We are all Greeks now, or soon will be

"Arrival of Lord Byron at Missolonghi", by Theodoros P. Vryzakis, 1861. National Gallery of Athens, Greece. The English Romantic poet sailed with his own fleet of ships as an aid agent of the London Committee in December of 1823, and stayed on to fight, eventually leading a Greek brigade. Four months after his arrival, he died of a fever at Missolonghi while preparing to launch an attack.

The isles of Greece! the isles of Greece!

Where burning Sappho loved and sung,

Where grew the arts of war and peace,--

Where Delos rose and Phoebus sprung!

Eternal summer gilds them yet,

But all, except their sun, is set.

--Lord Byron, "The Isles of Greece"

Lord Byron was either nearly two hundred years ahead of his time with that pronouncement, or else history is now by way of repeating itself, amplified. The struggle for Greek independence of Byron's day looks pale now in comparison to what lies ahead. Back then, it was only the Ottoman Empire the Greeks were up against. Today it's a vaster, more nebulous, and infinitely more bloodthirsty one, that of international capital.

Yeah, hi, it's me again. The pissed-off pedantic dissident of crapitalism has another axe to grind. And it's going to get swung over Greece--as far afield as Germany, France and even a whack or two at the good ol' Yankee military-industrial complex. You may want to grab yourself a big bottle of retsina, or ouzo, and a plate of Kalamata olives before you read on; this one's not for taking on an empty stomach. Plus, you may need something to throw when all this is over, although I doubt you'll be shouting "Opa!"

Y'okay. Let's begin.

Over at Ten Percent, blog-buddy Rick B has some good insights into the situation:

The quote 'inability of the Greek government to live within its means' is such a poisonous falsehood, as if financial institutions did not for years bribe key people into endless debt restructuring not because it helped them but because it made money for the banks. This is a merry game played by elites with the costs passed onto those not allowed to participate, yet the besuited oligarchs have the chutzpah to project their irresponsibility onto their victims. This is a rescue package within the rules of the game, better than what could have happened but ultimately it prolongs the scam. Neoliberalism, does not work, financialisation in place of actual productivity does not work (excuse the pun), capitalism unregulated and unconstrained does not work, Adam Smith was actually very clear on that despite what Randroids and laissez faire fundamentalists prefer to read into his works (by current standards he'd be labeled a socialist by corporate media). What we are seeing is a rolling breakdown of systems of human activity because we are serving the economy not making the economy serve us.

Right on, Rick, and you'll get no arguments from me. For the banksters to call the Greeks, along with the Irish, the Portuguese and the Spanish "PIGS", is gross projection from the overfed slop slurpers at the global trough. It's not the pampered people of those countries who are to blame; it's their lousy leaders, who opened the markets to foreign capital. Alas, it's the citizens who must reap what the politicians sowed, and of course, it's all tares; the banksters have already made off with the wheat. An economy where people serve capital, rather than the other way 'round, is one doomed to fail for all but those who have always had more than they could possibly have known what to do with anyway. A pity capitalism can't die of clogged arteries half as easily as its fat-assed proponents--being inanimate, it's infinitely capable of being resurrected by Victor Frankenstein and his electroshock machine!

I did promise to tell you what the role of the Germans in all this was, and I keep my word. So here's the ugly rotten maggoty meat of the matter, via Defense News:

France and Germany, while publicly urging Greece to make harsh public spending cuts, bullied its government to confirm billions of euros in arms deals, a leading Euro-MP alleged Friday.

Franco-German lawmaker Daniel Cohn-Bendit said that Paris and Berlin are seeking to force Prime Minister George Papandreou to spend Greece's scarce cash on submarines, a fleet of warships, helicopters and war planes.

[...]

"It's incredible the way the Merkels and Sarkozys of this world treat a Greek prime minister," he declared, adding that Papandreou had recently met Sarkozy and French Prime Minister Francois Fillon in Paris.

"Mr. Fillon and Mr. Sarkozy told Mr. Papandreou: 'We're going to raise the money to help you, but you are going to have to continue to pay the arms contracts that we have with you'," Cohn-Bendit said.

"In the past three months we have forced Greece to confirm several billion dollars in arms contracts. French frigates that the Greeks will have to buy for 2.5 billion euros. Helicopters, planes, German submarines."

Despite its economic woes, which recently deepened spectacularly when its credit rating was downgraded, Greece is one of Europe's biggest arms buyers, seeking to keep pace with its regional rival Turkey.

