The passing scene – August 31, 2015

Here are some links to article I found interesting, and perhaps you will, too.

How Close Was Donald Trump to the Mob? by David Marcus for The Federalist.

Maybe there are innocent explanations tof Donald Trump’s business connections with known Mafia bosses in New York City and Atlantic City.  If such exist, we the voting public deserve to hear them.

Katrina Washed Away New Orleans Black Middle Class by Ben Casselman for FiveThirtyEight.

Black homeowners and business owners lost the most in Hurricane Katrina.  Black professionals such as physicians and lawyers have moved on.  And black school teachers are losing their jobs to supposed school “reform.”

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Hat tip for the following to Bill Harvey—

The Myth of the Middle Class: Have Most Americans Always Been Poor? by Alan Nasser for Counterpunch.

The United States was the first country in which a majority of the people were taught to think of themselves as middle class.  In Victorian English novels, the middle class are the doctors, lawyers and other professionals who aren’t working class, but not truly upper class.

Greece’s debt and the Wiemar Republic analogy

Historical analogies don’t necessarily hold, but Germany in the 1920s and early 1930s, like Greece today, had a dysfunctional democratic government and was saddled with war debts beyond the nation’s ability to pay.

All well-informed people understood the situation, but the demands of the creditor nations on the Wiemar Republic were uncompromising.  Then Hitler came to power, and the debt was forgiven.

I wouldn’t be surprised if the fascist Golden Dawn party came to power in Greece, and I wouldn’t be completely surprised if the creditor nations relaxed their demands for debt repayment.

As Greece goes, so go other debtor nations

The Greek debt burden is more than the people of Greece can ever repay.

But evidently the creditor nations will not accept this until Greece is bled dry.

Their “austerity” plan is for higher taxes, lower wages and higher prices and the sale of Greek national assets at bargain prices.

Greece is being treated like a nation defeated in war, and, like a defeated nation, it will never prosper until it can free itself from the power of its conquerors.

A trust fund created by Greece’s creditors will sell off 50 billion Euros worth of Greek national assets, with half the money to be used to pay Greece’s debt and half to recapitalize Greek banks.   Greeks will not have a voice in what is sold or at what price.

Heather Stewart of The Guardian recently listed 23 nations that, like Greece, are in an external debt crisis, and 14 at high risk of an external debt crisis.

The 23 nations also in external debt crisis are Armenia, Belize, Costa Rica, Croatia, Cyprus, the Dominican Republic, El Salvador, The Gambia, Grenada, Ireland, Jamaica, Lebanon, Macedonia, Marshall Islands, Montenegro, Portugal, Spain, Sri Lanka, St. Vincent and the Grenadines, Sudan, Tunisia, Ukraine and Zimbabwe.

The 14 high risk nations are Bhutan, Cape Verde, Dominica, Ethiopia, Ghana, Laos, Mauritania, Mongolia, Mozambique, Samoa, Sao Tome e Principe, Senegal, Tanzania and Uganda.

My guess is that Ukraine is the next country in line to lose its national sovereignty to creditors; this is likely as soon as the government no longer needs financing to crush the rebellion in Donetsk and Lugansk.

We Americans should remember that the United States is a debtor nation like Greece, not a creditor nation like Germany, Japan or China.  What happens to Greece today and to Ukraine tomorrow could happen to the USA someday, too, when our debts are in yuan or some other currency instead of dollars.

LINKS

Beyond Greece, the world is filled with debt crises by Heather Stewart for The Observer.

Global Debt Can’t Be Paid by Briton Ryle for WealthDaily.

Germany got a debt writedown: Why not Greece?

After World War One, the Allies were saddled with war debts to the United States that were beyond their ability to pay.

Herman Josef Abs, center, representing Federal Republic of Germany, signs a 1953 agreement cutting Germany’s debts to foreign creditors in half.

They hoped to get the money out of Germany, which was obligated to make reparations payments beyond that nation’s ability to pay.

Eventually Germany defaulted on its obligations to the Allies, and the Allies defaulted on their obligations to the USA and its bankers—but not in time to prevent the onset of the Great Depression and the rise of Adolf Hitler.

After World War Two, the Allies learned their lesson.  They allowed the German government [1] to write off half its debts.

If this hadn’t been done, the postwar German economic miracle might not have taken place, and the recovery of Europe as a whole would have been delayed.

Today Greece has more debt than it can repay.  Eventually there is going to have to be a write-down of this debt.

The question is whether the Greek population will have to be reduced to poverty and Greek national assets sold off at bargain prices before this happens.

