Mar 102017
 

By Michael Nevradakis99GetSmart

mercouris2-300x201This week on Dialogos Radio, we will be featuring, as part of the Dialogos Interview Seriestwo special interviews!

First, we will have the opportunity to speak with journalist, analyst, and longtime lawyer in the Royal Court of the United Kingdom Alexander Mercouris, co-founder of TheDuran.com. Joining us from London, Mercouris will provide his insights for us on a number of current issues, including the latest actions of the Trump administration, the path towards Brexit in Great Britain, anti-Russia hysteria and the establishment media’s agenda, developments in the Ukraine and Syria, and a view on the Greek government’s latest deal with its creditors and what continued austerity means for Greece.bellows

This interview will be followed up by a special feature with young Greek spoken word artist Dylan Wolfram, who will speak to us about his latest spoken word release, titled “Bellows.” In addition to this interview, we will hear two cuts from Wolfram’s recent spoken word project.

Two great interviews, all this week exclusively on Dialogos Radio and the Dialogos Interview Series!

Mar 012017
 

By Michael Nevradakis99GetSmart

Originally published at MintPressNews:

If termites ‘start eating away at the foundations on both the left side of the building and the right side of the building, then the building looks fine from the outside but it could go any day,’ Mark Blyth tells MintPress, describing the hollowing out of the right and left in the US and Europe.

The crowd cheers as Republican presidential candidate Donald Trump speaks at a campaign rally in Baton Rouge, La., Thursday, Feb. 11, 2016. (AP Photo/Gerald Herbert)

The crowd cheers as Republican presidential candidate Donald Trump speaks at a campaign rally in Baton Rouge, La., Thursday, Feb. 11, 2016. (AP Photo/Gerald Herbert)

 

PROVIDENCE, Rhode Island — The world is in the midst of a tremendous political and global shift, with the rise of populism in the United States and Europe, largely in response to broader economic and social trends which have been materializing in recent decades.

From the election of Donald Trump in the United States, to the victory of “Brexit” in last summer’s British referendum and the strong position of populist parties in many European countries, including France, Germany, and Holland leading up to domestic electoral contests, voters are increasingly responding to political systems which many believe have failed them.

Mark Blyth, a political scientist and professor of international political economy at Brown University, has done extensive research on growing inequality and one of its possible causes: policies of economic austerity. Blyth is the author of “Austerity: The History of a Dangerous Idea,” and is a frequent contributor to a variety of publications, including The Guardian and Foreign Affairs.

In this interview for MintPress News, which first broadcast on Dialogos Radio in February, Blyth discusses the impacts of economic austerity, the potential outcome of Brexit and the economic policies of the Trump administration, the underlying reasons behind these electoral results, the opposition to “free trade” agreements such as the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership, and the possibility of a Greek departure from the eurozone.

 

MintPress News (MPN): Looking at the past couple of years and at the present in Europe, is there any sign, any indication at all, that the policies of economic austerity that are being pursued have had any sort of positive outcome?

Mark Blyth (MB): Quite the contrary, because what’s happened in the past couple of years is that everyone’s pretending to do a good game on austerity, but, in fact, they’re actually not. Budget deficits in Spain are around 5 percent of GDP. Italy’s is getting larger as well. So the so-called “automatic stabilizers,” in effect, kick in when an economy’s in a recession — taxes go down and transfers go up — is actually being allowed to operate. This means that the fiscal stance for the EU as a whole for the past couple of years has been positive instead of contractionary.

Now, is this because of some great revolution that people have had, that everyone tightening at once when you’re in a common currency union is simply zero sum against itself? Not really. It’s essentially a quid pro quo, and the quid pro quo is, the Germans will continue to allow the ECB [European Central Bank] to do whatever it takes to save the euro, basically the massive program of bond buying that has been going on and suppressing interest rates and adding liquidity to the banking system. And in return, the Germans will turn a blind eye to what’s going on in Spain and France, and we won’t even mention Portugal. The one place of course where it has continued is the troika program in Greece, and as you know it’s not going very well, still.

Watch Mark Blyth explain the follies of Austerity:

 

MPN: In recent months, we’ve been seeing a pronounced political shift, with the Brexit referendum result and with the election of Donald Trump in the United States. Detractors argue that the reasons Trump was elected and the reasons why Brexit prevailed have to do exclusively with racism and xenophobia. Do you agree with this view, or do you believe there are other reasons why we have been seeing this shift?

MB: If you’ve seen the stuff that I’ve been doing on “Global Trumpism,” if it’s racism that’s driving this exclusively, then the world has generated an abnormally large number of racists all at one time, which would be a hard thing to explain. So, yes, is there racism? Yes. Is there xenophobia? Yes. One of of my colleagues at Cornell, Jonathan Kirshner, in an essay on the L.A. Review of Books, I think put it best, saying that while it’s absolutely true that not everyone who voted for Trump is racist, it is absolutely true that every racist who bothered to vote, voted for Trump.

Now, what does this mean in terms of how we understand Trump and Brexit? The “blue wall,” the five states in the middle of the country that were solidly democrat, so solidly democrat that the Democrats forgot to visit four of them during the campaign, they were the ones that tipped the election. They were the ones that went for Trump. On a county-by-county level, the majority of those counties voted for Obama not once but twice. So you’ve got to explain to me why a bunch of people who voted twice for a black president suddenly voted for racism, if that’s what was driving it. Or, is it more likely that it was the message that Trump was sending, which was essentially, “You voted for hope and change with Obama. What changed? Nothing. What was your hope? Not very good. So you might as well try something with me.” And I think that’s what was driving it.

Same thing with Brexit. Xenophobia, anti-immigration, all that sort of stuff is definitely in the cards. Well, think about the conjunction of events. You’ve got a migrants crisis brewing in Europe. You’ve got terrorist incidents which the right are all too keen to play upon. So of course there’s a rise and of course this is part of the story. But at the end of the day what was driving this, and we’ve seen this in the statistics and in the more careful analyses on Brexit that have been done, is that it’s not so much areas where you have a high degree of immigration that are the most pro-Brexit. It’s the combination of that also with stagnant or declining incomes over a long period of time.

There’s a very simple public policy reason. If everyone is suddenly racist and that drives everything, what do you do with that? Do we send them off to re-education camps? Because if it’s economics, there’s something you can do about that, but if it’s racism and it’s pure cultural hatred, then I don’t know where we go from here. So I don’t actually buy that argument, I don’t think it’s a useful argument. The last thing I’ll say about it is, when you say this, you’re giving [an excuse to] the center-left in particular, who have authored these things such as trade agreements and presided over declining or stagnant incomes for the majority of people while the top 20 percent, the top 1 percent boomed. They’re the ones who have said everything’s fine, they were the ones running the campaign in the United States saying everything’s great, why would you possibly want to vote against us? And for many people’s experience, things are not great. So basically they’re being lied to.

Now, if the center-left or the center parties in the United States and Britain simply write these people off as racists, then there’s nothing they have to do in terms of examining their own actions, their own policies, or even think that what they’ve done is wrong in any sense, giving them some inclination as to why people dislike them so much. So it’s very dangerous to use the racism diagnosis, not because it’s empirically wrong but because it leads us to a dead end politically.

 

MPN: Looking at Brexit, how has the British economy performed since the referendum and how do you believe that the British economy will perform once the Brexit process has been completed?

MB: This is really interesting. There’s a famous line from one of the British politicians who, when all the experts lined up and said, before the Brexit vote, don’t do this, it’ll be the end of the world. The IMF, the ECB, the British Treasury, the Bank of England — all the experts agreed it would be terrible. And then for the next 12 months or so, the economy booms. What that guy, Michael Gove, said is that the British public have had enough of experts. In a sense he’s right, because of course they were wrong.

Why were they wrong? A lot of economics of the past decade and a half has been thoroughly wrong, so there’s nothing new in that. But what the fact is, people are calling people on their claims. I think what’s going on is this, and I know this from personal experience, as I was in London in January. London’s now super cheap if you have dollars or euros. Since Brexit, the pound has devalued quite a lot, and what that basically means is there’s a giant shopping spree going on which is boosting the economy, because imports are down while exports are rocketing ahead, they are getting a boost. But essentially, Europe, which is a free movement of peoples zone, is essentially going to London to shop and is driving up prices and has given the economy a real consumption kick. Now that won’t continue, it’ll adjust over the longer term, and then what happens is, those devalued pounds have to buy more and more imports, and those imports are going to get more and more expensive. So that’s going to lead to both an actual step function increase in the cost of living in Britain and also going to push some inflation into the system.

Now, is this deadly? Is Britain going to fall off a cliff? That’s what I’m going to be skeptical about with the experts. Will the British economy cease to function? Absolutely not. So it’s very much a mixed bag on that one.

 

MPN: You have argued recently that Donald Trump is, in a sense, a Marxist. This is certainly a comment that will provoke some reaction… Explain this to us, how does Donald Trump resemble a Marxist?

MB: This is a provocation, and I even wrote a piece for the Washington Post, but they decided to sit on it. Can’t think why. Here’s the story: Back in the 1970s, there was a debate between a guy called Ralph Miliband, who is the father of the two Milibands who went on to run the British Labour Party, David and Ed. He was a good Marxist. And there was another good Marxist in Paris, a Greek guy named Nikos Poulantzas. So you had the Miliband-Poulantzas debate about the state and capitalist society, and on the Miliband view, it was a sociological view that it’s these elites that go to the same schools, that talk the same way, they get all the top jobs, and that’s why the state does what the capitalists want and vice versa.

Poulantzas gave a much more structural reading, which basically goes along the following lines: There’s a collective action problem at the bottom of capitalism, and here’s what I mean by this — while it’s individually rational for a firm to offshore its labor or to replace its workers with robots, if everybody does it, it’s collectively suicidal. So, what the state has to do is get above the short-term interest of profits and take the long-term view of the health of the economy.

In that sense, Trump and the people around Trump kind of are drawing on that kind of Marxist thinking. They’re not really Marxist, they’re not reading Poulantzas, but they’re coming to the same conclusion. Essentially, if you have unbridled competition — and [Steve] Bannon, his adviser, has been quite explicit on this — if you basically turn everything into commodities with a price and turn everything into a balance sheet and make everything into assets, then you create a system that is incredibly volatile and has a huge race to the bottom component. Seen against that, the whole thing about border taxes and exhorting businesses to invest at home and buy American, is kind of drawing on those similar threads. Now, does that mean that Donald Trump is a Marxist? Absolutely not. But are they both getting at that endogenous weakness in capitalist power structures? They are. In that sense, Donald Trump’s a Marxist.

 

MPN: What is your outlook for the U.S. economy going forward? Do you believe that “Trumponomics” will be allowed to prevail and that his administration will succeed with the stated goal of bringing back jobs and industry which were lost?

MB: There’s two stories in this, and I honestly don’t know how which one to believe, because they’re equally probable. Let’s assume that we don’t end up in a war with Iran and China and markets fall off a cliff, and all those things which are sadly possible under this administration. And let’s assume that we sort of backpedal a little bit, that he tries to do what he says he’s going to do. Now here’s the story as to why it won’t work: Look at Germany. Germany’s the most efficient exporter in the world, it’s got a large manufacturing sector. It’s short 300,000 skilled engineers. So there’s plenty of room for manufacturers in this world, that’s true. But the size of the German manufacturing sector, in terms of the number of workers they employ in total, has been shrinking for the past 20 years. And it’s shrinking in China. Because ultimately in capital, machines do substitute for labor very efficiently, and unless you’re going to make a political commitment to build 1980s-style cars with 1980s-style production techniques, it’s just not clear how you’re going to provide that volume of jobs, because most of those jobs can and should be automated, because they’re dirty and unhealthy and probably better done by robots. So there’s that story.

Now here’s the other one: If you look at the total volume of manufacturing and total output of manufacturing across the planet, output is up but the number of workers is down, and that seems to go with that story. But there’s another way of telling that story, which is that a lot of firms just moved to China and moved to globalized locations, where it’s so cheap that you can substitute labor for capital. In a sense what you’ve done then is artificially depressed the number of workers that you can have in manufacturing. We could still have a bigger manufacturing sector if those processes were reversed.

Now, I think the second one is interesting. I’m not sure it contradicts the first one, but they do push in different directions. If the second one is true, Trump can do a lot of what he says he’s going to do. If the first one, the effect of the first one overrides the effect of the second one, he’s not going to be able to do that. But more importantly and more immediately, have a look at what he’s doing. The first thing is, we’re basically going to create trouble with every Muslim country that we’ve either bombed or been in or have bad relationships with. We won’t do anything to the Saudis despite all their links to God knows what.

That’s one thing, and the next thing is, we’re going to start talking trash with China, etc.

The third thing is we’re going to roll back the Wall Street playbook to 2006 and we’re going to have big tax cuts. So what does that actually look like? It looks like a Trumped-up version of Reaganomics. Giving me another tax cut is not going to produce jobs in the Midwest, irrespective of trade policy. It’s heading in several contradictory directions at once, but we’ll see where it goes. As to exactly how it’s going to play out, I have as much of a clue as anybody else, which is to say, we don’t know.

 

MPN: President Trump recently announced the formal withdrawal of the United States from the Trans-Pacific Partnership (TPP). It also looks like the Transatlantic Trade and Investment Partnership (TTIP) is also dead in the water, while the North American Free Trade Agreement (NAFTA) may be up for renegotiation. Free trade, of course, and these agreements are presented by some as this really great thing. What was the real economic impact of free trade agreements such as NAFTA, and what would TPP and TTIP have actually meant, in economic terms?

MB: I’m not a trade economist, so these are comments about what I think about this stuff without having the benefit of really deeply studying it. My basic story goes like this: NAFTA is qualitatively different from TTIP and these other agreements. NAFTA was about trade in real goods and services between countries that abut each other and were already heavily integrated, particularly in the Canadian case, into the American economy and supply chains. In a sense, what the American auto industry got was slightly cheaper, more flexible production of auto parts by the Canadians, and then what they got from the Mexicans was cheap labor to offshore a bunch of stuff. It’s the jobs effect in the Mexican side that people have paid the most attention to.

Ross Perot was right when he said there will be a giant sucking sound as all those jobs leave America and go to Mexico. That happened. But we also have to remember that prior to that — take Wisconsin, for example. Wisconsin lost one-third of its manufacturing jobs before NAFTA, when they moved from Wisconsin to places like Texas. There was a huge drain to the south to get away from organized labor, to make labor cheaper. So in a longer-term view, you can see NAFTA as the continuation of a process of getting out of the heartland which began in the 1960s, in fact. So that’s that one.

Now what about the other [trade agreements]? The other ones are totally different. If you think about their economic effects, they were all estimates because they didn’t do them. People talked about how they would boost GDP 0.5 percent or 1 percent. That’s nothing, that’s a rounding error. One percent on a $70 trillion economy is nothing to be sneezed at, but it’s not like it’s going to give us 10 percent or a huge boost to growth, and this is over a very long time period.

So why was the left, in particular, incensed by these agreements? Because of things called investor protection clauses, which essentially locked in the rights of firms to sue governments for policies they didn’t like. An example of this was the company which was suing the U.S., I think it was over the Keystone pipeline decision of Obama, for lost profits, because they would have made a profit had that decision not come down. The decision has now been reversed, of course, but I’m using it to illustrate the problem. Or imagine you’re in Denmark, and Denmark decides it’s going to do even more against climate change, and it pushes regulations on firms that cost them money. Under these agreements, they can go to a shadowy court where no minutes are kept, the public doesn’t get invited, and an independent tribunal of trade lawyers and lobbyists will decide if the Danish taxpayer has to compensate a firm for voting for things that they would like.

That’s why the left got really nervous about this stuff, and I think justifiably so. But they were missing the trick, because those agreements really weren’t about trade, they were about security. They were essentially cementing in the 21st century, with a rising China and a shift to Asia in terms of general economic activity on the planet, the Americans’ special position in the world. The TPP didn’t contain China but it contained everyone else. It was a way of keeping the Chinese out and keeping the economy locked down in terms of American rules and order. By walking away from that, we’ve in a sense shorted American rule and American hegemony in that area, and this is why the Chinese were absolutely delighted at first, when Trump got elected, because that meant no TPP, which meant their influence was going to grow. Of course, what’s happened since then has been a doubling of that effect, because the sum of the random shocks that appear to be generated almost every day by the Trump administration is effectively driving more and more countries across the world into the arms of China, because suddenly they look pretty reasonable. So there’s some, let’s say, some interesting politics going on because of these agreements.

Watch Mark Blyth answer the question “What is “free” trade?”:

 

MPN: How do you gauge the backlash to Brexit and to Trump’s presidency thus far, and all of the reactions that both have generated?

MB: What’s the Brexit reaction, the backlash against Brexit? Even when they had a free vote in Parliament, the vast majority of MPs endorsed it. The Brexit backlash, to the extent that it exists, is people like me and people of my class sitting in London and fretting about their rather exalted position in society and how it’s going to change because you’ve got this populist move which the Conservative Party, under [British Prime Minister Theresa] May, has embraced. Imagine the economy working for ordinary working people and not just the banksters and the elites. Goodness me! So there’s that.

