If you thought the Goldman Sachs banker who did the deal to get Greece into the euro might have been chased out of the City of London, think again.
Antigone Loudiadis, more widely known as “Addy”, has been richly rewarded by the bank for her dealmaking prowess and now sits atop one of Europe’s fastest growing insurance companies, Rothesay Life.
The 52-year-old, who lives with her family in a vast stucco house in west London, was one of the brightest stars in Goldman’s Fleet Street headquarters.
While she lists her nationality as Greek, her education was as English as can be. Schooled at Cheltenham Ladies’ College, she went on to Oxford University before joining JPMorgan, and then Goldman, gaining partner status in 2000.
Colleagues describe her as “fiercely clever”, although by some accounts, she was simply fierce. It is said some of her staff would pretend to be on the phone when she walked past them in the office to avoid her infamous rollockings.
Although her Continental twang remains hard to place, her fluency in Greek and strong connections in the country were instrumental in winning the lucrative mandate to create the financial deals that would flatter the country’s debts.
Christoforos Sardelis, former boss of Greece’s Debt Management Agency who worked on the trades with her, told Bloomberg she was “very professional – a little bit aggressive as is everyone at Goldman Sachs”.
But she was trusted by the government which, it should be remembered, was far more right wing than the Syriza party.
What it most liked about her seems to be the way she could magic away the country’s dismal financial position. The trade she came up with is reported to have made the bank hundreds of millions of dollars, although only Goldman knows the true figure.
Reports suggest she was paid up to $12m a year by the time she was named co-head of the investment banking group. Not that it wasn’t a stressful job. In an interview in 2005 she told the Wall Street Journal she was “your typical Type A workaholic smoker” with a “stressful schedule”.
Goldman moved her to head Rothesay Life which it set up in 2007 to buy big companies’ pension funds. She is likely to get a multimillion-pound payday when, as the City expects, Rothesay floats next year with a potential value of £3bn.
We Greeks have voted ‘No’ to slavery — but ‘Yes’ to our chains.
Not surprisingly, by nearly two-to-one, Greeks have overwhelmingly rejected the cruel, economically bonkers “austerity” program required by the European Central Bank in return for an ECB loan to pay Greece’s creditors. In doing so, the Greek people overcame an unprecedented campaign of fear from the Greek and international media, the European Union (EU), and most of our political parties.
What’s simply whack-o is that, while voting “No” to austerity, many Greeks wish to remain shackled to the euro, the very cause of our miseries.
Resistance, not Crisis
Before we explain how the euro is the cause of this horror show, let’s clear up one thing right away. All week, worldwide media was filled with news of the Greek “crisis.” Yes, the economy stinks, with one in four Greeks unemployed. But two other euro nations, Spain and Cyprus, also are suffering this depression level of unemployment. Indeed, more than 11% of workers in seven euro nations, including Portugal and Italy, are out of work.
But unlike Greece, these other suffering nations have quietly acquiesced to their “austerity” punishments. Spaniards now accept that they are fated forevermore to be low-paid servants to beer-barfing British tourists. Spanish prime minister Mariano Rajoy, who has enacted a draconian protest ban at home to keep his own suffering masses at bay, has joined in the jackal-pack rejecting anything but the harshest of austerity terms for Greece.
The difference between these quiescent nations and Greece is that the Greeks won’t take it anymore.
What the media call the Greek “crisis” is, in fact, resistance.
Resistance to nowhere
But it’s a resistance whose leaders are leading them nowhere.
For decades, Greeks have suffered governments that are both corrupt and dishonest. The election of SYRIZA changed all that: the government is now merely dishonest.
Our new SYRIZA Prime Minister, Alexis Tsipras, correctly called the austerity plan “blackmail.” However, before Sunday’svote, Tsipras told the nation a big fat fib. He said we could vote down the European Bank’s plan but keep the European Bank’s coin, the euro. How? Tsipras won’t say; it’s part of a policy ploy his outgoing finance minister Yanis Varoufakis calls “creative ambiguity.” To translate: Creative ambiguity is Greek for “bullshit.”