Greece and the new cold war

The big banks in Germany and other countries lent money to the Greek government that they had good reason to believe would never be repaid, with the understanding that they would be bailed out either by squeezing the people of Greece or at the expense of European taxpayers in general.

Source: The Hindu newspaper in India

Their confidence was not misplaced.  As the chart shows, they have already been able to offload most of the Greek government debt.

The Greek leaders have spoken to the Russian government about a possible rescue.  The Russian government’s reply is that it won’t help as long as Greece is in the Euro currency zone—which, as Ian Welsh pointed out, is as good as saying it will help if Greece leaves.

Independent journalist John Helmer recalled that Victor Yanukovich, the president of Ukraine, accepted a similar bailout offer from Russia and was quickly removed from power.   Helmer reported that Victoria Nuland, the Assistant Secretary of State for European and Eurasian Affairs, who engineered the regime change in Ukraine, is now working for regime change in Greece.

All this raises the question of just whose interests the U.S. government—and Germany’s—serve.

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Nuland’s Nemesis: Will Greece Be Destroyed to Save Her From Russia, Like Ukraine? by John Helmer for Dances With Bears.

Consequences of the Greek Oxi (No) Vote by Ian Welsh.

Greece Rejects the Troika by Michael Hudson for Counterpunch.

Behind the Greek Crisis by William R. Polk for Consortium News.

War and peace: Links & comments 2/27/15

In Midst of War, Ukraine Becomes Gateway for Jihad by Marcin Mamon for The Intercept.

Failed states, where governmental authority has collapsed, are ideal venues for warlords, organized crime and terrorists.  Ukraine fits the profile.

Ready for Nuclear War Over Ukraine? by Robert Parry for Information Clearing House.  (Hat tip to Corrente)

Ukraine’s deputy foreign minister said Kiev is preparing for “full-scale war” against Russia, and is unafraid of nuclear weapons.

The Cold War and Ukraine by William K. Polk for Counterpunch.

Russia sees NATO forces in Ukraine today as the United States saw Soviet missiles in Cuba in 1962 .

Germany’s army is so under-equipped that it used broomsticks instead of machine guns by Rich Noack for the Washington Post.  (Hat tip to Marginal Revolution)

What Is Russia’s Answer to Greece’s Plan B – Smile, Blow the Whistle, Pass the Red Card by John Helmer for Dances With Bears.

In short, Russia does not intend to bail out Greece.

 

Squeezing Greece won’t help German people

The Greek debt crisis is not a conflict between Germany and Greece.   It is the European Union acting as a debt collection agency for central bankers.

German working people get no benefit from the demand that the government of Greece impoverish the people of Greece so as to pay interest to the European Central Bank and the International Monetary Fund.

They in fact will suffer in the long run, because the more wages and living conditions are driven down in other countries, the harder it will be to maintain them in Germany.

Some five years ago, I wrote a post about how Germany was a good role model for the USA, because its leaders were committed to industrial productivity and a high-wage economy.   Unfortunately, the German leaders instead have taken the USA as a role model, and followed our downward path of financialization.

I believe that people who borrow money have a moral obligation to pay it back—if they can.  I believe that there are other moral obligations that take precedence, such as the welfare of those who depend on you.  That’s why the United States and other nations substituted bankruptcy laws for debtors’ prisons.

The Greek debt problem would have solved itself if Greece had its own currency instead of the Euro.  As Greece’s balance of trade worsened, its currency would be devalued and its products and services (including the tourist industry) would become cheaper in terms of dollars and euros.

The great fear of the “troika”–the ECB, IMP and the leaders of the European Union–is that Greece will stop using the euro, and that some of the other 17 countries that use the euro will follow suit.  That might be a problem for bond-holders.  I don’t see it as a problem for ordinary people in Germany, the USA or any other country.

LINKS 

It’s the class conflict, stupid! by David Ruccio on occasional links and commentary.

Europe: Shaking the Temple by Conn Hallinan for Dispatches from the Edge.  (Hat tip to Bill Harvey)

From Minsk to Brussels, it’s all about Germany by Pepe Escobar for RT Op-Edge.

 

Austerity: the global reach of a bad ideology

The Western world is in the grip of a bad idea that its governments can’t seem to shake off—although its peoples are starting to.

The idea is called “austerity.” It is the belief that public goods must be destroyed in order to increase private wealth.

Banks impose this policy on indebted nations such as Greece.  They say the governments must curtail public services, including schools and public health, while raising taxes and adopting economic policies that will result in higher prices and lower wages.

Supposedly the money saved can be used to pay off the nation’s debts.  The problem is that so-called austerity destroys the nation’s ability to generate new wealth, and so, as long as countries accept the “austerity” meme, they stay in debt indefinitely.

