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Trojan Hearse: 
Greek Elections and the Euro Leper Colony

By Greg Palast for το χωνί (Greece)
[updated January 20, 2015]



Europe is stunned, and bankers aghast, that polls show the new party of the Left, Syriza, will win Greece’s parliamentary elections to be held this coming Sunday, January 25.
 
Syriza promises that, if elected, it will cure Greece of leprosy.
Oddly, Syriza also promises that it will remain in the leper colony.  That is, Syriza wants to rid Greece of the cruelty of austerity imposed by the European Central Bank but insists on staying in the euro zone.
 
The problem is, austerity run wild is merely a symptom of an illness.  The underlying disease is the euro itself. 
 
For the last five years, Greeks have been told that, if you cure your disease—that is, if you dump the euro—the sky will fall.  I guess you haven’t noticed, the sky has fallen already.  With unemployment at 25%, with Greek doctors and teachers eating out of garbage cans, there is no further to fall.
 
In 2010, when unemployment was a terrible 10%, a year into the crisis, the “Troika” (the European Central Bank, European Commission and the International Monetary Fund) told the Greeks that brutal austerity measures would restore Greece’s economy by 2012. 
 
Ask yourself, Was the Troika right? 
 
There is a saying in America:  Fool me once, shame on you.  Fool me twice, shame on me.
 
Can Greece survive without the euro?  Greece is already dead, but the Germans won’t even bother to bury the corpse.  Greeks are told that if they leave the euro and renounce its debts, the nation will not be able to access world capital markets.  The reality is, Greece can’t access world markets now:  no one lends to a corpse.
 
There’s a way back across the River Styx.  But it’s not by paddling on a euro.
 
There’s Life after Euro
Many nations do quite well without the euro.  Sweden, Denmark and India do just fine without the euro—and so does Turkey, which had the luck to be excluded from the euro-zone.  As long as Turks stick to the lira, even Turkey’s brain-damaged Islamo-fascist President Tayyip Erdoğan cannot destroy their economy.
 
Can Greece just dump the euro?  They have happy precedents to follow.  Argentina was once pegged to the US dollar much as Greece is tied to the euro today.  In 2000, Argentines, hungry and angry, revolted.  Argentina ultimately overthrew the dollar dictatorship, the IMF diktats and the threats of creditors, and defaulted on its dollar bonds.  Free at last!  In the decade since, the Argentine economy soared.  Yes, today, Argentina is under attack by financial vultures, but that is only because the nation became so temptingly wealthy.
 
I was in Brazil when its President Luiz Inácio Lula da Silva told the IMF to go to hell—and rejected privatization of the state banks and the state oil company, rejected cutting pensions and thumbed his nose at the rest of the austerity nonsense. Instead, Lula created the bolsa familia, a massive pay-out to the nation’s poor.  The result: Brazil not only survived but thrived during the 2008-10  world financial crisis.  Despite pressure, Brazil never ceded control of its currency. (It is a sad irony that Brazil is only now faltering.  That’s the fault entirely of Lula’s successor, President Dilma Rousseff,  who is beginning to dance the austerity samba.)
 
Austerity:  Religion, Not Economics
The euro is simply the deutschmark with little stars on it.  Greece cannot adopt Germany’s currency without adopting Germany’s finance minister, Wolfgang Schäuble, as its own. 
 
And Schäuble has determined that Greece must be punished.  As my homey Paul Krugman points out, there is no credible economic theory that says that austerity—that is, cutting government spending, cutting wages, cutting consumer demand—can in any way help a nation in recession, in deflation.  That’s why, in 2009, Obama ordered up stimulus, not a sleeping pill. 
 
But austerity has nothing to do with economics.  It is religion:  the belief by the stern Lutheran Germans that Greeks have had too much fun, spent too much money, and spent too much lazy time in the sun—and now Greeks must pay a price for their sins.
 
Oddly, I hear this self-flagellating nonsense from Greeks themselves:  we are lazy.  We deserve our punishment.  Nonsense.  The average Greek works more hours in a year than any other worker in the 34 nations of the OECD; Germans the least.  
 
The Euro’s Father Describes his Little Bastard
Alexis Tsipras, the leader of Syriza, would like to pretend that austerity and the euro are two different things, that you can marry the pretty girl but not invite her ugly sister to the wedding. Apparently, the Syriza chief is blissfully ignorant of the history of the euro.  The horror of austerity is not the consequence of Greek profligacy:  it was designed into the euro’s plan from the beginning.
 