Sorry, Alexis, if you want to use the Reich’s coin you have to accept the Reichsdiktat.
Not a coin, a virus
Tsipras’ claim that Greece can keep the euro while rejecting austerity is crazy-talk. The fact is that German Chancellor Angela Merkel, the Cruella De Vil of the Eurozone, will ignore the cries of the bleeding Greeks and demand we swallow austerity–or lose the euro.
But, so what if we lose the euro? The best thing that can happen to Greece, and should have happened long, long ago, is that Greece flee the Eurozone.
That’s because it is the euro itself that is the virus responsible for Greece’s economic ills.
Indeed, the sadistic commitment to “austerity” was minted into the coin’s very metal. We’re not guessing. One of us (Palast, an economist by training) has had long talks with the acknowledged “father” of the euro, Professor Robert Mundell. It’s important to mention the other little bastard spawned by the late Prof. Mundell: “supply-side” economics, otherwise known as “Reaganomics,” “Thatcherism” — or, simply “voodoo” economics.
The imposition of the euro had one true goal: To end the European welfare state.
For Mundell and the politicians who seized on his currency concept, the euro itself would be the vector infecting the European body politic with supply-side Reaganomics. Mundell saw a euro’d Europe as free of trade unions and government regulations; a Europe in which the votes of parliaments were meaningless. Each Eurozone nation, unable to control neither the value of its own currency, nor its own budget, nor its own fiscal policy, could only compete for business by slashing regulations and taxes. Mundell said, “[The euro] puts monetary policy out of the reach of politicians” Without fiscal policy, the only way nations can keep jobs is by the competitive reduction of rules on business.”
Here’s how it works. To join the Eurozone, nations must agree to keep their deficits to no more than 3% of GDP and total debt to no more than 60% of GDP. In a recession, that’s plain insane. By contrast, President Obama pulled the USA out of recession by increasing deficit spending to a staggering 9.8% of GDP, and he raised the nation’s debt to 101% from a pre-recession 62%. Republicans screamed, but it worked. The US has lower unemployment than any Eurozone nation.
As Obama scolded the European tormentors of Greece: “You cannot keep on squeezing countries that are in the midst of depression.” Cutting spending power only leads to less spending which leads to further cuts in spending power — a death spiral we see today in the Eurozone from Greece to Italy to Spain–but not in Germany.
“Not in Germany.” There’s the rub. Normally, a nation such as Greece can quickly recover from debt-induced recession by devaluing its currency. Greece would become a dirt cheap tourist destination once more and its lower-cost exports would zoom, instantly increasing competitiveness. And that’s what Germany can’t allow. Germany lured other European nations into the euro in order to keep them from undercutting Germany’s prices in export markets.
Restricted by the 3% deficit rule, the only recourse left for Eurozone debtors: pay the piper with “austerity” measures.
Tsipras in Wonderland
So therein lies the lie. Tsipras tells his fellow Greeks that we can live in a Looking Glass world, where we can have our euro and eat it too; that we can stay handcuffed to the euro but run free without austerity.
The nonsense continues: Following the announcement of the official results of the referendum on Sunday night, Tsipras tweeted that the Greek electorate voted for a “Europe of solidarity and democracy,” while the now-resigned finance minister Varoufakis tweeted that “Greece’s place in the Eurozone is non-negotiable,” claiming that he would not allow the “only alternative,” the old drachma trading alongside the euro.
SYRIZA’s euro-fetish was already evident in its pre-referendum proposals to the IMF and European Bank, a 47-page document which included 8 billion euros in new austerity measures plus a new round of sell-offs of state industries, the maintenance of a primary surplus of 1% this year which would increase in the coming years, the increase of the retirement age to 67, and making permanent the previously “temporary” taxes upon an already overtaxed populace. In Tsipras’ own proposal, there was no word of a debt write-down or stoppage of payments, despite the fact that the government’s own Debt Audit Commission announced on June 17 that the bulk of Greece’s debt is illegal, “odious,” and should not be paid.