See why I'm angry? I'm a Bad German; "Deutschland, Deutschland Über Alles" is just the old Nazi version of the national anthem, as far as I'm concerned, and I have about as much use for that sentiment as I do for the Nazis. And since my mom's side of the family is from the Rheinland-Pfalz, right next to what's now Alsace-Lorraine, the tiny little soupçon of French blood I got from her means I'm also très fâchée about the whole steaming heap of merde coming from Sarko. This makes me hang my head about my ancestry, and doubt seriously of the goodness of humanity on the whole. Epic internationalist FAIL!

The only Greek I have is two years' worth of the ancient university stuff, just enough to foolishly convince me that I could almost translate Sappho if I wanted to, but like her poetry, it's very fragmentary. Greek history is what I'm now learning on the fly, also by snips and snaps. But it doesn't take a historian to see how stupid this whole arms race is. Greece is in the EU; last time I checked, Turkey was also, or well on its way to it. There is no logical (that's Greek) reason for an arms race between the two countries. And if it came down to it, Canada wouldn't be able to supply peacekeepers to get them off each other's throats, as it did in Cyprus. Our troops are too busy now making the world safe for pipelines capitalism "democracy" (another Greek word, and notice that I put it in quotes) in Afghanistan, don'cha know?

Meanwhile, Truthout has some good stuff on the Greek crisis and the growing resistance thereto. First, a little insight from a French analyst, Maurice Ulrich, of l'Humanité:

There are those who call for political unity in Europe right now, without which, they say, there will be no salvation. But to carry out which policies? What's come to the fore, today is the extreme noxiousness of a liberal Europe for its people. In the race for free and undistorted competition the poorest countries could only keep up with the richest by social dumping. The richest countries could only compete by playing on the same field. The message Europe is giving to Greece today - the same one it will give to Spain and Portugal tomorrow - is that the only way to keep in with a liberal Europe is to shatter salaries, pensions, and public services. But who really believes that tomorrow, or after tomorrow, our very own public services, pensions and salaries will be able resist?

[...]

What's happening in Greece isn't a fluke. Even as the media incriminate, and not without justification, the policies of Greek leaders, we must remember that they were aided and abetted by the very same players who now want to strip Greece of its hide and make a golden fleece. It's only the first of the crises that this capitalist Europe has in store for us. And it's precisely this Europe that we have to change. We want a Europe of cooperation, a different role for the European Central Bank (ECB), and we want the ECB to lend to Greece at 1% interest. It's what our petition calls for, a call that has been widely heard and one that must be amplified.

As Marx himself said: the free worker who goes to the free market to sell his hide 'has to expect to get it tanned.' The same is true for the people on liberal Europe's great competitive market. Yes. Now is the time to start resisting, to start working towards another kind of Europe. Now is the time to call up the people.

Then, sociologist Jean Ziegler, interviewed by the same French publication:

Caramanlis' right-wing government, which preceded the current PASOK (socialist) government, was a machine for systematically pillaging the country's resources. As in a banana republic, Greece's resources were privatized on a large scale even while tax evasion became massive. A reliable estimate by Swiss banks puts Greek tax-evading capitals in Swiss banks alone at 36 billion euro. In addition to this, some of the largest Greek ship-owners transferred their headquarters abroad: first among them, the biggest, namely Latsis, moved its own to Versoix near Geneva.

The scandalous end-result of all this is that the onus of paying heavily for the State's quasi-bankruptcy now falls on the Greek people, on Greek workers, while the ruling classes themselves have taken the precaution of transferring almost all their fortune abroad. The Greek public debt stands at 112% of the country's GDP.

[...]

With the European tax-payers' money (in the euro-area's fifteen countries and in Switzerland), draconian conditions are imposed on the Greek people. Under the guise of rescuing the country, the resources of whose State were pillaged by the previous, right-wing government, the rescuers make them suffer a considerable social backlash (a wage freeze, cuts in social benefits, in the number of public workers) and more privatizations - which has the advantage of bailing out the big European banks that were massively involved. This actually gives Europe and its financial institutions an opportunity to dismantle the Greek social welfare even though PASOK has been voted into office on a social justice platform.

[...]

The Europeans and the ECB could have lent funds to Greece at an exceptionally low rate to enable the country to meet its obligations in a short time. Instead, Greece was forced to choose between either borrowing at very high rates or accepting the EU and IMF's plan and the economic strings attached to it. Greece was reluctant to submit to the unacceptable conditions imposed by the EU and the IMF and had been hoping to get loans by itself on the international market. All it took to prevent this was for Standard and Poors, one of the private rating agencies, to lower its rating of the Greek State's solvency. And immediately Greece was barred access to the free capital market, or only at prohibitive rates of interest (almost 20%). Greece was left with no other choice but to submit to the conditions laid down in the EU and IMF's plan.

