By William K. Black
Bloomington, MN: January 26, 2015
I wrote a column Sunday, January 25, 2015 as the Greek election results became sufficiently clear to know that Syriza was receiving a strong plurality from the voters and as the New York Times and the Wall Street Journal posted on their websites the first reaction news columns. I criticized the dishonest nature of both paper’s coverage (actually non-coverage) of what austerity inflicted on the Greek people. Both of those initial columns have now been modified, so I have looked to see whether they improved their candor in their re-writes. The updated NYT column still contains this clunker.
“Syriza’s victory is a milestone for Europe. Continuing economic weakness has stirred a populist backlash from France to Spain to Italy, with more voters growing fed up with policies that require sacrifice to meet the demands of creditors but that have not delivered more jobs and prosperity.”
The NYT’s EU economic correspondents remain hopeless on austerity. It isn’t that austerity has “not delivered more jobs and prosperity to Greece” – it is austerity that destroyed hundreds of thousands of Greek jobs and forced the Greeks into a Great Depression that is more severe and has lasted longer than Greece’s Great Depression of 80 years ago. It isn’t that austerity has “not delivered … prosperity,” it is that austerity pushed Greece to a 25% loss of GDP. The NYT knows these facts, but refuses to link them to austerity.
“Greece has endured a historic collapse since 2009; economic output has shrunk by 25 percent, and the unemployment rate hovers near 26 percent.”
Austerity is not a “sacrifice” bunt that one makes to advance a runner to a scoring position – it’s the gratuitous infliction of unnecessary pain on the Greek people that also deepens the Great Depression. The Greeks have been forced to sacrifice their children’s lives in Greece as university graduates frequently emigrate, but the supposed sacrifice of Greece’s graduates simply makes the crisis and the amount of pain pointlessly worse.
Syriza is the party that has embraced real economics. The troika’s faux economics rests on faith in the oft-promised arrival of the mystical “confidence fairy” and the purported joy of self-mutilation that the Greeks are advised they should be experiencing.
The NYT presents these words by Germany’s economic hit man without any comment or analysis.
“‘I hope the new government won’t call into question what is expected and what has already been achieved;” Mr. Weidmann said in an interview with Germany’s public broadcaster.”
What Germany “achieved” by inflicting austerity on the Greek people was forcing them into a worse-than-Great Depression so we should all insist that Syriza “call into question” the Troika’s “achieve[ments].”
Similarly, the NYT treats this parade of insanity as if it represented revealed truth.
“While Greece sees itself as being punished by creditors’ demands, Germany and a host of European officials have argued that Greece and other troubled nations in the eurozone must clean up the high debts and deficits at the root of Europe’s crisis. They say Athens has failed to make enough progress on structural reforms seen as necessary to stabilize the economy, and they are pressing Greece to raise billions of euros through more budgetary cutbacks and taxes.”
“Debts and deficits” are not “the root of Europe’s crisis.” The Great Recession was not caused by sovereign “debts and deficits.” Greece’s Great Depression was caused by austerity. Austerity is the cause of “Europe’s [continuing] crisis.” European deficits are too small. The eurozone economy has stagnated. One symptom is that it has failed to meet its inflation targets for two years – because inflation is far too low. And what does Germany insist on in such circumstances? It demands that Greece double-down on austerity and continue to self-inflict austerity for at least five more years even though each of these demands constitutes economic malpractice. Germany’s answer to learning (once more) that bleeding the patient has harmed his recovery is to bleed him more.
And the NYT column still ends with the absurdity of quoting the most infamous proponents of austerity based in America – Pete Peterson’s posse – to call for Syriza to betray its voters and its campaign promises and instead embrace austerity. The NYT felt no need to inform its readers that this is the same Peterson posse that is responsible for getting so many parties like Syriza elected in Latin America. Why? Because Peterson’s posse named and defined the “Washington Consensus,” which pushed Latin American nations to engage in self-mutilating their economies through austerity. That led to the “lost decade” in Latin America, the enhancement of rule by oligarchs like Carlos Slim made fabulously wealthy by the Washington’s Consensus’ push to privatize national companies, and the election of many leaders opposed to the Washington Consensus. Peterson’s posse is deathly afraid that finance’s Frankenstein monster – austerity – is beginning to transform the politics of another continent in a manner that sickens Peterson.