Instead, Tsipras has come out in support of the IMF’s proposal for a mere 30% “debt haircut” and a 20-year grace period, effectively sweeping the problem under the rug. Greece is currently running a deficit, meaning that in order for the 1% surplus to be achieved, SYRIZA must cut, cut, cut. Exactly as Mundell and the supply-siders intended.
Death by “Reform”
Like Obama, Tsipras knows that cutting pensions, privatizing and closing industries, slashing wages — in other words, “austerity” — or, to use the latest jargon, “reform” — is not just cruel, it’s plain stupid: it can only push a nation in recession into depression.
That’s not just theory. The Troika (the European Central Bank, IMF and European Commission) first imposed their vicious austerity measures on Greece in 2010. Greeks watched their annual salaries plummet to half of a German’s paycheck. Greece’s supposedly generous pensions have been cut eight times during the crisis, while two-thirds of pensioners live below the poverty line. Everything from Greece’s airports to harbors, the national lottery to prime publicly-owned real estatewas sold off, while schools and hospitals were shuttered.
And, for the first time since World War II, widespread starvation had returned. 500,000 children in Greece are said to be malnourished. Students fainting from hunger in frigid schools which cannot afford heating oil is now a common phenomenon.
This cruel “belt tightening,” the Troika promised, would restore Greece’s economy by 2012 (and then 2013, 2014, and 2015). In reality, unemployment went from a terrible 12.5% in 2010 to a horrendous 25.6% today.
Now, the Troika demands more of the same, a continuation of this disastrous policy.
Crashing into Africa?
Meanwhile, following the referendum result which made him a hero, finance minister Varoufakis resigned. Ironically, while Varoufakis rubbed German officials the wrong way with his unorthodox style, he, too, maintained the pro-euro myth. Previous austerity measures continued under his watch. To please the mad austerity masters, he said he would “squeeze blood from a stone” to repay the IMF–which he did in May, when all remaining funds in the Greek Treasury were rounded up by presidential decree to make that month’s IMF loan payment. Varoufakis was so wedded to the euro that he claimed that Greece would be unable to print its old currency, the drachma, because we destroyed our currency printing presses when we joined the euro. In fact, the government’s banknote printing facility in Athens still operates, printing the 10-euro note.
Meanwhile, our future flees. A quarter million university graduates have abandoned our nation. They have no choice: unemployment for those under 25 has hit 48.6%.
I know that many Greeks, Cypriots, Italians and Portuguese all express a visceral fear of leaving the euro. Depending on which polls one chooses to believe, anywhere from a near-majority to an overwhelming majority of Greeks wish to remain in the euro at all costs. From the hysterical statements I heard from some Greeks that, “We cannot leave Europe!”, you’d think that dropping the euro will cause Greece to break off at the Albanian border and crash into Africa.
It would be refreshing to hear political leaders say the honest economic truth: “Workers of Europe unite! You have nothing to lose but the euro–and your chains.”
Starting in July, a new law in Kansas will restrict the amount of cash a welfare recipient can take out of ATM’s to just $25 a day—a move that critics say introduces a whole new host of financial burdens—including high ATM fees and travel costs—when they access cash.
Max Ehrenfreund at the Washington Post explains:
Since most banking machines are stocked only with $20 bills, the $25 limit is effectively a $20 limit. A family seeking to withdraw even $200 in cash would have to visit an ATM 10 times a month, a real burden for a parent who might not have a car and might not live in a neighborhood where ATMs are easy to find.
The law, backed by a GOP-dominated Kansas legislature and Republican Gov. Sam Brownback, will benefit the pockets of large banks while taking money from poor families who rely on food stamps.
