mistake. Europe never had the preconditions for a successful single currency — above all, the kind of fiscal and banking union that, for example, ensures that when a housing bubble in Florida bursts, Washington automatically protects seniors against any threat to their medical care or their bank deposits.” 
The bureaucrats of the EU, pressed on by Germany and the IMF, are not technocrats, but cruel, anti-democratic fools…The Syriza government, having buckled to EU pressure, has nonetheless refused to accept even more austerity and preconditions which try to force it from power. So there is, among poor people in Greece, a run on the banks, and a forced limit of a 60 euros ($67) per person withdrawal. And Prime Minister Alexis Tsipras has called for a referendum, an appeal to democracy against the banks/EU (the corruption of the European “Community” and its leaders in opposing democracy, toward Syriza originally and towards this referendum, is unspeakable…)
There is a lot of media talk about the absence of “trust” between the EU and Syriza. What the EU has imposed on ordinary Greeks, as Joseph Stiglitz, another fine economist, also points out below, is a horror. For the Syriza leadership had worked with the EU, even accepting existing austerity, but trying to limit further abridgment of a common good at home. 
The grotesque cynicism/racism of Wolfgang Schauble, the German finance minister as well as the German commercial press toward Greece, reported in a Times‘ column by Alexander Sorkin yesterday, is startling:
“To Mr. Geithner’s dismay, however, Mr. Schäuble took the conversation in a different direction. ‘He told me there were many in Europe who still thought kicking the Greeks out of the eurozone was a plausible — even desirable — strategy,’ Mr. Geithner later recounted in his memoir, “Stress Test: Reflections on Financial Crises.” ‘The idea was that with Greece out, Germany would be more likely to provide the financial support the eurozone needed because the German people would no longer perceive aid to Europe as a bailout for the Greeks,’ he says in the memoir.
‘At the same time, a Grexit would be traumatic enough that it would help scare the rest of Europe into giving up more sovereignty to a stronger banking and fiscal union,’ Mr. Geithner wrote. ‘The argument was that letting Greece burn would make it easier to build a stronger Europe [sic…] with a more credible firewall.’” See Andrew Ross Sorkin “The Hard Line on Greece’” here.
The EU/bankers are happy to drive Greece from the euro rather than do something a) intelligent, b) non-predatory, c) humane. If this policy is Europe, Europe will die (the Right will come to power pretty shortly…) Given the power of banks over democracy and to harm ordinary people, GREXIT – Greece leaving the European Union – looks better for the Greek people by the hour.
The Greeks could heal their economy as Iceland did…But the irrational general economic terms of the European Union – no tolerance for any country to pursue an independent fiscal or monetary policy to get out of economic crisis – is destroying the benefits of cooperation (mainly: heading off predatory nationalisms, ability to seek education throughout the Union, easy travel, acceptance of migration internally to a considerable extent, European funding of preservation of art, for example the New Acropolis Museum and the like).
The European Union has, from the first, harmed workers and does not tolerate democracy about entrance or to oppose strangling austerity. As Stiglitz puts it,
“…concern for popular legitimacy is incompatible with the politics of the eurozone, which was never a very democratic project. Most of its members’ governments did not seek their people’s approval to turn over their monetary sovereignty to the ECB. When Sweden’s did, Swedes said no. They understood that unemployment would rise if the country’s monetary policy were set by a central bank that focused single-mindedly on inflation (and also that there would be insufficient attention to financial stability). The economy would suffer, because the economic model underlying the eurozone was predicated on power relationships that disadvantaged workers.”
After the Euro was adopted, I was visiting in Toledo, Spain on a Sunday with my family. There was a march of 4,000 workers, in solidarity with 75,000 in Madrid. Prices had tripled; wages had not gone up… Before the current crisis, as Krugman rightly says below, the financial situation of Greece in terms of debt was no worse than the UK, for long periods. What the bankers have imposed is an unnecessary crisis stealing from the livelihood – subsistence – of ordinary people. 
