Tag Archives: Austerity

Financial Warfare, Geopolitics and Macro-Economic Agendas. What Happens Behind the Scenes

By Bill Holter
February 24, 2015
Global Research


money5So much is happening behind the scenes it’s mindboggling.  This past week we of course ended with “deal or no deal” over Greece.  The “deal” the markets were hoping for really was no deal at all, the markets were only hoping for more time and ONLY more time.  You see, Greece is broke.  They only have enough money for about another week, they don’t even have enough to make their early March debt payment.  The only possible “deal” from here on is to postpone reality.  Greece cannot be allowed to make any deal other than one that puts THE deal out into the future.  They cannot accept more “aid” because the markets will see through this.  They also cannot be allowed to exit because this would then be the thread which unravels the Eurozone.  The only deal acceptable to the markets will be one where THE deal is not “dealt with”.

Friday afternoon this very scenario was announced and of course the equity markets short squeezed higher in response.  A bit prematurely in my estimation because the newly elected Greek parliament will need to ratify any agreement.  A ratification will be in direct conflict with the election results of last month, what do you suppose the populace might do?  In my opinion, the Greek people are about to explode onto the streets no matter what deal is arranged and agreed to.  Broke is broke and no deal and no amount of newly borrowed money will fix this.  As my title suggested, I believe only something from “behind the scenes” will fix their problem.

The “fix” itself may end up being a geopolitical event that turns today’s perverted world on its head.  In my opinion, the very best fix for Greece is obvious and I believe is probably already in the works.  Before getting to this, it is important to understand how “gangs” are broken up.  “Gangs” can be broken in two ways.  You can either confront the leader and emerge victorious or, you can pick away at the weak sisters one by one.  Greece is obviously a weak sister but one very strategically located geographically and politically.  Greece is also a natural “bridge” from the Russia and the Middle East to Europe.  It is also part of the “old silk road” to China and will be part of trade in the new silk road.

It is my belief that negotiations have been going on behind the scenes between Greece and the Sino-Russian alliance.  Would it not make sense for Russia and China to try to woo Greece?  Greece could be offered a pipeline deal.  This would put people to work and Greece would actually receive an income royalty flow.  From a financial standpoint, this is the very best avenue for Greece because of the income aspect, they will actually get something rather than owe more.  For Russia and China not to be offering Greece a deal would be plain dumb in my estimation.  Think about it, if Russia does build a pipeline through Turkey, “someone” has to build a pipeline through Greece.  Why wouldn’t Russia want to be “the good guy” and to their own benefit?

Additionally, think about the benefits in relation to the costs in Russia and China “picking off” Greece?  In one single and inexpensive deal, they pull the thread on NATO and the Eurozone simultaneously.  This would obviously be problematic for the Eurozone financially as debt, derivatives, banks and central banks are all wobbled.  This would then expose all of the West including the U.S..  The U.S., should Greece turn to Eastern partners, will be seen as powerless!  So you see, the catch 22 is this, no real deal can be done by the West because Greece has already been bankrupted.  They cannot be allowed to default, they cannot be forced to take on more debt AND they cannot be allowed to do what is in their own best interest, form a new partnership Eastward.  The “offers” behind the scenes must truly be unbelievable!

One thing I believe is being totally missed here is the relations between Germany and the U.S..  What must Germany and Angela Merkel be thinking?  After she was spied on and hearing Victoria Nuland ‘s comment of “screw them”, how strong are the remaining bonds?  Wouldn’t it be easier …more profitable ,,,not to mention “warmer” if Germany were to pivot toward Russia and thus the Chinese?  They obviously know our credit line is nearly completely used up, doing business with Russia and the deep pocketed China only makes sense.  Any move like this will split the Euro yes, but there will be a point in time where nations will do what is best for them.  Moving away from hegemon and moving toward free commerce makes sense, will Germany remain silent as Greece does what is best for them?  A move Eastward may even be safer for Germany as she watches NATO hardware being moved into Ukraine.  Would it benefit Germany to aid in the fracture of NATO?  I think yes but time will tell.

Elsewhere behind the scenes, Ukraine is a basket case.  The cease fire never was and the U.S. began shipping hardware including “tank busting” planes.  Ukranian troops dropped their arms and folded by the hundreds and it looks like pro Russian forces will soon, probably this week attain two goals.  They will more than likely control a corridor all the way from their own border to Crimea.  More importantly, they will probably have proof, either dead or alive of Western, non Ukranian boots on the ground.  This is important because of the rhetoric war.  Mr. Putin will be able to point at direct proof showing possibly even U.S. mercenaries as being part of the fight.  This will be a very ugly back eye for Western propaganda(ists).  All the while, the U.S. response is …more sanctions  See NYT

Now for the stuff behind the scenes that has gotten almost no media attention whatsoever.  Individually, many of these could be huge on their own, collectively, could they somehow be connected?  What is really up with Benjamin Netanyahu’s visit to Congress?  Is he trying to garner support versus Iran, or Syria?  President Obama is refusing to meet with him, how does this look?  Never mind Mr. Obama claiming that U.S. presidents do not meet with ”candidates”, why would Mr. Netanyahu not have cancelled his trip before it was even announced?  Wouldn’t he have been told through back channels, “don’t come”?  But he is coming anyway?  Does this not show a split or at least “weakness” in our alliance?

Another area is the west coast port problems. tankers are lining up day by day with nothing being offloaded.  Is this really because of the unions?  Or is it because of the port owners and operators?  What will this do to our economy and distribution chain which has run so long on “just in time” inventories?  Are the Chinese somehow behind this?  Is this a way to ”stealth” pressure our economy and financial system?  They are actually scrapping some of their tankers, do they know something we don’t know…yet?  Other than alternative media, this has gotten virtually zero coverage, why?  Is this not huge news on its own?

A very strange one this past week was seeing Langley on lockdown.  What is up with this?  I don’t even care what the official story may or may not be, because of the source.  How is it they were locked down?  Has this ever happened before?  Were they after one guy?  Re there “factions” involved?  Infighting?  Who knows, but this is very strange indeed.