What gives me some heart in the midst of this massive Beschiss is the fact that the loudest internationalist voices against it are all, if their names are any indication, Franco-German (or Germano-French) leftists. People who are ethnically and ethically (woo! more Greek!) a lot like me, in other words.

And this leads me to the recent regional elections in Nordrhein-Westfalen (NRW). That's the most populous of the 16 German "lands" (states), and it also happens to be where my dad's side of the family hails from. The state recently dealt rightist Angela Merkel a huge bitch-slap by electing the centre-left Social Democratic Party (SPD) to the Bundesrat (upper house of the German parliament; the Bundestag is the lower). The Greens also doubled their percentage of the NRW vote over last time, and the socialist Left party is making its debut in the parliament thanks to this vote. All in all, it's a heavy blow to the CDU/CSU and the so-called "grand coalition", and it's gonna make it that much harder for Merkel to shove anything else filthy down Germany's collective throat.

So what motivated this heavy hitter among German lands to tack portside? The Greek crisis, and the fact that Angela Merkel decided to pillage German social services in order to make that hyper-conditional "bailout", i.e., to force the Greeks to buy all that aforementioned military hardware. Germans like their social services as much as we Canadians, go figure--and they are not at all impressed by international crapital taking a pound of flesh from those who are already skin and bones.

Of course, the major Anglo-Amurrican media (especially the bizmedia morons) deliberately choose to misinterpret the situation as merely a matter of Merkel being a weak sister, missing the overbearing crapitalist tyrant angle entirely (or worse, praising it.) All of them have one thing in common: they blame the Greeks, leaving out entirely the military-industrial angle. And no wonder: if they had to point the finger at the correct culprit, three more accusing fingers would be pointing right back at them in England and the US.

Who do you think started this damn snowball rolling, anyway? France? Germany? Gimme a break. As strong as the German economy has long been, historically, it's been sucked dry by two far bigger leeches than the so-called PIGS. The exsanguination of the German economy is the dirty little secret of London and New York during the Roaring Twenties. Bankers and stockbrokers, not Jews, were the real collective enemy of the Weimar Republic. They were, as Ike Eisenhower found out to his chagrin, also backing the collective enemy of the United States, relying on an endless weapons shopping spree to keep the economy rolling their way. But since it's hard to identify them just by looking, and they're well enough off to laugh at anyone who tries to make them wear a badge of shame, they'll never be rounded up and sent off to get a taste of their own medicine...

...more's the pity. Because if true justice prevailed, they'd be the ones forced to eternally work off the debt they created, for slaves' wages. Or to put it more poetically, they'd be made to roll that stone endlessly up a hill, like Sisyphus in Hades, never reaching the top.

Meanwhile, Lord Byron is stirring in his grave. And the Greek Resistance is rising, phoenix-like, from its own pyre...I dare to hope. But unless we all join in, it will be as futile as the one Lord Byron tried so bravely to lead.

We are all Greeks now, or soon will be.

'Tis something, in the dearth of fame,

Though link'd among a fetter'd race,

To feel at least a patriot's shame,

Even as I sing, suffuse my face;

For what is left the poet here?

For Greeks a blush---for Greece a tear.

CPAs MIA by Ralph Nader

CPAs MIA

by Ralph Nader

Where were the giant accounting firms, the CPAs, and the rest of the accounting profession while the Wall Street towers of fraud, deception and cover-ups were fracturing our economy, looting and draining trillions of dollars of other peoples' money?

This is the licensed profession that is paid to exercise independent judgment with independent standards to give investors, pension funds, mutual funds, and the rest of the financial world accurate descriptions of corporate financial realities.

It is now obvious that the accountants collapsed their own skill, integrity and self-respect faster and earlier than the collapse of Wall Street and the corporate barons. The accountants-both external and internal-could have blown the whistle on what Teddy Roosevelt called the "malefactors of great wealth."

The Big Four auditors knew what was going on with these complex, abstractly structured finance instruments, these collateralized debt obligations (CDOs) and other financial products too abstruse to label. They were on high alert after early warning scandals involving Long Term Capital Management, Enron, and others a decade or so ago.

These corporate casino capitalists used the latest tricks to cook the books with many of the on-balance sheet or off-balance sheet structured investment vehicles that metastasized big time in the first decade of this new century. These big firms can't excuse themselves for relying on conflicted rating companies, like Moody's or Standard & Poor, that gave triple-A ratings to CDO tranches in return for big fees. Imagine the conflict. After all, "prestigious" outside auditors were supposed to be on the inside incisively examining the books and their footnotes, on which the rating firms excessively relied.

