The Memory Hole Devouring Greece

A suffocating debt load, unable to raise money in the market and an economy in a death spiral on the verge of collapse. Sure, an apt description of the situation in Greece but one that would also apply to West Germany in 1953. February 27th of that year saw the signing of the London Agreement on German External Debts which forgave half of the German foreign debt and stretched the repayment of the remaining IOUs over 30 years. What's more, the agreement gave creditor nations an incentive to import German goods by stipulating that repayments were only due while West Germany ran a trade surplus and were limited to 3% of export earnings.

Fast forward almost 62 years and we found the new Syriza government led by Alexis Tsipras, elected on an anti-austerity platform by the Greek people January 15th, going hat in hand seeking a similar reprieve from her creditors. After five years of Troika (the ECB, IMF and European Commission) mandated austerity imposed in exchange for bailouts, the Greek economy is in ruins. Dictated spending cuts have led a plummeting economy, skyrocketing unemployment, services being cut and have ultimately cost lives. GDP has contracted 25% and unemployment is currently over 25% with youth unemployment above 50%. Experts have opined that is no coincidence that the cuts to health care, emergency services and benefits have accompanied a 200% increase in HIV infection rates, a 60% suicide rise and a plethora of other social ills.

Rarely mentioned in the press, much of Greece's pre-crisis debt was fraudulently obtained in order to qualify the country for the euro. Adding insult to injury, despite it being clear that the country was bankrupt in 2010, it was forced to add to the outstanding debt by accepting bailout money. Worse, this money didn't go to the people; instead it went directly to private Swiss, French and German banks thus effectively transferring the credit risk onto the public shoulders of the ECB and IMF. Many argue against debt forgiveness as it increases moral hazard, when risk is undertaken knowing that others will incur the costs, forgetting that private lenders undertook the original risk of lending without paying any price.

So the table was set for a showdown between unelected technocrats and the democratic will of the people. The new government had about a month to figure out how to avoid insolvency which would have occurred the day after the aforementioned 62nd anniversary while renegotiating a deal its people had repudiated. It was apropos that the protagonists in this confrontation were character yanked from the stage of a morality play as the two sides in the negotiations both attempted to claim the moral high ground; the debtor pleading for mercy and the lender stressing the dangers of moral hazard. Yanis Varoufakis, the new Greek finance minister, the leather clad Marxist economist arriving astride his motorbike versus Wolfgang Schäuble, the German finance minister, a conservative member of a conservative party whose sartorial selection was surely less S&M and more M&S.

Just as the doctor's whites convince the patient to trust him, the suits have

persuaded us that if the patient only took its austerity medicine they would be sure to recover. Yet, a quick glance tells us that no European country has done more to 'reform' its economy than Greece. It is in fact the medicine that is killing the patient. The quackery of men such as Schäuble would be more apparent if we were told of their past misdeeds. See, despite his adamant denials at the time, Schäuble, as second in command to Helmut Kohl in the 90's illegally accepted millions of marks of illegal contributions from arms dealers. As public prosecutors in Germany are not independent, but take orders from the government, of course all charges against Schäuble were dropped.

Public perception you see is far more important than the particulars. Never mind that the Greeks themselves never saw a penny of the debt they are now paying off as every cent went to pay back the banks who originally took on too much risk; the media's role is to perpetuate the myth of thrifty Germans supporting reckless Greeks. The public, already inured to the devious methods used to hoist private debt onto public shoulders, from government guarantees of bank debt in Ireland to the outright bank bailouts in the US and elsewhere, were primed to perceive the Greeks as undeserving. Instead of placing the blame on the very institutions responsible for the mess, thanks to lazy media coverage most point the finger at the shiftless Greek people. It would do us good to realize that according to the OECD, the average employed Greek works more hours than anywhere else in Europe, a measure which places Germans second from the bottom.

One couldn't help but be constantly reminded of who the Greeks owe in the past month's coverage. An example from the BBC:

Strangely, um, not, no one seems to mention that little 1% number next to foreign banks as the reason it is so small (and those Eurozone, IMF and ECB) numbers are so big has gone down the memory hole. Of the €226.7 billion disbursed to Greece, only 27 billion has made its way into Greece with the rest going into the pockets of the banks, mostly French, Swiss and German. In this way, a bank problem was transformed into a public problem making the Greeks an easy target for demagoguery.

Ah, but still, you say, where did all this debt come from? Those lazy ouzo drinking, early retiring slackers were able to high on the hog thanks to the original loans. Oh contraire, oh contraire. Not that the public sector has ever been particularly thrifty, but much of the fault can, as usual be laid at the feet of the banks who helped swap, sweep and mortgage Greece into the euro in the first place.

Once in the club, the Greeks behaved like any other country but forgot they no longer controlled the levers of monetary policy having forfeited them to Brussels and Frankfurt helping make the Germans the unquestioned winners of the eurozone. Don't just take my word for the benefits Germany reaped being able to sell Mercedes Benzes on cheap credit from Lisbon to Athens, take a look at this. The reason Germany has become number two only to China in trade surplus is the straightjacket called the euro. While its record €217 billion surplus is perceived as growth driver, it is in fact an anchor, dragging down the rest of Europe.

One needn't be David Ricardo to figure out that comparative not absolute advantage is the basis for optimal trade policies and the running of a surplus entails financing someone else's deficit, just ask China and the US. German savings needed to go somewhere and they chose to invest in paper IOUs that might never be repaid. Monetary policy would normally correct the imbalance, but the euro has taken away this tool from national central banks in the eurozone. Instead, austerity led to a collapse in domestic (European) demand, necessitating devaluing the currency (for example through printing money, last months quantitative easing) which in turn forces the world to borrow more in an endless cycle.

It may seem facile, but it's hard not to compare the situation to the 3 1/2 year German occupation of Greece in WWII. Not only did the host have the bear the cost of occupation but the Third Reich forced the Greek National Bank to lend Hitler's Germany 476 million reichsmarks interest-free. All told, it's estimated that German occupation cost the Greeks €162 billion. While the hindsight afforded by the repercussions of forcing Germany to pay war debt following WWI makes it difficult to argue that it wasn't a good idea to forgive its debt following WWII, it's equally difficult to be blind to the hypocrisy of the German position today.

Adding insult to injury, the Germans smugly point to their success of having achieved their first balanced budget last year since 1969 while not only ignoring the direct contribution of Greeks buying BMWs but the indirect help as well. One need look no further than the cost of defence. Again, it's hard to argue in favor of, um, you know, Germany increasing military spending, but the fact is they have been able to get away with only spending 1.4% of their budget on defence (versus NATO's suggested 2%) in part because of the safety provided by Greece picking up the slack by spending 4.3% to protect the southern flank of the continent. Oh, and one should also keep in mind that though they may not buy many tanks, as evidenced by their woeful state of military preparedness, the Germans certainly do benefit by producing them; Germany is the third largest military exporter in the world. Early in the austerity shell game, Greece had to cut public spending, but they were not allowed to cancel tank deliveries from Germany.