Then, there was 60 the nation “terrorist summit” in Washington, I could not find any U.S. coverage of this other than this link.  What was the outcome?  They apparently discussed ISIL among other terrorist groups.  Who is really funding them?  It is believed they were a creation of the CIA now run amok.  And what about 21 Christians being beheaded?  How much media coverage did this get?  Or is it not newsworthy or something our president should condemn.Speaking of the president, his immigration “stroke of the pen” was shot down in court, has he now been rendered completely lame?  Will he now be prevented from doing further damage?

Here is how I see all of this, the pot is boiling and the warring factions are making stands, everywhere.  When I say “warring factions”, I am talking about everything from hawks and doves in the military and in the financial markets to as grand as the East versus the West.  So many people have been conditioned that the can will always get kicked down the road and nothing bad will ever be allowed to happen.  I disagree.  There are just too many flash points in multiple areas for this to continue.  Markets have priced in nothing bad from here to as far as the eye can see.  Compensation for “risk” does not exist anywhere.

I stick to my guns and warn you as sternly as possible, the markets are about to “gap”.  Something is going to break very soon and when it does, we will go into a complete lockdown of everything.  You will not be able to alter anything or any position you own.  You will not be able to “trade around” what is coming.

Whatever you own going into this is all you will own.  You will not be allowed to “change” investments as very likely the banking system itself goes on a holiday.

It is what’s going on behind the scenes which is oh so important, but, we cannot be privy to it.  We can however put enough data points together to see that financial, economic and currency “war” has already begun.  Do not wait until the media announces this, by then it will be far too late even if timely and reported the following day!



Syriza capitulates to the EU

By Robert Stevens
February 21, 2015
World Socialist Web Site


The Greek government has repudiated its election pledges, agreeing Friday to a four-month extension of the existing loans and austerity programme dictated by “troika” of the European Commission, European Central Bank and the International Monetary Fund.

After nearly a month of negotiations with the political representatives of the European banks, Syriza has accepted the conditions demanded by the troika. The Eurogroup statement noted the agreement remained conditional on Greece presenting, on Monday, a “first list of reform measures, based on the current arrangement.”

Syriza’s proposals must be approved the following day by the Eurogroup and the troika, who will “provide a first view whether this is sufficiently comprehensive to be a valid starting point for a successful conclusion of the review.”

April was set as a deadline for Greece to complete a final list of austerity measures, which will be “further specified and then agreed” by the troika.

The statement asserts the “Greek authorities commit to refrain from any rollback of measures and unilateral changes to the policies and structural reforms that would negatively impact fiscal targets, economic recovery or financial stability, as assessed by the institutions”.

Without Greek compliance with these orders it will not receive billions of euros in further loans it requires in order to avoid defaulting on its debt of €320 billion.

Opening the press conference following five hours of talks, Eurogroup chairman Jeroen Dijsselbloem said Greece had given “their unequivocal commitment to honour their financial obligations” to creditors. He stressed, “Economic recovery cannot be put in danger, fiscal stability cannot be put in danger, financial sector stability cannot be put in danger.”

Before the Eurogroup meeting began, German Chancellor Angela Merkel held a press conference with French President François Hollande. She insisted that the Greek government had still not moved far enough in accepting the brutal cuts agreed to by the previous New Democracy-led government.

Merkel warned, “There is a need for significant improvements in the substance of what is being discussed so that we can vote on it in the German Bundestag, for example next week.”

As negotiations were taking place, at least a billion euros were withdrawn from Greece’s banks due to fear that no agreement would be reached. A reporter from Greece’s SKAI TV commented, “They came here determined to have a political solution, otherwise on Tuesday it would have been necessary to enforce capital controls [on Greek banks].”

Syriza’s agreement to continue enforcing austerity measures under the dictate of the European banks is the inevitable outcome of its class position and social interests.

Commenting on the political and social backlash Syriza will face, Pavlos Tzimas, a Greek political commentator, said, “Very heavy concessions have been made, politically poisonous concessions for the government. It’s going to be a crash test on the domestic front for the government.”

Immediately following the press conference German Finance Minister Wolfgang Schäuble spoke in similar terms: “The Greeks certainly will have a difficult time to explain the deal to their voters. As long as the programme isn’t successfully completed, there will be no payout.”

Greek Finance Minister Yanis Varoufakis earlier signalled that Syriza was ready to accept virtually anything. Athens had “gone not an extra mile [but] an extra 10 miles” in its proposal for the extension, he said. Other euro zone nations would have to meet Greece “not half way, but one-fifth of the way” in order to reach agreement.

The announcement on Friday followed by only one day the German governments’ emphatic rejection Thursday of a proposal by the Greek government for an extension of its previous credit agreement with the EU.

In that proposal, presented by Varoufakis, Greece insisted that the “new government is committed to a broader and deeper reform process aimed at durably improving growth and employment prospects, achieving debt sustainability and financial stability.” In the vaguest terms, it called for “enhancing social fairness and mitigating the significant social cost of the ongoing crisis.”

As soon as the text of the proposal from Varoufakis was made public, the German Finance Ministry rejected it. Financial Times writer Peter Spiegel pointed out that Germany took particular exception to language that “seems to leave main points open to negotiation” by stating that the “purpose of the requested six-month extension of the Agreement’s duration” is “to agree the mutually acceptable financial and administrative terms…”

For Europe’s ruling elite, there are no “mutually acceptable financial and administrative terms,” only an unconditional surrender.

Reuters published a document it said, “describes Germany’s position” in response to Varoufakis’s letter. It states that Greece’s request “opens immense room for interpretation” and includes no clear commitment to successfully conclude the current programme, and it falls short of a clear freeze of Greek measures.”

The document spelled out the precise wording that would be acceptable. It stated, “We need a clear and convincing commitment by Greece, which may just contain three short and well understandable sentences: ‘We apply for the extension of the current programme, making use of built-in flexibility. We will agree with the institutions any changes in measures from the existing MoU. And we aim at successfully concluding the programme’.”

In the end, this is what Syriza agreed to. It balked only at returning with an agreement that explicitly called on it to impose the hated “Memorandum of Understanding”—the list of austerity measures originally agreed to as part of the loan agreement. Syriza was allowed to have the “troika” renamed as the “institutions” and the “Memorandum of Understanding – MoU” recast as the “Master Financial Assistance Facility Agreement” (MFAFA)

However, the MFAFA, the official name of the loan agreement, includes language requiring that Greece “comply with the measures set out in the MoU,” that is, with the austerity measures dictated by the European banks.

