Saturday, June 16, 2012

In Greece it's a choice between people or banks

Tomorrow the Greek people will go to the polls to determine what is more important: the needs of the people or the greed of the banks.

Six weeks ago elections were held but no party was able to cobble together enough support to form a coalition. The two parties expected to slog it out on Sunday are the right wing New Democracy Party and the left wing Syriza. New Democracy is fully on board with the desires of the European banks and investors and is more than willing to sacrifice the future of Greece at the altar of the Euro.

Syriza, on the other hand, has campaigned hard against the austerity measures imposed upon Greece by the European banks.

Those supporting the austerity measures don't understand a basic fundamental fact. You can't pull an economy out of a recession by raising taxes and cutting spending to the poor and working classes. The problem in Europe is too little demand for the goods and services produced. The solution is to increase the aggregate level of demand. 

Taking money out of the hands of the Greek people and handing it to the banks won't help bring about an economic recovery. Taking that money out of circulation in Greece won't do a damn thing to stimulate demand. It will, instead, cause demand to drop, therefore, making matters even worse.

Cutting back on the amount of money spend on education and health care will have a negative long-term impact on the Greek economy, as well as on the everyday lives of the Greek people. This is part and parcel of the same conditions the IMF and World Bank have imposed on developing nations for decades - and it doesn't work.

Such measures destroyed economies in Africa and Latin America. You could even make the argument that the measures imposed on Mexico provided the fuel for the drug war that has engulfed the country. The measures forced our small-scale farmers to make room for larger mechanized farms. The measures created a multitude of low-paying factory jobs near the border which led to chronic underemployment. It was into such a mix that the drug cartels began their brutal turf battle.

Proponents of austerity are selling the Greek people a bill of goods. It is time for the people to tell their leaders that the citizenry must take priority over the European banks and investors

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