The only way to find any kind of silver lining to last week's Greek capitulation to the Troika is to imagine that at least a portion of the public has woken up to the contradiction that is the European Union. Ostensibly a vehicle to promote cohesion, democracy and peace, it has morphed into an untenable union which ignores democratic values thus enabling warfare of a modern variety. The two key pieces of the platform that got Syriza elected, debt renegotiation and remaining in the eurozone, proved mutually exclusive. Sadly, the more likely outcome of the Greek concessions will be the empowerment of parties on the other end of the spectrum from Syriza, from the Golden Dawn in Greece to Marine Le Pen's National Front in France.

The Hazardous Morals of Bankers

Warning: You must forgive the writer for the exceptional length of this piece as a combination of rust that accumulated over months away from writing, a little too much time on his hands and what is feared to be the initial stages of ambiguphobia all contributed to the problem. 
- ed.

US federal debt will be more than $16 trillion by the time you read this. Student loan debt in the land of the free surpassed both credit card debt and the $trillion mark earlier this year. Greece teeters on the brink of bankruptcy while the other PIIGS wait their turn in the slaughterhouse. Three cities in California declared bankruptcy within a month this summer while nations have given up their sovereignty in order to avoid the same fate. Tens of millions have been thrown out of their homes in the past four years while even the Catholic Church battles to remain solvent. All of this was kicked off with the collapse of Lehmann Brothers four years ago triggering a crisis which forced governments and central banks around the world to pour trillions of dollars of bailouts into the financial system in order to stave off financial collapse and the threatened panic, chaos and disaster sure to follow. So, why are we here four years later staring over the US fiscal cliff, waiting for the eurozone to collapse and watching local sheriffs play the muscle for the mafioso banks repossessing all our neighbours possessions? The same reason the crisis seems perpetual. Debt and it's collector, moral hazard.

“You have to choose between trusting to the natural stability of gold and the natural stability of the honesty and intelligence of the members of the Government. And, with due respect for these gentlemen, I advise you, as long as the Capitalist system lasts, to vote for gold.”
 - George Bernard Shaw

Like all good yarns, that of debt goes way back in time, before money, before barter, beginning with the Sumerians in Mesopotamia over 5000 years ago in fact, but we don't need to go back that far. No, forty-one years is enough for our purposes, when Richard Nixon ended the post war Bretton Woods International Monetary system by suspending the convertibility of the dollar into gold (then $35 to the ounce, today around $1600) on August 15th, 1971, effectively creating the current floating currency regimes: fiat money. No longer would the US dollar be convertible to gold; no longer would money creation and thus finance be constrained. Not only was the US fighting a war in Vietnam that had to be paid for but they were battling "international money speculators" as Tricky Dick dubbed them. Heck watch for yourself:



So it was that the casino known as the financialization of capital was built, in order to protect the average worker "because they [financial speculators] thrive on crisis, they help to create them". By no means was this the first time the world had used virtual money with nothing guaranteeing its value but our faith. According to David Graeber, there have been two such previous periods in the history of money and debt: The Age of the First Agrarian Empires (3500–800 BCE) and The Middle Ages (600 CE — 1500 CE). The key difference with today was that both those eras saw strong institutions and traditions which placed controls on the potentially catastrophic social consequences of debt from Mosaic jubilees (debt forgiveness every 50 years) to Christian and Muslim prohibitions on usury. Fast forward in time to go backward as the current era has seen protection turned on its head creating the first effective planetary debt enforcement system, operating through the IMF, World Bank, governments, corporations and other financial institutions. In the past we protected debtors; today we protect the interest(s) of creditors. Spot the doublethink involved here as the danger posed by financial speculators led to a policy which in turn empowered the threat leading to it's perpetuation becoming a necessity to maintain the status quo. The battle against the money speculators has been fought just like the war on terror.

Nixon's move had predictable results, a series of crises as wave after wave of speculation, manipulation and deregulation smashed against the economy. Predictably, with no physical limit to fiscal and monetary expansion, government debts ballooned leading to inflation which needed 22% interest rates to tame causing economic malaise that necessitated tax cuts (mostly for corporations and the rich) and deregulation to get the economy going again. The balance of power between rentiers and workers was shifted by slashing capital gains and opening investment loopholes so that in less than a generation the very group we had been warned about had been handed the keys to the Porsche and proceeded to drive us all over the edge. The process seemed almost planned, conspiratorial, but it was our own hubris that allowed it.

"There are compelling reasons for paying attention to this potential for catastrophe as, every debt crisis in history since Solon of Athens has ended in inflation, bankruptcy or war, and there is no cause to believe we’ve solved this one, even if it has been postponed." - Susan George; Fate Worse Than Debt, p. 196

The Cliff's Notes to the crisis reads like a tragedy. Steady erosion of the competitive advantage enjoyed by the US after WWII and the west as a whole to the east leads to policies which ensured wage stagnation for those working in industries losing employment and skyrocketing renumeration for the CEO's outsourcing those jobs and the financial industry which facilitates it. This creates a feedback loop in which those at the top enjoy more influence on legislation thanks to their enhanced financial position. Those at the bottom, seeing themselves falling further behind turn to debt in order to maintain the illusion of keeping up with the Joneses. Check out this interactive chart to see the machine in action. Meanwhile, the flood of money to the top leads to fewer and fewer available investment alternatives necessitating looser regulation on credit to lend to less and less credit worthy clients through the creation of creative, near magical, financial instruments. All the while, the growing inequality brought about by transferring wealth to the top slowly strangles the consumer driven economy (about 70%) as those who would spend have less while those who invest, at home or abroad, have more. A little more doublethink courtesy of trickle-down economics.

On the government side, though Reagan talked a fiscally conservative game, he walked a public spending splurge as debt tripled under his watch. Bush the elder didn't do much better and though Clinton managed to run a couple of surpluses late in his second term, Dubya and Congress managed to pass two successive $trillion plus tax cuts while fighting two separate $trillion plus wars along with passing a $trillion plus prescription drug plan. The Anglo-Saxon affinity saw the UK walking in near lockstep; just replace Reagan with Thatcher and Clinton with Blair at the head of the parade through the Corporation of the City of London instead of Wall Street. The financial sectors share of domestic US profits skyrocketed from below 16% to 41% making bankers more important than ever. The partial repeal of Glass Steagall, allowing banks to gamble grandma's pension with the Gramm-Leach-Bliley Act (also known as the Financial Services Modernization Act) and the Commodity Futures Modernization Act which ensured that the credit default swaps and collateralised debt obligations at the heart of the 2007/8 crisis wouldn't be regulated were the finishing touches as the banksters had merged with government and rigged the economy for explosion.