In terms of the backlash against Trump, if you put a bull in a china shop, people who buy china will get nervous. That’s exactly what’s happened, and there’s a certain kind of shock that still hasn’t receded in the U.S., that the election actually happened and that this guy and the people around him are now in charge. I’d like to think it was what Wynton or Branford Marsalis, the musicians, one of them I believe was critiqued on social media for not showing up at a rally against Trump. He said how about we actually wait until he does stuff and then we’ll find out what we can protest. Well, given the way things have gone with the immigration orders and the way that security tends to be trending and what’s going to happen with financial regulation, I think there’s plenty to get upset about at this juncture, and I think that’s going to continue. But even though the drivers behind Brexit and Trump were dissatisfaction with elites and declining wages and everything going to the top and the top getting bailed out but nobody else is, they’re the same but they’re playing out in different ways because they are in very different political systems.

 

MPN: Is the very existence of the eurozone or even the EU itself now in danger, in your view?

MB: It is, and that’s the line that I used to say. I used to worry about the euro so I wrote about it, and it decided it was going to stay. But what I wasn’t paying attention to is the thing that lies under the euro, which is the support of mainstream parties for the European project itself. What happens if those parties become very weak or fragile and are replaced by insurgents from the left and the right? Well, the left kind of likes the EU as a project, they like the cosmopolitanism of it, they’re not so xenophobic in that sense. But they are nationalists in economics, in the sense that they want economics to, as Theresa May — no left winger, but we’ll use her words — make it work for ordinary people. And that’s about re-nationalizing control of markets, and the Brexit, and taking back control comes from that control.

On the right it’s much more pronounced now. It used to just be the left parties that were having their lunch eaten. Think about what has happened to the British Labour Party in particular and the German SPD [Social Democratic Party], who now poll regularly around 22-25 percent. They’ll never form another government. Back then it seemed that the center-right was the impregnable force, and while May and [German Chancellor Angela] Merkel have definitely shored up their vote, you actually see with the Brexit decision, with the rise of AfD [Alternative for Germany] in Germany and with a host of other things coming up, for example, the French election, the right-wing center bloc is having its vote eaten away by insurgents as well.

Think of termites in a house. If they start eating away at the foundations on both the left side of the building and the right side of the building, then the building looks fine from the outside but it could go any day. The French election is going to be absolutely crucial, and then there’s German elections coming up and that’s going to be very important as well. I think one of the things that might have happened is that the Europeans are now having a kind of timeout, because they’re not squeezing their economies mindlessly at the moment, things are actually getting better. Unemployment dipped below 10 percent for the average of the EU for the first time since, I think, 2008, even though youth unemployment is catastrophically high and there’s still very low growth. Things have stabilized over the past two years. Whether you can keep them stable through central bank intervention forever is a different question, but that’s where we are at the moment.

I think that one of the weird things that’s happened with the election of Trump, you think about protests in cities all over the world, only America can provoke such a reaction. They’re so important that people protest the election of someone who doesn’t govern your country. But with those protests and then with the Trump administration’s behavior as soon as they got into power, I think it may be the case that a lot of the European public are looking around saying that we were thinking about going down that road with these populists, maybe that’s not such a good idea. So there could be a negative demonstration effect from the Trump effect, and that could mobilize more people, particularly on the left, to go out and vote against the National Front, etc.

But unless mainstream parties change their message and actually embrace some of the concerns that have animated and thrown the populists into power, then there’s a big problem ahead. Because if everyone shows up to block the National Front, the legitimate question from the Front supporters is, “What are you for?” All you are doing is blocking forces that want to make a change. You become kind of like the defensive tackle in American football, all you’re doing is there to block, you’re not there to create anything. And that, itself, is its own form of fragility.

 

MPN: Greece once again finds itself popping up in the news. Despite the government’s claims of an economic recovery and the achievement of a primary budget surplus, the future of the IMF’s participation in the Greek so-called “bailout” program is in question, Greece is facing another huge debt bill, revenues are shrinking, while there is increasing talk of “Grexit,” one that would be imposed by the EU itself. What do Greece’s economic indicators actually show and do you believe that Greece is on its way out of the eurozone? Indeed, do you believe that Greece itself should leave now, on its terms?

MB: Your question is a bit of a shocker to me, because I didn’t actually realize that there was new talk of Grexit. I didn’t actually hear that, I have been focused on other things, as they say, since November, given everything in the United States. But in Greece it’s not going well, you’ve got a real problem, those who have skills, those who are young have left. They tend to be your future taxpayers. You’re left with the public sector and the old essentially, to be very crude about it. They don’t generate much in the way of tax revenues, particularly when the economy is chronically depressed and is constantly trying to drive a budget surplus, which in the context of a debt overhang means less and less employment. It’s in a terrible place. But given the way the troika [the European Commission, the European Central Bank, and the International Monetary Fund] have structured this and the way the European Stability Mechanism works, which has taken most of the private sector risk from the banks that lent Greece the money and put it into the public sector, Greece is in a kind of tutelage state, where it lives off the drip feed of the troika.

Would Greece be better off outside? Probably. Would Greece be better off with its own currency? Probably. But then you’ve got a question of how you get there. There’s been discussions of parallel currencies, etc., but whichever way you go it’s already bad, and that transition is going to hurt even more. Think of it this way: You still have euros, and you have assets in a Greek bank and you get wind of the fact that there’s going to be a parallel currency. You’re going to try to do everything you can to move those assets into an Italian bank, because that way you’ve still got real euros when ultimately you’re handed new drachmas. If there’s a huge devaluation because of that, then those euros will buy lots more new drachmas than whatever parity sets on the day there’s going to be a swap. So this is the problem of the euro as a whole, it’s a “Hotel California” problem — you can check in but you can’t check out. That’s why I’m surprised by the new talk about this, because it’s not clear to me how you affect this. We can imagine various scenarios, but at this point in time they are all scenarios.

 

MPN: You mentioned the parallel currency as a possibility, and there has been talk about a so-called parallel currency being imposed. What has the history of dual or parallel currencies been in other situations where they have existed, and would this be a harmful prospect for Greece and its economy?

MB: The Greek economy is already on life support, so if you start playing around with the electricity to the life support machine, that can be kind of damaging. But ultimately if you’re laying in a ward and slowly dying, you might as well try something.

In terms of parallel currencies, they’re not great. The history of them is checkered, there’s not very many around. One of the ways that has been talked about most recently has been in the context of France and the National Front. The National Front want to get out of the euro, so in a sense what they’ve proposed is kind of reverse-engineering the euro. You had national currencies, now you have this thing called the EQ, which is kind of like, if we all had a currency, how much would it be worth and this is what it looks like, which was a prelude to going into the euro full blast. They’re saying, why don’t we basically take time to renegotiate all of our contracts, we’ll back out of it into the EQ as a kind of parallel currency, and from there we’ll go back.

The problem is the speed and reaction time of financial markets. Gone are the days where you could lock up the banks on a Friday on a bank holiday, stuff them with a brand new currency, and everybody opens up on a Monday and says, “Look at the new money,” and business goes on. In a global, interconnected, hyperlinked world run by algorithmic trading platforms and dominated by hedge funds and big banks that make bets on trades, if you’re trying to do this stuff, the currency markets will kick the hell out of you. It’s not about beating up Greece, it’s a bigger target. If I know that Greece is going to try this, I know there’s going to be a lot of volatility with the euro, I can basically take out options and bet on both directions in which way the euro moves, and then that creates amplifications in the system as everybody else tries to do it. So it’s just a very, very hard thing to do in the modern world, to back out of this. People talk about these things, but I have absolutely no way of weighing what the reality of it is.

 

MPN: What might the difference be between a parallel currency system and a cleaner break and a return to a national domestic currency?

MB: I find these conversations to be sort of, many angels dance on the head of a pin. If you just declare new drachmas tomorrow and start issuing script, anybody who’s got euro will recognize that as real money and will want to preserve their euros, so you’re going to be fighting an uphill battle immediately. If you try to do it more gradually through a parallel currency and hope that people adjust and you then legislate that payments should be done digitally rather than through cash and it’s always going to use the new unit of account, yes, in principle you can get there, but it’s not easy, and it’s not easy to foresee how it works out. I don’t really have any strong opinions on which one is better, because I do think these are philosophical more than practical exercises at this point.

 

MPN: Would you argue that the neoliberal world order, or even capitalism itself, are in crisis?

MB: I did a Foreign Affairs essay reviewing some recent work called “Capitalism in Crisis: Who’s To Blame and How We Got Here.” I think there really are big problems, and the big problems are pretty simple. One is inequality on a massive scale, simply because when 88 percent of the population doesn’t feel they are sharing in the prosperity they will want to redistribute one way or another, and if the mainstream parties are tone deaf to these needs or the movements that drive them, then they will be replaced, so that’s a problem.

In terms of capitalism itself as a social system, as an economic system, I think some of the stuff that’s out there, like robots replacing jobs, is a bunch of tech-speak from California, so I would short it. The fastest-growing job in the United States by volume is elder care nurse, and I have yet to meet an elder care nurse robot. But you do end up with a big service sector with low wages, in part because capital controls all the money, all the power, and all the advantages. That’s not going away anywhere soon, so that creates a lot of political tensions and frictions.

I think there are real deep structural problems. Can they be overcome? Yes, we can if we think smartly about them. It is easy to do something about inequality. Pick a tax system, the one from the 50s, the 60s, or the 70s. Any one, I don’t care which one. You’ll generate way more revenue, and you’ll actually create better patterns of consumption in the middle, because basically the top has all the money and they don’t pay taxes, the bottom isn’t earning any money and it pays most of the taxes, and then the very poor don’t pay any taxes and they have no money. That’s patently unsustainable. So you can imagine progressive tax reforms which would do a great deal to restore middle class consumption.

People have got to stop accumulating debt as a surrogate for wage growth. It’s great for banks, but it’s terrible for everybody who is actually taking on that debt. When you have an environment with low inflation there’s no way to eat away the value of the debt and your wages aren’t growing. You create kind of creditor-debtor standoffs. What’s happening at the level of Greece and Germany is in a sense also happening within countries, between borrowers and lenders, between generations, between the old — who have most of the assets, 75 percent of all financial assets are held by baby boomers — and the young — who are increasingly expected to pay for everything with wages that simply aren’t growing. There’s lots of problems and lots of tensions and the populism we see around the world is a reaction to that. Hopefully it’s not the only one.

 

michael-120x120ABOUT THE AUTHOR
Michael Nevradakis  

Michael Nevradakis is a PhD candidate in media studies at the University of Texas at Austin and a US Fulbright Scholar presently based in Athens, Greece.

Feb 242017
 

By Michael Nevradakis99GetSmart

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Dear friends and listeners,

Here’s the latest print pieces from Dialogos:

Our Article on Political Developments in Brazil and Similarities with the European South

Our latest article, taking a look at political developments in Brazil preceding and following the ouster of democratically-elected president Dilma Rousseff, and the many similarities and parallels which exist between Brazil and the European South, including Greece, has been published in Mint Press News. This article focuses on the politics of the previous Workers’ Party governments in Brazil and whether they were truly progressive, the harsh austerity which has been implemented by the non-elected president Michel Temer, and the many similarities of Brazil’s situation with countries like Greece.

Find this article here: http://www.mintpressnews.com/brazils-manufactured-coup-the-shock-doctrine-returns-to-latin-america/224823/.

Our Interview with Geopolitical Analyst Alex Christoforou Featured in Mint Press News

Our recent interviews, in English and Greek, with journalist and geopolitical analyst Alex Christoforou, co-founder of TheDuran.com, has been featured in Mint Press News! This is a combination of two recent Dialogos Radio interviews featuring Christodoulou, which aired on our radio broadcast in January and February.

In this interview, Christoforou discusses hot-button political and geopolitical issues, including Trump and the foreign policy he may follow, Russia and its response to developments along its border and in the Middle East, Syria, the Cyprus reunification talks, Brexit and Grexit, and much more.

Find this published interview, in English, here: http://www.mintpressnews.com/durans-alex-christoforou-treating-russia-bogeyman-failed/225175/.

Best,

Dialogos Radio & Media

Feb 142017
 

By Michael Nevradakis99GetSmart

Originally published at MintPressNews:

The Global South is growing unintelligible from the European South amid harsh austerity measures and other maneuverings that suit the rich and powerful at the expense of the poor and working class.

Maria de Jesus Oliveira da Costa, known as “Tia Zelia,” takes down an autographed photo given to her by Brazil’s impeached President Dilma Rousseff, to show it to journalists at her restaurant in Brasilia, Brazil, where photos of former President Luiz Inacio Lula da Silva also hang. (AP/Eraldo Peres)

Maria de Jesus Oliveira da Costa, known as “Tia Zelia,” takes down an autographed photo given to her by Brazil’s impeached President Dilma Rousseff, to show it to journalists at her restaurant in Brasilia, Brazil, where photos of former President Luiz Inacio Lula da Silva also hang. (AP/Eraldo Peres)

BRASILIA, Brazil — Harsh austerity. A 20-year public spending freeze. A non-elected government. A coup backed by the United States and corporate world.

This is the new reality that Brazil has faced following the impeachment and ouster of the democratically-elected Dilma Rousseff in August of 2016 on charges of corruption and her replacement by vice-president Michel Temer, a favorite of Washington.

This is also a new reality that has been met by widespread disapproval, occasional large-scale protests, and a new economic uncertainty for a country which, just a few years ago, was seen as an up-and-coming economic powerhouse, along with the rest of the BRICS, the bloc composed of emerging economies of Brazil, Russia, India, China and South Africa. This optimism has been quickly supplanted by an increasingly volatile social situation in Brazil and great pessimism for the future.

Much has been made in the media about the progressive credentials of the Rousseff government and that of her predecessor, Luiz Inácio Lula da Silva, both of whom represented the Workers’ Party (PT) of Brazil. Much has also been made of the mass protests which led to Rousseff’s outster, which bore similarities to protests seen in countries such as Venezuela against the Maduro regime, and the relative lack of protest that the Temer government has faced since ascending to power.

What is actually happening, though? As is often the case in such situations, reality is far more multifaceted and complex than frequently presented, while parallels can be drawn with other austerity-ravaged countries such as Greece.

A radical break or austerity lite?: The Rousseff and da Silva governments

A man pulls a cart with an electoral poster of Workers Party presidential candidate Dilma Rousseff, right, at Manguinhos slum in Rio de Janeiro, Brazil, Wednesday, Sept. 29, 2010. (AP/Felipe Dana)

A man pulls a cart with an electoral poster of Workers Party presidential candidate Dilma Rousseff, right, at Manguinhos slum in Rio de Janeiro, Brazil, Wednesday, Sept. 29, 2010. (AP/Felipe Dana)

The governments of da Silva and Rousseff were often compared to those of Hugo Chávez and Nicolás Maduro in Venezuela, Rafael Correa in Ecuador, Evo Morales in Bolivia, and Cristina Fernández de Kirchner in Argentina, in representing a break with the doctrines of neoliberalism, economic austerity, and privatization that much of Latin America experienced during the 1980s and 1990s.

This claim is borne out by some policies and certain economic indicators. In a 2014 article, well-known commentator Pepe Escobar, who frequently focuses on the BRICS nations in his writing, pointed out the tripling of the minimum wage between 2002 and 2014, a decline in unemployment, increased GDP per capita, the repayment of Brazil’s debts to the International Monetary Fund, higher purchasing power, plus social programs which benefited almost 50 million Brazilians.

Similarly, in a 2014 interview with me for Dialogos Radio, investigative journalist Greg Palast cited da Silva’s refusal to privatize state banks and the national oil company, while creating the “Bolsa Familia,” or a minimum income offered to many Brazilians, in an effort to lift them out of poverty. According to Palast, these policies — the opposite of the privatizations and austerity dictated by the International Monetary Fund — fueled Brazil’s phenomenal growth during this time, reaching 7 to 9 percent annually at its peak.

But did da Silva and Rousseff go far enough? Numerous commentators have expressed doubts.

For instance, the Rousseff government appointed Joaquim Levy, known as a pro-austerity “fiscal hawk,” as finance minister (this, it should be noted, was when Temer was Rousseff’s vice president). Scholar and author James Petras, an expert on Latin America, pointed out in November that da Silva implemented IMF-mandated austerity programs soon after being elected, and he appointed neoliberal economists to his cabinet whilst supporting the interests of agribusiness and major oil and mining concerns — all while overseeing policies which left numerous peasant families landless.

The Brazilian “economic miracle,” according to Petras, was a mirage fueled by high export commodity prices which the Brazilian economy temporarily benefited from, enabling programs such as the “Bolsa Familia.”

This was echoed by Palast, who in a 2016 follow-up interview with Dialogos Radio cited the sharp decline of oil prices and collapse of its commodities trade with China, as factors in the Brazilian economic slowdown — and increased unrest in the country prior to Rousseff’s ouster. In turn, Escobar also cited Rousseff’s concessions to big banking and agribusiness interests and a swing to the center as mistakes which also led to the emerging middle class increasingly flirting with the right once economic difficulties began.

In an interview with MintPress, Kat Moreno, a Ph.D. candidate in Political Science and visiting scholar for Global Workers’ Rights at the Penn State University, argued that the Rousseff government was quite austere, and that despite a militant, leftist background, the material conditions she faced pressured her to enact austerity policies during her reign.

