Once one oligarchy falls, it will threaten to topple a long line of oligarch dominoes.
A great many narratives invoking Greece are being tossed around, but only one really encapsulates the unvarnished truth: the Oligarchs blew it.
The oligarchs in both Greece and the European Union/ECB had the opportunity a few years ago to trade some of their outsized wealth and political power for stability and sustainable expansion.
Instead, they chose to not just cling to every shred of their outsized wealth and power but to actively increase it.
Their greed and hubris has now put their entire system of parasitic wealth extraction at risk of collapse. Their political stranglehold on power has been weakened, and there’s no going back: they blew it, and now it’s too late. The debt-serfs have finally had enough.
If you enter Greece in the custom search box on this site, six pages of blog entries come up. I have addressed the situation in Greece many times; this summarizes my conclusion:
Greece, Please Do The Right Thing: Default Now (June 1, 2011)
Thankfully, many in Greece have reached the same conclusion, for the same reasons:
The basic problem is that Greece is a Kleptocracy (June 28, 2011).
Greece has shown the world how oligarchies can expand their wealth and power even as their populace slides deeper into poverty. A recent article, Misrule of the Few: How the Oligarchs Ruined Greece, lays out the key dynamics.
Writer Pavlos Eleftheriadis pulls no punches:
“Greece has failed to address (rising wealth/income inequality) because the country’s elites have a vested interest in keeping things as they are. Since the early 1990s, a handful of wealthy families — an oligarchy in all but name — has dominated Greek politics. These elites have preserved their positions through control of the media and through old-fashioned favoritism, sharing the spoils of power with the country’s politicians. Greek legislators, in turn, have held on to power by rewarding a small number of professional associations and public-sector unions that support the status quo. Even as European lenders have put the country’s finances under a microscope, this arrangement has held.”
The vested interests have obscured the cold reality of rising inequality by focusing obsessively on “growth” as the fix-all to inequality.
But this is exactly backward. As Eleftheriadis observes:
“The fundamental problem facing Greece is not slow economic growth but political inequality. To the benefit of a favored few, cumbersome regulations and dysfunctional institutions remain largely unchanged, even as the country’s infrastructure crumbles, poverty increases, and corruption persists. Greek society also faces new dangers. Overall unemployment stands at 27 percent, and youth unemployment exceeds 50 percent, providing an ideal recruiting ground for extremist groups on both the left and the right. Meanwhile, the oligarchs are still profiting at the expense of the country — and the rest of Europe.”
All the blather about “growth” is just propaganda to misdirect our attention from the real problem: the total domination of governance and finance by a class of vested interests and mega-wealthy cartels/oligarchies.
The solution is straightforward: default on all debt by no longer making interest payments. There is no way Greece can pay back the $240 billion of current debt, and sooner the delusion that this can be renegotiated to preserve the oligarchy is smashed, the better.
As for the big threat of kicking Greece out of the euro currency–since most Greeks are already impoverished, how can they get any poorer?
The reality is poor countries prosper by making their goods and services cheaper via currency devaluations, and by paying a healthy rate of interest on capital so capital is attracted and invested productively, as high interest rates make speculative, marginal gambles soberingly risky.
The only people with enough wealth left to worry about a return to a sovereign currency are the wealthy who own the assets and who depend on handouts from the E.U.
As the old saying has it, you can’t get blood from a turnip. The impoverished face little downside from leaving the stranglehold of the euro, and only upside from a return to a sovereign currency controlled by the Greeks rather than the E.U. or the European Central Bank (ECB).
The threat of expelling Greece from the euro is hollow. A return to a sovereign currency puts the responsibility for prudent management of government expenditures and debt back in the hands of the Greek people and the leaders they elect.
Why is that something terrible?
If the new leadership of Greece pursues policies of fiscal prudence, high interest rates, zero-tolerance for corruption and freeing up the Greek economy to encourage small-scale enterprise, any decline in Greece’s sovereign currency will be brief.
If they pursue meet the new boss, same as the old boss policies, then the Greek people will remain shackled in poverty.
We have to remember that the lenders who entrusted capital to marginal borrowers took the risk and therefore have to absorb the losses.
In this case, the irresponsible lenders include sovereign nations that acted to protect their own oligarchies.
Why? Once one oligarchy falls, it will threaten to topple a long line of oligarch dominoes.
A related article
As The Middle Class Evaporates, Global Oligarchs Plan Their Escape Form The Impoverished Pleb Masses
The middle class has shrunk consistently over the past half-century. Until 2000, the reason was primarily because more Americans moved up the income ladder. But since then, the reason has shifted: There is a greater share of households on the lower rungs of the economic ladder.