Let's be specific with names. Carl Olson, chairman of the Fund for Stockowners Rights wrote in the letters column of The New York Times Magazine (January 28, 2009) that "PricewaterhouseCoopers O.K.'d AIG and FreddieMac. Deloitte & Touche certified Merrill Lynch and Bear Stearns. Ernst & Young vouched for Lehman Brothers and IndyMac Bank. KPMG assured over Countrywide and Wachovia. These ‘Big Four' C.P.A. firms apparently felt they could act with impunity."

"Undoubtedly they knew that the state boards of accountancy," continued Mr. Olson, "which granted them their licenses to audit, would not consider these transgressions seriously. And they were right...Not one of them has taken up any serious investigation of the misbehaving auditors of the recent debacle companies."

"Misbehaving" is too kind a word. The "Big Four" destroyed their very reason for being by their involvement in these and other boondoggles that have made headlines and dragooned our federal government into bailing them out with disbursements, loans and guarantees totaling trillions of dollars. "Criminally negligent" is a better phrase for what these big accounting firms got rich doing-which is to look the other way.

Holding accounting firms like these accountable is very difficult. It got more difficult in 1995 when Congress passed a bill shielding them from investor lawsuits charging that they "aided and abetted" fraudulent or deceptive schemes by their corporate clients. Clinton vetoed the legislation, but Senator Chris Dodd (D-CT) led the fight to over-ride the veto.

Moreover, the under-funded and understaffed state boards of accountancy are dominated by accountants and are beyond inaction. What can you expect?

As for the Securities and Exchange Commission (SEC), "asleep at the switch for years" would be a charitable description of that now embarrassed agency whose mission is to supposedly protect savers and shareholders. This agency even missed the massive Madoff Ponzi scheme.

The question of accounting probity will not go away. In the past couple of weeks, the non-profit Financial Accounting Standards Board (FASB)-assigned to be the professional conscience of accountancy-buckled under overt pressure from Congress and the banks. It loosened the mark-to-market requirement to value assets at fair market value or what buyers are willing to pay.

This decision by the FASB is enforceable by the SEC and immediately "cheered Wall Street" and pushed big bank stocks upward. Robert Willens, an accounting analyst, estimated this change could boost earnings at some banks by up to twenty percent. Voilà, just like that. Magic!

Overpricing depressed assets may make bank bosses happy, but not investors or a former SEC Chairman, Arthur Levitt, who was "very disappointed" and called the FASB decision "a step toward the kind of opaqueness that created the economic problems that we're enduring today."

To show the deterioration in standards, banks tried to get the FASB and the SEC in the 1980s to water down fair-value accounting during the savings and loan failures. Then-SEC Chairman Richard Breeden refused outright. Not today.

Former SEC chief accountant, Lynn Turner, presently a reformer of his own profession, supports mark-to-market or fair value accounting as part of bringing all assets and liabilities, including credit derivatives, back on the balance sheets of the financial firms. He wants regulation of the credit rating agencies, mortgage originators and the perverse incentives that lead to making bad loans. He even wants the SEC to review these new financial products before they come to market, eliminating "hidden financing."

Now comes the life insurance industry, buying up some small banks to qualify for their own large federal bailouts for making bad, risky speculations.

The brilliant Joseph M. Belth, writing in his astute newsletter, the Insurance Forum (May 2009), noted that life insurers are lobbying state insurance departments to weaken statutory accounting rules so as to "increase assets and/or decrease liabilities." Some states have already caved. Again, voilà, suddenly there is an increase in capital. Magic. Here we go again.

Who among the brainy, head up accountants, in practice or in academia, will join with Lynn Turner and rescue this demeaned, chronically rubber-stamping "profession," especially the "Big Four," from its pathetic pretension for which tens of millions of people are paying dearly?

Ralph Nader is a consumer advocate, lawyer, and author. His most recent book is The Seventeen Traditions.

If We Bail Out the Banks, Why Shouldn't We Own Them?

Sliding Down in Anger

By SAUL LANDAU

“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.”

-- Thomas Jefferson, 1802

"It’s worse than you can imagine,” a Member of Congress confided to me, referring to the downward spiral of the economy. “We just gave all those hundreds of billions to the bankers so they would lend it and they didn’t lend it and they still want more. The bankers don’t know what they’re doing and Tim Geithner [Treasury Secretary] doesn’t know what he’s doing. We all know this is the worst economic slump of our lifetime.”

While the arcane Washington budget processes – each Senator and Member trying to grab something for his or her district or State -- unfold, the poor should start to worry. They have already lost or about to be lose homes, jobs and health care. The propertied classes focus on their major concern: their property, which stands immeasurably higher in their moral guidelines than the lives and welfare of those without or with less.