The story that unfolded in continental Europe was somewhat different but had the same result. Overnight, countries such as Ireland, Greece, Spain, Portugal and Italy were expected to transform into Germany. Shockingly, it didn't happen and without their own currencies to debase in order to regain competitiveness, the peripheral, low-capital investment economies were crippled while German producers were given a boost. Not only did prices go up - in Spain a loaf of bread doubled in four years - but salaries stayed about the same, rising 14% in the ten years from the introduction of the euro January 1st, 2002 to the end of 2011. Throw in the additional enticement of suddenly being deemed nearly as credit worthy as their northern partners and you've got yourself the perfect debt bomb recipe. The explosion of Benzes, Beemers and Audis on the streets of Madrid and Dublin created a surplus that found its way back to German banks who had to lend this money to someone and were happy to find eurozone approved customers from Porto to Thessaloniki to buy more German cars or real estate developers to build beach resorts to take vacations in. Each country took their own path to purgatory, in Spain and Ireland it was more private bank debt while in Greece and Portugal it was more public (and Italy, well, they've always had too much debt).

As we know, our story doesn't end well, in fact, there doesn't seem to be an end as it's starting to feel like the neverending story. The total cost is incalculable  in dollars, euros or pounds, but it's the human cost that should remind us that economies are meant to serve people and not the other way around. When the crisis hit, we were told we had to bailout the banks or the world would end, so we did. Ever since it became clear that Greece wasn't going to be able to maintain its debt, the troika always manages to get the money to Athens on time. When the Irish banks couldn't keep afloat, their government threw them a lifeline and guaranteed their debt. Spanish banks were going under so once again the troika (IMF/ECB/European Commission) saved the day. Trillions of paper dollars, pounds and euros all to ensure the debt obligations continue to be paid, trillions the people will have to pay back. For what? The sums will never be paid off, everything has been done to keep interest payments flowing to the banks and to give them enough time to get their capital out. The price of paying off failed bankster bets is not only the sweat of our brows but becomes ever more demanding, framed in the Orwellian language of fiscal austerity/consolidation, structural adjustment/reform, labour flexibility, competitiveness, and growth.

In the 70's and 80's the IMF/World Bank became despised figures in the developing world. As global capital sought higher returns than could be found in the developed west, their sites settled on the poorer resource-rich nations of the south and east where they found dictators, anti-commie generals and corrupt legislators willing to sign over their people's futures in exchange for ready cash to build vanity projects, fund coups, suppress insurrections or simply pad their Swiss bank accounts. When the people of their nations found they couldn't pay, the men in black would arrive, preaching the 'free market' mantra of globalization, structural adjustment programs, which always had the effect of worsening life for the people while benefiting the foreign corporations. Eventually, the anti-globalization movement and debt cancellation voices became loud enough and democracy returned to many places and debt was in some cases even forgiven. The first part of the story is now playing itself out in the 'developed' world except this time the countries aren't even getting a hydroelectric dam, bombs or a statue in return. Debt is granted only to maintain existing debt in exchange for lowering spending on those things that help the people, shredding the social safety net, firing workers, lowering tariffs and taxes and eliminating workers rights in a duplicitous attempt to make the economy more competitive in order to grow and pay off the increased debt load. Unfortunately it has never worked, isn't working and never will. The only winner, for awhile at least, are the banks to whom the interest keeps flowing.

Ironically, many accept this punishment as atonement, self-flagellation to purify the soul. Debts are contracts that must be paid off, more than an obligation, as the threat of moral hazard would not only destroy our financial system but lead to anarchy (gasp!). Yet bank bailouts are a perfect example of moral hazard as the banksters have now learned that they will not pay the costs of their losses; their gains remain privatized while their losses are socialized. Morality should be the last thing they want to talk about as their lascivious behaviour has been highlighted this summer with a series of scandals that illustrate they have no intention of ever doing the right thing whenever there's a whiff of profit to be had. If they don't get caught, great, if they do, well, there will be newspaper headlines, an investigation and finally, at worst, a fine to pay, usually a fraction of what the illegal behaviour gained. Somehow, even though both Mitt Romney and the US Supreme Court have defined corporations as people, not only are the big banks Too Big To Fail, they've become Too Big To Jail (TBTF/J).

"Though the principles of the banking trade may appear somewhat abstruse, the practice is capable of being reduced to strict rules. To depart upon any occasion from these rules, in consequence of some flattering speculation of extraordinary gain, is almost always extremely dangerous, and frequently fatal to the banking company which attempts it." Adam Smith; The Wealth of Nations, Book V, Chapter I, Part III, p.820

This summer has put the lie to Adam's words once and for all. Most recently it was Britain's Standard Chartered, who NY state regulators accused of hiding $250 billion of transactions with Iran despite sanctions. A person would be charged with terrorism and sent to Guantanamo, a bank simply pays a $340 million fine; it's up to the families of those killed in terrorist attacks facilitated by StanChar to sue the bank. The reaction of the British government was particularly instructive; when a British bank is threatened with the loss of its New York banking license, officials, from the mayor of London to the Bank of England governor to the Chancellor of the Exchequer rush to its defense. This, from the same country that would and has done everything in its power to get Julian Assange extradited to the US for torture and possible execution and done nothing to prevent its own citizen, Gary MacKinnon, who suffers from Asperger's syndrome, from being extradited to the US for exposing weaknesses in the defense department's computer security systems.

Just a few week before that came the revelations of the LIBOR rigging scandal. A story that is 'too complicated' to understand by the public was therefore ignored by the media. Besides, there was that whole Batman shooting and then the Olympics to worry about. Denver theater body counts and jingoistic medal counts are far more interesting than a bunch of bankers sending each other emails, right? Well, no, not really when mass shootings seem to have become monthly occurrences in the US (surprise! another one today), the Olympic medal count can be predicted based on population, per capita GDP, past performance, and host status while the bankster collusion earned them hundreds of billions (trillions?) in profits while costing the public an impossible to figure, er, figure. Wait, sounds a bit like the Olympics. Anyway, as usual it's not all that complicated.

