Greece: (Re)Birthplace Of Democracy?

Posted on January 10, 2015

by Jerry Alatalo

aaa-25Alphabet Recent polls in Greece show Syriza as the leading party to win elections in two weeks on January 25. University of Missouri – Kansas City Associate Professor of Economics and Law Bill Black talks about the situation in Greece on The Real News.

Bill Black starts out speaking to a few problems he had with a recent Wall Street Journal article on Greece titled “The Triumph of Austerity”. With Greece economic conditions including unemployment near 25% for the general population and 50-60% for youths, Mr. Black – in contrast to the Wall Street Journal – compares that to the Great Depression, but worse.

Austerity measures are exacerbating negative economic conditions due to the simple fact that average Greeks have less money to spend, hence demand has plummeted, slowing the economy. According to Black, the so-called “Stability and Growth Package” the Greek government has become forced to adhere to by the “Troika” – the European Commission, European Central Bank, International Monetary Fund – has resulted in the exact opposite: instability and decline.

Black compares what has occurred in the belt-tightening steps, which Troika high officials claim will help the Greek economy rebound, to the ancient medical practices used by doctors of old of drawing blood, then, when the patient’s health fails to improve, the doctor prescribes more bloodletting. What has led many to believe Syriza will win the elections coming quickly in a few weeks is the people’s growing opposition to economic and financial “solutions” which offer more of the same highly negative results they’ve experienced for years.

Syriza is the only party in Greece which has said “enough is enough”. While the Wall Street Journal, New York Times and other media groups try to paint a rosy picture of Greece under harsh austerity measures, it seems the men and women of Greece aren’t buying it anymore. All they have to do is look around at their neighbors cutting down trees for firewood, scavenging for food, or without electricity, to understand that Syriza offers a path out of the economic darkness.

When Syriza wins the upcoming elections, the question which analysts are asking the most is whether they’ll take Greece out of the Eurozone or if Greece will remain. Apparently, leader Alexis Tsipras and Syriza party’s current stance on the Eurozone is Greece will remain. Some have suggested the best choice for Greece is to leave the Eurozone and the Euro, set up a state-owned central bank in charge of monetary policy with the return of the drachma (the Greek currency before adopting the Euro), and cutting ties with the Troika. With a state-owned central bank Greeks will have complete control of their monetary system, with the ability to increase or decrease the money supply according to economic conditions and financial indicators.

Perhaps the Greek people will seek to do business with the newest investment/development bank “in town” just started by the BRICS group of nations. If Greece takes the option of leaving the Eurozone, some nations including Spain, Italy, Portugal, Ireland, and other European Union member states may soon reconsider and follow in a domino-style that will transform the EU and the global financial/economic scenario in a way very rarely seen.

Austerity is on trial now in Greece, and, in that nation where democracy was born over twenty centuries ago, the Greek people and the world may well see democracy “born again”.


(Thank you to therealnews at YouTube)

Economic Crisis’ Cause: Screwiness Or Criminogenics?

English: Brooksley Born
English: Brooksley Born (Photo credit: Wikipedia)

Posted October 23, 2013

by Jerry Alatalo

“Money, money, money, monnn-ney… MON-ey.”  So goes the song by the Motown musical group The O’Jays, “For The Love of Money”, which came to the radios in the 70’s. To be honest, there are times when one wishes money were never created. Can’t Public Banking become implemented now as the new monetary system and replace the old debt-based, private-controlled central banking model? Well, they say patience is a virtue.

In this post we will find a large contrast in views between former Federal Reserve Chairman Alan Greenspan and Law and Economics Professor William K. Black of the University of Kansas City-Missouri. The very obvious contrast points to, in my mind, an intentional effort by those at the highest levels of management at the Federal Reserve to obfuscate or confuse the people.

In the first video (thanks to Kevin @ YouTube) we find Alan Greenspan on October 22 Daily Show with Jon Stewart. Mr. Greenspan”s book “The Map and the Territory” just came out, and he talks with Stewart about “what went wrong” in the events leading up to the 2008 economic crisis. In my opinion Greenspan speaks in a vague, hazy kind of way filled with generalizations.