Austerity is, in Europe and the United States, a way to cut or privatize common good-serving public programs, while shifting money to the now transnational/offshore/”citizens” only of their bank accounts, the .0001%. Since Keynes, economists have known that a stimulus like Obama’s (only bigger; his was 2/3 the needed size) can get money to employ poor people on publicly useful jobs (green jobs; teaching and the like). They spend the money domestically, with a multiplier effect – other locals are employed in sales of food, laundry, gas stations and the like – that begins to get an economy out of depression.
As Thomas Herndon, a graduate student at U Mass Amherst (previously at Evergreen State) showed, the famous Rogoff-Reinhart claim that every government with a debt ratio of 90% to Gross Domestic Product needs austerity is not only false, but fraudulent (these are “illustrious” Harvard professors, Rogoff a former Vice-President of the International Monetary Fund). This is also Congressman Paul Ryan’s theme song ( Ryan – the “brains” of the Republican and much of the “Democratic” outfit, speaks, only “for the money’s sake.”
Krugman had pointed out the obvious flaw in the Rogoff-Reinhart thesis: if a nation goes into a depression, its output will sink relative to its debt (“correlation is not causation,” to put in cliche terms). But the only way to get it out of a depression is Keynsian programs of stimulus or tax cuts to ordinary people (along perhaps with monetary easing or devaluation of currency – a stimulus to exports and, hence, employment as in Iceland).
Instead, Romney or Jaime Dimon or Robert Rubin or the many other hedge fund, Wall Street clowns of both parties often spend their “tax-relief” abroad (Romney would not even release his taxes as Presidential candidate, even though his father – George Romney – had made this a cardinal point of this in his campaign; that is because Mitt often pays no taxes at all, and at most, much less, on his $250 million “income” from stock – a tax rate for one year’s returns of 13.9% – than his garderner or cook…. When the rich buy an elevator for a fancy car at their fifth house in Aruba, no multiplier effect will occur in the United States. Similarly, when Goldman-Sachs which took its “bailout money,” spent it in China, reaped a profit, and paid it back, there was no stimulus to the American economy at all…
Herndon, a beginning graduate student in economics demanded to look at the Rogoff-Reinhart tables – they had not shared them in their famous conference paper for the IMF, being widely publicized for saying what the bankers/big money/kept politicians wanted to hear…They had made a statistical error and had incomplete data. The fraud Herndon revealed just underlines Krugman’s argument (after the repeated failures of austerity, that argument ought to have been enough, but there is gale-force money behind impoverishment of ordinary people in the U.S. and more strikingly in Europe, especially Greece. 

What is happening in Greece is already happening in Spain and Italy and France – and signs point the same way in the United States, particularly for young blacks, chicanos and poor whites. Despite a wave of well funded, belligerent rightwing economics typified by Rogoff-Reinhard – in this central and influential policy claim, these claims are as toxic as the “research” that nicotine really doesn’t harm you or that burning coal is unconnected to global warming – this fact is well known to most (honorable, literate) economists. It is the decisive scientific point of Keynsianism (after working for Roosevelt, Richard V. Gilbert, my father, wrote about this after World War II, in Seymour Harris ed, Saving American Capitalism).
But Krugman has now recognized, even in the Times, that Michael Kalecki, the Polish Marxist/Keynsian theorist of economic cycles, was right in a lecture in 1942. He said there – and Krugman did not believe him until the bizarre elite response to the 2008 collapse – that the rich will oppose any programs that benefit the working classes, and will starve them to death for fear of their seeking higher wages and better conditions.
Social Democracy is thus not possible under capitalism, even though it would save it economically (did save it for a period after World War II; today, this is the history of Papandreou and the austerity “socialists” in Greece, Hollande in France – cutting government programs that help the poor, becoming isolated from and even detested among their own original supporters, and as an accompaniment/result, furthering racism and Golden Dawn, Marine Le Pen and other – literally – fascists).
