Human Misery = Great Profit Opportunities!

A conservative columnist for the Chicago Tribune says Hurricane Katrina was a blessing in disguise. I’ll let that sink in. What does she mean?

Conservatives are pleased when bad things happen to other people. Hurricanes create investment bargains! Human misery = profit opportunity!

Which explains why Rick Santorum drew applause from the conservative base when he said rape could be a blessing in disguise. Bad things happening to other people can be translated into good things happening for you if you are paying attention, if you're right-thinking and sufficiently heartless.

It’s happening in Greece too. Crisis and misery tends to draw vulture capitalists eager for quick profits and easy bargains. If you discover someone is down for the count. Why help them? Why not use them as a stepladder to a better life?

This is the core idea behind Disaster Capitalism. Disaster = Profits

Republicans, conservatives, the 1%, venture capitalists. They all view terrible events happening to other people as great business opportunities for themselves. The Guardian wrote about this bizarre investment class cheerfulness while New Orleans was still underwater.

Because the ups and downs of fortune are just the natural course of events. The downturns may seem awful to those nobodies experiencing it firsthand, but they are too shortsighted to see the bounty being reaped by the blessed few God has put in a safer position. The investment class is wiser and more able to view these ups and downs philosophically. “Let things unfold as nature intended. Let the weak fail. It makes America stronger to weed out the less deserving and the unlucky." That’s a common view among the 1%. Disaster for others represents a windfall for them.

But their opinion changes when the disaster happens to them. (Through no fault of their own, of course.) When they face difficulties help must be sent immediately. Because they hold hostages. We are all hostage to the fortunes of the rich. If they fall they fall on us. Here's a list of the huge corporate bailouts working Americans have paid for, and corporate CEOs have put in their own pockets. Still, it had to be done. The alternative would have been worse.

Timely help in New Orleans might have been a good thing too, but it would only have helped regular people. Most of whom had negligible net worth.

The important thing is to rescue property. And in New Orleans what the money people discovered was letting the poor drown made it possible to scoop up bargains. Property on the cheap. Blocks of soggy historic downmarket houses ready to be cleared out and replaced with warehouses for Walmart and other corporations, or with more attractive apartment blocks suitable for new, more prosperous citizens more likely to be Republicans.

Working for a Living Vs. Owning for a Living

Jeb Bush said something odd yesterday: he said that our economy will do better if American workers will only work longer hours. Spoken like someone who owns for a living. The number of working people with jobs divided by those same workers working longer hours equals fewer jobs. It’s not that Bush is stupid, or that he is unable to think. His problem is he thinks like his money. His money thinks all problems should be solved to the benefit of money and people who have lots of it.

This from Bill Moyers. Lest anyone think Bernie Sanders is outside the American mainstream, he’s actually in the middle of it, historically. Unless you think every cooperative effort from barn raising to Social Security is unAmerican...

From The Guardian's George Monbiot: The Greek crisis is just a repetition of the age old conflict between people who work for a living (the 99%) and people who own for a living, between labor and capital. When it comes to money, capital always writes the rules.

The always perceptive and clearheaded David Cay Johnston writes about how venture capitalists loot pension funds. It’s a shame it’s in Al Jazeera where it will never persuade those it needs to persuade.

More Greek Perspectives (with some humor mixed in)

Germany vs. Greece, the Python Version.

From the NYRB, an interesting essay explaining how austerity policies like those the EU is imposing on Greece are similar to the policies George III imposed on the 13 American colonies. The result then was revolution.

Jeffrey Sachs urges the EU creditors to write down the debt.

Joseph Stiglitz, the views of a Nobel economist.

Kenneth Rogoff explains why the bailout failed. (And this is the fault of both the European creditors and Greece.)

Another worthwhile argument (From the Guardian, the dangers of deficit fetishists)

A thought I’ve been having: how would this work in a family? Most of the children are fine, doing well in school, if grown they’re earning a living. But one child fails in school. How does it help to withhold food from the one who fails in school? Will he stop failing if he has nothing to eat? If he’s refused medical care or family affection?

The perspective of a former “economic hit man”: what is happening to Greece looks a lot like the kind of damage he used to do.

Are We Like Greece?

There’s also this view of Greece. From the Daily Beast, a review of a new book about the Greek dilemma.

Is it a nation of tax dodgers? A place where nobody wants to pay the cost of public necessities?

What does this sound like? Sounds like America.

Sounds more than a bit like those Americans who bank in the Caribbean to avoid the taxes that would pave the roads––and employ construction workers. This 2013 article in the Economist estimates rich Americans have hidden $20 Trillion offshore.

Sounds a lot like the very profitable American corporations who pay no taxes and instead get corporate welfare paid to them. GE? Boeing? Verizon? Citigroup? Bank of America? FedEx? Senator Bernie Sanders compiled a list.

The grim austerity Greece is experiencing now sounds like Kansas, Louisiana, Wisconsin and a handful of other Republican-run states where austerity policies have taken a severe toll. They’ve lowered taxes on the wealthy and paid for it with deep cuts to public sector needs like schools and healthcare. Sounds a lot like what Germany is forcing on Greece, where the wealthy Greeks still evade taxes but teachers and doctors and nurses go unpaid.

