I really liked Ian Welsh’s “What passes for smart on the Greek Debt Crisis,” a response to a Kevin Drum piece, in which Welsh makes a convincing case that Drum kind of didn’t really know what he was talking about.
Basically, Welsh says, Drum and other leading liberal bloggers accept without skepticism a number of conventional (and wrong) assumptions about the catastrophic things that will happen in the event of a country not doing what it’s told to do by the world’s banking establishment. Welsh points to the less-than-cataclysmic consequences of Argentina’s and Iceland’s default. And a commenter brings up another alternative to Playing the Game According to the Rules–Malaysia, which in the 90s, instituted currency controls as opposed to doing to IMF’s bidding.
Anyway, I’ll be honest: a detailed discussion of the economics is a little beyond me (and, as per Welsh, beyond Drum and Digby, among others), but the insightful part of the Welsh piece, and the chunk I’d like to share, is in his summation of “the horribly anti-democratic nature of all this.” I’ve highlighted the best, most quotable, bits…..
There is no actual democracy in any part of the world which is attached to the Wall Street centered financial system. Calls can run up to 1000:1 against TARP and it will pass. Strong majorities can be for or against particular policies and if the elite disagrees, that’s all that matters. There are no parties to vote for if you are against the current system.
In a sense, this is fair. Westerners thought that they could have consumer democracy: they didn’t have to participate in it except at election time, when they would vote for parties and platforms paid for and produced by someone other than them. Coke(tm)/Pepsi(tm) politics – you have a choice, you can choose either Coke or Pepsi! Politicians aren’t paid by you (their salaries are the least part of their real income) why would you think they care about your concerns?
You don’t pay for politicians or politics. This is the Facebook rule: if you don’t pay the freight, you aren’t the customer, you are the product. Politicians compete for the money and favors of the rich, and what they sell is the ability to wrangle you: to pass the austerity bills, to cut the benefits, to privatize the jewels of the public system, to force through the multi-trillion dollar bailouts. They control government for the benefit of the rich.
And the rich pay all the way down the line. They control the media, right down to the bottom, to make sure that what is discusses is what they want discussed, in the terms they want it discussed. That default isn’t that bad: forbidden. That currency controls mitigate damage in these circumstances: forbidden. That lenders will lend to defaulting countries almost immediately: forbidden.
That the mere mention of a directly democratic approach to Greece’s debt woes led to widespread panic in global markets tells you all you need to know about how robust, and how undemocratic (that word again), the system is.
Papandreou has recanted, sort of, and the Greek referendum is off the table. Temporarily, I think. Whatever his motivation, the Greek PM (or former Greek PM, depending on when you read this), has let the democracy Genie out of the bottle. I don’t think it will be easy for whoever takes over to refuse a referendum in Greece. And perhaps, perhaps, this is a precedent.