The remaining masters of the universe on Wall Street still cling to the idea of their own infallibility. “El Duce is always right,” Mussolini said about himself – before the Partisans hanged him.

The capitalists oddly enough believe in capitalism and have done all in their power to spread the word. Their public promoters convinced lots of working people that capitalism and the American flag go together. Capitalism means freedom, so the very notion of nationalizing banks – forget socialism – looms in their minds as akin to the Holocaust.

The big bankers and their corporate brethren have connected to political power, one step below them, by simply throwing money at politicians who eagerly catch it. They also endow think tanks whose mavens will then explain to the gullible public why the United States needs perpetual war – to spread freedom (capitalism).

Count the victims of this cavalier assumption. Since the 1950-3 Korean War, US forces have overthrown -- or attempted to -- governments by force and violence in Vietnam, Laos, Cambodia, Chile, the Dominican Republic, El Salvador, Nicaragua, Brazil, Iran and Indonesia. They encouraged military coups in countless other nations in the third world.

Until the Soviet Union collapsed in the early 1990s, the battle against communism justified the interventions. The Reds have since been replaced as the demon by the Terrorists. Thus, Afghanistan and Iraq join the victim nations, with Pakistan inching its way onto the list.

The wars cost the lives of countless US servicemen and women and many more of the natives -- in the name of protecting freedom. To question the worthiness of service in any of the wars – Korea, Vietnam, the Persian Gulf--became tantamount to questioning the flag itself.

The mantra that surrounds the start of all the new wars remains numbingly in place. The President asks young people to fight because the nation’s freedom is at risk. Having said the magic words, the President then goes on to suck money from the taxpayers to “win” the noble struggle. Official language assumes “we” are good and those opposing us are bad. Listen to what Gen. David Petraeus, commander of U.S. forces in the Middle East, told US and European attendees at a security conference. “To win in the Afghanistan-Pakistan war, we need to identify and separate the ‘irreconcilables’ from the ‘reconcilables,’ striving to create the conditions that can make the ‘reconcilables’ part of the solution, even as we kill, capture, or drive out the irreconcilables.” (Remarks at 45th Munich Security Conference, February 8, 2009) Imagine a top British general in 1776 making similar remarks to his fellow officers regarding the populace in the American colonies!

“Reconcilables” means those the United States can buy or intimidate to collaborate with its policy goals. Some people would call them traitors. Later, after US forces withdraw and the “friendlies” become pariahs in their own country, the US government might reconcile itself to bring a few of them to the United States -- as they did with some members of the Hmong people after the Vietnam War.

Bush sent troops to Afghanistan in October 2001 to find and kill Osama bin Laden. Somehow the mission has changed into one of making Afghans reconcile to a US-designed order. This has not worked in Korea, Vietnam or anywhere else where US troops tried to export our – now sinking – way of life to people with different cultures. But it has been expensive.

The harsh fact, unmentioned in the US media, is that the United States, with its vast technological superiority and military power did not win in Korea or Vietnam, cut and ran in Laos and left Cambodia in such a mess that the bloody Khmer Rouge could take power there and slaughter a percentage of the population. Similarly, Washington policy “experts” do not reflect on the fact that all the CIA coups yielded little of permanence. Indeed, the blowback from CIA coups in Iran and Guatemala are still evolving.

The coups in Brazil and Chile have eroded military power in those countries and brought to the presidency socialists who have defied Washington – something that would not have been permitted fifty years ago. But how many of the powerful in the nation’s capital ask the question as budget time comes around: how can we afford to continue spending on wars we never seem to win when the state of our own economy is in virtual collapse?

The current military budget maintains “268 bases in Germany, 124 in Japan, and 87 in South Korea. Others are scattered around the globe in places like Aruba and Australia, Bulgaria and Bahrain, Colombia and Greece, Djibouti, Egypt, Kuwait, Qatar, Romania, Singapore, and of course, Guantánamo Bay, Cuba -- just to name a few. Among the installations considered critical to our national security are a ski center in the Bavarian Alps, resorts in Seoul and Tokyo, and 234 golf courses the Pentagon runs worldwide.” (David Vine, “The Costs of Empire: Can We Really Afford 1,000 Overseas Bases?” FPIF, March 10)

As the Congressman assured me, “the only thing that can put a halt to this military spree is for the public to get wind of how much were pissing away on this overseas nonsense. My God, it’s going to cost more trillions of dollars than we see in this round of bailouts. People have to start asking of the military budget just as they ask of the bank bailouts: do these expenditures really keep us stable?”