This was explained to me by the father of the euro himself, economist Robert Mundell of Columbia University.  (I studied economics with Mundell’s buddy, Milton Friedman.)  Mundell not only invented the euro, he also fathered the misery-making policies of Thatcher and Reagan, known as “supply-side economics” – or, as George Bush Sr. called it, “voodoo economics.”  Supply-side voodoo is the long-discredited belief that if a nation demolishes the power of unions, cuts business taxes, eliminates government regulation and public ownership of utilities, economic prosperity will follow.
 
The euro is simply the other side of the supply-side coin.  As Mundell explained it, the euro is the way in which congresses and parliaments can be stripped of all power over monetary and fiscal policy.  Bothersome democracy is removed from the economic system.  “Without fiscal policy,” Mundell told me, “the only way nations can keep jobs is by the competitive reduction of rules on business.”   
 
Greece, to survive in a euro economy, can only revive employment by reducing wages.  Indeed, the recent tiny reduction in unemployment is the sign that Greeks are slowly accepting a permanent future of low wages serving piña coladas to Germans on holiday cruises.
 
It is argued that Greece owes Germany, the IMF and the European Central Bank for bail-out-billions.  Nonsense.  None of the billions in bail-out funds went into Greek pockets.  It all went to bail out Deutsche Bank and other foreign creditors.  The EU treasuries swallowed 90% of its private bankers’ bonds.  Germany bailed out Germany, not Greece.
 
Nevertheless, Greece must pay Germany back, Mr. Tsipras, if you want to continue to use Germany’s currency, that is.
 
Greece:  Goldman Sacked
Greece’s ruin began with secret, fraudulent currency swaps, designed a decade ago by Goldman Sachs, to conceal Greek deficits that exceeded the euro zone’s 3%-of-GDP limit.  In 2009, when the truth came out, Greek debt holders realized they had been cheated.  These debt buyers then demanded usurious levels of interest (or, if you prefer, a high “spread”) to insure themselves against future fraud.  The compounding of this interest premium brought the Greek nation to its knees.  In other words, the crimes committed to join and stay in the euro, not Greek profligacy, caused the crisis.

The USA, Brazil and China escaped from depression by controlling their money supply, government spending and currency exchange rates—crucial tools Greece gave up in return for the euro.

Worse, once the Trojan hearse of the euro entered Athens, tourism, Greece’s main industry, drained to Turkey where hotels and souvenirs are priced in cheap lira.  This allowed Dr. Mundell’s remorseless wage-lowering machine, the euro, to do its work, to force Greece to strip all its workers of pensions and power.  
 
Greece fell to its knees, with no choice but to beg Germany for mercy.
 
But there is no mercy.  As Germany’s Schäuble insists, democracy, this week’s vote, means nothing.  "New elections change nothing in the accords struck with the Greek government,” he says.  “[Greeks] have no alternative.”
 
Ah, but they do, Mr. Schäuble.  They can tell you to take your euro and shove it up your Merkel.
 
Investigative reporter Greg Palast’s book, Vultures’ Picnic, with the no-BS inside story of the financial collapse, will soon be released in a Greek edition by Livanis.   

Greg Palast is the author of
several  New York Times bestsellers including The Best Democracy Money Can Buy and Billionaires & Ballot Bandits.

Palast is a Puffin Foundation Fellow for Investigative Reporting.

Greg Palast wins December Sidney Award
for Exposing a Defective Database that Endangers
the Votes of Millions of People of Color

NEW YORK – Greg Palast wins the December Sidney Award for “Jim Crow Returns,” and “Challenging Crosscheck,” a two-part Al Jazeera America exposé that shows how millions of innocent people were flagged as suspected vote fraudsters just because they have the same first and last name as someone in another state.

On the eve of the 2014 elections, officials had begun to purge voters based upon Interstate Crosscheck, voter fraud prevention software. More than 40,000 voters were dropped from the rolls in Virginia alone.

Read The Backstory, our Q&A with Greg Palast.

The Crosscheck program, used in 28 states, is ostensibly designed to prevent voter fraud by identifying people who voted in different states in the same election. The system is billed as a sophisticated fraud-detection tool, but Crosscheck lists obtained by Palast for three states show that the system matches on first and last name alone. Crosscheck flagged more than 2 million names in those three states, Palast found.