In Kansas’s system, every withdrawal incurs a $1 fee, and if the beneficiary doesn’t have a bank account, they will have to pay the ATM fee, too. Those fees might be worth it for some families, though, because the card issued by the state of Kansas isn’t like a debit card from an ordinary bank. Ordinary debit cards allow their holders to make purchases for free in stores. In Kansas, beneficiaries get two free purchases a month. After that, they pay 40 cents every time they use the card to buy something.
The ostensible rationale for this redistribution of wealth is to minimize waste and prevent low income residents from spending their money on non-essentials like alcohol and the much-feared lobster feast. This is the demonizing-the-poor trope that Republican lawmakers frequently deploy to justify punitive control over how low income people spend their money. In addition to the limit on withdrawals, the state’s new law carries restrictions to ludicrous levels by prohibiting spending on items such as swimming pools and fortune telling sessions.
As Mother Jones has written in the past, such concerns are wildly misplaced and seriously hurt the poor. President Obama recently addressed this conservative characterization, calling out Fox News for portraying the poor as lazy “leeches” eager to waste government funds.
Fortunately, Kansas’ controversial new provision may actually turn out to be illegal, violating federal law that mandates welfare recipients “have adequate access to their cash assistance” without enduring high fees.
A new free trade agreement being pushed by the Obama administration could allow foreign corporations to challenge American laws and regulations before international tribunals.
The Trans-Pacific Partnership (pdf) (TPP), being negotiated between the U.S. and governments throughout the Western Hemisphere and the Pacific region, includes a provision authorizing companies to sue the U.S. government for actions that undermine their investment “expectations” and damage their business opportunities.
The controversial section of the treaty, kept hidden as part of the ongoing negotiations for the TPP, was only revealed after The New York Times obtained a copy of the classified document with help from WikiLeaks.
The language could be used by corporate lawyers in other nations to challenge U.S. federal, state or local laws, regulations, court rulings and government actions. Multinational companies based in Asia, North America and South America could bring such challenges to legal bodies operated by the World Bank or the United Nations.
The provision amounts to “a scheme hidden inside a scam,” wrote AlterNet’s Jim Hightower. Twenty-four of the 29 chapters in the accord, he says, “create a supranational scheme of secretive, private tribunals that corporations from any TPP nation can use to challenge and overturn [U.S.] laws. All a corporate power has to do to win in these closed proceedings is to show that a particular law or regulation might reduce its future profits.”
“It’s been negotiated among trade officials of the 12 countries in strict secrecy,” he added. “Even members of Congress have been shut out — but some 500 corporate executives have been allowed inside to shape the ‘partnership.’”
Democrats in Congress have been the most vocal opponents of the provision, saying it would give foreign banks as well as pharmaceutical, tobacco and other companies the ability to undermine U.S. sovereignty.
“This is really troubling,” Senator Charles Schumer (D-New York) told the Times. “It seems to indicate that savvy, deep-pocketed foreign conglomerates could challenge a broad range of laws we pass at every level of government, such as made-in-America laws or anti-tobacco laws. I think people on both sides of the aisle will have trouble with this.”
Schumer and others like Senator Elizabeth Warren (D-Massachusetts) are hoping to enlist help from those on the right to fight the TPP.
“Conservatives are likely to be incensed that even local policy changes could send the government to a United Nations-sanctioned tribunal,” Jonathan Weisman wrote at the Times.
However, most GOP lawmakers reportedly favor the agreement, as they have with other free-trade pacts because of their business-friendly provisions. Obama administration officials are defending the accord and accusing its critics of drumming up fear that they say has no basis in reality.
Senator Sherrod Brown (D–Ohio) says the entire agreement is problematic, not only the “investment expectations” section. “This continues the great American tradition of corporations writing trade agreements, sharing them with almost nobody, so often at the expense of consumers, public health and workers,” he told the Times.
Meanwhile, negotiations on the pact are said to be nearing completion.
By now it’s a Republican Party tradition: Every year the party produces a budget that allegedly slashes deficits, but which turns out to contain a trillion-dollar “magic asterisk” — a line that promises huge spending cuts and/or revenue increases, but without explaining where the money is supposed to come from.