The rich and powerful think mainly about preserving and expanding their wealth and power. President Obama must realize that under the emergency powers of his office, he not only has the authority to seize our assets, but also has access to all the assets of America’s richest men for meeting those emergencies that threaten the common good.

It has become apparent to millions of people that the nation faces a severe crisis. One year ago, who could have predicted Congress would bailout banks and monster sized insurance giants, that GM would teeter on the brink of bankruptcy and our fabled way of life would become a joke for millions of recently foreclosed families?

Soon, lots of people will ask: If we bail out the banks then why shouldn’t we control them -- or even own them? The bankers screwed up. Why should they get any of our money? Maybe they’ll even question why Congress should continue funding a massive military institution that hasn’t won a real war since 1945 to the tune of some three quarters of a trillion dollars a year?

Saul Landau is an IPS Fellow, author of A BUSH AND BOTOX WORLD (Counterpunch) and director of forty films, available on dvd from roundworldproductions.com

Michael Parenti: Economic Crisis the Inevitable Result of “Capitalism’s Self-Inflicted Apocalypse”

March 12, 2009

Michael Parenti: Economic Crisis the Inevitable Result of “Capitalism’s Self-Inflicted Apocalypse”

Michael Parenti is a longtime political analyst and author of twenty books, including Democracy for the Few and Superpatriotism. Parenti writes, “Free-market corporate capitalism is by its nature a disaster waiting to happen.” [includes rush transcript]

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Guest:

Michael Parenti, political analyst and author of twenty books, including Democracy for the Few and Superpatriotism.

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• "Capitalism’s Self-inflicted Apocalypse" (Michael Parenti)

JUAN GONZALEZ: Treasury Secretary Timothy Geithner has unveiled a sweeping new plan that calls on the United States and other nations to offer billions more to bail out economies in crisis around the world. The news comes days after the World Bank warned the world is falling into the first global recession since World War II. The economic crisis is projected to push around 46 million people into poverty this year. Geithner said the Obama administration will ask Congress to make $100 billion more available to the International Monetary Fund to aid struggling nations.

The debate over how to rescue the global economy is setting up a clash of ideas, as finance chiefs meet for international talks in London this weekend to work out a unified approach to the crisis.

AMY GOODMAN: Amidst the economic turmoil, Geithner appeared on the PBS Charlie Rose Show this week for an extensive interview. Near the end of the interview, Charlie Rose asked Geithner, “Will capitalism be different?”

CHARLIE ROSE: Will capitalism be different?


TIMOTHY GEITHNER: I think capitalism will be different, and the financial system will be dramatically different. It’s already dramatically different. Again, if you look at the scale of adjustment and restructuring in the financial, it’s already happened. It’s profound in scope already. So if you just look at the system today relative to what was true three years ago, in terms of the institutions that existed then, and their basic shape has changed dramatically. And there’s going to be more changes ahead. But I think it will emerge stronger. This will clean out a lot of the excesses and bad practices. And those that don’t get cleaned out just by experience and knowledge now, better regulation and oversight, better rules of the game, enforced more cleanly, we’ll fix.

AMY GOODMAN: That’s Treasury Secretary Tim Geithner.

Well, our next guest argues “free-market corporate capitalism is by its nature a disaster waiting to happen.” Michael Parenti is a longtime political analyst, author of twenty books, including Democracy for the Few and Superpatriotism. His latest article on the financial crisis, “Capitalism’s Self-inflicted Apocalypse.” He joins us now in our firehouse studio. He gave a talk last night at Fordham called “Wealth, Poverty, and Empire.”

Welcome to Democracy Now!

MICHAEL PARENTI: Hello, Amy. Hello, Juan.

AMY GOODMAN: What should we understand right now, Michael Parenti?

MICHAEL PARENTI: Well, we should understand that the problem we’re facing is one which has to do with equity and fairness, that when the foundation gets consumed, the apex gets bloated, it’s going to collapse. And that’s just what’s happened. We had eight years of a president telling us that the economy was doing very well, and for his guys, it was doing very well. But in those eight years, wages remained flat or actually declined. And what we had here is so much money and nowhere to put it anymore. But that’s because there were no people below able to consume and buy the things they were supposed to buy. The assumption was that the housing market would just continue to go up and up and up, so you can do all these finaglings, but there weren’t enough people to buy these new houses. You had, in 2006, five people doing the work. By 2007, four workers were doing the work that it took five to do in 2006. That was a 20 percent increase in productivity, but there wasn’t any 20 percent or ten or five or three percent increase in income to those workers. People are just working harder and harder for less and less.