The first few minutes before Alan Greenspan walks on are about glitches/problems with internet enrollment in the so-called Obamacare program, good for a few laughs.

Mr. Greenspan says “we” didn’t see it coming-that we thought banks would be better stewards of their capital, that they (the bankers) didn’t understand the risks out there. He goes on to say that markets do “weird” things, and that people are sometimes a little “screwy”. He said that we always thought that the “screwiness” would wash out. First, can the former Chairman of the Federal Reserve be any more vague and non-specific than, in effect, blaming the worldwide economic crisis on “screwiness”?

He goes on to “identify” the problem: in 1970 the New York Stock Exchange made some change that allowed broker/dealers to incorporate, which led to risk-taking that would not have occurred if the partnership arrangements were kept as the majority of brokers and dealers’ relationships-equity would have been protected. Mr. Greenspan suggests the easiest thing to do is increase capital requirements because, when banks fail it “rumbles through the system”.

He goes on to say “that those of us who look at that sort of “stuff” (totally lacking specificity) recognize…” He sums it up by saying that if there is enough regulatory capital, “then they can do a lot of things which you shouldn’t be able to…which you shouldn’t worry about.” I am still trying to determine if, when he said “shouldn’t be able to” and “which you shouldn’t worry about”, this was a sort of gaffe. Did Mr. Greenspan start that sentence and almost say “which you shouldn’t be able to do”, thereby admitting that fraud and criminality will continue even with increased capital requirements, his idea of an easy fix? Has retirement dulled his ability to obfuscate and confuse on his feet, where before he never had to stop in mid-sentence and correct himself?

Mr. Greenspan mentions zero, nada, zilch about the frauds and corruption, or his dealings with Brooksley Born, head of the federal regulatory agency overseeing derivatives, and her very urgent call to regulate the multi-trillion dollar, unregulated derivatives trading transactions-which were a major factor in the economic crisis-and which Born’s suggested regulation Greenspan, Larry Summers and others fought and blocked. Find the essential, astonishing Frontline episode “The Warning” which reports on Brooksley Born and her unsuccessful battle to regulate derivatives trading.

Alan Greenspan and Ben Bernanke are “Wizard of Oz” characters, the men behind the black curtain, who have used smoke and mirrors, obscuration, confusing, overly complex economic blather, and banking jargon as they are high-paid managers for the ultra-rich owners of the Federal Reserve Bank.  Ivory Tower economists who don’t mention the “downsizing” and “workforce reductions” which led to millions of American jobs sent to Mexico and China for low-wage workers. They are Ivory Tower economists who assert that Americans aren’t working because “entitlement programs are too generous”, calling on governments around the world to begin “austerity measures” so that their bosses, the owners of privately owned central banks get paid the principal plus interest.

Contrast Alan Greenspan to Bill Black.

In 2011 Bill Black received an invitation to speak before Congress as part of a panel of experts on the issue of derivatives. He accepted the invitation. Shortly before the panel convened and was ready to speak to Congressmen, Mr Black was “disinvited” because, he was made aware in email communication, he was going to “bash banks”, be “confrontational”, and may “cause damage to the reputations of banks”.

Before this he had testified five times, before both Democrat and Republican committees, about fraud, banking and regulatory matters. He has over thirty years of experience in law, white-collar crimes and economics, and led the effort to convict around a thousand savings and loan executives in the bank crisis of the 1980’s. Mr. Black says that the 2008 crisis is the biggest in 75 years, the economies of America and Europe have suffered devastation, and nothing fundamental has changed.

Mr. Greenspan failed to note in his conversation with Jon Stewart, as Mr. Black does here, that millions of fraudulent “liars loans“, 40% of the mortgages made, were largely responsible for the crisis. Bill Black emphasizes that “liars loans” are fraud and they are crimes. Mr. Greenspan must have missed the “liars loans” meetings.

Mr. Black quotes Mr. Greenspan when he spoke to Brooksley Born about her push for the regulation of derivatives, “I don’t think there is any need for laws against fraud. The market will take care of itself”.

So, was the 2008 crisis caused by, as Alan Greenspan put it, “screwiness”, or as Bill Black sees it, “criminogenics”?