Dr. Keynes Was Right

It's the Distribution, Stupid
MAY 10, 2012 12:01PM

Pieces of Eight, Again

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Only a few, Krugman notably, have kept saying, contradicting the Rand-ians, that the Great Recession is due only to governments run amok (the intelligent understand that this only describes Greece).  He frequently points to Spain, where, he says, the problem has always been corporate debt.  But without details.  I have read from a few others, similar.  Well, todays NY Times business page tells the details.  Worth reading.

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Much of the borrowing in Greece, too, was done on the backs of secret derivatives deals and corporate greed, abetted by the ratings agencies which felt it was just fine to treat Greece as if it were Germany. Corporate politicians and corporatism all around I'd say.

And the austerity being pursued in Greece and other countries today has less to do with debt than it does with the attempt by neoliberal ideologues to conduct a generational counter-revolution by attacking workers.

Haven't visited the link you cited yet, but it's my understanding that a good deal of Greece's problems stem from getting involved with Goldmine Sux. Am I mistaken in that belief?
That's true of Spain. Not so much for Greece. They're understood, even by the Lefties, to have run amok.
Thanks for the correction. I'm also told the Greeks blame much of their troubles on the influx of Turkish emigres seeking to avail themselves of the much better social welfare system in Greece. Any opinion on that -- other than the obvious that the Greeks and Turks have been blaming each other for their troubles for centuries.
Greece is the poster child for bifurcated governance, or rather, the evil of same. Here in the USofA, the ingrate Red States (Greeks without gifts) are supported in significant measure by the Blue States through various fiscal policy mechanisms. While I disagree, since Red States are determined to make the USofA in their image, even Democratic administrations (not counting FDR, who started it all for national reasons) have continued to support the poor and stupid in the South. Germany, et al, exported to Greece because they needed the demand.

Once again: consumer debt rises when incomes fall, the powers that be (Red or Blue) always provide a mechanism with housing equity being just the most recent, since the output has to be consumed. Without the consumer, the capital is worthless. The fact that American corporations use Chinese labor isn't material; the corporations are American with American consumers.

The Euro, and many said so and stated why, was doomed from the start, just because there is no fiscal policy governance for the Euro Zone. Germany was the strongest "pusher" for the fiscal restraints required to join up. Now, we know why: they wanted both the market for their output, and really good returns on capital. Can't have both. No, no, no.
This is something that needs more highlighting. As much as the right wing ideologues shriek about how horrible all of that government debt is, the fact is that much of that so-called government debt is in fact tied to the overspeculation of the banksters and other supercapitalist high flyers who've attached themselves like leeches to the government treasury.

All of this is just more ammunition for organizing and fighting against the 0.01% worldwide.