Friday, April 20, 2012

Will Americans get their "Irish" up?

Where democracy took a stand and the bankers and barons paid

By Mike Krauss
Bucks County Courier Times

It’s not much in the news in the U.S., because people might get the wrong idea about all the good things austerity can do for a nation, but Greece is falling apart and democracy is dying there.

Some will argue that democracy is not doing all that well in the U.S., but Greece points to how bad it can get. Shops are shuttered, beggars wander aimlessly, hospitals report rising and alarming rates of suicide and mental illness. The Orthodox Church in Athens reports a food emergency, children starving.

In order to protect the banks and bondholders from losses on the debt they piled on Greece — much of it artfully concealed in complicated transactions that misled investors and even European regulators — the Greek people no longer have a democratic government. Like Italy, and soon perhaps Spain, the “prime minister” was appointed by — well, that’s not clear.

The Financial Times describes it this way: “In exchange for the most recent financing, the Greek government has had to cede part of its sovereignty to the Troika (the European Union, European Central Bank and International Monetary Fund).

“The lobby of the elegant Hotel Grande Bretagne on Syntagma Square swarms with north European lawyers and bureaucrats and their assistants laden with files. It is they who now determine Greece’s future. Many come from the law firms that advise the giants of global finance and the EU, the very institutions that helped create the Greek debt crisis.”

But the appointed Greek prime minister has excellent credentials. Like his opposite number in Italy, as well as the president of the European Central Bank and at least a dozen high ranking European ministers, he came up through the ranks on the flagship of the Wall Street pirate fleet, Goldman Sachs.

And what has the new Greek management done? They have laid off enough workers to drive official unemployment to 21.5 percent, cut pensions by 25 percent and state salaries by 60 percent. Unemployment is even more catastrophic among the young, as it is throughout Europe as austerity works its magic — about 50 percent.

Have a nice future.

But not all was lost. As European newspapers have reported, while European governments, led by the Germans, were telling the Greeks their credit was shot unless they agreed to cannibalize their economy, they financed more than $1.2 billion in military hardware to Greece — German aircraft, a French submarine, etc — and are demanding that the contracts may not be canceled, but must be paid for out of the “rescue” package imposed on the Greek people.

On both sides of the Atlantic, the military contractors get a pass on austerity.

The Irish are next in the bankers’ sights, but they are proving less amenable to coercion and have scheduled a referendum; partly because having already bowed once to the bankers’ demands, their economy is in a rapid descent to ruin.

Ireland may be where democracy makes a stand in Europe.

But if it is, it won’t be the first. Ireland is thought of by many as the frontier of Western Europe, the last island past England on the way to the New World. But it isn’t. Far out in the North Atlantic, little Iceland has already fought the bankers — and won. And while this may be news to Americans, the Irish know the story.

The same Wall Street special that blew up Ireland, then Greece and now threatens Italy and Spain, even as it devastates families and communities across the U.S., hit Iceland first. But while the rest of Europe, led by the U.S. rushed to bail out the bankers, Iceland let its big banks go down and defaulted on its debt to the big English and Dutch banks.

Today, Iceland’s economy is actually recovering, and three weeks ago, after three years of preparation, Iceland’s equivalent of the Wall Street barons went on trial — after the former prime minister was put on trial.

Iceland’s new prime minister sees this as therapeutic, and said in a recent speech that “the wide-ranging criminal investigation that is being conducted against reckless financiers” will help bring about “a national reconciliation” and “heal the wounds that the collapse inflicted.”

An Icelandic businessman who lost his 20-year-old construction company in the collapse put it differently, saying, “What is important is that this is the year when the bankers hopefully are made to pay.”

No such day of reckoning appears on the horizon in the U.S. The GOP and Democratic candidates for president, and most candidates for Congress seem determined only to talk about the twin catastrophes of unemployment and foreclosures and a rising tide of human misery, and focus on “fiscal responsibility” and protecting the wealth of their major donors in the 1 percent. The U.S. Department of Justice gave the barons on Wall Street a pass.

Certainly, there is nothing in the U.S. news about the trial of the bankers in Iceland. I mean, we wouldn’t want to send the wrong message to the American people.

But who knows? If little Iceland can tell the bankers where to get off, and the Irish people say “No” to more punishment for the sins of the bankers, maybe Americans will finally get their “Irish” up.

Mike Krauss, formerly of Levittown, is an international logistics executive and chairman of the Pennsylvania Project. Email:

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