But the just-released budgets from the House and Senate majorities break new ground. Each contains not one but two trillion-dollar magic asterisks: one on spending, one on revenue. And that’s actually an understatement. If either budget were to become law, it would leave the federal government several trillion dollars deeper in debt than claimed, and that’s just in the first decade.
You might be tempted to shrug this off, since these budgets will not, in fact, become law. Or you might say that this is what all politicians do. But it isn’t. The modern G.O.P.’s raw fiscal dishonesty is something new in American politics. And that’s telling us something important about what has happened to half of our political spectrum.
So, about those budgets: both claim drastic reductions in federal spending. Some of those spending reductions are specified: There would be savage cuts in food stamps, similarly savage cuts in Medicaid over and above reversing the recent expansion, and an end to Obamacare’s health insurance subsidies. Rough estimates suggest that either plan would roughly double the number of Americans without health insurance. But both also claim more than a trillion dollars in further cuts to mandatory spending, which would almost surely have to come out of Medicare or Social Security. What form would these further cuts take? We get no hint.
Meanwhile, both budgets call for repeal of the Affordable Care Act, including the taxes that pay for the insurance subsidies. That’s $1 trillion of revenue. Yet both claim to have no effect on tax receipts; somehow, the federal government is supposed to make up for the lost Obamacare revenue. How, exactly? We are, again, given no hint.
And there’s more: The budgets also claim large reductions in spending on other programs. How would these be achieved? You know the answer.
It’s very important to realize that this isn’t normal political behavior. The George W. Bush administration was no slouch when it came to deceptive presentation of tax plans, but it was never this blatant. And the Obama administration has been remarkably scrupulous in its fiscal pronouncements.
O.K., I can already hear the snickering, but it’s the simple truth. Remember all the ridicule heaped on the spending projections in the Affordable Care Act? Actual spending is coming in well below expectations, and the Congressional Budget Office has marked its forecast for the next decade down by 20 percent. Remember the jeering when President Obama declared that he would cut the deficit in half by the end of his first term? Well, a sluggish economy delayed things, but only by a year. The deficit in calendar 2013 was less than half its 2009 level, and it has continued to fall.
So, no, outrageous fiscal mendacity is neither historically normal nor bipartisan. It’s a modern Republican thing. And the question we should ask is why.
One answer you sometimes hear is that what Republicans really believe is that tax cuts for the rich would generate a huge boom and a surge in revenue, but they’re afraid that the public won’t find such claims credible. So magic asterisks are really stand-ins for their belief in the magic of supply-side economics, a belief that remains intact even though proponents in that doctrine have been wrong about everything for decades.
But I’m partial to a more cynical explanation. Think about what these budgets would do if you ignore the mysterious trillions in unspecified spending cuts and revenue enhancements. What you’re left with is huge transfers of income from the poor and the working class, who would see severe benefit cuts, to the rich, who would see big tax cuts. And the simplest way to understand these budgets is surely to suppose that they are intended to do what they would, in fact, actually do: make the rich richer and ordinary families poorer.
But this is, of course, not a policy direction the public would support if it were clearly explained. So the budgets must be sold as courageous efforts to eliminate deficits and pay down debt — which means that they must include trillions in imaginary, unexplained savings.
Does this mean that all those politicians declaiming about the evils of budget deficits and their determination to end the scourge of debt were never sincere? Yes, it does.
Look, I know that it’s hard to keep up the outrage after so many years of fiscal fraudulence. But please try. We’re looking at an enormous, destructive con job, and you should be very, very angry.
Putin has called for a “new world order,” with the aim of stabilizing the globe. He believes the US is abusing its role as global leader. What’s not being widely reported is the fact that the pillars of the old order have been crumbing for years.
It used to be all so simple. The world was split into two camps – the West and the rest. And the West was truly the best. Twenty years ago, six of the world’s biggest economies were part of the pro-Washington world.