Greece Explained

An excellent video from VOX. No more oversimplified than the final demand letters Greece is getting from Angela Merkel.

I keep going back to the meme I invented a couple of years ago: Kiss Up, Kick Down. Is this crisis just an international version of junior high bullying? The powerful preying on the powerless? Noam Chomsky writes about this.

Vox has discovered that NSA wiretaps reveal Angela Merkel's cynical calculations prior to the Greek bailout. Why did Merkel and Germany send Greece so much money knowing the debt would be unsustainable? Maybe the potential profit caused them to ignore the risks. No intention of fixing a problem, just a strong impulse to milk that problem for profit. The payday loan model again.

Europe isn’t a family. Families don’t starve the child that does poorly in school. Families don’t think how they can profit from a family member’s failure.

I realize it gets complicated in families too. But nations and organizations of nations need to lean toward the helpful model rather than the exploitive one. Think St. Francis not some mob kingpin. Keynes not Friedman. The Marshall Plan, not the Versailles Treaty.

Greece is the Word

When a nation is in a financial crisis it’s not always best to think like a banker. A banker cares more about his money than about the people involved. (It's easier that way.) There are certainly hard truths we need to face about the Greek crisis, and difficult problems that need to be fixed. But is a crisis the best time for a banker to extract his late fees and penalties? Does it matter if Greece recovers from this? For many of the financial experts discussing it, the money is less abstract than the people.

In the Guardian, Nobel economist Joseph Stiglitz returns us to a more rational discussion of what is involved and what will restore Greece’s financial health.

Even the conservative Daily Telegraph has a negative view of how Europe’s bankers have handled this. This writer says the Euro bankers set Greece up to fail.

Europe is a far different place than it was in the era of Keynes. We took Keynes' advice after WW2. By then we knew from grim experience not to treat a fallen nation the way Europe treated Germany in 1920.

I have an idea: look at how Germany was helped by the Marshall Plan after WW2. Maybe Greece would be treated better now if they'd invaded Europe instead of joining it.

From the Economist

From the London School of Economics

From TruthOut

German bankers think Greece has already been helped enough. The point is, after WW2 Germany was helped until they recovered. There should be mechanisms put in place that help repair the problems that caused the Greek crisis. Instead the European bankers, apparently, prefer to create a profitable lender-borrower relationship, and profitable relationships are meant to last, creating longterm profits for the lender. Did the European banks base their rescue plan on the model of payday lenders? (From the Guardian)

The Greek finance minister takes a very dim view of austerity.

The austerity model fails wherever it is tried. Why? Because it doesn't allow recovery. Instead it extracts the pound of flesh from the corpse of the debtor. Only money exists in the world of these bankers. No people, no communities, no societies, no nations, just money.

Economist Lars Syll on the failed austerity model

In Europe as in the U.S., it’s a case of Kiss Up, Kick Down. Pay the rich, gouge the poor. In any failed transaction the fault always lies with the poorer party. He always pays the penalty. (From the Washington Post)

Here are some key views from the bankers’ table via the New York Times

If Europe were a federal system like the U.S., the crisis in one state would matter to everyone. This idea gets a fuller airing at VOX.

Does Poverty Make You Less Moral?

Greece is in a worse position re Europe than Germany was after WW2. Germany had invaded and destroyed much of the continent. Greece has simply suffered a financial setback. Why is Greece in a worse position? (The New York Times discusses the Greek situation succinctly here.)

Germany could at least argue that failure to forgive its debts would cause it to invade its neighbors a third time. Would Greece be better off if it was an armed aggressor?

Why do we associate solvency with morality? Why are you more moral when you have more money?

It has to do with the hostages you hold.

Wall Street banks created havoc in the world economy by committing crimes, but they were bailed out. Why? Were they Too Big To Fail or Too Big To Jail or both?

(A judge writes about this in the LATimes. And Rolling Stone did an excellent piece about this in 2013.)

Germany may not have been solely guilty for the First World War, but it did cause and perpetrate the Second. And yet their argument in 1953 was valid. So is Greece’s. Germany of all countries should know this. Having a strong hand doesn’t make you the best moral arbiter.

In Ferguson, Missouri the mostly black citizens were targeted by police and city government as an easy revenue source. That revenue source meant the city could take less in taxes from property owners. If you are rich the system does you favors. If you are poor the system sees you as prey. Greece is the people of Ferguson, and the people of Ferguson are Greece.

Are the systems of government there to serve people? There’s a verb that has two possible meanings. There was a Twilight Zone episode where a book treasured by a ruling class of aliens was titled To Serve Man. It ended up being a cookbook, instructions how to serve humans as food in different and interesting ways.

Economics and justice sometimes turn on this kind of convenient misunderstanding. The powerful find it easier to misunderstand these things and profit from the misunderstanding.

