Myths and lies about Greece


Greece & debt

From Truth and Satire:

Every single mainstream media has the following narrative for the economic crisis in Greece: the government spent too much money and went broke; the generous banks gave them money, but Greece still can’t pay the bills because it mismanaged the money that was given. It sounds quite reasonable, right?

Except that it is a big fat lie … not only about Greece, but about other European countries such as Spain, Portugal, Italy and Ireland who are all experiencing various degrees of austerity. It was also the same big, fat lie that was used by banks and corporations to exploit many Latin American, Asian and African countries for many decades.

Greece did not fail on its own. It was made to fail.

Consider a recent article in the New York Times by Neil Irwin. The title says it all: “Now Europe Must Decide Whether to Make an Example of Greece.” Those lazy Greeks,” Irwin’s title suggests, “need to be taught a lesson. “

Here’s an excerpt, my emphasis:

The choice for leaders of Germany, France and the rest of Europe will look something like this:

If they tolerate the Greek government’s demands, they will be setting a bad example for every other country that might wish to challenge the strictures of the European Union, telling voters in Portugal and Spain and Italy that if they make enough fuss, and elect extremist parties they too will get a much sweeter deal. It would send the signal that a country can borrow all it likes, walk away from those debts and make the rest of Europe pay the bill, as long as it is intransigent enough. 

Notice Irwin’s use of the word, “tolerate,” as if the Greek government is a bratty, demanding child. He says a challenge to power cannot be allowed—have to nip that in the bud before it spreads to other “lazy” countries. Irwin calls anti-establishment, left political parties, like Greece’s Syriza, extremist. Syriza is “extreme, ” I guess, because it chooses the needs of ordinary people over making banks and hedge funds whole. Finally, he characterizes the Greek people as insufferable deadbeats.

Irwin’s “good vs. bad, white hat/black hat” narrative satisfies the embarrassingly uninformed and gullible American public, and protects the people, banks and institutions that caused the biggest global wealth heist in history.

“Bad Greeks!” Irwin is saying, “They’re getting what they deserve for spending way beyond their means.“ Being an unrepentant bank groupie, I’m sure he believes that. In 2013, Irwin wrote The Alchemists: Three Central Bankers and a World on Fire, a book on how three central bankers dealt with the 2008 financial meltdown. One Amazon reviewer described it as “Pathetic drooling over something that is essentially an anti-democratic institution. The book is littered with fawning details of how some central banker was travelling in a limousine when he received a call about markets being on fire. Or how Draghi was eating smoked goat cheese (or whatever is it that elites eat) when the Greece crisis erupted and then he had to do something on his mahogany table.”

The book earned the endorsement of the Peterson Institute for International Economics, an organization whose sole mission is to cut Social Security, Medicaid and Medicare, and lower taxes on the wealthy. If you didn’t get it from reading Irwin’s article, his book tells you where he stands psychologically and politically. He is typical of the sycophants who populate mainstream media.

My point in critiquing Irwin’s article is to encourage readers, especially those who call themselves “progressive,” to pay attention to the underlying perspective of those who speak or write in mainstream news outlets. What are their values? With whose interests do they identify?

Given the serial mendacity of the NYT, it’s important to look elsewhere to understand world events, and, in this case, what caused the crisis in Greece. Look for writers and journalists who identify with the struggles of the majority population, and who have a clear-eyed view of the rampant corruption in government, banks, and the private sector around the world. Look for writers who, at minimum, are not in awe of the wealthy and the powerful.

For starters, you might try Conn Hallinan’s “Europe’s Debt: Lies & Myths. Hallinan does a great job of countering Irwin’s myths by placing Greece’s plight in historical context. Here’s an excerpt, my emphasis:

Myths are dangerous precisely because they rely more on cultural memory and prejudice than facts, and behind the current crisis between Greece and the European Union (EU) lays a fable that bears little relationship to why Athens and a number of other countries in the 28-member organization find themselves in deep distress.

The tale is a variation of Aesop’s allegory of the industrious ant and the lazy, fun-loving grasshopper, with the “northern countries”—Germany, the Netherlands, Britain, Finland—playing the role of the ant, and Greece, Spain, Portugal, and Ireland the part of the grasshopper.

The ants are sober and virtuous—lead by the frugal Swanbian house frau, German Chancellor Angela Merkel—the grasshoppers are spendthrift, corrupt lay-abouts who have spent themselves into trouble and now must pay the piper.

The problem is that this myth bears almost no relationship to the actual roots of the crisis or what the solutions might be. And it perpetuates a fable that the debt is the fault of individual countries rather than a serious crisis at the very heart of the EU.
In Greece’s case corruption was at the heart of the crisis, but not the popular version about armies of public workers and tax dodging oligarchs. There are rich tax dodgers aplenty in Greece, but Germany, Sweden, and many other European countries spend more of their GDP on services than does Athens. Greece spends 44.6 percent of its GDP on its citizens, less than the EU average and below Germany’s 46 percent and Sweden’s 55 percent.

And as for lazy: Greeks work 600 hours more a year than GermansAccording to economist Mark Blyth, author of Austerity: The History of a Dangerous Idea, Greek public spending through the 2000s is “really on track and quite average in comparison to everyone else’s,” and the so-called flood of “public sector jobs” consisted of “ 14,000 over two years.” All the talk of the profligate Greek government is “a lot of nonsense” and just “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.”

There was a “score” in Greece. However, it had nothing to do with free spending; it was a scheme dreamed up by Greek politicians, bankers, and the American finance corporation, Goldman Sachs.

Greece’s application for EU membership in 1999 was rejected because its budget deficit in relation to its GDP was over 3 percent, the cutoff line for joining. That’s where Goldman Sachs came in. For a fee rumored to be $200 million (some say three times that), the multinational giant essentially cooked the books to make Greece look like it cleared the bar. Then Greece’s political and economic establishment hid the scheme until the 2008 crash shattered the illusion.

It was the busy little ants, not the fiddling grasshoppers that brought on the European debt crisis.

American, German, French, and Dutch banks had to know that they were creating an unstable real estate bubble—a 500 percent jump in housing prices is the very definition of the beast—but kept right on lending because they were making out like bandits.

When the bubble popped and Europe went into recession, Greece was forced to apply for a “bailout” from the Troika [The European Central Bank, the European Commission and the International Monetary Fund]. In exchange for 172 billon Euros, the Greek government instituted an austerity program that saw economic activity decline 25 percent, unemployment rise to 27 Percent (and over 50 percent for young Greeks). The cutbacks slashed pensions, wages, and social services, and drove 44 percent of the population into poverty.

Virtually all of the “bailout”—89 percent—went to the banks that gambled in the 1999 to 2007 real estate casino. What the Greek—as well as Spaniards, Portuguese, and Irish—got was misery.