The abject capitulation of the Syriza government exposes the utter political bankruptcy of the myriad petty-bourgeois pseudo-left organizations throughout the world who just a few weeks ago hailed the electoral victory of Tsipras as an earth-shaking event. Far from denouncing Syriza’s betrayal, these groups will work overtime conjuring up excuses and justifications. But broad sections of the Greek working class will see the agreement for what it is: a cynical and cowardly act of political treachery.

The drive to dismantle pensions in the United States

By Andre Damon
February 14, 2015
World Socialist Web Site


inequality-405x355States and municipalities throughout the United States are engaged in a frontal assault on the pension benefits of current and retired public employees. These attacks are proceeding with complete disregard for the law, riding roughshod over state constitutional protections safeguarding pension benefits that employees have earned over decades of toil.

Earlier this month, Judge Christopher Klein signed a confirmation order allowing the city of Stockton, California to go ahead with its plan to slash workers’ retirement benefits as part of a deal to exit bankruptcy. The agreement will eliminate health care benefits for municipal retirees while cutting pension benefits for new-hires and increasing employee pension payments.

In ruling that bankruptcy courts have the authority to slash current retirees’ pensions, Klein could not hide his enthusiasm. He declared that CalPERS, the state’s public employee pension system, “has bullied its way about this case with an iron fist.” But, he gloated, the pension fund “turns out to have a glass jaw.”

In Illinois, where Circuit Judge John Belz last year struck down a 2013 law that cut pensions for state workers, state officials are once again on the war path. Attorney General Lisa Madigan, a Democrat, is preparing to appear before the Illinois Supreme Court to argue that, even though the state constitution explicitly declares that public employee pensions “shall not be diminished or impaired,” the state’s “police powers” allow it to slash the benefits of current retirees in the name of “public safety.”

The argument is based on an authoritarian and absurd reading of the Tenth Amendment to the US Constitution, which states “the powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” Illinois Democrats are arguing that this amendment allows the state to gut constitutionally protected pension benefits without even going through a bankruptcy court.

If this claim is accepted by the Illinois Supreme Court, it will set a precedent for every state in the US to go after the pensions of public employees.

In Pennsylvania, the state legislature is debating a bill that would freeze pension benefits for current and future retirees and replace pensions for new-hires with 401(k)-style pension plans. In Jacksonville, Florida, the state is planning major cuts in pensions for future retirees.

These moves—and similar actions in other states and cities—have followed from the precedent set by the Detroit bankruptcy, which began in July of 2013 and was completed last November. They vindicate entirely the warnings made by the World Socialist Web Site at the time of the bankruptcy filing.

On July 20, 2013, two days after the city filed for bankruptcy, the WSWS wrote:

The bankruptcy filing has national and international implications. Detroit will serve as a precedent for other cities across the country that have been financially crippled by the economic crisis. The use of the bankruptcy court to rip up pensions and health benefits will open the floodgates for similar attacks on millions of teachers, transit workers, sanitation workers and other municipal employees.

Just as Greece became the model for attacks on workers throughout Europe and beyond, the Detroit bankruptcy—which goes beyond even the brutal measures carried out in Greece—will set the pattern for the next stage in the attack on the working class in the US and internationally. At stake is every gain won by the working class through immense and often bloody struggle and sacrifice in the course of more than a century.

The attack on public employee pensions at the state and local level has been accompanied by a drive to dismantle what remains of pensions in the private sector. In December, Congress passed a law allowing multi-employer pension funds to slash benefit payments to current retirees, reversing decades of federal precedents dictating that the pensions of current retirees could not be cut.

The assault on pensions is entirely bipartisan, with Democrats and Republicans equally ruthless in attacking the working class. It is being coordinated by the Obama administration, which played a critical role in the Detroit bankruptcy.

The drive to dismantle pensions is one component of the Obama administration’s attack on workers’ wages and benefits, which includes the dismantling of employer-provided health benefits under the auspices of the Affordable Care Act and a systematic assault on wages that was launched with the restructuring of the auto industry in 2009.

The constant refrain is the claim that there is “no money” to pay for pensions. This is a lie.

Even the Washington Post—which noted the “change in the social contract” as “employers, private employers as well as governments, increasingly view the mushrooming cost of pensions as unbearable”—felt obliged to point out that “the push to reduce retirement benefits is coming despite not just a long run of robust stock market returns, but also a real estate rebound that is projected to fuel strong city revenue growth.”

The spectacular rise in stock prices has been fueled by the handout of trillions of dollars to the banks, which have been provided with an endless stream of virtually free money. At the same time, hundreds of billions have been made available to fund military operations around the world in the American ruling class’ relentless and reckless pursuit of global hegemony. This is to be paid for through a historic reversal in the social position of the working class.

As far as the ruling class is concerned, young people should have no future, workers should live on poverty wages, the unemployed should be left to starve, and the elderly should be pushed into an early grave.

What is most extraordinary is the absence of organized resistance. Here, the trade unions, which long ago transformed themselves into business enterprises, have played a critical role. At every step, they have collaborated with the Democrats and Republicans in undermining and attacking pensions. The Teamsters, for example, gave their full support to the federal law allowing pension funds to slash benefits. A host of unions in Illinois are supporting the Democrats’ suit to slash pension benefits. The unions played the critical role in suppressing opposition to the Detroit bankruptcy.

These right-wing organizations and the corrupt executives who control them are concerned only with protecting their financial interests as pension fund administrators. They are more than willing to slash the benefits of union members to keep the funds afloat.

Social tensions are building to the breaking point. The strike by US oil workers, despite the efforts of the United Steelworkers union to isolate and betray it, points to the growing militancy and combativeness of American workers, who have had it with decades of cuts in jobs, wages and benefits. To take forward this and the many other struggles to come, workers must be armed with a new political strategy, based on their independence from the pro-corporate trade unions, a break with the Democrats and the two-party system of American capitalism, and a socialist program of reorganizing society to meet social need, not private profit.