Nations that default on their debts, as American states frequently did in the era before the Civil War, are threatened with loss of credit.  But the fact is that the banking system literally has more money than the bankers know what to do with.  In practice, lending always starts up again after a few years.

Members of the European Union that use the Euro as their currency have a special problem.  Historically the exchange rates of currencies fell when the issuing nation had a balance of payments deficit.  This tended to bring the balance of trade into balance, because their exports became cheaper in relation to foreign currencies and their imports became more expensive.

Under austerity, nations attempt to achieve the same thing by increasing prices, lowering wages and cutting government services.  Unlike with change in the exchange rate, the burden does not fall upon the whole nation equally, but only on the less wealthy and politically powerless.

Austerity involves raising taxes, but never taxes on the wealthy.  That is because the wealthy are considered to be the “job creators” who must be catered to in order to bring about economic recovery.

The “job creator” philosophy is popular here in the USA.  The saying is, “No poor man ever gave me a job.”  The conclusion is that the key to jobs is to have more and richer rich people.

Well, we Americans have made that experiment, repeatedly, and it hasn’t worked.

If we want mass prosperity, we need to invest in the things that create wealth—education, public infrastructure and scientific research—and then see that the benefits of the new wealth are widely spread, so as to create markets for private business.

We Americans once made that experiment, too, and it did work.

The passing scene: Links & comments 10/11/13

The Golden Dawn Murder Case, Larry Summers and the New Fascism by Greg Palast for TruthOut.

The Greek government has banned the xenophobic racist Golden Dawn party and arrested six members of Parliament who belong to that party.  Greg Palast wrote that the real reason for the Golden Dawn’s ban is that it is the only Greek political party who opposes the austerity measure imposed by the European central bank.  If you define fascism as the union of corporation and government, Palast said, then the Golden Dawn party is Greece’s only anti-fascist party.  He predicted that Greek leftists will come to bitterly resent the precedent that has been set, because they will be next.

He quoted Joseph Stiglitz, former chief economist for the World Bank, as saying that when the International Monetary Fund and World Bank impose austerity measures on Third World governments, they always insist that money be set aside for riot control.  He said they even have an expression, the “IMF riot.”

Fear and Loathing in the House of Saud by Pepe Escobar for Asia Times.

Peace between Iran and the United States would be good for almost everybody except the Saudi Arabian royal family and maybe the government of Israel.  Pepe Escobar explained why the Sandi Arabian government is threatened by a U.S.-Iran agreement and how it will use its leverage to prevent it.

Murder in the Age of Distraction by Jonathan Coppage for the American Conservative.

A man on a San Francisco commuter train pulled out a .45 pistol and aimed it at fellow passengers.  Nobody noticed until he actually shot someone because they were all focused on their hand-held phones and computers.

New law threatens vote-counting reliability by Thomas D. Elias of the San Bernadino County Sun.  Hat tip to the Brad Blog.

Touch screen voting machines can vulnerable to tampering by hackers.  But California has enacted a new law that allows counties to use touch screen machines that have not been certified as reliable.  This is a bad law and a bad precedent for other states.  Why take a chance on tampering with voting results?

Pharmaceutical firms paid to attend meetings of panel that advised FDA by Peter Whorisky of the Washington Post.

Two college professors who organized an FDA advisory panel on painkilling drugs charged big pharmaceutical companies $25,000 each to have their experts attend meetings.  The money went to fund their research projects.

There’s nothing wrong with a government agency getting outside advice, including advice from drug companies, but it is wrong to charge for the right to give advice and with giving special privileges to big companies who can pay a fee.

Quebec Fracking Ban Lawsuit Shows Perils of Free Trade Deals by Julian Beltrane on the Huffington Post.

A Canadian company registered in Delaware has appealed to a NAFTA tribunal to overturn Quebec’s mortatorium on hydraulic fracturing because it takes away expected profit.  The moratorium is intended to give the Quebec government time to study the impact of fracking.

The proposed Trans-Pacific Partnership agreement also would give international companies the right to appeal and possibly overturn national laws if it deprived them of privileges granted under the treaty.

Hillary Clinton: It’s Not Her Turn by Richard Kim for The Nation.

It would be nice to show that a woman can be elected President, just as it was nice to show that an African-American can be elected President.  But Hillary Clinton, like Barack Obama and like her husband Bill Clinton, represents the corporate and Wall Street establishment, not working people and young people.

The maturing of democracy: Picking up the tab in the Economist.  Hat tip to Craig Hanyan.

A democratic system requires wisdom and maturity in the electorate and in elected and appointed government officials.  The Economist reviewer considers two books that examine the past and future of democratic governance.