“It was absolute murder trying to get the Crosscheck lists out of the hands of these highly political agencies,” Palast said. “They knew damn well the lists were phonies—just common ethnic names, an excuse to knock off Democrats—and dynamite if exposed.”
 
In the states Palast studied, anyone with a common name is at risk, but the system disproportionately flags voters of color: If you’re white, you have a 1 in 11 chance of being flagged. If you’re Asian or Hispanic, your odds are 1 in 8. If you’re black, the odds are 1 in 7 that someone in another Crosscheck state shares your first and last name.

Check Al Jazeera’s interactive database to see if your name is in on the list.

“Greg Palast has uncovered a major threat to voting rights,” said Sidney judge Lindsay Beyerstein. “Crosscheck is casting unwarranted suspicion on innocent people and endangering their right to vote.”

Greg Palast produces investigative reports for the Guardian, BBC TV, and other outlets. Before becoming a reporter, he was an investigator of corporate crime and racketeering for governments and labor unions worldwide. He is the author of several books including “The Best Democracy Money Can Buy” and “Vulture’s Picnic.”

“Jim Crow Returns” was produced by Alex Newman, Steve Melendez, Tate Strickland, John Thomason, and Lam Thuy Vo, edited by Mark Rykoff and Jayati Vora, with photographs by Zach D. Roberts and interactive production by Alex Newman.

Al Jazeera America’s broadcast of "Crosscheck" was produced by Hanaan Sarhan, with Richard Rowley as director of photography.

*  *  *  *  *  *  *
The Sidney Hillman Foundation honors excellence in journalism in service of the common good. Judges are Rose Arce, Ta-Nehisi Coates, Hendrik Hertzberg, Katrina vanden Heuvel, Harold Meyerson and Lindsay Beyerstein.

The Sidney Award is given once a month to an outstanding piece of journalism about social or economic injustice, by the Sidney Hillman Foundation, which also awards the annual Hillman Prizes every spring. Winners of the Sidney receive a certificate designed by New Yorker cartoonist, Edward Sorel, a $500 honorarium and a bottle of union-made wine.
For 15 years, Greg Palast has been uncovering voter suppression tactics in investigative reports for BBC Television, The Guardian, Harper’s and Rolling Stone. 

Greg Palast is the author of
several  New York Times bestsellers including The Best Democracy Money Can Buy and Billionaires & Ballot Bandits.

Palast is a Puffin Foundation Fellow for Investigative Reporting.
 
Follow Palast on Twitter | Like Palast on Facebook | Forward to a frien

                                        OCCUPY

GregPalast.com

BP and the Three Stooges Defense
By Greg Palast for Truthdig
Thursday, 26 September 2014


GregPalast.com

Forget Stephen King. If you want scary, read U.S. District Judge Carl Barbier’s 150-page Findings of Fact released Thursday in the Deepwater Horizon case.

Although the judge found BP liable for “gross negligence,” some U.S. media failed to mention that Barbier let BP off the hook on punitive damages. And that stuns me, given that the record seems to identify enough smoking guns to roast a sizable pig. 

Here’s a standout example:

Every rig operator knows that, before a rig can unhook from a drill pipe, the operator has to run a “negative pressure test” to make sure the cement has properly sealed the drill pipe. If the pipe is safely plugged, the pressure gauge will read zero. The amount of pressure BP measured at 5 p.m. on April 20, 2010, the day of the explosion? 1400 psi (see the findings, pages 62-65). So, how could the company record zero? Answer: BP’s crew re-ran the test measuring the pressure in something called the “kill line,” which is definitely not the drill pipe.

By reporting that the pipe had no pressure and all was safe, BP could begin to unhook the Deepwater Horizon from the pipe—and sail away. Why would BP do that? In my view, there were three motives: money, money and money. It costs BP a good half million dollars each extra day the rig stays on top of the drill hole. It seems that BP wanted the rig gone and quickly.

So, instead of halting the disconnection process, BP appears to have lied and recorded the pressure reading as “zero.” The rig’s owner, Transocean of Switzerland, went along with BP’s actions.

So how did BP get away with mere “gross negligence” as opposed to the more serious claim of fraud? Because the court found that the blowout, explosion, fire and oil spill were caused by “misinterpretation of the negative pressure test.”