Greek Minister: Poison of Troika Austerity Fueling Rise of Nazi Party

After meeting in Berlin, Yannis Varoufakis says Syriza’s attempt to rectify economic conditions is all that’s keeping fascists from the door

By Jon Queally
February 6, 2015
Common Dreams


People gather for an anti-austerity demonstration outside the Greek parliament in Athens February 5, 2015. About 4,000 people gathered for an anti-austerity demonstration in Athens’ central Syntagma Square on Thursday but in sharp contrast with previous violent protests there were no barricades and barely any police. Thursday’s protest was called to support the new government’s tough stance with the EU, with whom it is seeking an end to the stringent budget rules. (Photo: Reuters/Yannis Behrakis)


Revealing the distance that still remains between the Greek and German governments when it comes to renegotiating terms of the bailout program, a meeting between the nation’s financial ministers in Berlin on Thursday was punctuated by the acknowledgement that the two could not, in fact, even “agree to disagree” and a warning from the new Syriza government that without a loosening of austerity, fascist forces will almost surely rise.

“We didn’t come to an agreement,” said Greek Finance Minister Yanis Varoufakis, recently appointed to the post after Syriza  swept into power during national elections last month. “We couldn’t even agree to disagree. We agreed to continue consultations as partners. Our solution will have Europe’s interest as a priority.”

He continued: “We did not reach agreement because it was never on the cards that we would… We didn’t discuss the debt, but we set the framework for discussions.”

For his part, German Finance Minister Wolfgang Schaeuble indicated that his nation would remain steadfast in its belief that Greece must adhere to the terms agreed to by the previous government, despite the fact that Syriza was elected on clear promises to renegotiate those terms. Without apology, Syriza has said the austerity measures attached to loans offered by the so-called Troika—the IMF, European Central Bank, and the EU—are crushing its economy and the Greek people and must be reversed.

“We have a common currency but different economic policies,” Schaeuble said of his meeting with Varoufakis. “There are commitments to the level of governments for their budgets and they need confirmation by the Greek Parliament, but it is important that agreed commitments and agreements must be respected.”

In his remarks, Varoufakis said that if the does not Troika bend and accept new terms, there is serious risk that the spiraling impacts of the economic Depression in his country will continue to fuel the rise of fascist, rightwing forces within his country.

“No one understands better than the people of this land how a severely depressed economy, combined with a ritual national humiliation and unending hopelessness, can hatch the serpent’s egg within its society. When I return home tonight, I will find a country where the third-largest party is not a neo-nazi party, but a nazi party,” he said, referring to the Golden Dawn party which currently, despite many of its members serving prison time for violence and corruption, holds the third-most seats in Greek Parliament. “We need the people of Germany on our side.”

Despite those risks and proving that members of the Troika are ready to play hardball with Syriza, the ECB on Wednesday applied market pressure on the new government by announcing it would no longer accept Greek-issued bonds. As explained by Mark Weisbrot, co-director of the Center for Economic and Policy Research, the move by the powerful institution “was a clear and deliberate attempt to undermine” the new leadership in Athens amid ongoing negotiations.

According to Weisbrot, “They are trying to force the government to abandon its promises to the Greek electorate, and to follow the IMF program that its predecessors signed on to.”

He concluded, “The ECB should be ashamed of its latest assault on Greek democracy. And they should not be able to get away with disguising it as anything less than that.”

Syriza, led by Prime Minister Alexis Tsipras, is expected to reveal its economic plan in the coming days.

As both Tsipras, Varoufakis and other ministers returned to Athens on Thursday night, they were greeted by a large public demonstration condemning the Troika’s austerity policy.

Thousands gathered in Syntagma Square  to cheer Syriza and protest the ECB’s move on Wednesday. According to the Greek daily Ekathimerini:

Responding to a call on social media, the crowd estimated by police at 5,000-strong stood in silence on Syntagma Square, the scene of violent protests at the height of the Greek economic crisis in 2012.

“It’s the first demonstration in favour of a Greek government. Finally we have a government which respects its campaign promises and defends the interests of our country,” Telemaque Papatheodorou, an engineer in his 30s, told AFP.

The protest was called following the decision by the European Central Bank late Wednesday to cut off a vital source of funds for Greece’s banks. […]

“The decision by the ECB demonstrates the pressure on Greece, but that’s nothing compared to the problems of people who are starving or suicidal,” said Dimitra Spyridopoulou, a lawyer.

The Obama budget: A populist fig leaf for militarism and reaction

By Patrick Martin
February 4, 2015
World Socialist Web Site


Barack-Obama-Following his demagogic State of the Union speech, the Fiscal Year 2016 budget document released Monday is a further attempt by President Obama to posture as a populist advocate of taxing the wealthy and helping the “middle class,” while pursuing policies whose substance is the exact opposite: tax cuts for big business, further cuts in domestic social programs, an escalation of imperialist military interventions in the Middle East and around the world.

By now, the cynical modus operandi of the White House is a familiar one. Obama declares himself to be dedicated to the interests of ordinary working people and offers various benefits—free community college, tax breaks for child care, expanded pre-kindergarten, more spending on infrastructure to create jobs. He proposes to pay for these measures through taxes on Wall Street interests, including levies on financial transactions and inherited wealth.

Obama proposes measures to a Republican-controlled Congress that he never attempted to enact when the Democrats had large majorities in both the House and the Senate. This underscores the cynicism of the whole exercise.

He knows very well that his minimal proposals for increased social spending will be flatly rejected by the Republicans, leaving the joint program of war and austerity on which the White House and Congress will eventually reach agreement, most likely after a series of stage-managed confrontations and mock showdowns.

The right-wing character of the budget plan was signaled by Obama’s choice of venue to announce it—the Department of Homeland Security. He denounced the draconian budget-cutting process known as the “sequester,” which the White House itself devised in 2011, but focused not on the sweeping cuts in social programs, but rather the damage supposedly done to the Pentagon by the cap on its regular spending, proposing a $38 billion increase for the military.

Combined with $51 billion in “contingency” spending on military operations in Syria, Iraq and Afghanistan, the gargantuan US military machine will, under Obama’s plan, consume more than $600 billion in Fiscal Year 2016.

There will also be a further increase in spending for domestic policing and intelligence programs.

As for social spending, the “breaking” of the sequester cap will have little impact. Obama’s FY 2016 budget projects that over the next five years, discretionary domestic spending will fall to the lowest level, as a proportion of national economic output, since the early 1960s.

Dwarfing the $37 billion Obama proposes in increased domestic spending—which the Republican Congress is virtually certain to reject—is the nearly $400 billion in cuts to future Medicare and Medicaid spending. This includes both reduced reimbursements to hospitals, doctors and other providers—which will lead to increasing numbers of providers refusing to accept Medicare patients—and higher premiums, deductibles and co-pays for Medicare recipients.