Krugman has long remarked that the costs of this policy are to throw away millions of people – the long term unemployed in the US who are eligible for no further insurance – and far greater numbers in Europe. Greek youth unemployment is 60% (austerity has forced a 25% decline in GDP). 
A foolish New York Times editorial yesterday here does not describe the impoverishment already forced on the people of Greece by “troika” austerity – see here. One cannot look at the harms has been imposed on the Greek people – and the failure time after time of false EU/banker “predictions” that extreme cuts for the poor will lead to economic boom – and not be horrified.
So the Times turns its eyes away. Krugman says, below, startled I think as for a long time so mainstream and serious an economist, that he would vote no on Greece accepting the bankers’ terms. So would Stiglitz hoping for the revival of democracy. Krugman rightly (and rather kindly) refers to the phony “technocrats” of Europe as “fantasists.” Real democracy, consulting the people from below, is the nightmare of the EU/bankers…
May the Greek people again stand up! We all have a common interest in standing up to the Banks and the Koch brothers/Adelsons, et al (and the mainstream parties, including, sadly. Obama in so far as they represent them). To survive, let alone flourish, we need to be democratic internationalists…For an action to be taken now, see here.
For the Greek people carry our fate, too. We should stand with them.
Alan Gilbert is John Evans professor at the Josef Korbel School of International Studies at the University of Denver and author of Marx’s Politics:Communists and Citizens(Rutgers, 1980), Democratic Individuality (Cambridge, 1990), Must Global Politics Constrain Democracy (1999) and Black Patriots and Loyalists: Fighting for Emancipation in the War for Independence (Chicago March, 2012). His blog Democratic Individuality is a rich mine.
    In response to democratic resistance in the referendum, the Times ran a decent editorial:
The Opinion Pages | EDITORIAL
For Europe’s Sake, Keep Greece in the Eurozone
The resounding victory for the “no” vote in Greece’s referendum has left European leaders like Chancellor Angela Merkel of Germany with a stark and clear choice. Only they have the
power to decide what happens next — whether to shove Greece out of the eurozone or offer some path forward for the Greek economy, starting by writing down its huge and unpayable debts.
Greece has suffered and will continue to suffer: its unemployment rate is over 25 percent; its gross domestic product has fallen by a quarter since 2008. What the past several years have shown is 
that suffering and austerity did nothing to help Greece or its creditors. And no more moralizing and punishment at this point will change that reality.
Ms. Merkel, the most powerful political leader in Europe, now 
has to decide whether she is willing to risk the stability of the European Union, consign Greece to economic depression and threaten global financial markets, or do the rational thing at this critical moment. 
Leaders of the eurozone will meet Tuesday to discuss their 
options and consider a new proposal from Prime Minister Alexis Tsipras of Greece. They will have to act quickly because Greek banks are running out of cash after the government shut them 
down and imposed capital controls a week ago.
From an economic perspective, it is clear what Europe’s leaders should do. They need to restructure Greece’s total debt of 317 billion euros — about 177 percent of its G.D.P. — and keep the country, a member of the European Union and NATO, in the eurozone.
Letting the country leave the euro will, of course, hurt Greece by making its banks insolvent and bringing most economic activity
 to a halt while the government issues new scrip, most likely followed by a return to a greatly devalued drachma. Nobody 
really knows how bad things will get in that scenario. That’s why Mr. Tsipras and the leaders of other Greek political parties said on Monday that they wanted the country to stay in the eurozone.
A Greek exit would also do untold damage to the credibility of 
the euro and the European project by making clear that any country’s membership in the eurozone could be revoked. That might not be an immediate concern for other economically weaker countries like Italy, Portugal and Spain, given that yields on their government bonds increased only modestly after the Greek vote. But the specter of more exits from the eurozone would 
undoubtedly make it hard for European leaders to respond to
 future crises. 