– From yesterday’s New York Times article: Middle Class Shrinks Further as More Fall Out Instead of Climbing Up
At a packed session in Davos, former hedge fund director Robert Johnson revealed that worried hedge fund managers were already planning their escapes. “I know hedge fund managers all over the world who are buying airstrips and farms in places like New Zealand because they think they need a getaway,” he said.
– From the Guardian’s article: As Inequality Soars, the Nervous Super Rich are Already Planning Their Escapes
So the other day, President Barack Obama once again demonstrated his contempt for the American public by using his State of the Union address to pejoratively blurt out meaningless phrases such as“but tonight, we turn the page” and: “The verdict is clear. Middle-class economics works. Expanding opportunity works. And these policies will continue to work, as long as politics don’t get in the way.”
Sorry, but why are “we turning the page” tonight? Weren’t you elected over six years ago? Why didn’t you turn the page in 2009?
Meanwhile, I’m astounded by the phrase “middle-class economics works.” Perhaps it does, but how would anyone know? The only thing I’ve seen from his administration is a laser focused determination to consolidate all American wealth and power into the hands of a tiny group of oligarchs and their lapdogs.
Indeed, the following articles published in the last two days by the New York Times and the Guardianshow the true results of Obama’s oligarch-coddling legacy. The Obama years have been nothing short of an oligarch crime scene.
First, from the New York Times:
The middle class that President Obama identified in his State of the Union speech last week as the foundation of the American economy has been shrinking for almost half a century.
In the late 1960s, more than half of the households in the United States were squarely in the middle, earning, in today’s dollars, $35,000 to $100,000 a year. Few people noticed or cared as the size of that group began to fall, because the shift was primarily caused by more Americans climbing the economic ladder into upper-income brackets.
But since 2000, the middle-class share of households has continued to narrow, the main reason being that more people have fallen to the bottom. At the same time, fewer of those in this group fit the traditional image of a married couple with children at home, a gap increasingly filled by the elderly.
Remember, middle-class economics works. If the goal is its total destruction.
These charts from the New York Times do not tell the tale of a thriving economy:
Even as the American middle class has shrunk, it has gone through a transformation. The 53 million households that remain in the middle class — about 43 percent of all households — look considerably different from their middle-class predecessors of a previous generation, according to a New York Times analysis of census data.
In recent years, the fastest-growing component of the new middle class has been households headed by people 65 and older. Today’s seniors have better retirement benefits than previous generations. Also, older Americans are increasingly working past traditional retirement age. More than eight million, or 19 percent, were in the labor force in 2013, nearly twice as many as in 2000.
According to a New York Times poll in December, 60 percent of people who call themselves middle class think that if they work hard they will get rich. But the evidence suggests that goal is increasingly out of reach. When middle class people look up, they see the rich getting richer while they spin their wheels.
One of the main reasons we have seen such a low level of resistance to this historic oligarch theft, is due to the successful brainwashing of the American public.
Despite clear evidence to the contrary, 60% of what is left of the middle-class still think they are going to get rich. They have no idea that they are really just a bunch of deluded plebs unable to see how systematically and catastrophically they are being played.
Meanwhile, the Guardian describes how many global oligarchs are already planning their escape. These people know full well they are being enriched criminally. Their response is to take as much money as possible and flee before the pitchforks emerge (see: The Pitchforks are Coming…– A Dire Warning from a Member of the 0.01%).
With growing inequality and the civil unrest from Ferguson and the Occupy protests fresh in people’s mind, the world’s super rich are already preparing for the consequences. At a packed session in Davos, former hedge fund director Robert Johnson revealed that worried hedge fund managers were already planning their escapes. “I know hedge fund managers all over the world who are buying airstrips and farms in places like New Zealand because they think they need a getaway,” he said.
But as former New Zealand prime minister and now UN development head Helen Clark explained, rather than being a game changer, recent examples suggest the Ferguson movement may soon be forgotten. “We saw Occupy flare up and then fade like many others like it,” Clark said. “The problem movements like these have is stickability. The challenge is for them to build structures that are ongoing; to sustain these new voices.”
Clarke said: “Solutions are there. What’s been lacking is political will. Politicians do not respond to those who don’t have a voice In the end this is all about redistributing income and power.”
She added: “Seventy five percent of people in developing countries live in places that are less equal than they were in 1990.”
Welcome to the recovery suckers.
Submitted by Mike Krieger via Liberty Blitzkrieg blog