On taxation, Obama is proposing to cut the corporate tax rate by up to 10 percent. The other main tax proposal amounts to accepting criminal tax evasion by large corporations providing they share a fraction of the loot with the Treasury.

A host of Fortune 500 companies are avoiding taxes by keeping $2 trillion in profits parked in foreign bank accounts. The Obama administration plan would cut the tax rate from 35 percent to 14 percent for profits repatriated this year. This would net the Treasury as much as $280 billion. The companies themselves would gain even more, saving $420 billion in taxes. The Obama proposal would also allow them to distribute the remaining $1.3 trillion as dividends or use the money for stock buybacks, pushing up their share values.

The three main components of the budget—corporate tax relief, an increase in military spending, and cuts in Medicare—far outweigh the minimal increases in other social benefits promised by Obama—increases that he and the Democratic Party can safely assume will never be enacted. Yet this budget is being portrayed in the corporate-controlled media as a political shift to the left of dramatic proportions.

Both the liberal and the ultra-right media, each for their own reasons, have joined in this exercise in falsification.

The New York Times hailed the Obama budget, while admitting that it was unlikely to be enacted by Congress. The newspaper all but acknowledged that the budget’s populist trappings were intended, in advance of the 2016 presidential election, to re-inflate sagging popular illusions in the Democratic Party as the party of the “common man.” The budget “seeks to frame the terms of the debate for the 2016 presidential election season,” the Times wrote.

Nevertheless, the newspaper claimed that, “The core of the president’s 2016 budget is a plan to boost the middle class” by extracting “greater contributions from corporate America and from those atop the wealth ladder.”

The Wall Street Journal published twin editorials denouncing the budget. The first, “Obama Unchained,” portraying Obama as a “tax and spend” liberal while decrying his supposed refusal to cut entitlement programs such as Social Security, Medicare and Medicaid, describing them as “largely untouched.” A second editorial, headlined “Taxes Unlimited,” simply itemized the proposed tax increases on the super-rich, as though each of these minimal proposals was an unthinkable outrage.

While the liberal and conservative media mouthpieces of the financial aristocracy pretend that a battle royal has broken out in Washington, a top Obama aide, multimillionaire investor and corporate adviser Jeffrey Zients, who heads the White House National Economic Council, declared that there was every prospect for a deal with congressional Republicans, particularly on cutting corporate taxes. “You have strategic alignment in some very important areas,” Zients said.

The purpose of this political charade is to provide ammunition for trade union officials, liberal publications such as the Nation magazine and various pseudo-left organizations to corral working people behind the Democratic Party in the 2016 elections. These forces will work to conceal the fundamental agreement of the two parties in defending the interests of the financial elite and keep working people tied to the corporate-controlled two-party system.


Launching ‘New Era of Political Change,’ Tens of Thousands March in Madrid

Fueled by Syriza’s victory in Greece, tens of thousands of Spaniards joined rising Podemos party in ‘March for Change’

By Lauren McCauley
February 1, 2015
Common Dreams, January 31, 2015


Tens of thousands crowded Madrid's Puerta del Sol. (Photo: Alejandro Ruesga/ El Pais)

Tens of thousands crowded Madrid’s Puerta del Sol. (Photo: Alejandro Ruesga/ El Pais)


Fed up with conservative economics and fueled by Syriza’s recent victory in Greece, tens of thousands of Spaniards flooded the streets of Madrid on Saturday to say: “No to Austerity and Yes to Change!”

The march, dubbed the “March for Change,” is the first mass demonstration in support of the country’s new leftist party, Podemos, which is Spanish for “We Can.”

According to reports, demonstrators chanted “yes we can” and “tic tac tic tac” suggesting the clock was ticking for the country’s two main political parties. Many waved Greek and republican flags and banners reading “The change is now.”

“This is not about asking for anything from the government or protesting. It’s to say that in 2015 there will be a government of the people,” said party leader Pablo Iglesias when the march was first announced.

“We want a historic mobilization. We want people to be able to tell their children and grandchildren: ‘I was at the march on January 31 that launched a new era of political change in Spain,'” Iglesias said.

“People are fed up with the political class,” Antonia Fernandez, a 69-year-old pensioner from Madrid, told reporters at the demonstration. Fernandez explained that she previously supported the country’s socialist party but reportedly lost faith in it because of its handling of the economic crisis and its austerity policies.

“If we want to have a future, we need jobs,” she added.

Since its inception last year, Podemos’s popularity has surged. Caputuring the momentum of the populist wave currently sweeping Europe, the party surprised many when it won five seats in the European Parliament in the May 2014 elections and a poll published earlier this month found that nearly half of Spain’s population would support Iglesias if he ran for Prime Minister.

Iglesias, a 36-year-old political science academic, is frequently compared to Syriza leader Alexis Tsipras. Like Syriza in Greece, Podemos has captured the country’s attention by running on a slogan that politicians should “serve the people, not private interests,” and promising to write off a portion of Spain’s debt, which has caused soaring unemployment.

AFP reports:

The party has struck a chord with Spaniards enraged by a string of corruption scandals, as well as public spending cuts imposed by the conservative ruling party and previously by the Socialists after the economic crisis erupted in 2008.

Born out of the “Indignant” protest movement that occupied squares across Spain at the height of the economic crisis, Podemos has overtaken the mainstream opposition Socialist Party in several opinion polls, and in some has topped the list ahead of the conservative ruling People’s Party (PP).

The significance of the election of Syriza in Greece

Chris Marsden
January 27, 2015
World Socialist Web Site


SyrizaSyriza and its leader Alexis Tsipras were able to exploit the mass discontent produced by the brutal austerity measures imposed since 2010 on the Greek population. But Syriza’s election victory does not express a political development, a step forward, progress or anything of the kind by or for the working class.

In its origin, social composition and politics, Syriza is a bourgeois party—one of many, including the Democrats under US President Barack Obama—that come to power making promises of “hope” and “change” and then impose policies of austerity and war. It will inevitably betray, sooner rather than later, the aspirations for an end to social hardship and suffering that it has cynically exploited.

