Tuesday, March 3, 2015

It's a Scam

I was going to write "Capitalism is a scam" for the title, but, as bloody, inhuman and monstrous as capitalism was and is, even Karl Marx realized it released enormous amounts of productivity. (Whether we're all the better for what we've been able to produce is an interesting argument, but one I don't want to enter into here.)

But if capitalism wasn't wholly a scam, it's certainly the case that the present manifestation of it is. As this article: "Europe's Debt: Lies & Myths" by Conn Hallinin shows, the present austerity being forced upon ordinary people in Greece (and Ireland, Italy, Spain, and Portugal) is a con-job. The banksters are taking advantage of a financial crisis brought on by their own greed and incompetence and criminality, and using it to weaken the European working class by blaming it on socialism.

A few choice bits:
The European debt crisis goes back to the end of the roaring ‘90s when the banks were flush with money and looking for ways to raise their bottom lines. One major strategy was to pour money into real estate, which had the effect of creating bubbles, particularly in Spain and Ireland. In the latter, from 1999 to 2007, bank loans for Irish real estate jumped 1,730 percent, from 5 million Euros to 96.2 million Euros, or more than half the GDP of the Republic. Housing prices increased 500 percent. “It was not the public sector but the private sector that went haywire in Ireland,” concludes Financial Times analyst Martin Wolf.
Spain, which had a budget surplus and a low debt ratio, went through much the same process, and saw an identical jump in housing prices: 500 percent.
In both countries there was corruption, but it wasn’t the penny ante variety of tax evasion or profit skimming. Politicians—eager for a piece of the action and generous “donations”—waved zoning rules, environmental regulations, and cut sweetheart tax deals. Hundreds of thousands of housing projects went up, many of them never to be occupied.
Then the American banking crisis hit in 2008, and the bottom fell out.
Poor Portugal. It had a solid economy and a low debt ratio, but currency speculators drove up interest rates on borrowing beyond what the government could afford, and the European Central Bank refused to intervene. The result was that Lisbon was forced to swallow a “bailout” that was laden with austerity measures that, in turn, torpedoed its economy.
There was a “score” in Greece. However, it had nothing to do with free spending, but was a scheme dreamed up by Greek politicians, bankers, and the American finance corporation, Goldman Sachs.
Greece’s application for EU membership in 1999 was rejected because its budget deficit in relation to its GDP was over 3 percent, the cutoff line for joining. That’s where Goldman Sachs came in. For a fee rumored to be $200 million (some say three times that), the multinational giant essentially cooked the books to make Greece look like it cleared the bar. Then Greece’s political and economic establishment hid the scheme until the 2008 crash shattered the illusion.

Now, perhaps a magazine like The Economist, which is basically the mouthpiece of the London financial sector, has an alternative point of view. I'm sure they do. I've been toying with the idea of dismantling their editorials as a semi-regular feature. But the problem with that is that I used to do that a lot in the 1990s, and I have a hard time mustering the enthusiasm to look at their (often pathetic) rationalizations and obfuscations again. The fact of the matter is the alternative point-of-view is bullshit. Just like the global warming deniers, the Chicken-Little screams of Saddam Hussein's "Weapons of Mass Destruction," and the cynical/stupid utterances of the harper cabal. It's all crap. It's all a crude scam.

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