Austerity and Neoliberalism in Greece, Richard Wolff & Barry Herman / The New School

[mother earth]

by Richard Wolff and Barry Herman.
Published on May 14, 2015
Development, Thought and Policy Lecture Series: Austerity and Neoliberalism in Greece, sponsored by the Julien J. Studley Graduate Program in International Affairs, at the Milano School for International Affairs, Management, and Urban Policy. Professors Richard Wolff and Barry Herman share their insights.

Austerity is about shifting the burden of an economic crisis from one part of the population to another. The mass of Greek people did not force Andreas Papandreou to borrow money. The mass of the Greek people didn’t know about or have much to do with fiscal policy at the national level. In fact, governments, bankers, leading industrialists, ship builders, the major players of the Greek economy, got together, as their counterparts did elsewhere, to produce the decisions that then, in the wake of the international collapse of capitalism, became unsustainable, producing a crisis in Greece. Once that had happened, there was only one question left: Who was going to pay the cost of all the debt Greece has run up or all the production decisions made that have left Greece without the capacity to export, with a dependence on imports etc.? And at that point, as has happened in every country – Greece is in no way unique – the wealthy and the business community went to work, with their resources and their business connections, to make sure that they didn’t pay the price. http://www.rdwolff.com/content/austerity-and-neoliberalism-greece

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Bio: Richard D. Wolff is a Professor of Economics Emeritus at the University of Massachusetts, Amherst, and currently a Visiting Professor of the Graduate Program in International Affairs at the New School University in New York. He is the author of many books, including Democracy at Work: A Cure for Capitalism, and Imagine: Living in a Socialist USA.
Wolff hosts the weekly hour-long radio program Economic Update on WBAI, 99.5 FM, New York City (Pacifica Radio). More: http://rdwolff.com/content/about

http://www.rdwolff.com

For more info or donations: http://www.democracyatwork.info/

Note: Used by permission of Prof. R.D. Wolff.

[Joe Chi Minh]

1. What a boon to have men such as Prof. Wolff and Michael Lewis, who explain

what's been going on.

[mother earth]

2. I agree. We need these voices during this pivotal time. It is my sincere hope to open hearts &

minds to the understanding that it is the same poison beating down humanity globally, which is why I post these at DU or am here at all. It is time to understand what we are up against and how status quo and acceptance of the "new normal" is like putting a noose around our own necks. There are precious few that are bringing truth and a fire brand all their own that are helping combat these social ills.

The situation in Greece is the great teaching (and learning) moment of our time, it is important to understand what is playing out and WHY. We are living in a time when we can go along with servitude or we can choose something better...it begins with us. Know the characters in this story, there are villains and heroes. What will we choose to empower?

[Joe Chi Minh]

6. Well spoken, indeed.

[daleanime]

5. +1

Now if more people would take the time to listen.

[mother earth]

3. For those perhaps like me, who have been wondering why the stagnation in talks with the EU, I

thought you might enjoy this opinion, it spoke volumes to me.

http://www.oftwominds.com/blog.html

When Europe Gets Greece's Jingle Mail: Dealing with Default (May 15, 2015)


The costs and consequences of Greece exiting the Eurozone may well dwarf the financial losses triggered by Greece's default.
The term Jingle mail originated in the great popping of the housing bubble 2008-2011. It refers to defaulting homeowners mailing the keys to their house back to the lender, and it denotes the finality of default: it's over.

The dream of ownership and easy wealth leveraged by vast debt: over. The dream that loans to marginal borrowers were as good as loans issued to qualified buyers: over.

And most importantly, the lender's dream that marginal borrowers could somehow make the payments if the terms were tweaked is also over.

Which brings us to the jingle mail Greece is about to send Europe. Greece is analogous to the marginal home buyer who took on way more debt than the household could afford. Europe is analogous to the lender, who faces a spectrum of unsavory options:

1. Accept the reality of default, write off the loans and accept the horrendous losses.

2. Play for time by renegotiating the loan, reducing the payments, stretching the payments over a longer period, etc.

3. Bury the non-performing loan as zombie debt: the loan disappears from the performing loans but isn't listed as a non-performing loan, either. It has become a zombie loan, neither performing nor non-performing.

Both of the latter strategies are versions of kicking the can down the road: what the lender does not want to do is report the loss and deal with the consequences (such as insolvency, lawsuits, etc.)

So the lender strings the debtor along, squeezing enough interest out to justify the claim that the loan is performing and the asset (i.e. the loan) is still worth its listed value.

The European leadership has done a grand job of stringing Greece along to maintain the illusion that default is not inevitable and final. This stringing the debtor along has yielded impressive returns for Greece's lenders, at considerable cost to non-Oligarch/non-vested-interests Greeks. Note how little of the Greek "bailout" actually went to the citizenry of Greece and how much was interest paid to Europe's financial powers.

MORE:
http://www.oftwominds.com/blogmay15/Greece-default5-15.html

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The powers that be enjoy much during the kicking the can down the road phase which is lasting quite a long time. No wonder things are not changing. The status quo...here and everywhere is enabled for good reason, always...

So, when you look at places here in the US (life Prof. Wolff explains) and you look at Greece, understand that wherever you hail from, whatever you endure, the principles that are behind these ills are all the same. Stay tuned...sea changes...gives new meaning to climate change, doesn't it?

[Joe Chi Minh]

7. Wow. Very enlightening.

[geretogo]

4. Wolf is like John the Baptist screaming repent to the King before being beheaded .