Those against debt relief have argued that saving Greece would merely reward a government that has failed to reform its 
inefficient economy. But that is a self-serving misreading of 
what happened in the crisis. It was European leaders and the International Monetary Fund that made the biggest error in 2012 when they only partially restructured Greece’s debts, a lot of 
which were owed to banks in Germany and the rest of Europe.
They compounded the problem by demanding that the country 
cut spending and raise taxes. That depressed a weak economy 
and drove up unemployment, making growth and increased revenues impossible. In their most recent proposal, Greece’s creditors sought even more cuts to already modest government pensions, which would lead to further economic contraction.
Yes, Greek officials past and present are responsible for many of their country’s problems. But European leaders have made the crisis worse by their mismanagement. Now it’s incumbent on them to end the threat to the eurozone by saving a small, paralyzed country.


The Nation
Austerity Has Failed: An Open Letter From Thomas Piketty to Angela Merkel
Five leading economists warn the German chancellor, “History will remember 
you for your actions this week.”
Dani Roderick

JULY 7, 2015

Global campaign group Avaaz organized this open letterto Angela Merkel on the 
back of a petition, signed by over half a million Europeans, demanding an end to the failed
austerity program in Greece.
As most of the world knew it would, the financial demands made by Europe have crushed the 
Greek economy, led to mass unemployment, a collapse of the banking system, made the external debt crisis far worse, with the debt problem escalating to an unpayable 175 percent of GDP. The
economy now lies broken with tax receipts nose-diving, output and employment depressed, and businesses starved of capital.
The humanitarian impact has been colossal—40 percent of children now live in poverty, infant mortality is sky-rocketing and youth unemployment is close to 50 percent. Corruption, tax evasion and bad accounting by previous Greek governments helped create the debt problem. The Greeks have complied with much of German Chancellor Angela Merkel’s call for austerity—cut salaries, cut government spending, slashed pensions, privatized and deregulated, and raised taxes. But in
recent years the series of so-called adjustment programs inflicted on the likes of Greece has
served only to make a Great Depression the likes of which have been unseen in Europe since
1929-1933. The medicine prescribed by the German Finance Ministry and Brussels has bled the patient, not cured the disease.

Together we urge Chancellor Merkel and the Troika to consider a course correction, to avoid
further disaster and enable Greece to remain in the eurozone. Right now, the Greek government
 is being asked to put a gun to its head and pull the trigger. Sadly, the bullet will not only kill off Greece’s future in Europe. The collateral damage will kill the Eurozone as a beacon of hope, democracy and prosperity, and could lead to far-reaching economic consequences across the
“Right now, the Greek government is being asked to put a gun to its head and pull the trigger.”—Piketty, et al.
In the 1950s, Europe was founded on the forgiveness of past debts, notably Germany’s, which generated a massive contribution to post-war economic growth and peace. Today we need to restructure and reduce Greek debt, give the economy breathing room to recover, and allow
Greece to pay off a reduced burden of debt over a long period of time. Now is the time for a humane rethinkof the punitive and failed program of austerity of recent years and to agree to a major reduction of Greece’s debts in conjunction with much needed reforms in Greece.
To Chancellor Merkel our message is clear; we urge you to take this vital action of leadership for Greece and Germany, and also for the world. History will remember you for your actions this
week. We expect and count on you to provide the bold and generous steps towards Greece that will serve Europe for generations to come.
Heiner Flassbeck, former State Secretary in the German Federal Ministry of Finance
Thomas Piketty, Professor of Economics at the Paris School of Economics
Jeffrey D. Sachs, Professor of Sustainable Development, Professor of Health Policy and Management, and Director of the Earth Institute at Columbia University
Dani Rodrik, Ford Foundation Professor of International Political Economy, Harvard Kennedy School
Simon Wren-Lewis, Professor of Economic Policy, Blavatnik School of Government, University of Oxford