Nothing better illustrates the real political character of Syriza than its choice of coalition partner. The Independent Greeks are a right-wing nationalist party formed in 2012 by Panos Kammenos, a former deputy shipping minister and member of the conservative New Democracy party who was honoured by France’s Gaullist President Nicolas Sarkozy, along with ten other New Democracy MPs.

The Independent Greeks agitate against immigration and multiculturalism, while advocating a Christian Orthodox education system and the formation of a patriotic “Democratic Front.” Kammenos rails against “money lenders from abroad” and recently claimed that Greek Jews paid less in taxes than others and were given preferential treatment.

The media is portraying Tsipras’s choice of the Independent Greeks as a “surprise” pairing, but the Syriza leader ran his election campaign with precisely this coalition in mind. His final election rally was dominated by calls for “a new social and patriotic alliance” and an end to “national humiliation,” along with appeals to anti-German chauvinist sentiment. Among his first public acts following the election was Tsipras’s reception, at his own request, by the archbishop of Athens and all Greece, Ieronymos II.

Tsipras and Syriza have other notable friends on the far right. Their victory was hailed by Marine Le Pen, leader of France’s National Front, as a “monstrous democratic slap” given by “the Greek people” to the European Union.

The New York Times all but endorsed Syriza’s victory as the only way of saving Greek capitalism and the European Union. In an editorial posted Monday on its web site, the Times noted favourably that Tsipras “has signaled to Europeans that he is ready to moderate his ambitions once in office.”

The newspaper called on German Chancellor Angela Merkel to renegotiate Greek debts and work with Syriza, writing: “Greece needs some breathing room, not only to give Mr. Tsipras a chance to turn the country around, but also for the sake of the rest of Europe.” It proceeded to give the new prime minister his marching orders, declaring, “Of course, Mr. Tsipras must use his popular mandate to push through the fundamental domestic reforms that his predecessor, Antonis Samaras, had begun.”

All of this will be dismissed as irrelevant by Syriza’s numerous apologists among the petty-bourgeois pseudo-left groups. They have hailed Syriza as “left,” or “socialist,” or even (according to Left Unity in the UK) the head of a “workers’ government,” which (in the words of the International Socialist Organisation in the US) “needs the support of workers and social movements across Europe.”

Syriza itself makes no such claims. Tsipras declared prior to the election: “Syriza does not want the collapse but the rescue of the euro… And saving the euro is impossible for the member states when public debt is out of control.” His then-shadow development minister, George Stathakis, told the Financial Times, “We want to make life easier for businesspeople, to help remove problems with bureaucracy that they complain about.”

If Syriza is socialist, this has certainly escaped the attention of the financial oligarchy. On the day of its election, the euro recovered from an 11-year low against the US dollar and all of the world’s main share markets rose in value. Global investors clearly believe that Tsipras is, as Margaret Thatcher once said of Mikhail Gorbachev, someone they can do business with.

Syriza has come to power based upon a programme that articulates the interests of a powerful section of the Greek bourgeoisie and more privileged sections of the upper-middle class. It makes its appeal to yet more powerful forces: the imperialists of Europe and the United States.

The austerity measures demanded above all by Germany have not resolved the economic crisis that erupted in 2008, but exacerbated it. The destruction of workers’ living standards, coupled with the hoarding of money by the major banks and global investors, threatens to plunge Europe, and with it the world economy, into a deflationary spiral and still deeper depression.

Earlier this month, the New York Times warned that Europe’s economy had reached a “psychological inflection point” with its descent into negative inflation for the first time since the depths of the global financial crisis in 2009. The Times warned that “the latest data is adding concerns that Europe is headed for a new financial and economic crisis.”

This is what led the European Central Bank (ECB), against opposition from Germany, to announce on January 22 a quantitative easing (QE) programme involving combined monthly purchases of public- and private-sector securities, including government bonds, totalling at least €1.1 trillion by 2016.

The move, both advocated and welcomed by Tsipras, has nothing to do with ending austerity. Its architect, ECB head Mario Draghi, has called for QE to be combined with “progress on the important structural reforms—more flexible labour markets, less bureaucracy, lower taxes,” especially in the highly indebted countries in southern Europe. There, Draghi declared, “Reforms have waited too long. It is now time to implement them. That’s my message.”

As with previous stimulus measures, whatever money is pumped into the economy will go overwhelmingly to the banks and corporations and be paid for by the working class. Syriza will be instructed to implement whatever attacks are deemed necessary by the European Union, the European Central Bank and the International Monetary Fund.

If there is any renegotiation of the “Memorandum” governing the terms of Greece’s debt repayment, it will be confined to allowing Syriza a little more time to impose reactionary measures on a politically restive and socially desperate working population.

“We are very motivated to work with the new Greek government to maintain the recovery path,” said Jeroen Dijsselbloem, speaking on behalf of the euro zone’s finance ministers. He added, “We all have to realise and the Greek people have to realise that the major problems in the Greek economy have not disappeared and haven’t even changed overnight because of the simple fact that an election took place.”

Tsipras may make some initial small or symbolic concessions to popular sentiment. However, they will be designed to win himself the time needed to reorient the policies of the bourgeoisie, reorganise the state, and disorient and demoralise the working class before a more decisive offensive is mounted.

During the visits Tsipras made to the US and in various discussions with American officials, the CIA will have sought his reassurances that Greece will pursue a foreign policy fully in line with the essential interests of the American bourgeoisie. Greece’s location in the Mediterranean and its proximity to the Middle East make it geopolitically crucial to the US in confronting China and Russia.

Tsipras will have been questioned about Syriza’s attitude to the growing investment of China in Greece, to the crisis in Ukraine, and to NATO’s encirclement of Russia. The coming months will reveal the dangerous implications of the reassurances he no doubt offered.

The International Committee of the Fourth International rejects with contempt the political excuse offered by the petty-bourgeois pseudo-left to justify support for Syriza and its pro-capitalist agenda—that a Tsipras government is a necessary “experience” for the working class, from which it will somehow come to understand the necessity for genuinely socialist policies.

Such sophistries are advanced only to oppose the emergence of a revolutionary movement of the working class, a development possible only through a relentless political exposure of Syriza. This task is undertaken by the World Socialist Web Site in order to prepare workers and young people for the decisive struggles they face in Greece and internationally.



