Greece, 2010: Tens of thousands of striking Greek workers took to the streets, some throwing stones at police, in a defiant show of protest against austerity measures aimed at averting the debt-plagued country’s economic collapse. (Photo:underclassrising.net)
The History of a Dangerous Idea: Mark Blyth Talks Austerity, Greece and the Global Economic Crisis
Saturday, 22 November 2014 11:33By Michael Nevradakis,
property amongst themselves.
In order to do that, the paradox is that you kind of have to take over the state. So you fight the civil war in order to run the state in order to make markets - and the dirty little secret of liberalism is that markets don't spring forth from the ground. They are often times made in conjunction with, or made possible by, the state.
If we go back to Greece again and the notion of an "orgy of pubic spending," if you look at Greek public spending through the 2000s, it's really on track and quite average in comparison to everyone else's. Over a five-year period between 2001 and 2006, it's pretty much flat. As for the orgy of public spending leading to all of those public sector jobs, which were useless, I believe that the figure was 14,000 jobs over a two-year period, which is no different from the United Kingdom when you scale it up. So there's a lot of nonsense being talked here as political cover for the fact that what we've done is bail out some of the richest people in European society and put the cost on some of the poorest.
And you have to remember that our assets are the bank's liabilities, and our liabilities are the bank's assets, so we're all in this together. So the top 30 percent see the banks failing, and we're quite happy then when the government steps in and bails out these banks, because they're bailing out your mortgage and your pension, and they're bailing out your assets and your investments, along with the 1%. They may have billions, but you still care about yours. So you're quite happy when it gets bailed, but the cost of that is a massive increase in government debt. Well, who are the people who ultimately pay for that when you cut spending? Those who receive government services or salaries. So they are the ones who get their salaries cut by 30 percent; meanwhile, you've had your pension "bailed." I like to call this a "class-specific put option" because that describes exactly what it is.
There's a report that came out at the end of last year that estimated that of the assets in the European banking system, 50 percent of them would be basically underwater or worthless if it wasn't for public money supporting the entire system.