A recent analysis published by TeleSUR further argues that austerity measures were implemented by the Rousseff government as a defense mechanism of sorts, in an effort to fend off Rousseff’s impeachment by appeasing the right.

In his 2014 interview, Palast cited Rousseff’s return to IMF-sponsored austerity policies and the reduction of pensions as factors which were disastrous for the Brazilian economy, calling the IMF “a society of poisoners,” while in his 2016 interview, he cited Rousseff’s political inexperience and her inability to effectively communicate with the public as factors which made her impeachment possible.

An uprising from below or from above?

Soldiers stand guard outside Planalto presidential palace where protesters have projected the word “Impeachment” on the building, as they call for the impeachment of Brazil’s President Dilma Rousseff in Brasilia, Brazil, Monday, March 21, 2016. (AP/Eraldo Peres)

Soldiers stand guard outside Planalto presidential palace where protesters have projected the word “Impeachment” on the building, as they call for the impeachment of Brazil’s President Dilma Rousseff in Brasilia, Brazil, Monday, March 21, 2016. (AP/Eraldo Peres)

2013 could be seen as a hallmark year for Brazil, one in which the tide began to turn against the ruling PT. The “Brazilian Spring” — following in the footsteps of the protests seen in Turkey that year, the Arab Spring, protests of the “indignants” in Spain and Greece, and the Occupy Wall Street movement of 2011 — emerged out of protests against public transportation fare increases and perceived government corruption. These protests could be seen as having served as a “dress rehearsal” of sorts for those which followed in 2015 and 2016, when fed-up Brazilians took to the streets en masse, including an estimated 7 million citizens during a March 2016 protest, to rally against worsening economic conditions and continued government corruption.

Or did they?

It has been pointed out that the protests of 2015-2016, leading up to the impeachment of Rousseff were not led by the impoverished or the working class, but by such groups as the Free Brazil Movement (MBL) and Students of Liberty (EPL).

Who are these groups?

In this March 18, 2015 photo, anti-government protest leader Kim Kataguiri poses for a picture in Sao Paulo, Brazil. (AP/Andre Penner)

In this March 18, 2015 photo, anti-government protest leader Kim Kataguiri poses for a picture in Sao Paulo, Brazil. (AP/Andre Penner)

Largely consisting of well-to-do, white academic circles, it has been revealed that they were financed by the decidedly right-wing Atlas Economic Research Foundation, itself funded by the notorious Koch brothers.Pepe Escobar has described the events of 2015-2016 as a “white coup,” fueled by the country’s major media outlets, who were “salivating” for regime change.

This scenario closely mirrors the protests seen recently in Venezuela against the increasingly embattled Maduro regime. Venezuela, like Brazil, has been battered by falling commodities prices — especially the sharp decline in the price of oil. This has brought to the forefront protests, led by right-wing elements seeking regime change and sensing an opportunity to make it happen.

Such protests are also not confined to Latin America. Greece, itself embattled by years of economic depression and austerity, has begun to see occasional (but, for the time being, relatively small-scale) protests led by supporters of the center-right parties such as New Democracy.

Prior to the country’s July 2015 referendum on approving or rejecting an austerity package demanded by Greece’s European “partners,” these elements organized fairly large protests in favor of “yes” (accepting austerity in order to “remain in the European Union”). In turn, smaller protests in 2016, organized with such social media hashtags as ftanei pia (“enough already”) ironically protested the austerity measures imposed by the purportedly left-wing Syriza-led government whilst supporting closer EU ties and the New Democracy party.

Similar to Brazil, Greece’s major media groups — all owned by oligarchic interests with a huge stake in the country’s major economic sectors — have vehemently supported austerity and supported the “yes” vote in the 2015 referendum.

Speaking to MintPress, Guilherme Giuliano, at Ph.D. candidate in Political Science at the University of São Paulo and member of the “Catso” social workers’ autonomous collective, described the 2016 protests as not having been solely against Rousseff or her government. Nevertheless, the protests were co-opted by certain parties and movements and used as a catalyst for the coup against Rousseff.

Kat Moreno described the MBL as one of the movements which freely took to the streets, while other protest movements not organized by formal actors and representing poorer strata of society were met with police repression.

Petras classifies the capitulation and eventual fall of the PT governments, led by da Silva and Rousseff, as another in a long string of failures of the left. These “failures” have also been evident in countries such as Greece, where Syriza was, in January 2015, elected on promises to “tear up” Greece’s memorandum agreements with its lenders and to put an end to austerity but has instead faithfully continued enforcing such policies and signed further austerity agreements with the country’s lenders, implementing further cuts and reneging on all of its pre-election pledges.

The ‘shock doctrine’ returns to Latin America

A police officer pepper sprays demonstrators as a scuffle breaks out during a protest against the money spent on Rio’s 2016 Summer Olympics on the route of the Olympic torch, in Niteroi, Brazil, Tuesday, Aug. 2, 2016.

A police officer pepper sprays demonstrators as a scuffle breaks out during a protest against the money spent on Rio’s 2016 Summer Olympics on the route of the Olympic torch, in Niteroi, Brazil, Tuesday, Aug. 2, 2016.

In her 2007 book “The Shock Doctrine,” Naomi Klein highlights how the global capitalist class uses crises and disaster situations — both real and invented — as an opportunity to pounce upon suffering countries when they are at their weakest, imposing harsh austerity christened as “free market” policies and imposed, when necessary, by force, including police violence and brutality.

This has been characteristic of Brazil following Rousseff’s impeachment and Temer’s takeover.

It has also been characteristic of the crisis-hit countries of the European South, where protesters in Greece have been dispersed and stunned into submission by tear gas and police violence which invariably goes unpunished, while riot police enforcing home foreclosures is a common sight in Spain.

Klein traces the origins of the “shock doctrine” to the neoliberal doctrine first espoused by economists such as Milton Friedman, the father of the “Chicago School” of economics, which Latin American countries such as Chile became intimately familiar with under autocratic regimes such as that of Augusto Pinochet.

It is ironic, therefore, that Klein openly and vocally supported the Syriza government prior to the January 2015 elections in Greece which first brought it to power. But she has remained conspicuously silent since then, while Syriza has continued the policies of its predecessors. Nevertheless, the “shock doctrine” serves as a useful guide to explain what is happening in such countries today, including Brazil.

In another one of his analyses on the Brazil situation, Escobar classified Brazil as a victim of a “hybrid war” launched by the world’s neoliberal elite one which is also targeting other BRICS nations such as Russia.

How has the “shock doctrine” unfolded in Brazil?

With a lot of shock, and a lot of awe, to say the least.

From left: Brazil’s President Dilma Rousseff , Indian Prime Minister Narendra Modi, President of Russia Vladimir Putin, President of China Xi Jinping and South African President Jacob Zuma sit during a signing ceremony at the BRICS Summit in Ufa, Russia, Thursday, July 9, 2015. (Sergei Ilnitsky/AP)

From left: Brazil’s President Dilma Rousseff , Indian Prime Minister Narendra Modi, President of Russia Vladimir Putin, President of China Xi Jinping and South African President Jacob Zuma sit during a signing ceremony at the BRICS Summit in Ufa, Russia, Thursday, July 9, 2015. (Sergei Ilnitsky/AP)

A 20-year federal freeze on public spending was almost immediately imposed by the Temer regime, placing caps on spending for health care, education, and social expenditures and shrinking a welfare state which, according to Moreno, was already much more limited than its European counterparts. This was followed up by the announcement of job cuts in the public sector (despite rising unemployment which has more than doubled since the country’s recent economic peak), and a special “Christmas gift” for Brazilian workers: the expansion of the workday from 8 to 12 hours, complete with a reduction in the lunch hour.

This closely resembles the sharp reduction in pay, dismantling of collective bargaining rights, and massive layoffs which have been seen in countries like Greece. (There, pensioners were treated to a “Christmas gift” of their own by the Syriza-led government: a paltry “Christmas bonus” used by the government as a ludicrous PR stunt after it had already slashed most pensions by approximately 50 percent in 2016 and announced further tax increases for 2017.) In Brazil, environmental regulations have also been scrapped or relaxed, posing a particular threat to the country’s indigenous peoples.

In a rare moment of frankness, Temer told an audience of business and foreign policy elite assembled in New York in September that Rousseff — who was no radical while in office — did not go “far enough” in implementing the harsh economic reforms demanded by Temer’s party.

The new Temer government does not feel itself constrained in any way in terms of going “far enough.” Corruption charges are now being faced by da Silva, who currently leads overwhelmingly in opinion polls for Brazil’s next presidential elections, and members of his family.

Not even bothering to keep up appearances, Temer’s appointed cabinet consists exclusively of wealthy white men, while his government attempted to legislate self-amnesty for itself in September — a privilege already enjoyed by members of the Greek parliament and Greek government ministers, who are immune from prosecution for any crimes committed while in office and who regularly “write off” internal parliamentary investigations into previous governments’ wrongdoings.

This comes as the Temer government, which led the ouster of Rousseff on corruption charges, is itself facing corruption scandals.

In such a climate, it is inevitable that corruption will “trickle down” to other sectors of society. Brazil is currently said to be experiencing a far-right resurgence, shattering the common image of the country as one of racial inclusiveness and harmony.

Tourists to Brazil now have the unique opportunity to visit a real-life plantation and be served by black “slaves.” Police violence, already a major problem under the Rousseff administration, continued to grow in 2016 and 2017. There’s also the increasing prison riot crisis, which has been encouraged by elements within Temer’s government who view it as an effective means of culling the population in the country’s overcrowded prisons.

How have Brazilians responded?

Demonstrators march with a sign that says in Portuguese “Get out Temer” and a drawing of Cuba’s late President Fidel Castro, as they demand the impeachment of Brazil’s President Michel Temer in Sao Paulo, Brazil, Nov. 27, 2016. (AP/Andre Penner)

Demonstrators march with a sign that says in Portuguese “Get out Temer” and a drawing of Cuba’s late President Fidel Castro, as they demand the impeachment of Brazil’s President Michel Temer in Sao Paulo, Brazil, Nov. 27, 2016. (AP/Andre Penner)

The spotlight of the international media was thrust upon Brazil in 2013 and again prior to Rousseff’s impeachment in 2016, when protests sprung up in the streets—which may have been fueled, at least in part, by Koch-funded and wealthy elements in Brazilian society.

With a regime in place which may not be supported by the majority of Brazil’s population but is very much supported by the global banking and business elite and by Washington, protests against Temer’s government have not been afforded the same level of coverage, perhaps giving the impression that the Brazilian populace has resigned itself to a tacit acceptance of the new regime. Reality, however, seems to be a bit more nuanced.

There have been both strikes and protests on a fairly wide scale in Brazil since Temer’s takeover, including protests which erupted following the enactment of the 20-year public spending freeze, further significant protests against the Temer government on Brazil’s Independence Day, and a strike of workers at oil refineries all across the country at the end of the year.

These movements are accompanied by abysmal approval ratings for the new government in multiple public opinion surveys, even if approval ratings and poll numbers are often meaningless or inaccurate. Just look at the low approval ratings and exceptionally high re-election ratings for members of the U.S. Congress, for instance, or the multiple polls which all but assured a Hillary Clinton victory in the U.S. presidential elections, or the public opinion polls in Greece which have repeatedly been not just grossly inaccurate but always in a pro-austerity direction. For instance, Greek polling firms predicted a neck-and-neck referendum result in July 2015, when in fact, the “no” vote rejecting the European Union’s proposed austerity package received an overwhelming 62 percent of the vote.

Demonstrators protest Brazil’s President Michel Temer after a military Independence Day parade in Brasilia, Brazil, Wednesday, Sept. 7, 2016. (AP/Eraldo Peres)

Demonstrators protest Brazil’s President Michel Temer after a military Independence Day parade in Brasilia, Brazil, Wednesday, Sept. 7, 2016. (AP/Eraldo Peres)

Despite the protests that have taken place ever since Temer took over in Brazil, Kat Moreno points out the factors that have prevented them from being more widespread or long-lived.

According to Moreno, some strata of society do not feel safe in taking to the streets, and Moreno cites fear as a “strong variable” to consider when examining responses to the political situation in the country, as a result of the high degree of police repression and brutality, which has been especially evident during protests of left-wing groups and protesters who are not affiliated with any major organization or party.

Such a situation could also be said to foster “protest fatigue,” which is often seen as a factor in the lack of wide-scale protest in Greece and other crisis-stricken countries of the European South in recent years. Following large-scale protests seen in the 2010-2012 period, which peaked with the movement of the “Indignants” in Spain and Greece in the spring and summer of 2011 and which were eventually met by a violent and heavy-handed police response, protests have largely disappeared or been confined to ephemeral and single-issue efforts without longevity.

In Greece, a common response to questions as to why Greeks no longer take to the streets is that protesters will simply get tear gassed again and sent back home. The “shock doctrine” described by Naomi Klein may also serve as another psychological factor: When protests turn out to be fruitless and unpopular policies are rammed through despite opposition, feelings of discouragement and despair become more prevalent and serve as obstacles to further action.

To some extent, Brazilian society may be experiencing some of these symptoms.

Familiar Tactics

Brazil’s acting President Michel Temer arrives to speak, at Planalto presidential palace in Brasilia, Brazil, Thursday, May 12, 2016.

Brazil’s acting President Michel Temer arrives to speak, at Planalto presidential palace in Brasilia, Brazil, Thursday, May 12, 2016.

Escobar refers to the “toolbox” of tactics employed in Brazil leading up to Rousseff’s ouster. This set of strategies included the creation of manufactured consent amongst the populace, for the impeachment and the new regime.

This bears a great similarity to the cases of countries such as Greece, where public opinion polls conducted by polling firms which are not independent of the state and which are commissioned by pro-austerity media outlets have repeatedly shown vast majorities purportedly in favor of EU and eurozone membership at all costs, while the very few independent surveys conducted in Greece, such as those by Gallup International, have actually found such majorities to be slim or nonexistent.

Manufactured consent is used to legitimize the austerity policies which then follow, and to characterize any dissent as belonging to a small, marginal minority.

Indeed, similarities between the case of Brazil and the case of countries of the European South such as Greece abound. Just as the Temer government has not been elected and overthrew a government which apparently did not go “far enough” in its austerity regime, the EU imposed a non-elected technocrat prime minister, Lucas Papademos, a former banker, on Greece in late 2011 to ensure that a new package of austerity measures and “reforms” would be railroaded through parliament.

At around the same time, a non-elected prime minister, Mario Monti, was also installed in Italy, with the blessings of the EU — technocrats from which described this unelected government as “the best thing that ever happened to Italy” during a visit of mine to the EU in 2013 as part of a week-long academic program. Italy is now being governed by no less than its third consecutive non-elected prime minister.

The Greek referendum overwhelmingly rejecting EU-proposed austerity was shot down in short order, replaced by an austerity package even harsher than that which had originally been proposed, and even more onerous than the two prior memorandum agreements signed by Syriza’s predecessors, the New Democracy and PASOK (“socialist”) political parties.

The manufactured consent and “shock doctrine” which imposed the “bitter medicine” of austerity on Greece could be viewed as a pre-emptive strike against any thoughts of “Grexit,” a Greek exodus from the Eurozone or even the EU, much like the “hybrid war” against countries like Brazil and Russia described earlier by Escobar.

A man holds a sign that reads in Portuguese “Respect, I’m a teacher, the vandal is the state” at a burning barricade set up by protesters in Rio de Janeiro, Brazil. (AP/Silvia Izquierdo)

A man holds a sign that reads in Portuguese “Respect, I’m a teacher, the vandal is the state” at a burning barricade set up by protesters in Rio de Janeiro, Brazil. (AP/Silvia Izquierdo)

Kat Moreno identifies certain parallels between the Global South, of which Brazil is part, and the European South, which has in recent years experienced much of the same IMF-supported austerity which Latin America is all too familiar with. She highlights the “clear relationship” between being a part of the Global South and being dependent on and the hostage of the international financial system.

And in looking to the future, it is difficult to say who can lead these countries, whether it is Brazil or Greece or Spain or Italy, out of their current death spiral unscathed. Guilherme Giuliano points out that what has been happening in Brazil, as in Greece, Argentina (where the Kirchner government was replaced by one much friendlier to Washington and to global capital), or even the United States, are symptoms of a global crisis — a crisis which, according to Giuliano, “nobody has a progressive way out.”

Indeed, many progressives and much of the global left seem to be focused more strongly on identity politics and a notion of a world without nations or states. In doing so, they have supported such undemocratic, austerity-driven institutions as the EU, while demonizing phenomena such as the “Brexit” as the exclusive realm of racists and xenophobes, widening their chasm with vast sections of the poor and working classes in the process.

Meanwhile, a blind eye has been turned to the actions of former President Barack Obama and former Secretary of State Hillary Clinton, who in conjunction with Wall Street, supported right-wing coups and electoral takeovers all across Latin America, from Brazil to Venezuela to the Honduras. In this vein, James Petras chastises “left politicians who speak to the workers and work for the bankers.”

As for Brazil, Moreno describes the country as finding itself at a crossroads.

“People are seeking autonomy over their destinies, but where it is going we are not sure,” she said. “It can lead to neo-fascism, or it could go towards leftist  positions.”