And the goal really—the goal is really to bring America to a closer resemblance to Indonesia. The goal is to avoid Denmark and get Indonesia. I mean, they say things like that. In 1978, a number of these financiers came out and said, “This country is just heading for a social democracy, and we don’t want that.” I mean, they used the term “social democracy.” They’re aware of these things. A few months ago in The New Yorker, there was an article about how Republicans had a loss for issues, and one of them said, “Well, the reason we’re at a loss is because we’ve accomplished all we wanted to. We’ve destroyed the social democracy.” And that’s their goal.

And if you listen to them now, I mean, it’s fascinating and outrageous. They’re talking about doing nothing, just putting a cap on all spending, that the market is in a stage of correction. They use terms like “correction” or “adjustment.” They don’t mind recessions. Recessions are fine. It allows them to buy up smaller companies at bargain prices. It disciplines labor. It humiliates and beats back people. And this, I think, is what we’re facing. And I’m infuriated by the Republicans in the Congress and the way they’re going at this. The only passion they show is to protect the tax cuts for the super rich. That seems to be the only interest they have.

JUAN GONZALEZ: Michael Parenti, I’d like to ask you, in terms of this—we’re almost a year now into this—into the beginning of the unraveling of this crisis, yet there’s been no attempt so far to have any kind of reforms, of regulation. We still have a situation where a huge portion of the financial system is consumed with all of these derivatives and credit defaults, while it’s not even in your normal banking procedures. How do see this, in terms of your sense of a self-inflicted apocalypse of finance capital?

MICHAEL PARENTI: Well, I argue that one of the functions of a capitalist state is to defend capitalism from itself, to defend capitalism from the capitalists. It was Marx—dare we mention him? I hear he’s coming back in style. It was Marx who said one capitalist will kill many other capitalists, that the system begins to consume itself. We see that with Bernard Madoff and the like.

And it’s not merely because of a number of wicked personalities, because these personalities are brought to the fore. Those are the people who get the rewards. Those are the people who—yes, and what we need are drastic sets of regulations, and there hasn’t been enough talk. We just got a vague reference to it here, Geithner referencing and saying, well, it’s going to be a little bit of a different camp, a little more responsible, accountable maybe. But as far as actual regulations, we haven’t seen it.

The free market does not work. It’s not free. It’s not really a market; it’s a plunder. And it has to be done away with.

AMY GOODMAN: Talk about the Democrats and Republicans. You said you’re infuriated by the Republican response, because they just want tax cuts for the rich. But what about the Democrats—I mean, just now we were playing for you Tim Geithner, the Treasury secretary—and the approach to this crisis?

MICHAEL PARENTI: Oh, it’s insufficient. I mean, that’s what’s coming out with your questions. It’s insufficient. They’re not dealing with systemic questions. There’s all this debate about the stimulus package. Hardly a word has come out about the Federal Reserve giving away two-and-a-half trillion dollars, just giving it away unaccountably.

AMY GOODMAN: Explain that.

MICHAEL PARENTI: The Federal Reserve just went—while we had this $750 billion stimulus package, which was passed by Congress, the Federal Reserve printed up—it can print up money and create money—and handed out over $2 trillion to the financial community in America, with no accountability, no debate in Congress and very little notice.

AMY GOODMAN: So, what’s the significance of that?

MICHAEL PARENTI: Well, the significance is that we’re going to—I mean, that’s our money, that it becomes real money when it becomes debt, and we’ve got to pay it.

You see, the Republicans were never against debt; they were the biggest debt spenders there ever was. When Ronald Reagan came into office, the national debt was $800 billion. When he left office, it was $2.5 trillion. I mean, it was OK with him to spend. He also put in the biggest tax program that ever was, but it was a regressive tax. It was a Social Security tax on tens of millions of people. When George Bush, Sr. came in, the national debt went from $2.5 to $5 trillion. Clinton—I’ll give him credit for that one thing—he did try to go for solvency. But when you got to George Bush, Jr., for eight years, the debt has gone from $5 trillion to $10 trillion. And these Republicans were voting for that all along. All these spending bills were theirs. So, you see, they don’t mind debt, because debt is really a way of upward distribution. You tax the common people, and you give the money to rich creditors. It’s a very regressive way of redistributing wealth upward. So debt is fine with them.

JUAN GONZALEZ: I’d like to ask you, given the increasingly global connections of our banks and other multinational corporations, the issue of how you remedy a crisis in one country. For instance, I heard last night on C-SPAN the hearing that Congressman Kucinich had of the bailout. He had an oversight hearing yesterday. And he questioned the Treasury Department over the fact that the bailout money has been going to banks that, in some cases, are then using the bailout money to invest overseas, a $6 billion—

MICHAEL PARENTI: Right.

