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June 11, 2012

Why the media want you to blame Greece

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Written by: iankehoe

By Ian Kehoe               Looking through some of Rupert Murdoch’s newspapers recently I found myself shocked and equally intrigued by the vilification of Greece, this corrupt little country that had brought down Europe and irritated those poor suffering markets so much… so much so that I was half expecting a headline saying ‘Greece causes man to burn his toast’. Like someone baying for blood in the Coliseum it’s so tempting to join in and forget oneself in the thirsty crowd…  and it’s just such a nice simple explanation for everything – the Greeks did it!

After reading all this I came to the conclusion that it suits a lot of people to locate our very human problem in Greece. Firstly, because the case of Greece is largely a case of bad public management, and therefore supports those who want to see the global economic crisis as a government spending problem. However, this focus hides the fact that in the other struggling countries, Spain, Ireland, and Portugal most of the debt crisis was actually caused by bank lending to the construction industries and consumers. Indeed Spain was the only country in the Eurozone to keep its borrowing below the agreed 3%. In the US, where let’s not forget all this started in 2008, it was caused by the collapse of Lehman brothers and sub-prime loans.

Yet somehow, what used to be called the ‘banking crisis’ has been rebranded as a ‘European government spending crisis’ and focusing constantly on Greece very conveniently reinforces this idea. However, if we follow the money it is all about banks. The ECB bailed out European banks to an extraordinary 1 trillion, economists are on record for saying that almost none of this money went back into the economy. In the UK they bailed out their banks to the sum of 850 billion, yet they consistently seem more interested in Greece’s far smaller bailouts than their problems with The City of London. Even the so-called bailout of states public finances are actually bailouts of banks. The Spanish PM called Spain’s bailout a ‘victory for the Euro’ – surely the transfer of 100 billion of badly needed public money into banks is not a victory for anyone but the banks? In Spain just like Ireland and other countries, national governments are being forced by Germany to take the loans  – rather than the failing banks directly taking the loans – this means these bailouts are loans that have to be paid for by you and me and will mostly be paid for by younger generations to come.  So, in reality, besides Greece, the bailouts that are occurring are not about bailing out irresponsible governments but about bailing out the financial sector.

Yet, for all this, it is Greece’s problems that tend to attract negative media attention? There are far bigger issues at play here than Greece – but it’s in a lot of people’s interest that we don’t face up to them – including much of the media. The global financial system has become deeply corrupt, so corrupt that it is surprising that there has not been a revolution – but dealing with our financial system is messy, complicated and frightening and might involve real transformation from everyone – a collective acceptance that the system just isn’t working anymore and an acceptance that we can’t keep living like we do – but it is so much easier to imagine that a little country of 11 million people is causing the whole problem.

The purpose of this article is not to deny that Greece caused many of its own problems and badly needs reform and to take collective responsibility – but Greece has been made into a very useful scapegoat for Wall Street and the City of London, and they and their friends are very glad that we are distracted from what they have done, and are still doing. Greece is just the shadow on the wall of the cave, the real monster is still there, and nothing has changed it, if anything it has grown even more dangerous because we have done nothing about it.

 






One Comment


  1. tony kehoe

    You have correctly anaysed that countries like Ireland and greece getting out of their depth and into debt, is not the core issue. Since time began people and institutions have being getting into debt, but usually with the Sovereign (kings or governments). Ultimately debt forgiveness followed because the alternative(blood on the streets and power overthrow) was the unacceptable alternative.
    Since the rise of the banks and the transfer of money and hence power to a small oligarchy the concept of debt forgiveness is a no-no and why?. Simply because there is no downside as consequence passes to the Sovereign power to sort out the inevitable backlash from those (all of us) who are deprived of the means to repay our debts, The Oligarchy cannot lose because to save themselves the Sovereign (EU or states) have to shoulder the debt to save the people from themselves while the monied class can sit on the sidelines encouraging the eventual win-win (for theselves)



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