Associated Press reported Sunday that European Central Bank Executive Board member Joerg Asmussen publicly admitted that the ECB, the World Bank, the IMF, and all sorts of other establishment bureaucrats have been lying about Greek debt in order to defraud the public. There is, in fact, no way to really bail out Greece, he now admits. In 2014 we will need a fresh supply of bailouts for 2015 and beyond.
Ha ha. Just kidding. That didn’t happen.
Or it did happen, but without being admitted. AP did report a story about Asmussen. Asmussen did say that, “Greece will need yet more international financial assistance beyond the agreed bailout programs through 2014.” That much is true, but it is still told in a deceptive way.
The deception is simply this: Asmussen is being reported as if he’s offering some new discovery. Reading the story, you would think that Asmussen was doing some calculations, laboring hard into the late hours of the night, using the newest data, and it led him to this disturbing new finding.
No, it was always true. Greece was and is an insolvent nation. It should default and drop out of the European Union and rebuild. As it stands now, these “bailouts” aren’t doing a thing for Greece, except putting them longer in a deeper hole. These bailouts are for the bondholders and simply extend the debt. Yes they make claims about “a much deeper than expected recession,” but the expectations were also fictional. Greece was and is never going to recover in the current monetary regime.
Many conservatives see the austerity riots in Greece as a sign of the welfare class resisting reality. That is partially true. But this “austerity” is for the sake of people who want the European governments to backstop their unwise lending. Real “austerity” would involve suffering both for those who are in debt and for those who have loaned out money at high interest rates. The justification for those interest rates was precisely the fact that they were risky loans because anyone who did due diligence should have known that Greece could not afford more debt.
And before conservatives judge the Greeks too harshly, they should take a look at banksters, like Asmussen, who are completely unaccountable in their own profligate spending. Asmussen and his crew wanted to build new headquarters and proposed a budget for it in 2008 for 1.2 billion Euros. That budget was found unacceptable and reduced to 850 million. Now, it turns out cost overruns have driven up the price to exactly what was proposed in 2008. This is one example among many. They love spending other people’s money. They preach austerity and practice profligacy.
This lesson is not lost on the Greeks or the Spaniards or anyone else. Conservatives need to not think that the only reason for “austerity riots,” is a welfare mentality. Yes that is a loathsome part of the problem. But the EU bankers are also loathsome. Extending a nation’s debts so that they just get in more debt is not a “bailout” and it does not permit any real economic progress. Let the Greeks go free and learn economic reality with their own drachma.
Conservatives have been fighting both the Republican and Democrat parties to reduce spending. Eventually, the interest is going to overwhelm the budget and we will get our own austerity pushers. But it won’t be austerity in order to rebuild a balanced budget. It will be austerity imposed while taxes are even increased to pay interest on debt that will go on forever.
Every step on this completely predictable path will be treated like it was unexpected news. Every statement by a politician or economist about what must be done next will be treated as an ad hoc response to an emergency.
It will all be a fraud. It will be scripted drama. It won’t be news. Just propaganda.