JUAN GONZALEZ: —investment in Dubai, an $8 billion investment in a company in China—

MICHAEL PARENTI: China, I was just going to say, right.

JUAN GONZALEZ: —I think by Bank of America, so that—and Kucinich was asking, what are we doing giving money to bailing out banks who say they can’t lend in the United States, but then they use the money in investments abroad? How do you reconcile the global connections of these companies with the need in one particular country to stem the financial crisis?

MICHAEL PARENTI: Well, I mean, you’ve got to stop these kinds of examples that you’re giving, that the money should be spent where it has to be, and the money should come with lots of strings attached to it. And actually, it should be the government making direct investments. The government should go directly into production. It should be the government that’s building housing. It should be the government that gives healthcare.

Healthcare is a perfect example of that, where you—health coverage is terrible. So to give everybody health coverage will put us all still fighting these private insurance companies for money and not getting it and such. And the insurance companies get nothing—give nothing, do nothing. They just are toll. They just get billions of dollars that comes through and perform nothing. If you had single payer, it would just come right from the government, like Medicare does or something like VA Hospital, and that would be it.

And so, with the banks, perhaps we should start nationalizing banks. We should start bringing a closer link between the financial system and what’s called—very revealingly called the “real economy,” where people still need to work and consume and live. And that might be a way.

What do we do internationally? I don’t know. You’ve had some good people on. You’ll have to ask them next time.

AMY GOODMAN: What do you see is the future of capitalism, Michael Parenti?

MICHAEL PARENTI: I see it as a future in which there’s going to be a lot of suffering. I see it—the goal is to have more and more Indonesias and fewer Denmarks and such.

AMY GOODMAN: And that means?

MICHAEL PARENTI: That means that even in the social democracies in Western Europe, there are going to be cutbacks, there’s going to be privatization, deregulation, greater—growth of inequities, rollbacks of human services and such, in countries that were pretty decent, countries where capitalism was reined in and held in line, to some degree, anyway.

AMY GOODMAN: And aside from the brutality of Indonesia, what it means when you say “and more Indonesias”?

MICHAEL PARENTI: Well, Indonesia, I mean it’s a free market paradise. They talk about free market. In Indonesia, there are no consumer protections, there are no regulations, there is no public medical care, there’s no public education. People just die younger.

AMY GOODMAN: Do you see mass riots happening?

MICHAEL PARENTI: No. Well, one thing is that people can become so demoralized and such, and it’s a pretty repressive state, so it’s not that easy.

AMY GOODMAN: Michael Parenti, we want to thank you for being with us. His latest article on the global economic meltdown, “Capitalism’s Self-Inflicted Apocalypse.”

MICHAEL PARENTI: I hope next time I’ll have better news for you, we’ll have a nicer subject to be discussing.

How the world pimps America

Pepe Escobar: And how the US is shifting the crisis into the rest of the world

The US Treasury will borrow no less than one trillion dollars from the developing world in 2009. It will need even more in 2010. Pepe Escobar argues the US is indeed in a privileged position: not only it unleashes a global financial crisis, it then sucks up money from all over the world, based on the fact that the US in fact remains the "manager" of choice of global capitalism. As if this was not hardship enough for the developing world, it now also has to cope with the resurgence of the discredited World Bank and IMF. A certain Tim Geithner has been through this before - during the Asian financial crisis in 1997/1998 - and then he got it all wrong.

Monetary and Fiscal Failure, Fraud, and Fear of What's Next - by Stephen Lendman

Monetary and Fiscal Failure, Fraud, and Fear of What's Next - by Stephen Lendman

Even the powerful are worried with the IMF on February 7 saying advanced economies are in "depression (and) the worst cannot be ruled out." Forecasting a 2010 recovery is "very uncertain" at this time as further financial turmoil may disrupt it regardless of policies adopted, and trouble is outpacing resources to alleviate it.

On March 10, its Managing Director Dominique Strauss-Kahn forecast "below zero" 2009 global growth - what he termed "the worst performance in most of our lifetimes."...

Everything discussed in this article is real and worrisome at a time the greatest ever economic crisis is deepening, government policies are corrupted, broken, and uncaring for deprived millions, so sooner or later public anger will erupt, but when it does severe crackdowns await it.

Obama promised change. Few understood that he meant abandoning the millions who elected him, looting the national wealth for fraudsters, and crushing public dissent should it erupt. Given growing impoverishment and pain, it's hard imagining it won't. It's only a matter of when and how much - but then what.