 

Feb 082017
 

By Michael Nevradakis99GetSmart

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Dear listeners and friends,

This week on Dialogos Radio, the Dialogos Interview Series will feature a timely interview with Brown University professor of political economy, author and analyst Mark Blyth. Blyth will speak to us about global economic developments, including the policies likely to be pursued by new U.S. president Donald Trump, Brexit and its likely impact on the British economy, the real reasons why voters chose Trump and Brexit, the state of the economy in Greece, the results of austerity in the EU, and much more.
 
Tune in for this interview this week, on Dialogos Radio!
 
For more details and our full broadcast schedule, which begins today, visit http://dialogosmedia.org/?p=6679.
 
Best,
Dialogos Radio & Media
Dec 192016
 

By Michael Nevradakis, 99GetSmart

Originally published at MintPressNews:

Russian President Vladimir Putin meets with then-Secretary of State Hillary Clinton in Vladivostok, Russia in 2012.

Russian President Vladimir Putin meets with then-Secretary of State Hillary Clinton in Vladivostok, Russia in 2012.

‘That’s not a democracy, when three two-bit punk judges who don’t amount to anything overrule the majority vote of the British people! … There are not any democracies in the West,’ Roberts tells Michael Nevradakis in this wide-ranging interview.

ATHENS, Greece — The post-election climate in the United States has been nothing short of bizarre. Recount efforts in several states are being championed by Green Party candidate Jill Stein, accusations have repeatedly been made that the “Russian menace” influenced the presidential elections and the victory of Donald Trump, and that Russia is also behind an online disinformation campaign which the mainstream media describes as “fake news.”

One of the websites accused of delivering “fake news” is that of former assistant secretary of the U.S. Treasury under President Ronald Reagan, Paul Craig Roberts. An author and analyst and former Wall Street Journal editor, Roberts has become a vocal critic of neoliberalism, austerity, and those who seek confrontation with Russia and China.

In this interview, originally aired on Dec. 8 on Dialogos Radio, Roberts discusses Trump’s electoral victory and Hillary Clinton’s defeat, what interests may be behind the electoral recount efforts, the “Brexit” vote and recent Italian referendum result, and the conflict in Syria. He also shares his reaction to the accusations of delivering “fake news.”

MintPress News (MPN): Why did Donald Trump win the election, and what does a Trump presidency mean for the United States and for the world?

Paul Craig Roberts (PCR): We don’t know yet what it will mean. We know what we hope it will mean. Trump won because he spoke directly to the people in a way that they haven’t experienced in my lifetime. He told them that the ruling oligarchy did not and would not have their interests in mind, that they had been sold out with the oligarchy moving their jobs offshore to where labor is cheaper while still expecting from the unemployed American workforce to buy the products that are brought in from China and Indonesia and India and elsewhere. This resonated with people, as they have been experiencing this now for roughly a quarter of a century. There’s been no growth in real median family income in decades. Young people can’t find jobs to support an independent existence. The value of a university education is collapsing because there is no employment for that type of an education, and people realize that the economic policy of the country has been captured by the oligarchs and serves only a very few interests. The consequence has been a massive change in the distribution of income inside the United States. The United States now has one of the worst income distributions in the world. In fact, it’s worse than income distributions in many Third World gangster states.

[Trump] spoke directly to these things. He also said that he would not see the point of conflict with Russia, which no one sees in an era of thermonuclear weapons, and he also said that he didn’t understand the function of NATO, 25 years after the Soviet collapse. This also resonated with the public, because they understand that all of these supposed threats are bleeding them in order to put hundreds of billions of dollars into armaments industries. That’s the reason why he won the election, and the reason we are hopeful is that we assume he is sincere about this. We assume he’s sincere because of the fierce opposition he has from the ruling oligarchy and from their media “presstitutes,” who did anything they could to demonize Trump, to turn him into a “Putin agent,” and so forth. But the public ignored them, or at least enough of the public ignored them for Trump to carry almost all of the states except for a few really large cities on the coast.

MPN: Do you believe President-elect Trump will keep his campaign promises, and what do you make of his Cabinet selections thus far?

PCR: We don’t know if he will be able to. The oligarchy’s candidate, Hillary Clinton, lost, so the oligarchy lost the election, but they did not lose it by such a great margin that they’ve given up. They’re still in the fight, they’re still there. Trump has a billion dollars but they have trillions. They’re well-established. They have many, many servants and think tanks and university faculty and the media [on their side], and of course, the neoconservatives, who have dominated American foreign policy since the Clinton regime. So they’re still there, and Trump is in combat with these people.

Trump’s appointments, we don’t know whether they will support what he wants to do or not. If they support him, they are the type of people he needs. They are well-to-do, they’re self-confident, they don’t need money from the oligarchs, they don’t have to worry about their careers when they leave government. So he does have the kind of person you’ve got to have if you’re president, to bring about any change. So the real question is, will they support him or will they go with the oligarchs? We don’t know. We’ll have to wait and see what happens. We can’t judge them based on their past associations. I don’t think any of them are actual representatives of an oligarch’s agenda. So there’s a chance they will support him and that they will be strong enough people that he’ll have the government that will actually do something. But you can’t take it for granted, because as I said, the oligarchs lost but they weren’t routed. They’re still there.

MPN: What would a Hillary Clinton victory have meant for the United States and the world, particularly in terms of foreign policy?

PCR: It would have meant war with Russia and China and the end of life on Earth. She’s an insane warmonger, she demonizes Russia and the president of Russia, calling him the “new Hitler.” She said that the South China Sea is an area of the United States’ national interest. You can’t be more provocative than this, and if you have a president who convinces Russia and China that they’re going to be attacked, they’re not going to sit there and wait. So we really have escaped Armageddon by the defeat of Hillary Clinton. This would have been the worst possible outcome imaginable. Of course, it would have been bad on the other score — jobs, I mean, she’s the agent of the big banks, they made her rich! She and her husband have a personal fortune of $120 million, given to them by the oligarchs, and their foundation has $1.6 billion, also given to them but not just by domestic oligarchs, but by oligarchs abroad. [The Clintons] sold influence for money.

MPN: What is your reaction to the recount effort being led by Jill Stein? Who do you believe is behind all of these efforts?

PCR: The oligarchs, obviously. I mean, Jill Stein couldn’t get any funding for her presidential campaign, but she instantly got something like five or six or seven times the amount of funding she got for her entire campaign, for the recount! Where did that money come from? Not her supporters. And what this is about … the oligarchs were positioned to steal the election for Hillary. But they got deceived by their own propaganda, that she was the shoo-in winner, The New York Times telling them that it was 94 percent certain that she would be elected. They didn’t bother to steal the election, because they didn’t think they needed to. And they were shocked, everyone was shocked — that is, not the people voting for him, but the media, the oligarchs, the established interests. They were shocked by the election results, and so they’ve used Jill Stein, who really has no standing in this issue, since it doesn’t involve her campaign, she has no chance of benefiting from a vote recount. So they’re using this corrupt woman, who sold out the Green Party, to try and throw a monkey wrench into the Electoral College. The only states being recounted are the three that he won which he wasn’t expected to win [Michigan, Pennsylvania and Wisconsin], and his margin in these three states is not very great. They’re not recounting votes in states that he lost by small margins, only where he won by small margins. This is an effort to steal the election from the working class who elected him, and Jill Stein is part of it.

MPN: One of the reactions of the mainstream media has been to attack online news outlets which they claim are delivering so-called “fake news.” Your website was included on this list of alleged “fake news sites.” What’s your response to these claims, and who do you believe are the true purveyors of fake news?

PCR: We know the true purveyors are the media, the press prostitutes. We call them “presstitutes.” The mainstream media throughout the West is totally corrupt and has no integrity. What you see happening is that the independent internet media is taking away the oligarchy’s control over the explanations that people receive. So everywhere you see the subscription rates of newspapers falling dramatically, the viewers of TV programs falling dramatically, and internet readership rising. And so this is an effort to try to discredit the people who actually tell the truth by identifying them with Russia. They are hoping that all the demonization of Russia during Obama’s second term has aroused fears that the “Russian menace” is back, and they’re hoping this fear is substantial and that by associating those of us who challenge their lies, with Russia, they will discredit us.

Who’s funding it? We don’t know, because the people who prepared this list, no one knows who they are. When the Washington Post gave it [the group PropOrNot] all that publicity, they very carefully did not say who these people are. It is a new internet site that didn’t exist before a couple of months ago. Who is funding it? I would say the National Endowment for Democracy, which is a U.S. State Department-funded [organization]. It could be the CIA. It could be George Soros. But it is an oligarch operation, which, of course, involves the military-security complex, because they are the greatest beneficiaries, in terms of money and power, of all the threats, all the wars. They want a Russian threat, for their budgets and for their police state powers. Those are the people who are most likely funding it, but it hasn’t worked! All it did was to provide people with 200 sites they could go to, to find out what the truth is!

I think it’s failed, but it shows the desperation of the oligarchs, and what they will do now is, they will use the people they still control, in the House and the Senate — the oligarchs will get some type of legislation passed that will put pressure on people who dissent from official lines of the oligarchy, that dissent from stories they plant in the “presstitute” media. And so it’s going to be perhaps harder to express dissent or tell the truth in the United States, but we’ll just have to see what they do to Trump. Some people say that he was always a fake, but that doesn’t make sense to me because the oligarchs didn’t need him when they had Hillary. And they clearly didn’t want Trump in the election. They tried to deny him the Republican nomination, and then they used the media against him in very vicious ways during the presidential campaign. Trump said once that he believes in revenge, and I hope he does. I hope he exacts revenge on the oligarchs.

MPN: What has been the aftermath of the Brexit vote for Britain, and have the doom-and-gloom scenarios regarding the impact on the British economy come to fruition?

PCR: No, of course not. The opposite! What’s happened with Brexit is, I think it’s been overturned. The United States is not going to permit Brexit, Washington won’t permit it. Now, this may change with Trump, but under Obama, you may remember he traveled to London to tell the British prime minister to forget all about leaving the EU. The EU is a creation of the CIA. It was created so that the United States could more easily maintain control of Europe. It’s easier to control the EU Commission than to control 20-something different governments. What has happened is, the United States government used three corrupt British judges that decided, “Well, the people may have voted, but you did not really have to pay attention to them, it’s all up to Parliament and Parliament can decide that we’re not [leaving].” And, of course, Washington is now lobbying the Parliament very hard, with promises and money and, no doubt, threats.

So I don’t think Brexit will happen, it’s being overturned. The notion that it would take two years to get out — when that came out, instantly I said, “They’ll never get out.” Two years is all Washington needs to overturn it. I think it’s already overturned with that court ruling. So we had three two-bit punk judges overruling the majority vote of the British people, and they call it democracy! What kind of democracy is it? That’s not a democracy, when three two-bit punk judges who don’t amount to anything overrule the majority vote of the British people! And they call it democracy, oh boy! What a joke! There are not any democracies in the West. Europe is a collection of American vassals. It’s been that way since World War II.

MPN: Italian voters recently voted no in a referendum on amendments to the nation’s constitution. What does this vote, in your estimation, mean for Italy and for Europe?

PCR: It’ll end up being overturned, like the Brexit vote. Just like they are trying to overturn Trump’s election! I mean, that’s what this vote recount is about. It’s the oligarchy trying to overturn the people’s will, just like the three judges in Britain, like what happened in Greece [in the July 2015 referendum]. The vote, in itself, doesn’t mean it’s going to happen. Brexit hasn’t happened, I don’t think it ever will. We don’t even know if Trump is going to be president. But that’s the whole purpose of the vote recount, to block it. They wouldn’t be doing it otherwise. They’ve got all kinds of agents to use, all kinds of things to do.

One of our best journalists, Chris Hedges, who has had to go independent because the prostitute media no longer will publish his work … he’s concluded that elections can’t change anything, only revolution can change things. I think that’s what the oligarchy is proving. They are proving that you can’t change things with elections, because it’s really not a democracy, it’s a facade, and when the people vote, in come the oligarchs and they overturn it one way or the other. How will they overturn the vote in Italy? I don’t know, but they’ll overturn it, or they’ll ignore it, or some judge will rule that Italian law is subject to EU law, that EU law is supreme. They can do all kinds of things.

MPN: Do you believe that we are heading toward that revolution that Chris Hedges spoke of?

PCR: I don’t know. It depends on the people. They don’t seem to be nearly as feisty as they used to be. In previous times in the United States, when we reached this kind of situation, the government was scared of the people and had to make concessions. I don’t see the government afraid of the people today. They’ve got a police state established, they’ve got internment camps built, they’ve militarized the police, the police are as well armed as the military, the police routinely shoot people down the streets. I just don’t know how hard the people have to be pressed. Maybe they just simply will cease to have any gain in their living standards and some slight declines over time but won’t actually be facing starvation and homelessness, as they have in the past. So who knows? I don’t know. But I don’t think they will succeed in changing anything with elections. Possibly, Trump being the kind of very strong-willed, determined, ego-type person that he is, that’s the kind of person you need for a leader if things are going to be changed. You can’t have some conciliatory, shrinking violet who wants to get along with everybody. You can’t get change out of that.

It could well be that Trump is already rich, he doesn’t need any more money, he has a big ego, and he wants to go down in history as the man who saved America, “Trump the Great.” So if he has that kind of a goal, then the oligarchs are up against a real formidable president. If he can find other people to back him, we can get some change. But it remains to be seen. We can’t know that in advance. That’s the hope. What the result is, we don’t know, but that’s the hope. The hope is … Trump has a huge ego, wants to be “Trump the Great,” wants to save America, and that that’s more important than having a few more billion dollars, that he doesn’t care about all these people, these oligarchs, they haven’t supported him. So maybe something will happen, we’ll just have to see. Maybe they’ll prove Chris Hedges wrong. But it’s hard to bet one way or another.

MPN: What’s your take on recent developments in Syria, including the attempted invasion of Syria by Turkish troops, and what do you believe we’ll see in Syria going forward in light of a Trump presidency?

PCR: As far as I can tell, the Russians and Syrians have won that war. They’ve defeated the Washington-supported ISIS. The Obama regime sent ISIS to Syria to overthrow [Syrian President Bashar] Assad when the Russians prevented our involvement. So that way we can pretend we don’t have anything to do with it. But I think the Russians, as I said, defeated ISIS. I think it could have happened much sooner, but [Russian President Vladimir] Putin kept pulling out, kept trying to appease the Europeans, hoping they would see they didn’t need to be American puppet states, but he seems now to have finished the job, more or less. I don’t think the Turks would be permitted to invade Syria, the Russians would just tell them no. And, I don’t think the Turks think they are a match for Russia or that the Turks are stupid enough to think Europe and the United States are going to come to their aid if they get in a war with Russia.

These nuclear weapons are very, very powerful. Russia can wipe out all of Europe in a few minutes. For these itty-bitty European politicians to be running around fomenting trouble with Russia, they’ve got to be insane. There’s no way Europe can come out of this. The same with the United States. Here we are demonizing Russia and China. These are powerful nuclear powers. We can’t possibly survive a conflict with them, no one can. It’s all insanity, it’s nonsense. Europe is unable to produce leadership that’s intelligent. Putin, he’s intelligent. For some reason the Chinese can produce intelligent leadership. Who in Europe has intelligent leadership? Nobody. Maybe we finally have it with Trump, we don’t know yet. But there’s not any intelligent leadership, none in Europe.

Nov 112016
 

By Michael Nevradakis99GetSmart

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Dear listeners and friends of Dialogos Radio,

This week on Dialogos Radio, the Dialogos Interview Series will feature an interview with Duke University professor of political science Bahar Leventoglu. Prof. Leventoglu will speak to us about all of the political developments in Turkey, especially in light of last summer’s attempted coup, will discuss the ongoing conflict with the Kurds in Southeastern Turkey as well as Turkey’s involvement in the Syrian conflict, government crackdowns on opposition political parties and media outlets, and a host of other hot-button issues relevant to the entire Eastern Mediterranean region.

Hear this interview, as well as some great Greek music, this week on Dialogos Radio! For more information and our broadcast schedule, visit http://dialogosmedia.org/?p=6532.

Announcement – Ανακοίνωση

Due to the launch of a new FM radio station by our parent organization in New York State and the necessary preparations which will take place this month, Dialogos Radio’s broadcasts will be on hiatus for the remainder of the month of November. In their place, hear some of our best interviews from the past two years, on issues which remain timely and relevant today.

Ανακοινώνουμε στους ακροατές μας πως εξαιτίας της έναρξης λειτουργίας νέου ραδιοφωνικού σταθμού FM στην πολιτεία της Νέας Υόρκης από τον μητρικό φορέα μας, αναβάλλονται οι εκπομπές του “Διάλογος” για το υπόλοιπο του μήνα. Στην θέση των εκπομπών μας, θα μεταδώσουμε μερικές από τις καλύτερες συνεντεύξεις από το αρχείο μας, συνεντεύξεις που παραμένουν εξίσου επίκαιρες σήμερα.

