Why Greece matters to the Occupy movement
Summary: A small but informative OccupySF rally on February 15 was held in solidarity with the sovereignty of the people of Greece highlighting the importance of their economic situation to the Occupy community, the United States, and the world as a whole. SF Occupiers, with green signs dotting the sidewalk, called for the IMF to leave Greece, noting that the austerity measures were designed to benefit the banks but enslave the people, and pointing out that Greece should follow the example of Iceland, default on its debt, and arrest the bankers involved in the fraudulent derivative agreements that helped bring down the economy.
Former international bankers with ties to such private banks as Goldman Sachs have been bolstered to the helm of Greece and Italy, much like what’s happened in the United States when the Bush and Obama economic teams pushed through the massive bank bail-outs and began calling for “budget cuts”, aka: austerity. And many states and municipalities in the United States are burdened with debt to private bankers stemming from interest-rate swaps that private bankers pushed on them, much like the debt that Greece faces.
Greece has a choice: it can continue on this path of austerity agreements which will contract their economies even more, and lead to the sell-off of their state assets and resources to international banks and corporations, or it can follow the example of Iceland and default on its debt and use its tax revenues to invest in a green energy infrastructure, a localized productive economy, and its own people while setting an example for Italy, Spain, Ireland, and yes, the United States.
Are the people of Greece being set up “economic hitman” style and could the US be one of the next victims? About seventy-five of us gathered Friday February 15 at 101 Market Street in front of the Federal Reserve Bank of San Francisco, our home-base. Green signs dotted the sidewalk with messages such as “IMF out of Greece” and “The people of Greece are sovereign.” Cars, buses and trolleys passed by, some honking in support. But today was different than a typical Friday evening at OccupySF, because a speaker from Greece, Maria, stood with a megaphone describing the economic tragedy that Is unfolding for the Greek people, “Children are fainting in schools due to lack of food…this austerity package sets up the country for privatization where the people will have to sell off their water, their sewage, their telecommunications and their natural resources which includes coal and oil. It will lead to the country’s resources being pillaged.”
As we munched on delicious Greek dolmas donated by a local Café, an Occupy speak-out began on the plight of Greece, and some of our homeless occupiers exhibited knowledge of economics far surpassing the average US citizen. Mike spoke about the involvement of Goldman Sachs in the derivative swaps that set the country up for failure, and how the signing terms of the austerity measures “literally sell off Greek democracy to private banks and corporations.” Rob spoke about the parallels with Iceland, a great example of what should happen, and how Wiki-leaks releases showed the corruption and fraud of the bankers, prompting the Icelandic people to denounce the debt. “We need to prosecute these bankers and get our sovereignty back,” he said. Derek spoke about how we need alternative structures such as a time-bank/skill-share system to challenge the currency-based system so people can take direct responsibility for what their actions produce, and Nick, a Veteran for peace compared the oppression of the Occupy movement which led to the breaking of his ear-drum by police, to the oppression of the people in Greece.
Janice, who organized the rally, says that although the turn-out was low since it was organized in just two days, it was a success because it gave people the opportunity to learn and understand the parallels between what is happening in Greece and what is happening here in the United States. Rallies were organized in Atlanta, New York, Chicago and other cities. “The austerity measures they are enforcing in Greece are by an oppressive government. We also face an oppressive government and we will get to that point if we do not do anything about this system. Their struggle is our struggle,” Janice explained. Maria from OccupySF Accountability pointed out that US Union leaders were not at the rally. That large non-profits and Union leadership in our country tend to become part of a non-profit industrial complex to maintain their funding and access, aligning themselves with banks and politicians to the detriment of the people and the rank and file members. John pointed out that “the largest Union in Greece put out a warrant for the arrest of the head of the IMF. That Spain, Italy and Ireland are the next dominoes to fall.”
So is there any truth to what these Occupiers are pointing out? Well, John Perkins, who wrote “Confessions of an Economic Hitman”, fully agrees. Perkins says “Greece is a classic example… These events are classic cases of what I detail in my books… “ In Perkins’ book he detailed his career at a private economic consulting firm which worked with the IMF, World Bank and the USAID, and covertly with the CIA, to create virtual debt enslavement for developing countries by convincing their leaders to take on massive infrastructure projects that they could not afford. Perkins’ firm would give exaggerated economic forecasts to the leaders of the country to convince them to take out loans from international banks and hire US and Western corporations to build these projects that the banks knew the country could not afford, then force the country to sell off its resources to private corporations to further US interests. If the leaders of the country did not take the bait after bribery and coercion, the CIA would step in to facilitate coup d’etat, assassination, or war.
“Greece has been struck by economic hit men…this nation, where democracy was first defined more than 2000 years ago, is clearly demonstrating how predatory capitalism works to undue the freedoms of its citizens. The Greek people were not the ones who agreed to accept these debts… yet they will be burdened for years to come because they were hoodwinked by the international banking community and their own corrupt leaders…Bailouts serve the creditors; they enslave the debtors,” Perkins writes.