LIBOR stands for the London Inter Bank Offered Rates and it's used in the setting of most other kinds of interest in the world, from credit cards, student loans and mortgages to the cost of government bonds. Seeing as we live in a 'free market', up until the scandal we all assumed this rate was set by the 'laws' of supply and demand but, as usual, our naivety cost us and profited them. Instead, the most important rate in the world is determined every morning by representatives of the 18 largest western banks who report on what they expect to pay to borrow funds from each other (Inter Bank) in the future. Under LIBOR rules, the four highest and four lowest estimates are eliminated, and the average of the rest becomes the official rate. Well, shockingly, banksters used this opportunity to artificially set rates everyday a bit higher or lower in order to profit from the positions they held in their portfolios. Barclays had their boss Bob Diamond resign and was fined ￡290 million by British authorities, who were involved in the racket, while seven banks including Barclays have been subpoenaed in the States. A few Italian families get together and we call them the mafia and charge them with racketeering but when banks do it we call it cooperation. It will take years of litigation to sort it all out but you can be assured, a few banks will have to pay a fraction of the profits earned in the scam.

Speaking of the mafia, seeing as interest rates aren't spicy enough to make headlines, the other summer scandal involved just that, Mexican drug lords who line headless bodies on highways. Once again the contrast between the justice meted out to the flesh and blood people and the corporate people is illuminating. A real person gets caught selling dime bags on the street corner trying to raise money to go to college, we go to jail for life; they get caught laundering the money from the profits earned on those bags, they say they're sorry and get a slap on the wrist. Europe's largest bank, HSBC, not only transported billions of dollars of cash in armoured vehicles, cleared suspicious travellers' cheques worth billions, and allowed Mexican drug lords to buy planes with money laundered through Cayman Islands accounts, they also moved money from Iran, Syria and other countries on US sanctions lists, helped a Saudi bank linked to al-Qaida shift money to the US and even cleared $290 million in "obviously suspicious travelers cheques" that benefitted Russians "who claimed to be in the used car business." Lucky we only have to worry about Iranian-American used car salesmen hiring Mexican drug lords to assassinate the Saudi ambassador or this might sound like a conspiracy theory. Yep, all this was part of a report by a US senate committee which revealed HSBC failed to monitor $60 trillion in wire transfer and account activity, had a backlog of 17,000 unreviewed account alerts regarding potentially suspicious activity, and failed to conduct anti-money laundering due diligence before opening accounts for HSBC affiliates.

Each time new revelations come to light, bank executives line up to testify in front of an important sounding committee and explain how they are "horrified" by what has happened, that they couldn't have foreseen events, that measures have been put in place, that it was bad luck or a black swan or a rogue trader. Then it happens again. Just this spring, the last remaining 'good banker', Jamie Dimon had his bank JP Morgan victimized by one of those rogues as "the London whale" lost a bet on a position that could cost his bank $9 billion. Just the kind of gamble we were promised these banks would no longer make in exchange for bailing them out just four years ago. Just the kind that lost UBS $2 billion last September, Societe Generale $6 billion in January 2008, or Barings Bank $1.3 billion in 1995. Our always vigilant press is always sure to name them rogues, despite being the norm, performing unauthorized trades and justice is swiftly served on these lone scoundrels while pensioners and savers pay the price and the banks continue to promote the culture of short term profits in which psychopaths thrive, to inflate their quarterly earnings. Had enough yet? There's always the fattening of the PIIGS, the Magnetar trade, the Sentinel fraud, any of these, or ...

If these were people, as corporations such as banks have supposedly become, we'd execute, jail or banish them from our communities so how do you explain the social pressure to repay criminal enterprises that are slowly sucking the life from our economic system? In order to succeed in society, few would disagree that a university or college education is a prerequisite. Such a degree costs tens of thousands of dollars or pounds obliging many to take out student loans which become payable upon completion of their studies. In America, if you decide to head to Vegas and max out your credit card on hookers, blow and roulette only to find yourself unable to pay, one option is to declare bankruptcy, ruining your chances to obtain credit but clearing the debt off the books just as the hangover clears after a good, greasy breakfast. If you find yourself without a job (or only part-time or unpaid internship) once you finish school and unable to pay back a student loan, you don't have the bankruptcy option, it can't be cleared and will be with you until death or its paid. Heaven forbid if you're among the 25% of Americans without health coverage and you or a family member fall ill, the cost of which forces many into a debt spiral. This is nothing if not slavery. Even if you're a good client and you pay your debts, or the debts of your nation through your taxes, you are forced to work in order to earn the income. What else is forced labour but slavery?

Funny that we (or at least the Sumerians) had this all figured out 5000 years ago. Even then they recognized the need to protect those forced into debt from unforeseeable circumstances or the avaricious. Interest rates also seem to have first appeared in Sumer where most transactions were conducted on credit. Years with bad harvests resulted in peasants hopelessly indebted to the rich, forced to surrender their farms and, ultimately, family members, in debt bondage. Inevitably this would lead to a social crisis in which the masses were enslaved to the few. It soon became traditional for each new ruler to wipe the slate clean, cancel all debts, and declare a general amnesty or 'freedom', so that all bonded labourers could return to their families. Significantly, the first word for 'freedom' known in any human language, the Sumerian amarga, literally means 'return to mother' while in Sanskrit, Hebrew and Aramaic, debt, guilt, and sin are actually the same word. Julius Caesar became the hero of the Plebs, and was ultimately killed by the nobles, for introducing debt forgiveness schemes after he took power from the corrupt patrician oligarchy. Solon laid the foundation for Athenian democracy by "shaking off the burdens" of enslaving debt. Biblical prophets instituted a similar custom, the Jubilee, whereby after seven years all debts were similarly cancelled, the direct ancestor of the New Testament notion of ‘redemption’. Through some historical error, we inherited the institutions of lending at interest without the original checks and balances.

Instead, we live in a world where banks are bailed out while people are sold out. In which lenders making up details on credit applications became such a common practice it became known as liar loans but debtors get sent to jail for 30 years for lying on the same forms. It was after all many of those liar loans that were slapped together, sliced, diced and bundled into the CDO's that helped cause the crisis, but no one needs to be jailed for that. It's only those uncivilized countries that obviously need a good bombing where bankers are actually punished for fraud. Tax evasion is only for the rich and corporation kind of people not the 99%. It's jail for you or me if you screw the IRS but if you're HSBC or Credit Suisse, you just cut a deal in which you hand over email and telephone records of your staff to the US Department of Justice. Stealing from your clients is frowned upon unless your MF Global, an investment company run by the former governor of New Jersey Jon Corzine, then of course it's okay. It's usually fraud if I sell you something that I know is going to blow up, but if you're Goldman Sachs, where your clients are referred to as muppets, well, it's fine to sell your clients investment products that your bank is offloading as fast as possible on the open market because you know they're about to explode, even when there's emails to prove it.