Dialogos Radio & Media

Nov 042016
 

By 99GetSmart

Originally published at MintPressNews:

Bystanders wait to be handed bags of oranges during a free distribution of fruit and vegetables as a protest by farmers and vendors over proposed pension reforms, in Athens on Wednesday, Jan. 27, 2016. Greece’s leftwing government is facing an escalating wave of protests over its proposed pension overhaul that has been demanded by bailout creditors. (AP Photo/Petros Giannakouris)

Bystanders wait to be handed bags of oranges during a free distribution of fruit and vegetables as a protest by farmers and vendors over proposed pension reforms, in Athens on Wednesday, Jan. 27, 2016. Greece’s leftwing government is facing an escalating wave of protests over its proposed pension overhaul that has been demanded by bailout creditors. (AP Photo/Petros Giannakouris)

ATHENS — This has been another eventful year in Greece. Almost one year after it turned its back on the July 2015 referendum result which rejected further austerity, the Syriza-led government has pushed forward a program of even harsher austerity, spending cuts, and privatizations.

Following the British vote to proceed with “Brexit,” or a departure from the European Union, fears that Greece might follow suit led Greece’s lenders to demand even more austerity measures from a country already mired in an economic depression.

In this interview, Dr. Jack Rasmus, a professor of economics and politics at St. Mary’s College of California, analyzes these issues and the many challenges facing the Greek and European economies today.

The author of such books as “Looting Greece” and “Systemic Fragility in the Global Economy,” Dr. Rasmus shares his insights into the consequences of austerity for Greece and other peripheral European economies, and presents his proposed solutions for an end to the crisis and austerity.

MintPress News (MPN): In September, Greek Prime Minister Alexis Tsipras gave his annual “state of the nation” address, where he boasted that the Greek economy has turned the corner, that unemployment is going down, that salaries will be increased, and that the country is returning to growth. Is this what Greece’s economic indicators actually show?

Protesters march to the Greek Parliament in Athens on Tuesday Nov. 6, 2012. Greece’s unions are holding their third general strike in six weeks to press dissenters in the country’s troubled coalition government not to back a major new austerity program that will doom Greeks to further hardship in a sixth year of recession. Two days of demonstrations are planned to start Tuesday, continuing until lawmakers vote late Wednesday on the bill to slash euro13.5 billion ($17.3 billion) from budget spending over two years. (AP Photo/Dimitri Messinis)

Protesters march to the Greek Parliament in Athens on Tuesday Nov. 6, 2012. Greece’s unions are holding their third general strike in six weeks to press dissenters in the country’s troubled coalition government not to back a major new austerity program that will doom Greeks to further hardship in a sixth year of recession. Two days of demonstrations are planned to start Tuesday, continuing until lawmakers vote late Wednesday on the bill to slash euro13.5 billion ($17.3 billion) from budget spending over two years. (AP Photo/Dimitri Messinis)

Dr. Jack Rasmus (JR): No, not quite. Greece’s debt is still the same as it was in 2011, roughly 180 percent of GDP. Unemployment has come down by only 3 to 4 percent, so instead of 27 percent, it’s about 23 to 24 percent. That’s depression-level unemployment. All the other indicators in the economy are flat or declining, so I don’t see anywhere that Greece is really “recovering,” and neither, really, is the entire eurozone economy. It’s been bouncing along the bottom.

As I said in my book “Systemic Fragility,” it’s a case of chronic stagnation. [The eurozone] might grow a little, 0.5 percent or 1 percent above GDP, mostly as a result of Germany’s growth, then it flattens out or goes below. Most of the periphery economies in Europe are stagnant or in a recession, as they have been for quite some time.

As far as raising wages, Greece cannot raise, at least in the public sector, any wages without the approval of the troika [Greece’s three major lenders: the European Commission, European Central Bank, and the International Monetary Fund]. It’s a real stretch to say that Greece is recovering. It’s kind of moving sideways, in the condition of still chronic economic depression.

MPN: One of the perceptions that has been prevalent in global public opinion with regard to the economic crisis in Greece is that the country has been “bailed out” with billions upon billions of euros in free money. Is this really the case, and where has the so-called “bailout” money to Greece actually gone?

JR: Countries don’t get bailed out. Governments, banks, businesses, and sometimes, though not so frequently, households get bailed out. So the question is, who got bailed out here, in the debt restructuring deals of 2010, 2012, 2015, and this past spring? The banks got bailed out several times. Foreign investors and speculators in Greek bonds and other securities clearly got bailed out in 2012. If you look at where the money has gone, there’s $400 billion in debt in Greece still, that they have to pay off, with an economy that is less than half that size, so it’s impossible.

Where has all this money gone? Recent studies by the European School of Management and Technology documenting the 2010 and 2012 bailouts indicate that 95 percent of all the loans to “bail out” the Greek government, which then bailed out the Greek banks — 95 percent of that went back to Northern Europe, mostly to the German and Northern European banks that had loaned so much money to Greece. [Bailout funds also went] to the troika, particularly the European Commission, that then distributed it to the banking system and investors in turn. The EC is the big player here, and to some extent the European Central Bank, and to a minor extent now the International Monetary Fund. So, 95 percent of all the money loaned to Greece went right back to [Europe] and less than 5 percent of that went back into the Greek economy. Greece has been subsidizing the financial system elsewhere in Europe.

A supporter of the communist-affiliated union PAME takes part in an anti-austerity rally in front of the parliament in Athens, Monday, Oct. 17, 2016.

A supporter of the communist-affiliated union PAME takes part in an anti-austerity rally in front of the parliament in Athens, Monday, Oct. 17, 2016.

MPN: What do you believe needs to be done about the Greek debt?

JR: You might ask what needs to be done about debt throughout the eurozone, because it’s not just Greece. Greece is perhaps the most serious case, but other places in the periphery of Europe are still heavily indebted. You cannot sustain, with austerity measures designed to pay the interest and principal on debt, a $400-plus billion debt based on an economy that’s less than $200 billion. Even the IMF has come to that conclusion and is maneuvering with the other troika members on that particular point.

Is [the debt] legitimate? Well, you have to understand the origins of this debt. It was originally private sector debt that was created as a result of the formation of the eurozone in 1999, the ECB as part of that creation, and other elements of the eurozone agreements, particularly the Lisbon Strategy that Germany adopted. Germany and other Northern European businesses and bankers pumped money and capital into the periphery, including Greece, from 2005 onward. Germany had a strong competitive advantage in exports, so a lot of the money and capital was pumped into the periphery, including Greece, in order to purchase German and other exports. So the money went in and circulated around, leaving a pile of private sector debt in Greece, Italy, and other places.

Then we had the crash of 2008-2009 and the debt could not be repaid, and the troika stepped in to [offer] the governments of Greece and other countries money in order to continue to bail out the private sector and enable the repayment of the private debt. So it starts out as private debt, because of this great imbalance in exports within the eurozone, and then that gets converted to government debt, and then the big crash of 2008-2009 adds even more debt, and then you have the recession of 2011-2013 in the eurozone and the 2012 bailout, which piled on more debt in order to pay the old debt, and then in 2015 the same thing. So the troika’s piling more debt on Greece in order for Greece to pay the previous debt, and that’s totally unsustainable. They’re going to have to expunge some of that debt.

Of course, the Germans, Wolfgang Schauble [the German finance minister] and the coalition in the north, does not want to allow that. And they don’t really want to change the eurozone, because the eurozone, while very imbalanced for the periphery, has benefited Germany significantly. [The Germans] dominate the finance ministers’ council in the EC and they dominate the ECB, and they’re just keeping the situation the way it is because it’s profitable for them.

Demonstrators hold a poster against the austerity policy of Germany prior to a special session of the parliament Bundestag on negotiations with Greece for a new bailout in Berlin, Germany, Friday, July 17, 2015. (AP Photo/Markus Schreiber)

Demonstrators hold a poster against the austerity policy of Germany prior to a special session of the parliament Bundestag on negotiations with Greece for a new bailout in Berlin, Germany, Friday, July 17, 2015. (AP Photo/Markus Schreiber)

MPN: Why must Greek banks be nationalized, in your view?

JR: Look at the debt negotiations of 2010, 2012, and 2015. What happened was the ECB, which pretty much controls the Greek central bank — the ECB is just a council of central banks dominated by the Bundesbank [the German central bank] and its allies, so they have control — and what you saw in the negotiations is that in 2015, the ECB put the screws to the Greek economy, and Syriza collapsed and agreed each time the screws were tightened, bringing the economy to a halt. They couldn’t deal with the squeeze on the economy by the ECB. This brought the economy to a halt, squeezing it and of course not releasing loans that [the troika] had agreed to provide Greece under previous agreements. There was an economic squeeze that Syriza did not have a strategy to deal with, and eventually it capitulated.

You’ve got to nationalize, make the Greek central bank and the banking systems independent of the ECB. Gain control over your economy once again, and that is one of several key steps to prevent the squeeze every time you attempt to renegotiate the debt or restructure the debt. Without an independent, Greek, people-controlled banking system, the eurozone and the troika will squeeze and bring Greece to its knees every time. We’ve seen that three times. You’ve got to nationalize the banking system, including the central bank, or if you want to just leave the central bank as part of the ECB structure, go ahead, but create an independent central bank authority elsewhere in the Greek government.

In the U.S. during the Great Depression, the U.S. central bank had screwed up badly, and [President Franklin Delano] Roosevelt took over and had his Treasury Department take over and run the economy. Greece would have to set up a parallel central bank in its finance sector, and isolate and bypass the influence of the ECB through the Greek central bank. You would have to create a parallel currency as part of this and impose serious controls on bank withdrawals and capital flows outside the country, which Syriza did not really do, because the ECB and the troika opposed it. When you have all the capital, bank withdrawals and capital flight is another way of squeezing the country economically.

FILE – In this Sunday, Oct. 18, 2015 file photo, a man walks past street art depicting Greek Prime Minister Alexis Tsipras and German Chancellor Angela Merkel in Athens, Greece. Tsipras’ decision to sign off on a bailout led to many in his left-wing Syriza party to quit in protest.

FILE – In this Sunday, Oct. 18, 2015 file photo, a man walks past street art depicting Greek Prime Minister Alexis Tsipras and German Chancellor Angela Merkel in Athens, Greece. Tsipras’ decision to sign off on a bailout led to many in his left-wing Syriza party to quit in protest.

MPN: The current government in Greece has been continuing a policy of massive privatizations of Greek public assets, with profitable airports and harbors having been privatized in the past year, in addition to the recent selloff of the Greek national railroad for a total of €45 million ($49 million). What are the short- and long-term impacts of the privatization of such public assets?

JR: The short-term is that when you privatize them, under the aegis of the troika, if you sell below market prices, which a lot of these assets are being sold at, that’s profit on the sale for the investors who are buying up these assets. But once the assets are in private hands, where does the revenue go? Does it go back into Greece or does it go back into the pockets of the investors and the corporations and the banks outside Greece that are buying it up? Well, it goes out. It’s a form of capital flight. Money that is needed in Greece flows out of Greece.

This is a new form of financial imperialism, wealth extraction in other words, that is being structured and managed on a state-to-state basis. It’s not 19th century British imperialism where they set up a factory in India, paid them low wages, and brought the textiles back to London to re-sell at a higher price. It’s not that kind of production imperialism. This is financial imperialism imposed on Greece, and it’s a new form that’s emerging everywhere, where you indebt the country and then you force the country to engage in austerity in order to pay the principal and interest on the debt, and you extract the income from the country. Privatizations are another form of that.

You privatize public goods, you get them at fire-sale prices, and then the income flows from those assets flow back to the coffers of the private companies or the banks, outside of Greece.

The other consequence is when you privatize, they come in and they cut costs, which means they lay off people in mass numbers, they put a hold on wages, they get rid of benefits, and they do everything else to maximize their revenue.

Finally, longer term, it means that Greece has less control over its own economy if it can’t control its infrastructure and everything is owned by foreigners. Then you can’t influence it as much, and if you’re part of the eurozone, you’re legally prohibited from what you can do to make sure that these foreign-owned infrastructure companies are behaving in terms of the benefit for the public sector, for the rest of Greece.

MPN: You have argued in your book, “Systemic Fragility in the Global Economy,” that there are nine major trends which account for the economic troubles that are seen on a global scale. What are some of these trends?

JR: Everywhere, and particularly since 2008, we see central banks and monetary policy to be ascendant, and that means creating money, pumping it into the economy to bail out the financial systems, the financial institutions, the banks and the shadow banks, meaning speculators, hedge funds, private equity firms, asset management companies, and so forth. We’ve seen bailouts of tens of trillions of dollars since 2008. All of that liquidity injection into the economy has driven interest rates down to zero or even, in Europe and Japan and elsewhere, negative rates, and that fuels debt. With rates that cheap, corporations and businesses float new corporate bonds, and they use the money not to invest necessarily, they use it to buy back the stock and drive up the stock prices and pay out dividends, or they sit on it, they hoard it, or they send it to emerging markets. That’s a problem everywhere, and that’s the result of massive liquidity injections, which have really been escalating since the 1980s, when controls on international capital flows were eliminated everywhere.

After the 1970s, when the Bretton Woods system collapsed and central banks took over, the combination of those has led to the financialization of the global economy in the 21st century, where profits are far greater for investing and speculating in financial securities than they are in investing in real assets and real things that create real jobs and real income and real consumption. We’re becoming dependent on debt more and more. The economy is increasingly credit- and debt-driven, and that’s the result of this massive liquidity injection, and it also leads to a shift from real asset investment — investing in real things that create jobs that people need — toward financial asset investment. That means that real investment collapses over time and productivity collapses over time as well, and we see that happening everywhere.

That’s a major point that I argued about in my book, “Systemic Fragility,” this financialization of the global economy based on liquidity and debt and squeezing out. It’s diverting money and capital from real investment into financial speculation. What’s going on in Greece is a concrete expression of this, the reliance on financial means and financial manipulation. The periphery in the eurozone is at a great disadvantage to Germany and others, and they’re being manipulated financially. All the payments on interest and the debt flow back to the north. This is all flowing through the EC to the private sector, and it’s a nice constant money capital flow from interest payments and privatization and speculation on government bonds and securities and stocks in these countries as the volatility occurs.

It’s a reflection, in Greece, of what’s happening on a broader scale elsewhere in the global economy, and that’s why we haven’t seen much of a recovery in the global economy. Global trade is stagnant and real investment everywhere is drifting toward zero, productivity is negative almost everywhere, even in the U.S., and we’re seeing growth rates of barely 1 percent, 1.5 percent, at best, when it should be double that. We see these growing, non-performing bank loans, almost $2 trillion in Europe, the worst in Italy with about $400 billion. We see the same thing in Japan and in China. We’re becoming more systemically fragile financially because of this shift to financial speculation.

In this July 5, 2012 file photo President of the European Central Bank Mario Draghi speaks during a news conference in Frankfurt, central Germany. (AP Photo/dapd, Mario Vedder, File)

In this July 5, 2012 file photo President of the European Central Bank Mario Draghi speaks during a news conference in Frankfurt, central Germany. (AP Photo/dapd, Mario Vedder, File)

MintPress: What is your outlook for the eurozone economy and the difficulties that it is currently facing?

JR: The European banking system has never fully recovered from the 2008-2009 crash. The ECB is pumping money into the banking system in various ways, long-term refinancing options and all the bailout funds and qualitative easing and negative interest rates and so forth. They’re desperately pumping money into the banking system, but the banks aren’t really lending, at least to those businesses that would reinvest in real assets to create jobs. It’s far more profitable to make money now. Investors make more money from financial speculation than they do from investing long-term and expecting to get a return over 10 to 20 years for investment in a real company that creates real things.

We can see the strains now with the non-performing loans, in particular in Italy. Of course, we know the situation with the non-performing bank loans in Greece. Portugal is in bad shape as well in terms of non-performing loans, and now we see even institutions like [Germany’s] Deutsche Bank and others beginning to feel this strain, and the further impact on the European banking system of the “Brexit” [the departure of Great Britain from the European Union].

The problem is that the private banks are either hoarding the cash, they won’t invest in real growth, or they’re sending their money offshore to emerging markets, or they’re using it, as in the U.S., to buy back stock and pay out dividends and loaning money to companies to do just that. The global economy has changed dramatically in ways that make it much more fragile than ever before. A lot of debt has been building up everywhere: Over $50 trillion in additional debt has occurred since 2009, and when the next recession comes, how are they going to pay that debt?

When times are stable or growing, you can add debt without a great crisis emerging, but when you have a recession or a downturn that’s significant, where are you going to get the money capital to pay the principal and interest on the debt? Then you start seeing defaults and you start seeing financial asset price collapses going on, and now you’re back in 2008-2009. That’s the picture of the global economy.

A farmer tries to protect himself as he clashes with a riot policeman during an anti-government protest at central Syntagma square in Athens, Wednesday, Nov. 18, 2015. Greek farmers protesting over planned tax and pension reforms demanded by the country’s bailout creditors have clashed outside parliament with police, who used tear gas to disperse them. (AP Photo/Yorgos Karahalis)

A farmer tries to protect himself as he clashes with a riot policeman during an anti-government protest at central Syntagma square in Athens, Wednesday, Nov. 18, 2015. Greek farmers protesting over planned tax and pension reforms demanded by the country’s bailout creditors have clashed outside parliament with police, who used tear gas to disperse them. (AP Photo/Yorgos Karahalis)

MPN: What would be the steps for Greece to follow, in your view, in order to escape the spiral of economic depression and austerity?