Syriza’s Challenge

Combatting Austerity and Post-Democracy in Greece

By Binoy Kampmark
January 27, 2015
Counter Punch, January 26, 2015


Alexis Tsipras. Bologna, May 2014. [Laurenzo Gaudenzi/Flickr]

“Marx’s once scandalous thesis that governments are simple business agents for international capital is today an obvious fact on which ‘liberals’ and ‘socialists’ agree.”— Jacques Rancière, Dis-agreement (1999), 113

Across Europe, and more specifically, the euro-zone, a spectre did not so much haunt as totally materialise in the form of Alex Tsipras and the Syriza party. Greece woke up to a new party that had never seen office, coming within a few seats of governing in its own right. Any European party would have salivated at such an outcome – coalitions tend to be a matter of course, and majorities normally associated with authoritarian types. In the Greek case, the order established during the post-junta period had been overturned – at least on electoral paper.

Tsipras, in just falling short of the 151 number required to form government, has sought support from other potential partners. To date, it seems that the right-wing ANEL Independent Greeks party has agreed to muck in. Both have a common anti-bailout position, though it remains to be seen what else they can find common ground about.

This immediately got the leaving incumbents speculating that the union would not last, a desperate attempt at premature Schadenfreude. Petros Doukas, former deputy finance minister, pondered that, “It’s ultimately going to be much more difficult to figure out exactly what policies they will ultimately agree on.”

A mixture of euphoria and terror has met the result. The latter reaction is typical of the market-managers who see earnings being whittled away in speculation and a rocking of the financial sector. The market, in such language, is a sanctified deity which should be propitiated. It is not something to control, let alone directed by human hand. It has its own inscrutable morality.

Consider the wording of Nick Squires (The Telegraph, Jan 26), as he was monitoring the numbers: “The surprise alliance between two staunchly anti-bailout parties, spooked markets and triggered a loss of nearly 4 percent on the Athens Stock Exchange as well as elsewhere in Europe.”

But the Syriza victory is more significant in another sense: the challenge it poses to democracy in the euro-zone. The issues of austerity and debt cannot be divorced from that of political management. Where, given Syriza’s jarring win, does that sit in the European rubric, frayed as it is? For one, the party faces what has been termed by French philosopher Jacques Rancière as the “post-democratic” moment.

Democratic institutions, in this age, are openly, and unquestionably, identified with the market, something which distinctly takes the gloss off their accountability for the broad citizenry. “From an allegedly defunct Marxism,” argues Rancière in Dis-agreement (1999), “the supposedly reigning liberalism borrows the theme of objective necessity, identified with the constraints and caprices of the world market.” The company boardroom and the cabinet meeting room, have become one.

Axiomatic to this is the creation of the debt, or indebted society, a system of control that works through imposing punishment, providing dispensation, and reimposing punishment in accordance with the manager’s logic. The manager works according to biblical dictates, moralising the world of debt, frowning against the heavily indebted, but frowning even more when the debts are paid.

Colin Crouch, who had already written about post-democracy in 2004, sees the Greek-austerity policy adopted, and imposed, by the troika, as its ultimate form in action, debt fanaticism generated from above. It is a situation where bankers and financiers, responsible for a crisis (the Global Financial Crisis being their supreme handiwork), manage it through compliant governments who, in turn, forged a response sympathetic to bankers and financiers “at the expense of the rest of the population.”

For Crouch, “the most explicit expression of the post-democratic aspects of crisis management was the framing of the Greek austerity package, designed by international authorities in close collaboration with an association of leading bankers” (LSE Blogs, 2013).[1]

There are even some writers who feel that another, more threatening stage in the funereal rites of democracy is being read, something far more sinister: that which totally inverts it, creating a form of self-defeating totalitarianism.

Little surprise, then, that European leaders warn of irresponsible democratic behaviour, one that will lead to bank runs and negative European Central Bank briefings. (Eight billion euros was withdrawn from Greece in the last week alone.) Ultimatums are being hinted at: if you are against austerity, then you must be against the euro-zone. British Prime Minister David Cameron, having only recently glowed at the achievements of the late authoritarian Saudi monarch, King Abdullah, found Greek democratic judgement a touch too much to bear. “The Greek election will increase economic uncertainly across Europe.” (Twitter, Jan 25).

For all those reasons, the austerity brigade, with its philosophy, has taken a battering. Savage cuts and so-called structural reforms to the Greek economy have actually served to increase unemployment and shrink the welfare state. This can be laid squarely at the feat of those who have become Greece’s economic managers, these post-democratic managers in the form of the European Commission, European Central Bank and International Monetary Fund.

The mountain to be scaled by Syriza is a monumental one. Come March, seven billion euros worth of debt will mature with menacing, guilt-worn clout. Liquidity will be needed, but Tsipras will be very much in his rights to ask for debt cancellation and a readjustment of bailout terms. But even cancellation will not let Greece off the hook, giving only a false hope and liberation from a distinctly unequal financial system within a zone that is artificially democratic. The words of the Greek electronic music band from 1992, Stereo Nova, may still apply: “My country is a colony of a larger colony.”[2]

Dr. Binoy Kampmark was a Commonwealth Scholar at Selwyn College, Cambridge. He lectures at RMIT University, Melbourne. Email: bkampmark@gmail.com


[1] http://blogs.lse.ac.uk/politicsandpolicy/five-minutes-with-colin-crouch/

[2] http://www.chronosmag.eu/index.php/y-stavrakakis-my-country-is-the-colony-of-a-larger-colony.html


¡Podemos! Spanish Party Rises from Grassroots to Challenge Corruption of Elite Party Rule

In tandem with other rising parties of the Left in Europe, supporters of new political party in Spain have organized their way to doorstep of power

By Jon Queally
December 29, 21014
Common Dreams


Pablo Iglesias, secretary general of the Podemos Party in Spain, speaking last month at the United Against Austerity Conference on November 22, 2014. (Photo: Bloco/flickr/cc)


The ascendent leftwing Syriza Party in Greece is not the only progressive party in Europe seeing an increase in its popularity and political might on the basis of a consistent, two-pronged anti-austerity and pro-democracy platform.

In Spain, the fledgling Podemos Party (translated as ‘We can’) has been surging in public opinion polls since it officially formed earlier this year and now, according to a profile and analysis published in Reuters on Monday, it may be on the verge of ‘overturning’ the two-party hold enjoyed by the ruling People’s Party (PP), led by Prime Minister Mariano Rajoy, and the standing opposition Spanish Socialist Party (PSOE). The fast rise of Podemos, according to Reuters, has forced “the center-right government to veer away from austerity and the left-leaning opposition to scramble for new leaders.”