Misinterpretation? If a woman says “thanks” when you say she’s dressed nicely and you think she wants a kiss, that’s “misinterpretation.” But on the Deepwater Horizon, the drill pipe gauge read 1400 psi and BP picked a different pipe that gave the company the magic zero. That’s not, I contend, “misinterpretation.”

Maybe the judge thought he was pretty tough by calling out BP for “gross” negligence (rather than plain-vanilla negligence, the finding against Transocean and contractor Halliburton). But, in fact, it seems Barbier fell for the Three Stooges defense.

Throughout the 150-page decision, the judge cites one instance after another of bone-headed, buffoonish, slapstick decisions, and plenty of pratfalls and banana-peel slips by BP, Transocean and Halliburton. You have to wonder how these schmucks even found their drill hole. It was a corporate Larry-Moe-and-Curly-Joe routine that would provide a lot of belly laughs if 11 men hadn’t died as a result.

I’ve seen the Three Stooges defense before in federal court. In 1988, the corporate owner and the builder of the Shoreham nuclear plant were on trial on accusations they bilked their New York customers out of $1.8 billion. In court, they pleaded stupidity and incompetence as a defense against deliberate deception. As the government’s investigator, I didn’t buy it—billion-dollar corporations can’t be that stupid—and neither did the jury. (The racketeering charges were settled after trial for $400 million.)

And here is a new set of Stooges: BP plays Larry, Transocean puts on Moe’s wig and Halliburton makes “Nyuk! Nyuk! Nyuk!” sounds like Curly Joe. Halliburton, the judge found, failed to test the final cement mix and BP bitched about it—“[Halliburton engineer Jesse Gagliano] isn’t cutting it any more,” reads an email between two BP managers on the rig—but BP went ahead and used the bad cement anyway (Findings, paragraphs 227-228). 

When the pressure in the drill pipe read 1400 psi, BP and Transocean managers should have stopped the rig departure immediately. They didn’t. Nevertheless, other systems should have prevented a blowout. According to Barbier, other safety systems were jacked with to save a penny here, a penny there (or, a million here, a million there). Example: BP used leftover cement (Findings, paragraphs 209-211) that contained chemicals that destroyed the integrity of the new cement, because using the old stuff saved some serious cash.

And this leads to the question of punitive damages.

...

1400 psi is not zero. Stick a balloon in your mouth with zero pressure and nothing happens except that you look silly. Replace the balloon with a hose delivering a 1400 psi blast and it’ll blow your skull apart.

...


So maybe it was not the judge but the public that was blinded by the government and media crowing about a possible $18 billion fine for gross negligence. Eighteen billion dollars may sound like a lot to us mere mortals, but to a trillion-dollar behemoth like BP, it is not a punishment, but a reasonably priced permit for plunder.
Greg Palast is the author of the New York Times bestsellers, Billionaires & Ballot BanditsThe Best Democracy Money Can Buy, Armed Madhouse and the highly acclaimed Vultures’ Picnic, a BBC Television Book of the Year. 
Greg Palast's mailing address is:
Greg Palast
PO Box 90
Greenport, NY 11944

Greg Palast has a book  14 called Vultures' Picnic

Greg, the New York Times bestselling author of Armed Madhouse, offers a globetrotting, Sam Spade-style investigation that blows the lid off the oil and banking industries, and exposes how government agencies aren't
regulating either.

This is the story of corporate vultures that feed on the weak and ruin our planet in the process-a story that spans the globe and decades.  Palast shows how transnational economic cartels (the International Monetary Fund, World Bank, World Trade Organization, and Central Banks) act as puppets for Big Oil.

With Palast at the center of an investigation that takes us from the Arctic to Africa to the Amazon, Vultures' Picnic shows how the big powers in the money and oil game avoid regulations and break the rules to take advantage of nations and everyday people. 


Greg Palast is the author of the New York Times bestseller, "Armed Madhouse" (Penguin Paperback 2007).   When Palast (an investigator of corporate fraud and racketeering) turned his skills to journalism, he was quickly recognized as,
"The most important investigative reporter of our time" [Tribune Magazine] in Britain, where his first reports appeared on
BBC television and in the Guardian newspapers.    Greg Palast's Reel Click here to watch.  
Download the Greg Palast's Bio here.  contact@gregpalast.com