As U.S. leaders push our own form of “austerity” in the form of budget cuts, they threaten that the United States will be the next “Greece” if we do not implement them, as did Representative Cathy McMorris Rodgers in the weekly Republican address on Saturday. However, many economists point out that austerity is the opposite of what needs to happen. During a recessionary period, austerity measures contract the economy even more, causing a vicious cycle leading to even less tax revenues to pay off debt, when the economy needs to be stimulated with investments to spur expansion, “Austerity is a suicide path” according to Nobel prize winning economist Joseph Stiglitz, “…the opposite of what the global economy needs.”
Austerity kills: Conservative cure worst thing for what ails the economy says Stiglitz
#OccupySF occupied Bank of America #BofA 11/16/11
So why are these austerity measures being pushed? Well, similar to the bank bailouts in the United States which over 60% of the US population ultimately opposed (despite the mountain of corporate press claiming it would prevent armageddon), the austerity measures are imposed to make sure tax-payer revenues are siphoned off to pay private banks for their speculative derivative deals in the form of debt repayments or bank bailouts, instead of used for education, pensions, social programs, or sustainable productive investments within the local economy.
Greece is implementing austerity to prevent the default on its loans to the same private bankers who convinced its government to enter into risky currency and interest rate swaps, and then betted in the market against those instruments causingGreece’s borrowing costs to sky-rocket and the economy to crash.
And like in the United States, former bankers associated with Goldman Sachs, JP Morgan and other banks hold high-level positions within the government, or as advisors to the government. The recently installed Prime Minister of Greece, who was supposed to “fix” the problem, was head of the Greek Central Bank and is associated with negotiating Goldman Sachs derivative deals that hid Greek debt from its books, eventually leading to the financial crash. And Mario Monti, the newly installed Prime Minister of Italy, the next country that could face a massive default, was an International Advisor to Goldman Sachs, and was recently praised by President Barack Obama for his austerity program.
In the United States, President Obama appointed an economic team filled with former Wall Street executives and CEO’s from Goldman Sachs to Citigroup who helped design the US bank bail-out which made “too big to fail” banks even larger to the detriment of community banks.
Like in the United States, bankers who were part and parcel to creating the system that set up the crash, were elevated to “fix” the problem. And they are fixing it, for the benefit of their friends who reap millions at the highest levels of private banks, but certainly not for the benefit of the people, while President Obama and other leaders defend their multi-million dollar “earnings”.
And like in the United States, the 1% percent continues avoiding taxes to dump the burden on the middle class while they sail around on their yachts and sun-bathe on their Greek Islands, “A fiscal legacy of the colonels’ 1967-74 junta was tax evasion by the well to do. A 2010 report stated that nearly a third of Greek income was undeclared, with ‘fewer than 15,000 Greeks declaring incomes of over €100,000’, despite tens of thousands living in opulent wealth on the outskirts of the capital,” writes University of Missouri Economist Michael Hudson.
In the United States millionaires have over twelve trillion dollars in investible assets according to figures by Merrill Lynch, and in Greecemuch of the wealth at the top goes to off-shore banks.
A wealth tax at the top, if actually collected, could replenish some or all of the tax revenues lost by recession preventing budget cuts, or austerity measures, that decimate the middle class and the social safety net.
http://www.guardian.co.uk/business/2011/nov/03/wealth-tax-bail-out-economy. The Greek austerity measures include layoffs, cuts to the minimum wage, healthcare, pensions, and education: over two thousand schools will be shut-down. These measures follow two years of previous austerity measures and the unemployment rate is over 20%.
The banking deception hits close to home, as Oakland and San Francisco pay millions of extra dollars annually in inflated interest payments to Goldman Sachs and JP Morgan while cutting funding for education, after-school programs, healthcare and infrastructure. Oakland will pay nearly half the amount of its budget deficit to private banks over the next few years because of high interest rate obligations stemming from interest-rate swaps with banks such as Goldman Sachs. This is tantamount to redistribution of wealth from the poorest people in Oakland who will give up education and healthcare to millionaire bankers who.
http://www.eastbayexpress.com/ebx/oaklands-toxic-deal-with-wall-street/Content?oid=3125660. This has been happening in states all over the country says economist Michael Hudson, “Because what’s happening in Greece is a dress rehearsal for what’s going on in the United States. … What’s happening in Greece in the last week is exactly what’s happened in Minnesota with the close-down of government. And the demands of privatization–Greece sell off its roads, its land, its port authority, its water and sewer–is just what Illinois’s been doing, what Chicago’s been doing, what Minnesota’s been told to do, and what American cities are trying to do.
http://michael-hudson.com/2011/07/greece-now-us-soon/. What if the United States had bailed out the states instead of the multi-national banks? We could have retained funding for education, infrastructure and social programs that could have stimulated local economies and kept people in their homes, where the majority of the people’s wealth is held, since the banks that would have foreclosed upon them would have been stuck in bankruptcy court.