It doesn't seem like banks have morals and they definitely don't learn their lesson from the punishments they receive. Bank of America’s securities unit has agreed four times since 2005 not to violate a major antifraud statute, and another four times not to violate a separate law. Merrill Lynch, which Bank of America acquired in 2008, has separately agreed not to violate the same two statutes seven times since 1999. They're just doing cost-benefit analysis, where their benefits are our costs as when Morgan Stanley entered into a complex swap agreement with the New York electricity provider KeySpan in 2006 that gave it a stake in the profits of a competitor enabling the two companies to push up the price of electricity. Price fixing is illegal, so Morgan Stanley had to pay a fine of $4.8 million for enabling it, but they got to keep the $21.6 million they made for handling the swap and didn't have to admit any wrongdoing. The cost to New Yorkers in higher utility bills? $300 million. Bear Stearns, Lehman Brothers, Goldman Sachs and JP Morgan Chase came out smelling like roses converting human shit into billions of dollars in profits by financing a new sewer treatment plant for the people of Jefferson County. The people didn't come out smelling so pretty though as the financing cost forced them into the biggest municipality bankruptcy in US history. The same thinking probably went into Wells Fargo's alleged decision to fire an employee three days before his daughter was scheduled for surgery in order to avoid paying the bill. No cash, no cure for cancer as the hospital cancelled the surgery and the child was left to die.

What of finances role of market maker and facilitating transactions for investors and consumers, surely we owe them something for that? Well, thanks to the deregulation of the agricultural commodity market in 2000 Goldman Sachs earned £600m from food speculation in 2009 alone. While the bank's profits were boosted, the numbers dependent on food banks and aid were exacerbated thanks in part to the banksters. No one disagrees that their gambling pushes up prices, the only question is how much relative to other factors such as biofuels, changing consumption patterns and drought. The poor are disproportionately affected by a rise in food prices as they spend a higher percentage of their income for the basics, just as they do for debt. If you use anything made of plastic, drive a car or heat your home, you should know oil speculation adds $23.39 to the price of a barrel (around a quarter) which translates to about an 83-cent-per-gallon of gas premium and costing an average American family $82/month. And people we're angry when Bank of America introduced a $5/month debit card fee!?! Seems these financial behemoths need the cash though as they need to keep up with their competitors in the new world of flash trading. By spending billions on faster cables they can shave microseconds off the latency, or trading execution time, thus allowing themselves to peek at the orders of other traders before they're made. Not only does this destroy the idea of investing, especially by us flesh and blooders, but it opens up the markets to one of the newest perils, the flash crash. Hooray, more risk!

Perusing the comments under any number of stories of payday loan companies charging four to 5000% interest, distraught families being tossed on the street or students in the streets protesting their debt enslavement, one can always be sure to find defenders of the faith of finance. These moralizers are quick to point out that no one forces people to sign on the dotted line but never take into account the asymmetry of information and power between the parties or the corrupting influence of living in a society built on sating our short term desires no matter the cost. The tired refrain of taxation and representation is trotted out to rationalize paying the debts of our governments but loses all meaning when put in the context of the options faced by voters today: Bad or Worse, Red or Blue, vote wrong and it's a redo, either/or results in another IOU as the need for money to get elected forces politicians to prostate themselves before the FIRE (finance, insurance and real estate, one for all and all for one thanks to deregulation). Insisting people today make rational economic decisions seems ludicrous while our educational system is being sold off to the lowest bidder and converted into a propaganda factory where standardized test scores are more important than critical thinking. Arguing we have a choice when the information we receive is nothing but a toxic mix of cognition clogging updates in our Twitooglebook universe alongside stories from a media controlled by six corporations (down from 50 in 1983) offering 2,000 channels with the same message while selling an illusion of choice barraging us with a constant stream of crisis reports, crisis summits and near-crisis averted but never connecting the dots.

"When national debts have once been accumulated to a certain degree, there is scarce, I believe, a single instance of their having been fairly and completely paid. The liberation of the public revenue, if it has ever been brought about at all, has always been brought about by bankruptcy; sometimes by an avowed one, but always by a real one, though frequently by a pretend payment." - Adam Smith; The Wealth of Nations, Book V, Chapter III, Part V, p. 481

To review. Forty years ago we entered a new era of fiat currency which untethered money and thus debt from any constraints in order to protect ourselves from "money speculators". The US in particular experienced a long economic boom for the wealthy with stagnation and even decline for the rest as taxes for the rich and corporations were cut, unions were gutted and jobs were outsourced. In the past 30 years, 96% of the growth of average incomes have gone to the richest 10% and in the past 10 years, the incomes of the other 90% have declined. In Europe, a new currency was introduced with supposed magical powers to turn the likes of Greece into Germany but only had the effect of causing them to diverge. On both sides of the Atlantic, the shortfall of the poor, the middle class and their governments was made up by increased borrowing. The "money speculators", whose ingenuity was unleashed by the deregulation that regulatory capture bought them, were more than happy to find more and more creative ways to eliminate risk and earn huge rewards. When the ponzi scheme faltered, we were told there was no alternative to saving the banks, transferring trillions from public hands to private with no consequences and next to no oversight. With nothing fixed and no lesson having been learned, the banks emerged bigger and more powerful than ever with the knowledge they can act with impunity while the public from Madrid to Manchester to Miami are forced to accept ever more stringent austerity measures in exchange for ever larger bailouts which continue right under our noses.

Oh, it continues. TARP was just the beginning of bank bailouts as the program has continued in stealth and shows no sign of being abandoned therefore changing the game is the new moral imperative and sustaining it a sin. Language is their most effective ruse, twisting meanings and changing expressions. Quantitative easing in the US and UK is nothing more than printing money electronically and using it to overpay banks for their financial assets or by lending to them on the cheap, minimizing their borrowing costs and lowering their reserve requirements in the hopes they will lend that money on to the real economy. Of course they don't, they just buy more bonds (gilts in the UK) to earn a risk free return (as long as the merry-go-round continues) and wait for the next round of easing (QE3 is rumored for a fall sailing). All this goes to pad the bottom line which they need to perpetually improve to keep increasing CEO salaries, keep the stock market happy and of course, give idiots like this something to babble about incoherently.



European sensibilities were a bit too sensitive for such blatant Zimbabwe/Weimar Republic-like behavior (at least until recently when they just up and gave Spanish banks €100 billion that the people will have to pay back), so the ECB basically did the same thing but called it LTRO, Long Term Refinancing Operation. Prohibited from giving money directly to countries, the ECB printing press is used to give money to banks ostensibly to buy bonds from countries having problems selling them (ie. Greece et al). More free money for the banks if the game continues as they can either put the cash into the riskier bonds at higher rates or play it safe and deposit it back at the ECB. Other Newspeak candidates include 'Growth friendly' policies, those which hand more power to foreign corporation and banks to continue their plunder while David Cameron's 'expansionary austerity' is more Orwellian than his Big Society and has driven the UK into a 'surprise' double-dip recession. Confused? Yep, you're meant to be, otherwise you'd wonder why they don't just give the money directly to the people instead of banks while artificially maintaining low interest rates in order to force the elderly to eat cat food or starve.