The immorality and viciousness of the city government of Ferguson has been demonstrated and certified by the Justice Department. But it’s happening all over the country. Poverty or alienness makes innocent people easy prey, allowing police and city governments to take their property and extract fines from them with no law broken and no charges placed.

(The New Yorker described this in a riveting piece last year. I didn't believe such things happened legally in this country. They do.)

Being poor or being less than rich is becoming a crime in this country. Who and what have we become?

How Is A National Economy Not Like A Household Budget?

Krugman is especially good today. He makes some crucial points, one in particular, that most Americans don't understand, and that the conservative power structure, the banks, the 1%, are determined Americans never understand:

"Let’s start with what may be the most crucial thing to understand: the economy is not like an individual family. Families earn what they can, and spend as much as they think prudent; spending and earning opportunities are two different things. In the economy as a whole, however, income and spending are interdependent: my spending is your income, and your spending is my income. If both of us slash spending at the same time, both of our incomes will fall too."

The Austerity mantra tells us that nobody should spend more than they have in their pocket right now. No homeowners, no car owners, no college for you.

Unless you are a member of the 1% who have accumulated all of America's earning power over the past 30 years.

What income and savings ordinary working and formerly middle class consumers used to spend now belongs to the very rich and adds to the leverage that the 1% has to manipulate the economy.

The 1% also uses this leverage to manipulate Congress to ease their taxes and increase ours, to get our tax dollars to bail out the big banks but not help the homeowners who were wrongfully foreclosed, to get government to protect corporate earnings and CEO pay from taxes but cover any losses they might suffer through their own risky behavior.

The concentration of wealth also buys a lot of media, a lot of punditry, a lot of "expert opinion", a lot of public relations that can be used to persuade the mass of Americans that they don't deserve what they used to deserve, that austerity is good for them, that Americans should settle for less and quit grumbling.

Austerity policies take trillions out of the middle class consumer economy and put them into the well-stuffed mattresses of the 1%.

To what purpose? The rich can afford to play a long game. (Call it a long con if you like.) Their goal is to suppress working incomes to their lowest possible degree. They own for a living; they see working incomes as an evil. They have been suppressing working incomes for the past 30 years. What will eventually happen is the U.S. economy will begin to resemble a third world country, with large slums full of workers desperate enough to work for pennies and small gated enclaves of very wealthy people and their bodyguards.

Interestingly, the Austerity preachers give us Greece as an example of what happens if a country doesn't act according to the wishes of the very rich. But Greece is an example of the opposite. The Greek economy fell apart because its extremely wealthy stopped paying taxes and the consequences (unwise austerity policies) were forced upon the working population. But economies are made up of people who work and spend money, not just people who own for a living, who are rich for a living and do nothing productive. Why are the latter group made immune to taxes? What happens when trillions are taken out of a nation's economy and put tax-free in offshore banks? What happens is a Greek style collapse.

We're As Bad As Greece

While the crisis persists in Greece, rich Greeks aren't worried. It's not their problem. The rich float above the crises that impoverish and destroy working people. They benefit from the conditions that ruin the broader economy.

This article in the Guardian explains the Greek problem, and it's the same as the problem here in the U.S.: rich parasites. In both countries the rich are overpaid and immune to taxation. Meanwhile they benefit the most from the government spending they refuse to fund. Our tax financed military protects their trade. Our roads move their products. Our government funded research invents their patents. Our government cleans up their messes. Our safety net takes care of the workers they throw away. These three paragraphs from the Guardian are especially telling:

"Greek shipowners, who have gained from their profits being tax-free and who control at least 15% of the world's merchant freight, have also remained low-key. With their wealth offshore and highly secretive, the estimated 900 families who run the sector have the largest fleet in the world. As Athens' biggest foreign currency earner after tourism, the industry remitted more than $175bn (£112bn) to the country in untaxed earnings over the past decade. Greece's debt currently stands at €280bn.

"As ordinary Greeks have been thrown into ever greater poverty by wage and pension cuts and a seemingly endless array of new and higher taxes, their wealthy compatriots have been busy either whisking their money out of Greece or snapping up prime real estate abroad.

"An estimated €8bn flowed out of the Greek banking system in May as speculation over the country's possible exit from the eurozone mounted. Another €4bn was reported to have been withdrawn in the last two weeks – on top of an estimated €20bn since the start of the crisis in late 2009. Stories of rich Greeks sending their wives and best friends on "shopping missions" to remove secret hoards kept in banks in Switzerland and Cyprus are legion."

These three paragraphs might as well be about the U.S. and its lucky one percenters, the carefree rich––like the Romneys, who happily deduct twice the national median annual income every year for their horse expenses. It must be nice to have an expensive tax-deductible hobby like dressage. Why are our tax dollars subsidizing Mrs. Romney's playtime?

The Romney candidacy is all about making the rich less obligated to pay their way. It's about giving themselves and their friends a free ride while working Americans work harder and longer for less. President Romney would shift even more of the tax burden off people who live off wealth and onto people who work to survive. That is the Greek model, and it doesn't work. Rich Greeks are abandoning Greece, taking their wealth with them, just as Romney has most of his wealth in Switzerland and the Caymans.