Greece now, US soon

Geithner says, wait a minute, American banks have made huge billion-dollar–maybe, for all we know, a trillion-dollar bet that the Greeks will repay. They’ve made derivative plays, they’ve made cross-party insurance, and American banks would lose money. Now, if there’s a choice between American banks losing $1 and Europe going into neo-feudalism for a generation, Geithner will support the $1.

Privatizing Will Make Life Worse

November 12, 1989, New York Times PERESTROIKA GOES SOUTH This article was published in the NYT more than 20 years ago, forecasting precisely what has happened. I attended the annual meetings of the International Monetary Fund and World Bank in Washington last month. When the meetings ended, I was left with the impression that no further writedowns would be forthcoming for Latin America's debtor countries unless they followed the lead of Mexico. To do this, countries like Brazil and Argentina would have to sell off their public utilities, some potentially profitable industrial corporations and some service industries like airlines. In the past, one met mostly bankers at these big international meetings. Now there are a lot of lawyers. For Latin America the foreclosure process has begun, but for the time ...

How a $13 Trillion Cover Story was Written

Free money creation to bail out America's elite financial speculators, but not for Social Security or Medicare Only the “Crazies” Get the Bank Giveaway Right Financial crashes were well understood for a hundred years after they became a normal financial phenomenon in the mid-19th century. Much like the buildup of plaque deposits in human veins and arteries, an accumulation of debt gained momentum exponentially until the economy crashed, wiping out bad debts – along with savings on the other side of the balance sheet. Physical property remained intact, although much was transferred from debtors to creditors. But clearing away the debt overhead from the economy’s circulatory system freed it to resume its ...

How Financial Oligarchy Replaces Democracy

Will Greece Let EU Central Bankers Run Riot Over Sovereignty? When Greece exchanged its drachma for the euro in 2000, most voters were all for joining the Eurozone. Their hope was that it would ensure stability, and that this would promote rising wages and living standards. Few saw that the stumbling point was tax policy. Greece was excluded from the eurozone the previous year as a result of failing to meet the 1992 Maastricht criteria for EU membership, limiting budget deficits to 3 percent of GDP, and government debt to 60 percent. The euro also had other serious fiscal and monetary problems at the outset. There is little thought of wealthier EU economies helping bring less productive ones up to par, e.g. ...

EU: Class War Declared

Concentration of financial power in non-democratic hands is inherent in the way that Europe’s centralized planning in financial hands was achieved in the first place. The European Central Bank has no elected government behind it that can levy taxes. The EU constitution prevents the ECB from bailing out governments

EU: Politics Financialized, Economies Privatized

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Breakup of the euro? Is Iceland's rejection of financial bullying a model for Greece and Ireland? This article is an excerpt from Prof. Hudson’s upcoming book, “Debts that Can’t be Paid, Won’t Be,” to be published later this year. Last month Iceland voted against submitting to British and Dutch demands that it compensate their national bank insurance agencies for bailing out their own domestic Icesave depositors. This was the second vote against settlement (by a ratio of 3:2), and Icelandic support for membership in the Eurozone has fallen to just 30 percent. The feeling is that European politics are being run for the benefit of bankers, not the social democracy that Iceland imagined was the guiding philosophy – as indeed it was when ...

Will Iceland Vote “No” or commit financial suicide?

A landmark fight is occurring this Saturday, April 9. Icelanders will vote on whether to subject their economy to decades of poverty, bankruptcy and emigration of their work force. At least, that is the program supported by the existing Social Democratic-Green coalition government in urging a “Yes” vote on the Icesave bailout. Their financial surrender policy endorses the European Central Bank’s lobbying for the neoliberal deregulation that led to the real estate bubble and debt leveraging, as if it were a success story rather than the road to national debt peonage. The reality was an enormous banking fraud, an orgy of insider dealing as bank managers lent the money to themselves, leaving an empty shell – and then saying ...

Greenspan Returns to De-Regulation

His Old Time Religion was right after all. It all seems so long ago! On October 23, 2008, Alan Greenspan choked up a mea culpa for his deregulatory policy as Federal Reserve Chairman. “Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief,” he told the House Committee on Oversight and Government Reform. “The whole intellectual edifice, however, collapsed in the summer of last year.” For a moment he seemed to be rethinking his lifelong assumption that the financial sector would seek to protect its reputation by behaving so honestly that its customers would gain from dealing with it. “I had been going for 40 years ...

Schemes of the Rich and Greedy

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Tax-Avoidance - The Worst is Yet to Come “Let me tell you about the very rich. They are different from you and me.” “The Rich Boy,” by F. Scott Fitzgerald The 30-year campaign of the wealthy to rig our economic system – especially the tax component – for their own benefit will accelerate with the GOP capture of the House of Representatives and the likely capture of the presidency and Senate in two years. For a foreshadowing of what is to come, a dress rehearsal has been conducted in Latvia, Iceland, Ireland and other financially strapped countries. Latvia has been burdened with the world’s most regressive tax system, while Iceland and Ireland have become record setters in tapping taxpayers to bail out financial ...