The leader, the US itself, was so far in front that its total Gross Domestic Product (GDP) was more than four times larger than China’s and nine times the size of Russia’s.
The world’s most populous country, India, had almost the same gross income as comparatively tiny Italy and the UK. Any notion that the order would change so dramatically in a mere two decades seemed laughable.
The Western perception was that China and India were backward and would take a century to become rivals. Russia was seen as a basket case, on its knees and ruled by chaos. There was a lot of merit in that notion in the 90’s.
US setting sun
Now the joke is on the West. The International Monetary Fund (IMF) estimates that by 2015, four of the world’s top economies will be members of the club known by its acronym, BRIC (Brazil, Russia, India, China). China will replace the US as top dog. This might already have happened; economic figures tend to lag behind economic facts.
Italy, the sick man of Europe, is out of the top 10 and the UK is barely hanging on, although London is still promoted as a financial powerhouse. The only people who believe that anymore are little Englanders. The UK has become the Julie Andrews of geopolitics, a fading star that was once luminous. France is impotent, lurching from crisis to mishap and back again.
It’s too soon to write off the US. The empire isn’t going to end any day soon, but the sun is lower in the sky. This is less the fault of the US and more to do with the diminishing importance of its traditional allies.
Indeed, the only two that are still holding their own are Germany and Japan, neither of which are serious military players. Britain and France have long supplied the heft for martial adventures. In reality, Germany is not a hugely enthusiastic partner because a large section of Berlin’s political class is extremely skeptical of US power. Significant numbers of the German intelligentsia feel that Moscow is their natural ally – not Washington.
The rise in importance of the BRICs and other emerging economies has major implications for global consumption, business, and investment. By 2020, the IMF estimates that Russia will have overtaken Germany, and India will outperform Japan. They also forecast a fall in US global share from 23.7 percent in 2000 to 16 percent by 2020. In 1960, the US represented 38.7 percent of the world’s economy. Conversely, in 1987, China scored only 1.6 percent – but at the end of this decade it will claim 20 percent. This is unprecedented change in a relatively short time.
Importance of stability
Putin’s speech at the Valdai Club was not a wild stab in the dark. It’s a nuanced understanding of where the global balance currently sits and is heading over the coming years. The US hegemony was based on the fact that, along with its allies, it controlled the bulk of global trade as well as wielding a big military stick. That is now history.
Rather than engage with Putin’s issues, the Western media has mostly played the man and not the ball. Op-eds described his speech as a “diatribe” and assumed Putin was singularly focused on US foreign policy which he believes is anti-Russian. That misses the point.
Putin’s concern is for stability and predictability, which is the antithesis of modern Western liberalism. In fact, Putin’s position is closer to that of past visions for world order promoted by the likes of Konrad Adenauer’s CDU in Germany and Harold Macmillan’s British Tories, classic European conservatism.
Putin is often misunderstood in the West. His public statements, aimed more at a domestic audience than an international one, come across as aggressive, almost chauvinistic. But observers would do well to remember that he is a judo master whose moves are calculated to confuse and wrong-foot an opponent. Reading between the lines, the Russian president is seeking engagement – not isolation.
The Russian president envisages his country as part of a new international alternative, joining with the other BRIC nations to restrain US aggression wherever possible. Putin sees this as the path to stability. Adenauer and Macmillan would have understood this perfectly but modern European and North American leaders don’t get it. Drunk on the dominance they have enjoyed over the past 20 years, the penny has yet to drop that the global order is rapidly changing.
How the US reacts to the new reality will be vital. In an almost cartoon-like way, Washington discourse is now focused on the NSA, spooks, shadow governments, a lost and pathetic fourth estate, squandered militaristic might, and rampant, terrifying nationalism. This juvenility requires a bad guy. In a decade, it has moved from Bin Laden, Saddam, and ‘Freedom Fries’ to Russophobia. If the American elite maintain the same behavior, the transition to a multi-polar world mightn’t be peaceful. That’s the fear, and that fear is real.