“We want to seize local, regional and national power. We want to blow over the political chessboard and move the pieces around.” —Luis Maestre, Podemos member in Madrid

Co-founded by university professor and talk show host Pablo Iglesias, other leftist academics and participants of the Indignados movement that was born in the aftermath of the 2008 financial crisis in Europe, Podemas joined the political fray during elections for the European Parliament in May. Surprising many, Podemos candidates, including Iglesias, won fives seats. Since then, its political impact has continued to grow. Domestically, the party entered national politics by challenging the status quo with a very particular brand of street-savvy politics backed by a grassroots organizing effort.

As Reuters reports:

Podemos has set up hundreds of local assemblies known as “circulos” across the country, staging unruly weekly meetings at which Spaniards can vent the anger built up during worst economic crisis since World War Two.

“The one thing we all share is the outrage over what’s going on in Spain,” said Jose Luis Soriano, a 32-year old unemployed computer scientist who has been coming to the circulo in the upscale Madrid neighborhood of Salamanca since the summer.

The Salamanca circulo now has about 500 members. Each week about 50 people attend its meetings in a rented private school classroom. They come from all walks of life and political backgrounds: pensioners, students, housewives, executives.

“I like the fact that they’re open to debate, transparent and want to change this rotten system,” said Soriano.

Those who attend describe the meetings as an experiment in democracy. There is no leader; members can attend whenever they like and they vote on everything – from organizing a Christmas contest with local shops to choosing who will be their representative, to their policy platform in a local election.

National elections in Spain in 2015 will give Podemos their first real chance at taking hold of large segments of parliament and some polling suggests they could, in fact, take majority control. Like their counterparts in Greece—with whom they regularly communicate and have supported politically within the European Parliament—the members of Podemos have largely based their critique of the ruling class and political leaders on the negative impact that imposed austerity measures have had on the Spanish economy and people, especially the young. Podemos has also lashed out against government corruption and what it characterizes as a “caste system” which dominates domestic politics.

In the wake of Monday’s announcement from Greece that new general elections will be held early in the new year, Iglesias tweeted his support for Syriza and their leader Alexis Tsipras, saying, “2015 will be year of change in Europe. We’ll start from Greece. C’mon SYRIZA.”

As an editorial by the right-leaning The Spain Report noted on Monday, the financial elites and establishment figures of the European Union may not like the rise of Podemos and Syriza, but “They’re coming anyway, and they want to bring radical change not only to the Spanish and Greek systems but to the whole European project.”

And that fear among the establishment is not necessarily unfounded.

Speaking with Reuters, Luis Maestre, a  56-year old civil servant who voted for the socialists and the communists for 40 years, said he now wants to run for a seat in Madrid town hall under the Podemos banner.

“The system can only be changed from the inside,” Maestre said. “We want to seize local, regional and national power. We want to blow over the political chessboard and move the pieces around.”

Vowing to End ‘Neoliberal Experiment,’ Greek Left Rises as Snap Elections Called

After three failed votes within parliament, Greek public will get chance to vote for new government.

By Jon Queally
December 29, 2014
Common Dreams



The anti-austerity Syriza party led by Alexis Tsipras is ahead of the ruling New Democracy coalition in opinion polls. (Photo: Chris Ratcliffe/Bloomberg)


“The future has already begun.”

That’s what Alexis Tsipras, head of the leftwing Syriza Party in Greece, reportedly said on Monday after parliament failed in its third attempt to elect a new president and the scheduling of a popular general election was announced for next month.

Syriza, which is polling ahead of rival parties and boycotted the parliamentary elections in order to force a popular vote, has vowed to renegotiate regressive bailout conditions that the ruling government of Prime Minister Antonis Samaras agreed to with European creditors, including the so-called “Troika”—the European Central Bank, the International Monetary Fund, and the European Commission.

“With the will of our people, in a few days bailouts tied to austerity will be a thing of the past,” Tsipras said.

In an op-ed published on Sunday in the leftwing Avgi newspaper, Tsipras explained his party’s thinking in clear terms:

SYRIZA’s victory will be the start of a great national effort to save society and restore Greece – a national effort with international repercussions, since our historical responsibility is to pave the way for an alternative policy in Europe, turning a Eurozone country from a neoliberal experiment to a model of social protection and growth. […]

[W]e are coming to unite, not separate [Greece]– to build on the ruins of a looted society. That is why SYRIZA’s government will not be a single-party government, it will be the government of the people.

With rhetoric like that and Syriza’s victory in a popular election a very possible outcome, the financial markets in Europe are reportedly jittering about how an anti-austerity takeover of the Greek government will impact the Eurozone.

As Bloomberg reports:

Stocks and bonds plunged after the government defeat, recalling the height of the Greek financial crisis in 2012, with investors concerned a victory by the opposition Syriza party would jeopardize the terms of Greece’s rescue struck with the so-called troika of international creditors. Syriza, which opposes austerity measures imposed in return for outside aid, leads Samaras’s New Democracy movement in opinion polls.

“These elections will be a struggle between fear for euro exit and anger against austerity,” George Pagoulatos, professor of European politics and economy at the Athens University of Economics and Business, said by phone. “The government will be emphasizing the risks associated with Syriza’s anti-bailout stance and Syriza will try to convince voters that it can offer a viable alternative, without endangering the country’s euro membership.”

However, according to Reuters:

In a bid to reassure international partners, Tsipras has sounded a more moderate tone recently, promising to keep Greece in the euro and negotiate an end to the bailout agreement rather than scrap it unilaterally.

But he has stuck to his promise to reverse many of the tough austerity measures imposed during the crisis, reversing cuts to the minimum wage, freezing state layoffs and halting the sale of state assets.

As Channel 4‘s Paul Mason explains on his blog on Monday, “people all over Europe who’ve opposed austerity see [these developments in Greece] as a turning point” in the years-long fight against regressive cuts to public services, pensions, and the privatization of national assets across the continent.

Asking readers to understand the pervasive impact of austerity across Europe, Mason describes how the economic crisis in Greece—where youth unemployment is now 60 percent—has become emblematic for economic policies that have “destroyed the prospects for much of a generation.”