JR: Syriza made it clear, when it came into power, that it was not in favor of “Grexit” [a Greek departure from the eurozone], and it has always maintained that position. An unprepared, “we’re leaving the eurozone and the euro” kind of decision would cause a collapse of values, particularly among those who have investments in some savings in Greece. To some extent, Syriza was caught between a rock and a hard place here. They couldn’t or didn’t want to advocate an exit, and at least those who had investments didn’t want it because of the potential effect on their investments. The broader Greek populace thinks, still, that to be European you have to be in the eurozone. That’s a big mistake.

I think what Greece and Syriza should have done is to create a parallel currency and to take over its banking system. In other words, make the banking system truly independent, including the Greek central bank, and if that was not possible, bypass the Greek central bank and set up a central banking function in the finance ministry, as the U.S. has done at different times. Create a parallel currency, and policies and programs to get people to convert their euros into the parallel currency. Maybe declare that henceforth all taxes to the Greek government will be paid with the parallel currency, and that means that people would then trade in their euros for the parallel currency to pay their taxes.

Then tell the troika [the EC, the ECB, and the IMF — collectively, Greece’s lenders] that we’re going to pay you in your euros, but if we run out of euros here as a result of the conversion, well, tough luck, we don’t have a way of paying you, let’s negotiate a final deal where you expunge some of it and we pay you off and we go our separate ways. Of course, you would have to create significant capital flow controls, which has always been a problem every time there’s been a crisis; the money flows out of Greece. Take the economy out of the control of the troika without a formal exit.

That could have been done, but for some reason Syriza and its finance advisers either didn’t want to do that or didn’t know how to do that.

MPN: Arguments that have been heard against a parallel currency include the claim that the existence of two currencies would create a situation where there would be “haves” and “have nots” — between those who would hold a stronger, hard currency, compared to those holding a weaker, devalued currency. How do you respond to this?

JR: There are policies and approaches you can take that entice and require people to convert their euros into the new currency. That would raise the demand and therefore the value, the price of the new currency. If you just had the currency and you didn’t have this forced trade-in, then of course you would have “haves” and “have nots,” the new currency would collapse, and pretty soon no one would want to use it. But, for example, saying that taxes could only be paid with the new currency, would force people who had corporations and businesses and so forth to purchase the new currency with the euro. It would undermine the value of the euro in Greece and it would raise the value of the new currency in Greece as well. That might set off a parallel elsewhere in the eurozone with other countries thinking the same thing, which would undermine the value of the euro and put the squeeze on the troika for once. Greece never put the squeeze on the troika, it was just the opposite in all of these negotiations that occurred, they never really hurt the troika in negotiations, and that’s the only way you prevail in negotiations. You’ve got to make it unpleasant for the opposition. Syriza never did that, they played along and made concession after concession.

Syriza thought that their example would strike a spark elsewhere in Europe of other social democratic forces and governments. They thought that they would get the rest of the social democracies behind them and together they would reform the eurozone. That was a fiction, a fantasy thought on the part of Alexis Tsipras and others, but that was the core of their whole strategy. European social democracy is a dying force, and that’s why you see the growth on the fringes, both to the right and the left.

Tsipras and [former Greek finance minister] Yanis Varoufakis’ problem was that they thought they could get all these elements behind them and that together they would have enough weight to force Schauble and other finance ministers to make concessions. Well, Schauble and the other ministers, the “German faction,” as I call it, within the finance ministers’ council in the EC, remained dominant. At every step along the way, whenever Syriza and its few allies tried to make a compromise where some concessions were made to them, the German faction squelched it. We saw that, for example, at the very end, when [Greece held] the referendum in July 2015. Greece held the vote, and the vote said “go back and negotiate a better deal for us,” and what did Tsipras do? He totally caved in to the Schauble faction, and then the Schauble faction said, “The offer we made last week is now off the table, you’re going to have to accept an even worse one.” So they put the screws to Syriza, and Syriza looked to its allies in the EC, and they totally caved in as well. Things just got worse and worse until you had the final [austerity] agreement on August 20, 2015.

It was a step-by-step retreat from [Syriza’s election in] January 2015, because Syriza had the wrong strategy and was not engaged in certain necessary tactics. Of course, the troika itself had a lot of cards to play. It would have been an uphill fight for Syriza. The time where they might have been able to strike some concessions from the troika was 2012, but New Democracy [the center-right party in power at the time in Greece] was totally in the pocket of the troika, so that was impossible.

[This past spring], the IMF and the troika were worried about “Brexit” and what impact that might have on renewing “Grexit.” So they put the screws to Greece again, raised the debt even more, austerity even more, and I think another round of that is coming, because the IMF wants out of the troika deal. We’ll see what happens at the IMF meeting, but they haven’t endorsed even the 2015 agreement because they know it’s unsustainable. I think the IMF is maneuvering to have the EC to buy its portion of the debt, and once that happens, the EC will demand even more austerity from Greece.

President of France Francois Hollande, U.S. President Barack Obama, Britain’s Prime Minister David Cameron and Germany’s Chancellor Angela Merkel attend the Transatlantic Trade and Investment Partnership (TTIP) meeting at the G20 the G-20 leaders summit in Brisbane, Australia, Sunday, Nov. 16, 2014.

President of France Francois Hollande, U.S. President Barack Obama, Britain’s Prime Minister David Cameron and Germany’s Chancellor Angela Merkel attend the Transatlantic Trade and Investment Partnership (TTIP) meeting at the G20 the G-20 leaders summit in Brisbane, Australia, Sunday, Nov. 16, 2014.

MPN: In the event that a parallel currency is implemented and steps are taken to maintain or strengthen its value, could that be a prelude to a switch to a national, domestic currency?

JR: Yes. At some point, one currency will become dominant. You can’t have two equal currencies like that. Another advantage of the new currency is that it will start out at less value than the euro, and that will be used as the trading currency. That will stimulate Greek exports to elsewhere, outside the eurozone.

Part of the problem is that the periphery in Europe is so dependent on exports and imports to Germany and the north, that it can’t really engage in its own independent export strategy without cutting wages. Throughout Europe, you have what’s called “internal devaluation,” when you are stuck with a currency and someone else’s central bank, the ECB and the euro. You can’t really engage in independent monetary policy to stimulate your economy and you can’t engage in lowering your currency in order to gain some advantage in exports. You’re stuck, and only the most powerful country that’s most efficient and has the lowest costs is able to take advantage of global exports, and that’s Germany. The weaker economies of the periphery will always be at a disadvantage to Germany when it comes to trying to push their exports anywhere else outside the eurozone.

That’s the lesson. The lesson is that you’ve got a 1999 agreement in which you have this quasi-central bank, the ECB, and you have [the euro], and that arrangement significantly benefits the most efficient, low-cost producer, which is Germany, at the expense of the periphery. Until you have a true central bank and fiscal union to some extent, that will pump the money into the periphery to help it grow when it doesn’t, you will always have the situation you have in Europe right now.

Compare that to the U.S., where there’s a fiscal union, so that if certain states have economic problems … the federal government can pump money into those specific locations. If you don’t have a true federal government and fiscal union, you can’t do that, and if your central bank is dominated by the largest economy — Germany — even the monetary policy has no effect. And if it’s a single currency, it’s to the advantage of the stronger economy at the disadvantage of the weaker.

The eurozone economy is structured to emphasize the growth of the strongest economies at the expense of the weaker, and that’s not going to change. It’s built into the eurozone. You cannot create a currency union and a customs union without a true banking union and fiscal union. More and more countries in the eurozone are beginning to come to that conclusion, but it was foreordained. Economists knew this from the beginning, and that’s the tragedy. Greece has tied its tail to the eurozone, dominated by Germany, and it can never get out of this situation as long as Germany dominates the institutions, which it does, because the whole arrangement is great for Germany.

A protesters carries a protest sign during a rally prior to the opening of the new European Central Bank (ECB) headquarter in Frankfurt, Germany, Wednesday, March 18, 2015. At least four police cars were set alight and two officers injured Wednesday as authorities confronted violent anti-austerity protesters ahead of the inauguration ceremony for the European Central Bank’s new headquarters (AP Photo/dpa, Arne Dedert)

A protesters carries a protest sign during a rally prior to the opening of the new European Central Bank (ECB) headquarter in Frankfurt, Germany, Wednesday, March 18, 2015. At least four police cars were set alight and two officers injured Wednesday as authorities confronted violent anti-austerity protesters ahead of the inauguration ceremony for the European Central Bank’s new headquarters (AP Photo/dpa, Arne Dedert)

MPN: Tell us about your most recent book, “Looting Greece.”

JR: It’s really a case study of the consequences of financialization and globalization and integration. I argue that there is this phenomenon of the smaller economies being tied into the larger economies through free trade agreements, which lead to currency unions, which lead to banking unions, and then you’ve got a situation like Greece and the euro periphery and the problems associated with that.

The book also takes a historical look at the origins of the Greek debt, that starts in 1999 with the [creation of the] eurozone, the adoption of the euro by Greece in 2002 and the consequences of that, how the debt developed, first in the private sector because of German export domination and then conversion of the private debt in 2008-2009 to the public debt, and then the collapse of 2008-2009, which added to the government debt. Then you had the 2012 agreement where the private sector was bailed out, and that added more debt, and then 2015 and so forth. All this is described in detail in the early chapters, and then most of the book is a step-by-step look at the negotiations between Syriza and the troika, from [Syriza’s January 2015 election] through the spring of 2016, and what were the strategic and tactical errors of Syriza and the strategic and tactical moves by the troika which enabled it to prevail.

At the end, [the book discusses] how this is a form of a new emerging financial and wealth extraction from smaller economies by the larger economies, because of the globalization and integration arrangement that exists, the emergence of financial extraction and financial exploitation, and how central banks are feeding that all. This will lead to my next book, which is about global central banks and the problems they’ve created as we move to another crisis, which I think is coming in the next five years.

Demonstrators dressed as clowns pass by a burning police car Wednesday, March 18, 2015 in Frankfurt, Germany. Blockupy activists try to blockade the new headquarters of the ECB to protest against government austerity and capitalism. (AP Photo/Michael Probst)

Demonstrators dressed as clowns pass by a burning police car Wednesday, March 18, 2015 in Frankfurt, Germany. Blockupy activists try to blockade the new headquarters of the ECB to protest against government austerity and capitalism. (AP Photo/Michael Probst)

 

 

Oct 192016
 

By 99GetSmart

Originally published at MintPressNews:

Far from representing truly alternative voices, three Syriza leaders crafted empty public images as anti-austerity renegades and champions of democracy and justice.

Protesters against new austerity measures hold a placard depicting Labour Minister George Katrougalos as the movie character Edward Scissorhands during a protest outside Zappeion Hall in Athens, Friday, Sept. 16, 2016. The placard reads in Greek”Katrougalos Scissorhands”.

Protesters against new austerity measures hold a placard depicting Labour Minister George Katrougalos as the movie character Edward Scissorhands during a protest outside Zappeion Hall in Athens, Friday, Sept. 16, 2016. The placard reads in Greek”Katrougalos Scissorhands”.

ATHENS — (Analysis) In January of 2015, opponents of neoliberalism and the harsh policies of economic austerity rejoiced at the electoral victory of Syriza in the Greek parliamentary elections.

Touted as the “first-time left,” the new Syriza-led government was portrayed as a “would-be savior” for Greece. It was further hailed as the regime that would reverse the country’s fortunes and stand up to the demands of Greece’s lenders in the European Commission, the European Central Bank, and the International Monetary Fund–the trio collectively known as the “troika.”

Flash forward to today: One year after ignoring the result of a referendum which rejected further austerity measures proposed by Greek lenders, the Syriza-led government is enforcing the dictates the third memorandum, an even more onerous austerity agreement agreed to in August 2015. In the interim, further legislation has been passed which has ceded control over the entirety of Greece’s publicly-owned assets for 99 years and relinquished the sovereign parliamentary right to pass legislation on key budgetary and economic issues.

The end results of these agreements and the new austerity plan which has followed have been catastrophic. Already-battered pensions have been further slashed by as much as 50 percent or more. The port of Piraeus, 14 profitable regional airports, the national railway system, and the prime site of Athens’ former international airport have been sold off to foreign investors at bargain-basement prices and privatized. The sell-off of Greece’s municipal water utilities, which Syriza officials at one time claimed would occur “over our dead body,” is the next in line to be completed. Further, automatic budget cuts lurk ominously ahead, to be implemented automatically if Greece does not meet its troika-imposed fiscal targets.

After a long period of dormancy, lulled by the promise of a government that was purportedly engaged in hard negotiations with Greece’s lenders, the people of Greece have roared back to life. Air traffic controllers recently staged a wildcat strike, walking off from their jobs in protest of the privatization of Greece’s airports–a process slated to be expanded to the remaining facilities in which the Greek state still owns a share. With nothing left to lose, pensioners have taken to the streets to protest the virtual elimination of their already meager pensions.

A protester chants anti austerity slogans during a demonstration in central Athens, on Friday, May 6, 2016.

A protester chants anti austerity slogans during a demonstration in central Athens, on Friday, May 6, 2016.

While back in January of 2015, the world celebrated as the “saviors” in Syriza removed barricades around the Hellenic Parliament and promised to dissolve the violent, corrupt riot police, nowadays the Syriza government prefers to unleash the very same riot police on elderly, impoverished protesters, who are also targeted with generous sprays of tear gas. Instead of tearing up the memorandum and austerity agreements, as had been promised prior to January of 2015 by current Prime Minister Alexis Tsipras and other Syriza officials, Syriza officials now express regret that the word “memorandum” has been “demonized.”

Within Greece at least, the hero worship previously afforded Syriza has transformed into a wide-ranging sentiment in which many citizens and voters now openly support “anyone but Syriza.” In such a climate, voters have once again begun searching in earnest for a new “savior” to rescue Greece from its death spiral of austerity, hopelessness, and crippling economic depression. Several such political personalities loom large in the imaginations of many voters, including “radical” economist and former finance minister Yanis Varoufakis, former speaker of the Hellenic Parliament and founder of the “Course of Freedom” party Zoe Konstantopoulou, and former energy minister and founder of the Popular Unity party Panagiotis Lafazanis.

Do these personalities represent a true hope for change and optimism? Or are they merely the next in line to follow Syriza’s footsteps in promising radical change but delivering continued austerity instead? Their respective backgrounds and actions while in positions of power reveal the likely answer.

 

Yanis Varoufakis: Radically promoting austerity

Former Greek finance minister Yanis Varoufakis attends a news conference about the launch of a new left-wing pan-Europe political movement called 'Democracy in Europe Movement 2025' in Berlin, Germany, Tuesday, Feb. 9, 2016. (AP Photo/Markus Schreiber)

Former Greek finance minister Yanis Varoufakis attends a news conference about the launch of a new left-wing pan-Europe political movement called ‘Democracy in Europe Movement 2025’ in Berlin, Germany, Tuesday, Feb. 9, 2016. (AP Photo/Markus Schreiber)

Yanis Varoufakis has crafted a reputation for being a “radical,” “anti-austerity” renegade economist who is unafraid to break conventions and tackle the status quo.

However, his record–particularly during his time as Greece’s finance minister from January to July 2015–tells a different story.

In his early days as Syriza’s finance minister, Varoufakis entered negotiations at the February 2015 Eurogroup summit proposing the continuation of 70 percent of previously implemented austerity measures for an additional six months. He refused to raise the possibility of a eurozone departure for Greece, not even as a “plan B” or a negotiation tactic. The 70 percent proposed by Varoufakis ultimately became an agreement for the continuation of 100 percent of the existing austerity measures for four additional months. Varoufakis, in his usual style, described the agreement as an exemplar of “creative ambiguity,” while suggesting that the troika now be referred to as the “institutions” instead.

In these early days of the “first-time left” government, Varoufakis hired Wall Street firm Lazard to advise the Greek finance ministry. This is the same firm which advised the government of George Papandreou (whom Varoufakis advised for six years) on the signing of the first memorandum agreement in 2010, the government of unelected technocrat Lucas Papademos on the introduction of further austerity in 2012, and the previous New Democracy-PASOK coalition government on the privatization of public assets.

Varoufakis’ “radical” rhetoric continued when he repeatedly stated, as finance minister, that Greece’s debt was legal and would be repaid “ad infinitum,” even while a parliamentary committee which was purportedly investigating the legality of this very same debt was in session.

In an interview with The Associated Press, Varoufakis stated that he would “squeeze blood out of stone” in order to repay the IMF, while in another interview, Varoufakis stated that he sought to develop good relations with Christine Lagarde and the IMF, which holds views that he said he personally agreed with. In an interview with Australia’s ABC, Varoufakis further stated that even if the government wanted to proceed with the “Grexit,” it was unable to mint its own currency, claiming that Greece’s mint was destroyed when the country joined the eurozone. In reality, Greece’s mint is still operational; it’s where €10 notes are printed today.

Former Greek Finance Minister Yanis Varoufakis, explains why he thinks Brexit could trigger dire economic consequences for the European Union.

As finance minister, Varoufakis tapped Elena Panaritis as Greece’s representative to the IMF. This is the same Panaritis who was a former World Bank official and who was the architect of the catastrophic “Fuji Shock” policies implemented in Peru under the regime of the now-jailed Alberto Fujimori.

