We’re All Greeks Now

European Central Bank (Photo credit: kumbarov)

One of the joys of being American is that every new day is a clean slate—no history, no memories, no experiences, a complete blank. This may help explain why our national conversations serve their intended purposes while being entirely content-free. Newsflash to self-described liberal economists: austerity works! If your goal is loot nations while putting their populations into permanent debt servitude, austerity is a real winner. 

The IMF (International Monetary Fund) has been implementing “structural adjustment” programs, AKA austerity, for decades. It has usually “worked” for their bank clients in the sense that wealth extraction from victim nations to international banks took place. And given that victim nations tended to have both culpable leaders and “developing” nation status, the economic outcomes were rarely news in New York or Washington. Needless to say, outcomes were better for bankers than for their structurally adjusted victims.

When the ECB (European Central Bank) began discussing structural adjustment policies for Greece in 2009 there was little pretense that they would benefit the Greeks. European banks had loaded themselves to the gills with peripheral sovereign debt, in some measure to game the regulatory capital requirements in much the same way that Wall Street banks did with “AAA” rated garbage in the lead-up to the most recent financial disaster. More...