"And Jesus went into the temple of God, and cast out all them that sold and bought in the temple, and overthrew the tables of the moneychangers, and the seats of them that sold doves" - Matthew 21:12

Just this past week US VP Joe Biden got in a little hot water for telling a half-truth:

People (well, right-wingnuts) went, well, nuts, as they tried to turn his words into an insensitive race play. The mistake he made though is that we're already in chains, slaves to greedy, immoral (amoral?), psychopathic bankers. It wouldn't be so bad if we at least we're being driven for a monumental purpose, I dunno, like building pyramids, the US capitol or White House instead of facilitating the worship of the Golden Calf. Up til now we've been complicit in their shakedown where debt is a sacred obligation only if it is owed by the poor and vulnerable to the rich and powerful who have used their gains to purchase political power or hidden them away in the Caymans. Yet debt is always negotiable or can even be written off when it's the other way around ensuring the wealth keeps flowing upwards. The growth in inequality seen before the crisis has been put on steroids since the bailout with more than 90% of the gains going exclusively to the richest 1% causing the middle class to slowly disappear and poverty to explode while Paul Ryan argues to cut their support. Regardless, much of the rabble will rally to the Romney/Ryan call to extend the Bush tax cuts and further cut taxes on the rich while making the rest pay for it. We used to ask "What's the Matter With Kansas?" but we need to ask "what's the matter with us?" today for doing nothing as the air raid sirens are sounding the next attack.



Alone, none of us can destroy the false idol of greed, there's no Moses amongst us, the only way is if enough people act together. Think and buy locally, plant a garden, ride your bike, vote for alternative parties and take your money out of the TBTF/J  banks (US, UK, Facebook) and put it in a credit union that puts profits back into communities are all simple ways to start. The more ambitious can talk to and teach others, join a protest, or even try to get out of the fiat economy altogether by investing in physical gold, silver or other metals. Of course if you're worried about all that extra weight in your pockets try using the alternative, electronic, secure Bitcoin currency. Finally, we have to shed the holier-than-thou shackles placed on us by those that would call people who walk away from underwater homes deadbeats, graduates unable to make their student loan payments slackers and governments tricked into a debt trap unable to meet their debt obligations lazy while bailed out banks behave beligerently, 'good' governments gut the promised social welfare state and corporations renege on obligations and commitments made to provide health care, pensions and other benefits to workers. The parasites may seem to have the power, they may have won the previous battles, but we, as flesh and blood people, have the real power, it's time to Strike Debt, stop paying what is no longer morally owed, a debt strike to stop the bankster shock doctrine takeover.

Wrestling Greco-Roman Mythology

"Greece and our money"

You hear it all the time. The Greeks are lazy. Those indolent loafers deserve what they get seeing as they've been living high on the hog for the past decade on cheap credit. Retiring at 50 after a life on the payroll of the state where they took ouzo-filled three-hour coffee breaks filled with idle chit-chat about how to avoid paying their taxes before kicking off work early to head to the beach. It's all their fault the financial markets are gyrating wildly, freezing the lines of credit needed to feed the economic recovery that's just around the corner. Don't get me started on the Italians and how they'll be better off now that Berlusconi's gone. We all know his lascivious penchant for underage girls and bunga-bunga parties were the reason the bond market had turned its attention to Italy driving rates over the unsustainable 7% level. It's too perfect to be true and so, as usual, it isn't. Its all propaganda, doing its job of diverting our attention from what's really happening as democracy does its elephant imitation and returns to die in its birthplace.

Yeah, I know cliche, but c'mon. Tragedy, pandemonium, chaos and drama are all Greek words, tailor made for headlines that mix truth and lies. The stories are almost pre-written - the financial fixes proposed so far are just rearranging deck chairs on the Titanic, water guns when we need bazookas and so on. Only farce could bring us the word play of a Papendreou being replaced by a Papademos on the orders of Merkozy or a surreal comedy get away with having a communist president finally replacing a buffoon like Berlusconi with a bankster butler named Monti. Yet neither Monty Python nor Groucho Marx had anything to do with it, the iceberg has already hit and it isn't very funny. Calling them unity or caretaker governments is meaningless as they aren't legitimate, nothing but our civilized version of a military coup with bankers in place of generals to pass and enforce austerity measures the people would never agree to and will be voted out once the dirty work is done. We'll pat ourselves on the back for returning the power to the people but it'll be too little too late.

Before we go back to the beginning, let's dispel a few of those myths that somehow make this takeover palatable. Greeks, along with the rest of the Club Med countries, work more hours per week and receive less paid holidays than German workers. At 42 hours/week, the Greeks top the EU table while you find the Germans mid-table at 36 and the Dutch at the bottom clocking in 31 hours. In fact, a quick look at all the OECD nations tells us the Greeks trail only the South Koreans in the developed world. The Greeks, Spaniards, Portuguese and the Irish all retire later than Germans while the percentage of GDP devoted to public pensions is roughly the same in Greece, France and Germany. As for that profligate Greek spending, well they lay out less for their public sector as a percentage of GDP than the EU average. Yes, they've got some tax collection problems but it's clearly not the average Greek who's to blame for the problems and understandably don't want to be the ones to pay for them.

The next fallacy is that this is a crisis caused by Greek/Irish/Portuguese/Spanish/Italian debt. Neither jubilant crowds celebrating the departure of Silvio Berlusconi in piazzas across Italy, nor Greece swearing in a new cabinet after George Papandreou's resignation, nor Ireland paying billions to unsecured Anglo Irish Bank bondholders, nor Portugal's recently elected prime minister Pedro Passos Coelho promising his serious looking suit-clad visitors from Brussels and Frankfurt that his country will fulfill the pledges the previous caretaker government made, nor Spaniards replacing their government today with the same party that got them into trouble and promises to make deeper and more painful budget cuts, will get us any closer to solving the problem. No, no, no, no and no, we've been witness to a putsch executed with blietzkreig efficiency, a European disaster that is doing exactly what should have been expected, subsidizing German producers and punishing the PIIGS for feeding at the trough placed in front of them.