The Updated WSJ Column Claims Austerity is the Medicine that Makes Its Prisoners Free
The WSJ goes bonkers in its first sentence.
“ATHENS—Greek voters handed power to a radical leftist party in national elections on Sunday, a popular rebellion against the bitter economic medicine Greece has swallowed for five years and a rebuke of the fellow European countries that prescribed it.”
Austerity is not a “medicine” – not even a quack medicine – for a Great Recession. Austerity in such circumstances pushes nations towards deep depressions. If sensible economics makes one a “populist,” what label would the WSJ pin on the economic illiterates that think that the answer to inadequate demand for goods and services is to further reduce that demand through austerity?
The WSJ tells us that it is “astonishing” that an EU nation would elect a party like Syriza that believes (at least in the context of austerity) in conventional economics rather than the mythical “confidence fairy” that will magically appear if only the Greek people can be made to suffer enough. Pain makes one free.
“A Syriza victory marks an astonishing upset of Europe’s political order, which decades ago settled into an orthodox centrism….”
Austerity as the rational response to a Great Recession is not an “orthodox” view among economists, but a cargo cult devoted to the veneration of the confidence fairy. The WSJ admits that Europe “is mired in economic stagnation,” but refuses to note that this is due to austerity and that all of Europe would be better off if it ceased the economic malpractice of austerity that is akin to bleeding the patient to make him healthy. A doctor that bled his patient would be disbarred. In the eurozone, an economist who bleeds the economy is promoted and praised even when he gratuitously causes a Great Depression.
It is only in the penultimate sentence of the lengthy article that the (5% of readers who read that far) would learn an important fact vital to understanding why Syriza won – austerity has forced Greece into a Great Depression worse than its Great Depression of 80 years ago. Correction, the reader would not learn that fact because this is Murdoch’s paper. Instead, the reader would learn that austerity had caused Greece’s economy to grow. Ok, the growth is a negative 25 percent, which we normally call the opposite of growth, but the WSJ wants us to ignore the bit about austerity forcing Greece into a worse-than-Great Depression and focus instead on the last several months. Thus does the WSJ picture austerity as a raging success that the unfathomable Greek people have turned their back on in electing Syriza. Notice that the propaganda, in what is purportedly a straight news story rather than opinion, states this lie as if it were undisputed fact.
“Since first seeking a bailout in 2010, Greece has undertaken broad economic overhauls and cutbacks that have helped mend its public finances and nudged the economy back to growth following six years of deep recession. Those cutbacks have come at a cost: Some 25% of Greeks remain jobless, while a quarter of households live close to the poverty line.”
Well, no, actually, austerity has not “nudged the economy back to growth,” but rather hurled Greece into a gratuitous Great Depression that has caused mass unemployment and poverty.
Germany’s answer to that human catastrophe caused by its austerity demands is to demand increased Greek austerity. You know, a “centrist” cargo cult of devotees of the confidence fairy. The WSJ finds it “astonishing” that the Greeks want out of the cult. The paper finds it “astonishing” that the Greeks have decided to take back their nation and restore Greek sovereignty rather than continue to be ruled by German puppets who masochistically followed the economically sadistic German diktats that they inflict pointless pain and humiliation on the Greek people. Throwing 1.5 million Greeks into unemployment and poverty is never a sensible or moral policy. Germany’s elites have not simply been indifferent to the suffering of the Greek people. Top German politicians and media figures delight in denouncing the Greek people who have been reduced to poverty by Germany’s insistence on austerity as lazy defectives and freeloaders. Top German politicians have demanded that Greece be forced to sell Greek islands to bail out German creditors. The only thing “astonishing” about the Greek reaction was that it took so long for the Greek people to say “hell no” to Germany’s diktats.
The WSJ Once Had Many Great Reporters
Ten years ago, when a WSJ reporter called me he or she would emphasize in the first 30 seconds that they were from the news side of the shop rather than the land of the looney ideologues. Now, only a few surviving good reporters say that because the news side of the operation has been thoroughly Murdoched. Read the WSJ article again with a “Where’s Waldo” approach and find the sentence in which the “journalists” managed to slip the word “Marxist” into their screed posing as a news column. You know that they, and Murdoch, loved blowing that dog whistle.