Thursday, July 25, 2013

Michael Stephens — The “Success” of the Greek Bailouts

Along with ideology and pet economic theories, C. J. Polychroniou suggests another (far more cynical) interpretation [than the failure of austerity as a policy]. The bailout programs, he says, aresucceeding in some respects; the problem is that we may be incorrectly assuming what the main priorities are:
"Amazingly enough, in the face of this ongoing and uncontrolled catastrophe, and despite the IMF’s admission that it misjudged the impact of austerity on Greece’s economy and its people, IMF and EU officials remain as committed as ever to the policies responsible for Greece’s collapse. But while many seem surprised by this apparently contradictory posture, they shouldn’t be. The austerity “shock treatments” administered by the IMF and the EU have two explicit goals: (1) to ensure that the loans are paid back no matter what the cost, and (2) to roll back the average standard of living in order to create highly favorable conditions for international business-investment opportunities and to increase the rate of profit for the corporate and financial elite at home. It is an avowedly class-warfare approach, cloaked in the organization’s holier-than-thou rhetoric about the overall benefits of a neoliberal economic order and the economic drag created by organized labor and workers’ rights, social welfare provisions, and decent wages."
Doh. That was the neoliberal goal from the get-go and it hasn't changed a bit. It's straight up "disaster capitalism" as laid out by Naomi Klein. In fact, although the context is different, the policy is actually quite similar to the assassination of President Allende and installation of General Pinochet in Chile. Neoliberalism is antithetical to democracy and treats workers as a commodity in "the labor market." When C. J. Polychroniou says "roll back the average standard of living," this means reduction in the real wage, and lowering of benefits and protection for workers as well as public services. This is also an opportunity to privatize public resources and enclose more of the commons in order to monetize it "for greater efficiency" through market disciline.

Multiplier Effect
The “Success” of the Greek Bailouts
Michael Stephens

Greg Palast shows how this was the intention of the creators of the EZ, Robert Mundell, evil genius of the euro — For the architect of the euro, taking macroeconomics away from elected politicians and forcing deregulation were part of the plan


Ralph Musgrave said...

Tom, That’s all too conspiracy theory for me. I’ve no doubt there are plenty of people with a neo-liberal outlook who are delighted at being able to snap up Greek public assets at rock bottom prices. But the idea that the Euro was dreamed up by any one person, Robert Mundell or whoever, is far fetched. The Euro came about, and could only have come about as a result of a very wide consensus amongst hundreds of leading European politicians.

And those politicians, far from being neo-liberals have left wing views compared to US politicians.

I view the EZ disaster as a straightforward mistake rather than a deliberate attempt by anyone to sabotage anything.

Tom Hickey said...

Ralph, I sympathize with your point of view but I think that it is more complex than that. we have had many discussion over ignorance versus complicity, and I am convinced that both are work, sometime among different parties but often within the same mind, too.

I don't see it as accidental that neoliberalism just happens to be the dominant social-economic political theory and favors capital over labor. That is too convenient for vested interest to be so.

Moreover, at this point the evidence is in. Why the determination to pursue an obviously failed policy, especially when it is opposed by a majority of an electorate who then are prevented from protesting publicly. Free expression in a democracy is a public danger?

I don't think that hysteresis, path dependence, or ignorance cut it as plausible explanation.