And what is the next step for Greece? Well, as the occupiers described, the banksters, corporations, and their friends get valuable state assets and natural resources at fire-sale prices when the terms of the debt re-payment agreement cannot be met. But what should be done, and what are the consequences of not doing it? Many people point to the example of Iceland a few years ago, and Argentina some ten years ago. Instead of impoverishing their people into a cycle of perpetual renewal of loans to private banks at increasing interest rates, they defaulted. They decided they were better off investing resources into stimulating their own economy and retaining sovereignty over their own natural resources and state assets than using their tax revenues to pay unproductive interest payments on re-financed debt to foreign banks. They were threatened by international bankers and told they would not receive loans in the future even in their most dire times of need, yet within a few years bankers were ready to push new predatory loans on Argentina again and they are warming up to Iceland already, which was just upgraded to investment grade status by the Fitch rating agency.
The Verboten Story of Argentina’s Post-Default Economic Success
And guess what helped Iceland stimulate the recovery of their economy? Spending on green jobs and clean energy (to the chagrin of the international oil companies who want to keep their monopolies on energy, and the weapons corporations who want to keep their monopolies on war for oil). Iceland is reportedly powered entirely by renewable energy. Renewable energy is the primary driver of economic development…” says Thordur Hilmarsson, Managing Director of the Government Agency, Invest in Iceland.
http://www.renewableenergyfocus.com/view/17136/rising-from-the-ashes-renewable-energy-in-iceland/. Investing in renewable energy not only creates jobs, but it also protects against the price fluctuations of buying energy in the international market, not to mention preventing wars for oil and destruction of ecosystems. According to Iceland President Olafur Grimsson, after the default, “the irresponsible bankers… lost their jobs — not middle class workers.”
In fact, the social safety net was actually expanded to help those hurt by the crisis, homeowners protected with forgiveness of debts exceeding 110 percent of their home values, and this year Iceland’s economy is growing faster than most of the industrialized world. http://www.bloomberg.com/news/2012-02-20/icelandic-anger-brings-record-debt-relief-in-best-crisis-recovery-story.html. In 2001, Argentina also defaulted on its record $100 billion dollar debt instead of paying international bankers. The Center for Economic and Policy Research wrote in 2007 that ” …the economy began growing just three months after the default and has enjoyed uninterrupted growth since then.” And in 2011 Yves Smith noted, “From 2002 onward, Argentina…has sported one of the highest growth rates in the world. Its success is not dependent on a commodities boom. It has increased social spending from 10.3% of GDP to 14.2% of GDP. Inequality has fallen. Poverty and extreme poverty have fallen by roughly 2/3.”.
So why is the small country of Greece, population of less than twelve million, (albeit, birthplace of democracy) so relevant to the Occupy movement and the world? Well, how this crisis unfolds could affect not only the future of the European Union, but could be a crucial turning point for the entire global economic system, including the United States: are we going to create sustainable productive economies that invest locally in people, communities, and clean energy, or are we going to contract our economies, sell off our assets to the 1% billionaire bankers, and give up our sovereignty for debt enslavement? Is Greecegoing to lead the way, like Iceland, and stand up to the international bankers and corrupt politicians so that the people of Spain, Italy, and Ireland, who may soon be facing similar plights, will have the political capital to stand up?
And what about the United States? We are not yet in a situation nearly as devastating as Greece…yet. Our dollar remains the reserve currency of the world and we have the ability to expand the money supply, or print money, which Greece does not have. (http://www.truth-out.org/why-united-states-not-greece/1328799863). But we cannot print money forever: at some point, and possibly soon, it will lead to soaring inflation, mass devaluation of the dollar, and the inability to afford to buy the goods that keep us and our economy alive.
Printing money also fails to help the cities and states that are saddled with bank debts from interest-rate swaps. If we continue contracting our economy with budget cuts and our own austerity measures, and if we continue to bail out the speculative losses of too-big-to-fail banks, and if we fail to invalidate the fraudulently induced interest rate swaps that burden our cities and states with debt owed to private banks, then we may be on the road to Greek-style economic and social chaos. However, if we begin comprehensive investment in a sustainable productive economy that creates local jobs and growth through clean energy investment, education, social programs, and community food production, and we re-direct the massive amount of overseas spending on war and weaponry to investments in green infrastructure at home that will prevent climate catastrophe for future generations, then we may be able to retain our sovereignty, create a localized clean green manufacturing base, and avert a Greek-style catastrophe.
This piece was first published at OccupySF.org by Beth Seligman, JD.