It's the Germans who have been the most heavily subsidized for the past decade thanks to the creation of the eurozone. Waaaaah? That's right. Think about it, the euro has given German producers a powerful boost while crippling the peripheral, low-capital investment economies. The 17 current members of the eurozone share the same currency but have wildly divergent cultures, economies and policies. Yeah, only in theater of the absurd could anyone have expected a worker in Greece to be as productive as a German given the capital infrastructure differences. Exchange rates have traditionally been the mechanism by which countries regain competitiveness but these countries have now had over 12 years of fixed rates (10 for Greece). So, not only has German industry been granted a huge barrier-free market but also a set exchange rate to keep its goods reasonably priced from Lisbon to Athens. The explosion of Benzes, Beemers and Audis on the streets of Madrid and Dublin created a surplus that found its way back to German banks who had to lend this money to someone and were happy to find eurozone approved customers from Porto to Thessaloniki so that they could buy more German cars and build beach resorts for their builders. If Germany had its own currency, the New Deutschmark would be like the Swiss Franc on steroids and appreciate dramatically while the currencies of other nations would fall making their products more competitive, helping their domestic industries while forcing German industry to contract.

"The traitor within the European family"?

It's hard to remember but the German economy still hadn't fully recovered from reunification by the launch of the euro, even falling in 2003 as the Economist wrote of the Teutonic Plague (there's those misleadingly true headlines again!). By setting interest rates artificially low, the ECB helped German and French exporters but it also inflated real-estate bubbles in Spain and Ireland. The resulting decade of eurozone-aided German current account surpluses and the corresponding accumulation of debt willingly doled out to the PIIGS has given rise to contagion fears of another kind, debt default. It's no coincidence that the combined $183 billion current account deficit of Italy, Spain, Portugal and Greece are almost perfectly offset by Germany's current account surplus of $182 billion. The only solution we are told is for the PIIGS to implement austerity in exchange for more debt. Yet the only entities being helped by this are the banks while ensuring long term pain for everyone else in the countries receiving the 'help'. We've mentioned it here many times but it bears repeating, almost all of the bailout money winds up being siphoned out of the country by the banks and the payments only grow with each 'rescue' package. Meanwhile, the austerity measures demanded in return only serve to slow economic growth meaning further bailouts will be needed.

One need only have looked at the forerunner to the euro, the European Exchange Rate Mechanism (ERM) based on the European Currency Unit (ECU) to have foreseen the impracticality of fixed exchange rates among countries without common economic policy. This was a semi-pegged system based on fixed currency exchange rate margins, but with exchange rates variable within those margins. Only looking between November of 1991 and July of 1993, the Finnish markka was first devalued by 12% then severed the link altogether, the British Pound fell to its lower limit leading to its suspension, the Italian lira was devalued by 7%, as was the Spanish peseta, first by 5% then later another 8% along with the Portuguese escudo by 6.5% and the Irish punt by 10%, then Sweden and Norway abandoned the peg until finally the trading band had to be widened from 2.25% to 15% to save the French franc. Yet, 1999 apparently offered a unique point in economic ceteris paribus time when currencies could forever be fixed againt each other. It's not that currency pegs have failed time and again or have ever given powerful exporting nations an advantage leading to balance of trade problems, otherwise we might have known the idea was doomed to failure.

"Those who would give up Essential Liberty, to purchase a little Temporary Safety, deserve neither Liberty nor Safety"
- Benjamin Franklin

The funny thing about the whole EU project has been how anti-democratic it's consistently been from its ECSC beginnings, from Maastricht through the Lisbon Treaty all the way up to murdering democracy in its cradle. Even opposing the idea has somehow always been considered heresy, you've gotta be a wacky UKIP supporter or conspiracy theorist to have questioned it at any point. Yet nobody voted for the Treaty of Paris in 1957 that created the first incarnation of the EU suprastate, the European Coal and Steel Commission between France, West Germany, Italy, Belgium, Luxembourg and the Netherlands. Though ostensibly a trade arrangement, Robert Schuman, the man who first proposed the idea, declared his aim was to "make war not only unthinkable but materially impossible." To do this, the temper of the people had to be cooled, no more nasty Hitler-type populism-fueled democratic uprisings. When the ECSC morphed into the EEC, again there were no ballots. From time to time, annoying national constitutions required a yes vote in a referendum. Given the choice, the Danes rejected Maastricht and the Irish Lisbon, but both were told they had voted wrong and made to do it right. So who was surprised when the Papendreou was forced out for giving the Greek people a choice of whether or not to turn up the torture of the past few years?

I pity poor Papendreou a bit. Elected in October 2009, he not only inherited a crisis but was finally forced to fully revealed the extent to which the Greek books were cooked. National debt had been concealed, hidden and masked in order to get them into the eurozone and had now exploded, making the debt to GDP ratio unsustainable. The austerity demanded by the troika (the ECB/EU/IMF) in exchange for bailouts to keep the debt payments being made to the (mostly) French and German banks not only adds debt to the numerator and lowers GDP in the denominator but also fuels skyrocketing suicide, drug use and HIV rates while crippling employment, support and hope. There was no alternative until he wanted to give the people one. Reality becomes conspiracy from this point as the elected leader of Greece was summoned to the G20 meeting early where he received a scolding of French in one ear and German in the other. We learned Merkozy was annoyed, orders were issued and we were told the Greeks would have a new prime minister. Oh, and there wouldn't be any kind of referendum as it would have to be about being in or out of the EU and not about accepting more debt in exchange for death.

Whether it was a political ploy on Papendreou's part or not, announcing a referendum on the latest plan to (en)s(l)ave Greece was the right thing to do. The headlines trumpeted the EFSF, the European Financial Stability Facility, as cutting Greek debt by 50% in exchange for another €100 billion or so and more austerity pain. However, €150 of the total €350 or so billion in debt, the portion lent by the ECB and IMF, wouldn't be touched by this plan, making it a reduction of less than 30% (do the math 200/2=100; 100/350=.2857). Even more importantly, the wording states the private lenders were 'voluntarily' accepting the plan. Ha! Who are they fooling? Oh, that's right, the ISDA, the body that determines when a credit event occurs (PDF) and triggers all the CDS (Credit Default Swaps, you remember those right?) and a replay of Lehman Brothers 2008. They're the big reason neither default nor leaving the currency could be discussed until now. Yet while Papendreou's gambit may have backfired, it has made leaving the EU a possibility. After over a year of strikes and rioting he finally knew it was time to ask the people after seeing the national day parades to commemorate the Greek refusal to surrender to a Hitler-backed Mussolini being halted by violence and the president being shouted down as a traitor.