These policies drove millions of Peruvians into poverty, resulted in price increases of up to 8,000 percent on basic goods, and led to the privatization of hundreds of public assets. Later, as a member of parliament with PASOK, Panaritis voted in favor of austerity and the memorandum agreements. In turn, Varoufakis, as finance minister, stated that previously implemented privatizations would not be rescinded and that he supported the privatization of public airports and harbors “under certain conditions.” He also spoke out favorably of the so-called “investments” of China’s COSCO, including the privatization of the port of Piraeus, describing this as a “positive development” for Greece.

Forging ahead in the spring of 2015, Varoufakis, in his capacity as finance minister, oversaw the implementation of a governmental decree which confiscated the cash reserves of the entirety of the Greek public sector. Later ratified by parliament, including Varoufakis’ vote, the decree authorized the payment of the May 2015 installment of Greece’s loans to the IMF with the confiscated funds. This action was then followed up by a 47-page proposal crafted by the finance ministry under Varoufakis’ watch as part of supposedly “fierce” negotiations with the troika. That proposal foresaw €8 billion in new austerity measures, including a perpetually increasing primary budget surplus (which would mean more cuts in order to maintain a surplus in a sinking economy) and the privatization of major public assets.

At around this time, Varoufakis presented a proposal for the introduction of a parallel currency, similar to the IOUs that had been issued by the state of California in 2009. He also announced the impending implementation of capital controls in the form of weekly limits on withdrawals from domestic bank accounts. These capital controls remain in place today and have significantly crippled the Greek economy, particularly small and medium-sized businesses which have been stripped of access to their own capital.

This set the stage for the July 5, 2015 referendum which was scheduled soon thereafter. Varoufakis did not present any proposals to the people of Greece nor give any indication of what the government’s plan would be should the “no” vote against austerity prevail, as it ultimately did. Following his resignation from his post as finance minister–a well-timed move which allowed him to make a heroic exit in time to avoid the forthcoming trainwreck, Varoufakis was absent from the parliamentary vote which ultimately authorized Prime Minister Tsipras to make a deal with the country’s lenders. Varoufakis did publicly state, however, that had he voted in parliament, he would have voted to give Tsipras authorization to reach an agreement—authorization which led to the third, and harshest, memorandum agreement for Greece.

Other highlights of Varoufakis’ tenure include his vote for corrupt conservative former New Democracy minister Prokopis Pavlopoulos as president of the Hellenic Republic, his asinine plan to hire tourists as “tax snitches” to report on cases of tax evasion, his high praise for Margaret Thatcher, and his statements calling for Greeks to lead an “austere existence” while he posed alongside his wife for a photoshoot at his luxury residence in Athens with a view of the Acropolis and a table set with a rich lunch spread.

Yanis Varoufakis poses with his wife on a terrace of the his luxury family villa Danae in Athens.

Yanis Varoufakis poses with his wife on a terrace of the his luxury family villa Danae in Athens.

A scion of a family of wealthy Greek industrialists, Varoufakis is comfortable mingling with a crowd far removed from the “leftist” rhetoric he supposedly embodies. In January of 2015, just prior to that month’s elections, Varoufakis’ new book in Athens was presented by television talking head Babis Papadimitriou, infamous for proposing that the conservative New Democracy consider a future governing coalition with a “more serious” Golden Dawn, Greece’s far-right party.

This is the same Varoufakis who is now poised to “save Europe from itself” through his new pan-European “pro-democracy” movement, DiEM25. The movement claims to have a plan to “reform” EU institutions, yet ignores the deeply undemocratic, authoritarian foundations upon which it has been constructed. And it further refuses to raise the specter of abolishing the grossly neoliberal European common currency project or to advocate for the bloc’s weaker economies to depart from the eurozone, including Greece.

 

Zoe Konstantopoulou: Charting a new course or more of the same?

Zoe Konstantopoulou acknowledges the supporters during a pre-election rally, in central Athens, Tuesday, Sept. 15, 2015.

Zoe Konstantopoulou acknowledges the supporters during a pre-election rally, in central Athens, Tuesday, Sept. 15, 2015.

Even more so than Yanis Varoufakis, the political figure who has been presented as a beacon of hope and change in Greece in recent months is Zoe Konstantopoulou, president of the Hellenic Parliament during the first Syriza-led government of January to August 2015. Like Varoufakis, she stems from a prominent family: Her father, Nikos Konstantopoulos, had been the head of Syriza’s predecessor party, Synaspismos, while her mother, Lina Alexiou, is the acting president of the (essentially defunct) National Committee for Radio and Television, a rough equivalent of the United States’ FCC.

As president of the Hellenic Parliament, Konstantopoulou (via the same mass media which was purportedly battling her at every turn) engineered an image of a fierce champion of law and justice. This perception was formulated both as a result of the establishment of a parliamentary commission to audit Greece’s debt—overseen by Konstantopoulou—and by seemingly not being afraid to speak out against the male-dominated Greek political establishment.

The devil is in the details, however, and many of the details of Konstantopoulou’s tenure were overlooked. The debt audit commission began its investigation in parallel with statements repeatedly being made by Yanis Varoufakis, Prime Minister Tsipras, other Syriza government ministers, and even the newly-elected president of the Hellenic Republic, Prokopis Pavlopoulos, promising that Greece’s debt would be repaid in full.

Watch Zoe Konstantopoulou speak out against the Greek government’s agreement with the European troika regarding the political and economic countermeasures to the Greek government-debt crisis:

The otherwise outspoken Konstantopoulou did not respond to these statements, nor did she address actions such as the implementation of a decree to confiscate the cash reserves of the Greek public sector for the purpose of repaying an IMF loan installment. In fact, Konstantopoulou voted for Pavlopoulos in the parliamentary vote to confirm him as the Hellenic Republic’s president, just as she voted to confirm all of the austerity bills passed by the Syriza-led government during its initial term in power.

Far from speaking out, Konstantopoulou publicly stated in May 2015 that Syriza’s pre-election promises to “tear apart the austerity agreements” were a mere “figure of speech.” These are hardly the actions of a dynamic anti-austerity advocate of justice, and neither was her show of support in favor of the Tsipras government following the betrayal of the July 5, 2015 referendum result which rejected the lenders’ austerity proposals. Instead of speaking out against the government or resigning from her post–even at that late moment, even following the passage of the third and harshest memorandum agreement to date, Konstantopoulou continued to publicly support Tsipras and the Syriza-led government, just as she, as president of parliament, never suspended parliamentary debate as further austerity bills were being debated. Konstantopoulou courageously voted “present” (as opposed to “no”) in the parliamentary vote ratifying the third memorandum agreement. The public proclamations of support for the Tsipras government only ceased when Konstantopoulou and other Syriza “renegades” were informed that they would not be included on the ballot for the September 2015 snap parliamentary elections.

This tenure has apparently served as the perfect preparation for Konstantopoulou to now swoop in and save the day for Greece and its people. This past spring, she announced the establishment of the Course of Freedom political party, which promises to deliver an end to austerity and to chart a course for a “plan B” for the country—a plan, however, which does not encompass a departure from the eurozone or the European Union, but instead proposes a parallel domestic currency in circulation alongside the euro and the likely formation of a two-tiered economy of “haves” and “have nots.”

 

Panagiotis Lafazanis: Hardly a fresh face

Panagiotis Lafazanis, former energy minister and head of the left-wing Popular Unity party, flashes the victory sign during a pre-election rally, in central Athens, Tuesday, Sept. 15, 2015.

Panagiotis Lafazanis, former energy minister and head of the left-wing Popular Unity party, flashes the victory sign during a pre-election rally, in central Athens, Tuesday, Sept. 15, 2015.

Panagiotis Lafazanis is no stranger to the political landscape. An old mainstay of the Greek “left,” Lafazanis has passed through Greece’s Communist Party (KKE), Syriza’s predecessor party Synaspismos, and Syriza prior to founding the Popular Unity political party ahead of the September 2015 elections.

In the first Syriza-led government of January to August 2015, a particularly sensitive time for such issues in Greece, Lafazanis served as energy and environment minister. His portfolio encompassed the issue of the controversial and environmentally damaging gold-mining activities in Skouries in northern Greece, as well as the potential privatization of Greece’s largest water utilities. Syriza, prior to being elected, campaigned heavily against the activities in Skouries and against the privatization of water utilities, which Tsipras had once said would occur “over our dead body.”

While Lafazanis did suspend two licenses issued to the operators of the Skouries mine, the Canadian-owned Barrick Gold Corp., gold mining activity in the region continued, as did the government’s talks with Suez and other foreign corporations which are interested in buying up Greek water utilities. Lafazanis deliveredmixed messages, stating his opposition to the mining activities while referencing Greece’s “commitments” to its investors. Like Yanis Varoufakis and Zoe Konstantopoulou, Lafazanis voted in favor of the election of Prokopis Pavlopoulos as president of the Hellenic Republic; he also voted yes for all of the austerity bills presented by the Syriza-led government leading up to the July 5, 2015 referendum.

Like Konstantopoulou, Lafazanis also continued to support the Syriza-led government even after the betrayal of the July 5, 2015 referendum outcome. This support continued until Lafazanis, like Konstantopoulou, was not included on the Syriza ballot for the September 2015 snap elections. It was at this time that Lafazanis hastily announced the formation of Popular Unity, a purportedly anti-austerity party which essentially regurgitated the old Syriza promises from prior to its initial elections, while presenting mixed messages regarding its stance on a “Grexit” and whether Greece should remain in the eurozone or return to a domestic currency.

 

Discovering the savior within

A supporter of the communist-affiliated union PAME takes part in an anti-austerity rally in front of the parliament in Athens, Monday, Oct. 17, 2016.

A supporter of the communist-affiliated union PAME takes part in an anti-austerity rally in front of the parliament in Athens, Monday, Oct. 17, 2016.

Far from representing truly alternative voices, Yanis Varoufakis, Zoe Konstantopoulou, and PanagiotisLafazanis have acted as political opportunists. They’ve crafted a public image as anti-austerity renegades and champions of democracy and justice, even as their real actions while in a position of power and authority belied that empty rhetoric.

This matches Syriza’s ascension to power and its current ludicrous efforts to pass off the harsh austerity and privatization regime that they are enforcing as an example of “leftist” politics and a triumph of “social justice.” It is absurd to believe that political figures who voted for and justified the policies that they are supposedly denouncing, are capable of delivering on those same promises.

Instead of placing all their hopes with the next establishment-anointed political savior or an official electoral process, Greek voters have a golden opportunity to make their voices heard and demand real change. Each day is a chance to call for an end to stifling austerity and privatizations that are further crippling the domestic economy, the much-needed reform of Greece’s corrupt justice system and collapsing educational and health care systems, and a departure from the European Union and the eurozone, two institutions which have been so destructive for Greece, its people, and its economy.

Even as more and more rumors circulating in Greece of impending snap parliamentary elections, the time has come for the people of Greece to become their own saviors rather than place their homes with tired, discredited political retreads.

 

Sep 302016
 

By Michael Nevradakis, 99GetSmart

deborah1-300x281The transcript of Dialogos Radio’s interview with Déborah Berman-Santana, retired professor of geography and ethnic studies at Mills College in Oakland, California. This interview aired on our broadcasts for the week of September 15-21, 2016. Find the podcast of this interview here.

MN: Joining us today on Dialogos Radio and the Dialogos Interview Series is Déborah Berman-Santana, recently retired professor of Geography and Ethnic Studies at Mills College in Oakland, California. Deborah will speak to us about the latest economic and political developments in Puerto Rico, which is facing an economic crisis similar to that in Greece, and she will discuss the similarities that she has seen between Puerto Rico and Greece, after spending some time in Greece recently. Deborah, welcome to our program today.

DBS: Thank you!

MN: Getting us started, describe for us the history of the economic exploitation of Puerto Rico. What has the impact of colonialism been on Puerto Rico’s economic viability?

DBS: Colonies exist so that the colonizer will benefit economically and politically. Since the U.S. invaded and occupied Puerto Rico in 1898, it has extracted profit in numerous ways: First, through converting it into a sugar colony. After World War II Puerto Rico was transformed through “Operation Bootstrap” into a special economic zone to benefit U.S. corporations under the guise of “development via export-led industrialization.” As a captive market, Puerto Rico also became the home to the most WalMarts per square meter in the world. Finally, Puerto Rico’s colonial “neither U.S. state nor independent state” political status allowed the U.S. bond market to give special exemptions to investors, which has brought Puerto Rico to its current debt “crisis.”

During the 1930s, the anti-imperialist congressman Vito Marcantonio sponsored a study which revealed that since 1898, U.S. corporations had extracted as much as $400 billion in profits from Puerto Rico. Recently, independent researchers in Puerto Rico have estimated that since the 1950s, more than half a trillion dollars has been extracted from Puerto Rico. Both estimates encompass the free usage of Puerto Rican resources and the restriction, via U.S. cabotage laws, requiring all imports and exports to use U.S. merchant marine ships and U.S. crews. It would not be an exaggeration to say that the U.S. has taken more than a trillion dollars away from its colony, which certainly dwarfs Puerto Rico’s $73 billion public debt.

MN: We are speaking with professor Déborah Berman-Santana here on Dialogos Radio and the Dialogos Interview series, and Déborah, how did this ongoing exploitation contribute to the present-day “debt crisis” in Puerto Rico, and what has been the role of Washington, Wall Street, and the so-called “vulture funds” in perpetuating this crisis?

DBS: With the eventual elimination of industrial tax incentives beginning in the 1990s, Puerto Rico’s governments increasingly looked to loans to balance its budget and continue practices of rewarding political cronies with contracts for large infrastructure projects. Subsequently, President Clinton’s elimination of the Glass-Steagall Act allowed for investment bankers to increasingly engage in bond market speculation. Puerto Rico received “triple exemption” because of its colonial status, which meant that every pension fund and every municipal and state government, among others, bought Puerto Rico bonds, ignoring the fact that its economy began shrinking once the special industrial exemptions were completely eliminated in 2006.

Election of a protege of the Koch Brothers, Luis Fortuño, as Puerto Rico’s governor in 2008 resulted in a “bitter medicine” law that eliminated tens of thousands of public jobs, which accelerated the descent of an economic recession into a depression. By 2011 the major credit agencies began degrading Puerto Rico’s ratings, with the result that it increasingly resorted to short-term, high interest loans similar to “payday loans.” Bondholders increasingly unloaded their Puerto Rico bonds in the secondary bond market, which were then swooped up by vulture funders such as Paul Singer and John Paulson – often at 10 to 20 percent of the bond’s value. Today, these vulture funders possess up to 50 percent of Puerto Rico’s public debt, and are the creditors who are least willing to renegotiate the terms of the loans. They have been the major lobbyists for the Congressional law known as “PROMESA” that recently became law.

MN: “PROMESA” been touted by some as a “bailout” for Puerto Rico. What does this bill actually mean for Puerto Rico, in your view, and what is the significance of the acronym that was used, “PROMESA”?

DBS: The new law, which President Obama signed on June 30, is entitled the “Puerto Rico Oversight, Management, and Economic Stability Act” (PROMESA). In Puerto Rican popular parlance, a “promesa” is a pledge that someone makes when dealing with a family crisis. The person promises to do something for the community if the crisis is resolved. Often this is an annual fiesta, including traditional music, food and drink, and may last for decades. That the U.S. Congress would give this name to a law that strips away any pretense of self-governance, [it] has caused a tremendous amount of resentment in Puerto Rico.

This law allows President Obama to appoint a seven-member board — paid for by the Puerto Rican people — which will take control of the budget, eliminate environmental laws, dismiss public employees, abolish public agencies, cut the minimum wage by half for young workers, close schools and hospitals, increase utility bills, and cut pensions. These measures are justified by the priority of making payments on the public debt. There is no provision for economic development or restructuring of the public debt, let alone canceling it. There is no acknowledgment that such measures are likely to greatly increase emigration of working age Puerto Ricans while severely deteriorating quality of life for those who remain. Any “bailout” that might occur as a result seems directed only at the Wall Street vultures who now control most of the debt.
On August 31 President Obama announced the names of the members of the junta. Four were born in Puerto Rico. Two of those were in the government of former Puerto Rico governor Fortuño. One of them, Carlos “Caco” García (his nickname, used in Puerto Rico to refer to criminals) was directly involved in the “bitter medicine” law in 2009 that began massive layoffs of public employees, and was also responsible for billions of dollars of short maturity bonds that have now virtually bankrupted the government development bank. Were it not for such actions it’s possible that the “promesa law” would not have been exacted. Was he named to cover up the tracks of his patrons? Certainly, he was not chosen for fiscal responsibility. Among the other three junta members is Andrew Biggs, who is known for crusading in favor of privatizing Social Security and other public pension funds It is not difficult to imagine what role he will likely play in Puerto Rico.

MN: We are on the air with professor Déborah Berman-Santana here on Dialogos Radio and the Dialogos Interview series, and Déborah, There’s a lot that has been written about the economic crisis in Puerto Rico recently, including a report by the Committee for the Abolition of Illegitimate Debt (CADTM), which has also written about the Greek debt in the past as well. What do you make of these reports, and were any Puerto Rican economists given the opportunity to provide their own input into these reports?

