The Austerity Charade

In a 2015 column Trojan Hearse: Greek Elections and the Euro Leper Colony, author, blogger and investigative reporter Greg Palast takes on the subject of Austerity and how it has played out in Greece.

Austerity has nothing to do with economics. It is a religion. For the last five years, Greeks have been told that, if you cure your disease—that is, if you dump the euro—the sky will fall. I guess you haven’t noticed, the sky has fallen already. With unemployment at 25%, with Greek doctors and teachers eating out of garbage cans, there is no further to fall.

Palast goes on to say that the Euro – backed by the Deutche Bank, the IMF and the European Central Bank – is the problem. It was designed by the proponents of Chicago School neoliberal economics as an honey trap, luring in needy countries with promises of stability in exchange for selling off their public assets and ensnaring them into perpetual debt peonage in order to just pay back the ineteest – never mind the principal. That stays around to insure that the none of the proceeds from the debtor state’s economy is used for developing or maintaining any competing public assets like a public banking system.

This was explained to me by the father of the euro himself, economist Robert Mundell of Columbia University. (I studied economics with Mundell’s buddy, Milton Friedman.) Mundell not only invented the euro, he also fathered the misery-making policies of Thatcher and Reagan, known as ‘supply-side economics’. Supply-side voodoo is the long-discredited belief that if a nation demolishes the power of unions, cuts business taxes, eliminates government regulation and public ownership of utilities, economic prosperity will follow.

It is argued that Greece owes Germany, the IMF and the European Central Bank for bail-out-billions. Nonsense. None of the billions in bail-out funds went into Greek pockets. It all went to bail out Deutsche Bank and other foreign creditors. The EU treasuries swallowed 90% of its private bankers’ bonds. Germany bailed out Germany, not Greece.

Who benefits from austerity programs? The private bankers and the owners of capital assets do, not the debtors, not the workers, not the students nor their teachers, and certainly not the taxpayer.

Below is a recent interview featured on the Tom Hartmann Program where the host talks with Greg Palast about this charade called Austerity.


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