(Not so) funny enough, across the Adriatic the Italians got a new PM with much the same credentials as the Greek PM and the head of the ECB. Yes, newly appointed (last week) Greek PM Lucas Papademos and Super Mario Brothers, as in the new president (as of November 1st) of the ECB Mario Draghi and new Italian PM Mario Monti (last week) are all Goldman Sachs alumni. Greece gets a former ECB official who worked at Goldman Sachs, Italy gets an EU near-lifer with a bit of Goldman advising thrown in all because the current Italian head of the ECB, another Goldman Sachs alumni won't bend the ECB directives to bail out his countrymen and print euros. While the Germans try to hold the line on turning on the printing press for fear of a 1930s style inflation disaster, the vampire squid has maneuvered its tentacles around the economic lifeline of Europe much as it has done in America. No wonder we can't talk about how we got here otherwise we might notice that the same folks who wrote the opening scenes of this farce are being placed in charge of fixing it.

We need to flashback again. The 1990s saw a number of countries, notably Italy and Greece deliberately engage in financial transactions with no other purpose than to mask their public debt levels in order to secure entry into the euro. We don't need to look far to find those who put these debt bombs in place; Greece's PM Papademos oversaw his country's entry to the euro running the Central Bank of Greece from 1994 to 2002 before he became vice-president of the ECB in between stints advising Goldman and indoctrinating the next generation of neoliberals from Colombia University; Italian PM Mario Monti had to quit his role as adviser to Goldman Sachs before taking his new job while Mario Draghi was head of the Italian Treasury from 1991-2001 before heading to Goldman until 2005 until he took over at the Italian Central Bank. By using complex derivatives supplied by Goldman Sachs, Italy and Greece were able to slim down the apparent size of their government debt, which euro rules mandated shouldn't be above 60% of the size of the economy and thus created the problem the technocratic rulers are now tasked with fixing.

"Resistance is Futile"
 - Locutus of Borg

I'm not the only to have noticed that it seems as though technocratic overlords have been dropped into erstwhile democratic nations in order to implement the medicine that their kind deems necessary. Goldman Sachs Conquers Europe; Goldman Sachs, le trait d'union entre Mario Draghi, Mario Monti et Lucas Papadémos; Our Friends From Goldman Sachs; The great euro Putsch rolls on as two democracies fall, read headlines from Paris to London. As the Financial Times itself said, it's like we've decided the Borg would make a better commander of the Enterprise than Jean Luc Picard. Worse yet, they have provided a smokescreen for the vile Berlusconi to transform himself from goat to sacrificial lamb. Instead of being tossed from the legislative to the prison chamber for any of the many criminal cases pending against him or new revelations of some perversion vile enough to revolt even his media desensitized pubic, he offered himself up in exchange for passing austerity measures the markets had suddenly deemed necessary. This despite the fact the country runs a primary fiscal surplus, its fiscal deficit to GDP ratio being only 60% of the OECD average, less than the euro area average and its ratio of non-financial private debt to GDP also being very low relative to other OECD economies. Every new announcement is met by cheers from the market, but each period of euphoria is shorter than the last, like a junkie perpetually searching for a quicker hit.  I'm taking bets Berlusconi's back in a few years and will be PM again as the Italians were robbed of the opportunity of purging the toxin themselves.

You'd think the Goldman/ECB/unity/caretaker/technocratic overlords in Italy and Greece would be careful about naming ministers representative of the people's wishes while (fourth)Reich-enbachs land in Athens and Rome to ensure compliance and Monti parrots Merkel's phrase about Europe facing its toughest test since WWII. No, Monti's cabinet is technocratic not democratic, consisting of bankers, soldiers and diplomats without a single elected member. It's worse in Greece where Papademos has named a motley crew with multiple links to the pre-1974 military junta. Full blown former fascists are being transformed into non-ideological technocrats to administer the neoliberal medicine to solve the problem, modern day quacks applying leeches to cure their patients. Terms of surrender are accepted not for fear of bullets and bombs but of losing our pensions and iPads, the former getting more elusive and the latter more addictive as it becomes harder to qualify for benefits and gadgets get ever more distracting. Few even noticed that while most Greek government bonds were issued under Greek law where the bonds could be redenominated in new drachma should they ever have to leave the euro, the deal stuck October 26th changes the jurisdiction governing the bonds to English law, making redenomination impossible, resistance is indeed futile, we're being assimilated.

You want worse? Well, the Spaniards are about to vote in the PP, the right wing freakshows that brought us the Jose Maria Aznar gongshow, now led by a non-entity named Mariano Rajoy because they'll do a better job of following the banksters orders. Yeah, right. Not only did the Irish people start paying back unsecured Anglo-Irish Bank bondholders as penance for their sins, they also watched as the one-time richest man in Ireland Sean Quinn who owes Anglo-Irish some €2.9 billion declare personal bankruptcy - in Northern Ireland where the law is more friendly. In Portugal, retired Col. Otelo Saraiva de Carvalho, a leader of the democracy-restoring 1974 "Carnation Revolution", told Lusa news that a growing dissatisfaction with the government could trigger a military revolt. The entire euro zone is already in severe recession, yet the ECB, the Germans, the French and virtually every single policy maker in the core continue to advocate the economic equivalent of medieval blood-letting via ongoing fiscal austerity in order to keep the interest payments flowing to the banks so they can gamble on the commodity markets, driving the price of heating oil and corn up so we freeze and starve. And, surprise, surprise, the public deficits continue to grow. Americans can't be too smug about the situation seeing as their government was long ago taken over by Goldman Sachs, Citigroup et al and are about to pay their pound of flesh across the board as the 12 person "super committee" can't seem to agree how to serve 200 lobbyists rather than 300 million citizens. Wouldn't it be interesting if we spent more time talking about the reality of who this craziness is helping instead of the mythology of lazy Greeks and Berlusconi's bunga-bunga?

Ultimately Greece will have to default and in all likelihood so will Italy, Spain, Ireland and Portugal (and yes, eventually the UK and the US too). The technocrats are nothing but another ploy played by the bankers to keep skimming off as much as possible for as long as possible, repeating over and over that there is no alternative. As long as we keep believing their myths we'll stay pinned to the mat as our rights are slowly stripped away along with our wealth. We just need to turn our heads away from the screen to see the choices we really have instead of what they're offering us. Argentina declared bankruptcy as recently as 2001, Russia in 1998 as has almost every other nation on Earth while Greece was the first recorded case of sovereign default in 377 BC. You want a more modern model? Just compare Iceland's quasi-default to Latvia's austerity. Yes, it'll be a tragedy, pandemonium, chaos and drama but would it really be so bad if they had to import a little less stuff for a while? The money lenders will always return and at least it offers a light at the end of the tunnel instead of this cycle of doom and gloom. Modern Greece has already tried being a failed German state; it's time to shake off the myths and remember that Athenian democracy could only be established after Solon legislated "shaking off the burdens" to free the people from debt slavery.