DBS: CADTM’s article was odd in that there did not appear to be any effort to read up or try to understand Puerto Rico, but simply to use information from Europe and change names where needed. For example, it referred to Puerto Rico as a member of the “Commonwealth of the United States,” an entity that does not exist (unlike, for example, the British Commonwealth). Puerto Rico is defined by the U.S. as a “territory belonging to, but not part of, the United States”, with not a single iota of sovereignty. A White House report on Puerto Rico in 2006 claimed that the U.S. could give Puerto Rico away to another country should it choose to do so. The term “commonwealth” is used for Puerto Rico to give the illusion that Puerto Rico achieved some form of self-governance in 1952, which resulted in the United Nations removing it from their list of colonies. There has been a movement to get Puerto Rico reinstated to that list for decades.

Another weakness of CADTM’s analysis was its use of secondary sources of statistics about Puerto Rico, such as the Pew Foundation, instead of Puerto Rico’s own government, or any of several Puerto Rican independent research institutes. Perhaps most egregious of all is that it does not mention the fact that, as a colony with no sovereignty, all of Puerto Rico’s public debt may be considered illegal. One might presume that an international organization dedicated to cancellation of debt would know that it was the successful insistence by the U.S. in 1898 that Cuba did not need to pay any of its debts because they were contracted by Spain, that helped shaped the concept of odious debt. I am not sure of the purpose of CADTM’s article — I hesitate to call it a “report” — other than to jump on the Puerto Rico misinformation bandwagon.

MN: In what ways has the colonial administration of Puerto Rico made the island economically dependent on the United States, and how does this dependency impact the national psyche of Puerto Ricans?

DBS: There used to be a geography book, written by a North American named Muller, which was the first textbook studied in all Puerto Rican schools. The first sentence read: “Puerto Rico is a small, overpopulated, poor island, lacking in natural resources, which cannot survive without the United States.” Puerto Rico has served as a laboratory for generations of U.S. academics, most of whom were awarded government and foundation grants to prove that Puerto Rico and its people were geologically, biologically, and socially inferior. Their claims were often absurd, such as that Puerto Ricans were afraid of the sea and that there [are] hardly any fish in the surrounding Caribbean — both of which could easily be disproved — or that somehow Puerto Rico’s rich soils could not feed the population, which was not the case until most arable land was diverted to sugar cane and later covered in cement for the industrialization strategy.

Puerto Ricans were constantly told to look to the U.S. for all sources of innovation and progress, and warned that independence would be economically and socially disastrous. A favorite slogan was, “Where would we be without her?” alongside the U.S, flag. Never mind that all of the disastrous economic and social consequences about which we were warned, have occurred precisely because of our colonial relationship to the U.S. You simply cannot extract the amount of profits from a country that the U.S. has taken from Puerto Rico, plus restrict our ability to protect our own resources or capital, and expect to have a positive economic result.

MN: We are speaking with professor Déborah Berman-Santana here on Dialogos Radio and the Dialogos Interview series, and Déborah, describe for us the political system of Puerto Rico, the major political parties, and to what extent the island enjoys any degree of “self-governance.”

DBS: For the first 50 years after the U.S. invasion of Puerto Rico, the president named a governor and most directors of government agencies. Since the establishment of the “Associated Free State” (commonwealth) in 1952, Puerto Rico has elected its own governor and legislature, as well as a non-voting representative to the U.S. Congress. Elections are held every four years. The two majority parties are the pro-statehood New Progressive Party (PNP) and the Popular Democratic Party (PPD), which favors the current status with greater autonomy. The Puerto Rican Independence Party (PIP), once the second-largest party, has been relegated by decades of political repression and extreme factionalism among pro-independence and left organizations to the status of a small party that barely manages to elect some representatives at municipal and island-wide levels. There is also a Puerto Rican court system, using only Spanish and based on Roman law, as is true of Latin American countries, which, however, is subordinate to the English-only U.S. federal court, located in the U.S. federal building in San Juan, a concrete reinforced stronghold that is the official seat of U.S. colonial rule.

The Puerto Rican government has not had the power to truly protect local businesses against product dumping from U.S. companies, nor to make economic treaties with other countries without U.S. approval. However, it has had control over its budget and taxes, which both majority parties have used to curry political favor with contractors and corporate sponsors. This has encouraged a culture of corruption, which would appear to confirm the dominant narrative, that Puerto Ricans lack the capacity to properly govern themselves. But at no time since 1898 has any Puerto Rican government been able to exercise sovereign decision-making against the wishes of Washington. That the so-called “commonwealth” did not change its status was confirmed by two rulings of the U.S. Supreme Court in June, one of which dealt with Puerto Rico’s exemption from use of Chapter 9 bankruptcy while at the same time nixing its government’s attempt to write its own bankruptcy law. Briefly, the Supreme Court affirmed that Puerto Rico lacked even the limited sovereignty that a U.S. Indian tribe might possess, and that Puerto Rico’s constitution had about as much validity as the Puerto Rican peso had after the U.S. takeover. In addition, President Obama said that “there is no alternative” to the PROMESA bill and the imposition of a junta, which of course means that Puerto Rico’s elected government, laws, and constitution mean nothing.

MN: What do you make of the summertime visit of presidential candidate Bernie Sanders to Puerto Rico and what came out of this visit?

DBS: Sanders’ primary campaign strategy was to attract independents to vote for him in the primaries. Even though Puerto Ricans and other residents of U.S. colonies do not vote for president and have no voting representation in Congress, they do have delegates to the Democratic and Republican conventions and so usually hold primaries. By far the largest of the colonies in terms of population is Puerto Rico, and so Sanders’ strategy was to encourage independentistas — supporters of independence who do not vote in U.S. primaries — to vote for him. In his congressional career Sanders had never appeared to be aware of Puerto Rico’s existence, yet suddenly he was promoted as a “savior” who would decolonize Puerto Rico, all based upon his criticism of Wall Street and a supposed reputation as a “radical leftist.” Sanders never could bring himself to mention the “c” word — colony — when speaking about his country’s relationship with Puerto Rico. More than once he referred to Puerto Rico as a “protectorate,” and his harshest words accused Washington of using the PROMESA bill to “treat Puerto Rico as a colony” — without, of course, admitting that Puerto Rico already is a colony! Unfortunately, colonies foster colonized mentalities, so Sanders did manage to divide independentistas yet again, when what is most needed at this time is unity.

Sanders introduced an alternative bill to PROMESA in the Senate after PROMESA had already been approved by the House of Representatives and endorsed by Obama, so his bill did not even get a hearing. The proposed bill itself was a hodgepodge of measures that may have been marginally better in economic terms, but it also included a section on holding yet another referendum on political status — though at least five have already been held. It provided detailed instructions on how to fast-track statehood, should that option win, but nothing about U.S. responsibility for ensuring free determination and indemnification for eventual independence. I should also add that many U.S. politicians, from George Bush and Ted Kennedy to Hillary Clinton and Barack Obama, have made extravagant promises while campaigning for Puerto Rican delegates to their parties’ conventions. In sum, Sanders used Puerto Rico exactly as have other U.S. politicians before him.

MN: We are on the air with professor Déborah Berman-Santana here on Dialogos Radio and the Dialogos Interview series, and Déborah, how is the issue of independence viewed in Puerto Rico today, and how has Washington typically responded to the independence movement?

DBS: There have been independence movements in Puerto Rico ever since the 19th century, when Spain was still the colonial power. Since the 1898 invasion, Washington has combined violent repression of independence groups with selective co-option of broad sectors of Puerto Rican society, using church officials and entrepreneurs, politicians and civil society leaders to divide Puerto Ricans against each other while promoting Uncle Sam as benefactor. Neighbors were paid to spy and report on every aspect of the lives of independence supporters, while many lost their jobs or were expelled from universities. Leaders were often arrested on a variety of charges, and many served long prison sentences. Not even leaving Puerto Rico for the diaspora exempted them from persecution. For example, Oscar López Rivera is currently imprisoned, having served 35 years of a 55-year sentence for “seditious conspiracy to overthrow the U.S. government and its territories” — in other words, for struggling for Puerto Rican independence. Oscar grew up in Chicago, and has not been accused nor convicted of any violent act, yet his refusal to defend himself in a U.S. criminal court, and demand that he be tried as a political prisoner in an international tribunal helped lead to such a disproportionately long sentence. There is currently an international campaign to pressure President Obama to release Oscar from prison before the president leaves office. Many countries – including Greece – have held events in support, and important figures such as Bishop Desmond Tutu and Uruguay President Pepe Mujica have advocated directly for his release. In Puerto Rico support is massive and includes all political and social sectors.

Puerto Ricans as a whole do not support independence, at least not openly, because they have been taught that Puerto Rico has no choice but to be associated with the U.S., either as a state or in some kind of autonomous association. Yet every single environmental, social, political and cultural struggle and campaign has had independence supporters as key members. Puerto Rican pride and self-identification with a Puerto Rican nationality is much broader than open support for independence. It is obvious in sports, in music, in cultural celebrations, even in jokes and everyday life. Even many statehood supporters will often refer to Puerto Rico as their nation, as contradictory as that may sound to outsiders. Especially given the recent actions of the U.S. government — and the realization by many Puerto Ricans that Uncle Sam does not have their best interests in mind, it would be interesting to see if support for independence would increase, should a serious proposal include some indemnification by the U.S. for over a century of colonial rule.

MN: The “PROMESA” bill has triggered a wave of demonstrations in Puerto Rico all throughout the summer months, which are continuing up until now. How have these protests taken shape?

DBS: As soon as Obama signed the bill, a number of organizations set up a “civil disobedience encampment” in front of the main entrance to the federal building in San Juan. This is a very common feature of activism in Puerto Rico, as it serves as a semi-permanent focus for education, organizing, and resistance, and has been used to block environmentally dangerous projects as well as the U.S. Navy’s former bombing range on Vieques Island. The encampment has been continuously occupied since the end of June, and is a focus for seminars, cultural events, picketing, and “community building.” For now, the Puerto Rican police have said they do not plan to remove the protesters, although federal agents often conduct provocative actions, such as blasting diesel generators near the tents and walking bomb-sniffing dogs through the encampment.

On August 31 there were massive protests which successfully blocked a planned conference by the colonial Chamber of Commerce to promote business opportunities under “promesa.” It was very inspring to see union members, students, women’s groups, and others join together to resist the attempts of opportunists to profit from a dictatorial imposition. The most dramatic monent came when hundreds of riot police tried to force the protesters out of the street, but were pushed back by people of all ages despite batons, pepper spray, and brute force. Several days later protesters forced the largest Walmart in Puerto Rico to close early. This took place on “Labor Day” which was renamed “Unemployment Day” since Walmart has destroyed thousands of local businesses. (There are more Walmarts per square meter in Puerto Rico than anywhere else in the world; it receives incentives and went to federal court to validate its refusal to pay a reasonable amount of taxes in Puerto Rico.)

Other protests include a massive and broad-based movement against a plan by the U.S. government to use military planes to fumigate all of Puerto Rico with dangerous pesticides, supposedly to kill mosquitos carrying the Zika virus. To this are added a large number of ongoing protests and campaigns, all of which now refer to the coming junta de control as possibly complicating even more the scenario. Activists in the large Puerto Rican diaspora also hold seminars and stage protests, many times in coordination with the groups in Puerto Rico. Of course, most Puerto Ricans are not protesters, and [they] try to go about their daily lives while listening with alarm, resignation, or both to the news. Puerto Rican activist organizations face many challenges as they try to work through decades-long factionalism and develop more effective ways to educate the public. Most of all, the challenge is to not burn out, and convince others that there is hope!

MN: We are speaking with professor Déborah Berman-Santana here on Dialogos Radio and the Dialogos Interview series, and Déborah, describe the difficulties in forming alliances in Puerto Rico today, within this fractured and divided political landscape that you have described.

DBS: Pro-independence organizations in Puerto Rico have always suffered from severe repression, including efforts by the colonizers — both Spain and the U.S. — to infiltrate and divide them. Some of the earliest campaigns by the FBI upon its establishment in 1908 included the criminalization and repression of independence activism in Puerto Rico, and such activities continue today. Recent examples include grabbing well-known activists in the street and forcing them to give DNA samples for supposed “ongoing terrorism investigations.” This operation included activists who had previously been imprisoned, and for whom the U.S. government would already have had DNA samples. This is just one example of a century-long campaign of repression that has included murders, disappearances, long incarceration, blacklisting, and spying. The Puerto Rican government has also been complicit in the criminalization of independence, including creating discord among activists and organizations.

However, we cannot simply blame outside forces for the divided state of independence and left activism. Besides the personal antagonisms — many of which are due to the same societal ills that afflict leftist organizations, such as sexism — there are also ideological disputes, such as the roles of nationalism and socialism in colonial struggles. One new political party, for example, declines to take a position on Puerto Rican political status even though most of its leaders have been identified as independentistas. They expect that by doing so they can attract pro-statehood workers to vote for them. I would argue that it would repel more statehood supporters, because they would be seen as dishonest. Of course, this divides the votes of those who no longer want to vote for the two majority parties. The Puerto Rican Independence Party is running a full slate of candidates and is trying to position itself as the alternative. But they have in the past been quite sectarian and have alienated many independentistas. Despite such divisions, we have seen many activities that include representatives of both parties, as well as other independence and left organizations. This indicates that many understand that somehow we need to overcome our divisions, if not our disagreements.

MN: Puerto Rico has often been described as the “Greece of the Caribbean.” You have had the opportunity to visit Greece twice in the past year, including this past summer. How similar are the crises in the two nations in your view?

DBS: I would say they are strikingly similar, and in fact that the same playbook is being used in both countries, despite the differences between them. For example, the acronym TINA, “There Is No Alternative” to continued policies of austerity, privatization, and increased taxes in order to pay off an unsustainable public debt, is constantly repeated, as is the myth that “There is no Plan B,” and that political independence for both (in Greece’s case, leaving the European Union and the eurozone) would be disastrous — as if U.S. and EU colonial rule is not already a disaster! In Greece there is a proposal for an eight-member junta de control fiscal named by the EU which must approve — and often even write — laws that the Greek government must implement, such as automatic budget cuts and further privatizations. While as a classic colony Puerto Rico cannot officially deal with the IMF, in practice the PROMESA bill follows the IMF playbook, as was prescribed by “former” IMF officials who were hired by the Puerto Rican government — as ordered by their masters in Washington — to produce a report with recommendations for dealing with the debt crisis. In addition, you see “vulture capitalists” such as Paul Singer and John Paulson swooping into both Greece and Puerto Rico to buy up assets such as banks and land, plus debt — at a discount. The fact that Puerto Rico is a classic colony actually makes the problems of lack of sovereignty much clearer. Greece is still officially an independent country, so for some people its de facto colonial status may not be quite as clear. Also, the problem of equating national sovereignty with fascism is particularly acute in Greece as a European country. In Puerto Rico we have some of that confusion, but it is not as strong since in general Latin Americans, including Puerto Ricans, understand the necessity for national sovereignty as part of anti-colonial struggles.

MN: We are on the air with professor Déborah Berman-Santana here on Dialogos Radio and the Dialogos Interview series, and Déborah, in your estimation, what is the best solution for Puerto Rico and its people, economically and politically?

DBS: The international community recognizes the right of all peoples to self-determination, including freely and unilaterally choosing their political status. There are three recognized statuses: first, union with another independent state under conditions of equality; second, association with another state, with the right to unilaterally change its status; and independence. The U.S. has historically added new states whose native populations have been reduced to a small and powerless minority. The three Associated Republics of Micronesia complain of a lack of sovereignty and the unwillingness of the U.S. to renegotiate their compacts. There is zero interest in the U.S. to add a new state comprised of Spanish-speaking people with a distinctly different culture, and which additionally has a per capita income less than half of Mississippi, the poorest state in the Union. I believe that political independence represents the only possibility for Puerto Rico to exercise its sovereignty, and it should be accomplished — with international pressure — as part of a negotiation that includes indemnification for more than a century of colonial exploitation. Certainly, Puerto Rico’s colonial debt belongs to the colonizer. Far from seeing independence as “separation,” I would argue that it would actually open up Puerto Rico to the rest of the world, instead of being chained behind the iron curtain of U.S. rule. There is a saying in Latin America that its independence will not be complete without Puerto Rico, and I believe that time is now.

MN: Before wrapping up, do you have any message that you would like to share with our listeners and with the Greek people?

DBS: I would say that I appreciate the solidarity of the people in Greece, much solidarity and much understanding that they showed towards Puerto Rico that they showed during my visits there. I would encourage the people in Greece to not give up hope, and to not accept the notion that there is no alternative to the ongoing loss of sovereignty and the ongoing economic deterioration that you are facing. There’s always hope, but also, love of country is not necessarily fascist. I have to say that here in Puerto Rico as well, and basically, free people in free countries, individual freedom and freedom of people go together. I don’t think you can separate one from the other. I have much love for the people in Greece and for people in solidarity everywhere. Viva Puerto Rico libre!

MN: Well Déborah, thank you very much for taking the time to speak with us today here on Dialogos Radio and the Dialogos Interview Series, and for sharing with us your experiences from both Puerto Rico and Greece.

DBS: Thank you very much.