The Present Age: Freak Out of the 1%

It quickly got dark Sunday morning after the day dawned with bright sunshine.

Saturday evening as I reclined on my mattress on the floor reading Ed Sanders' The Family: The Story of Charles Manson's Dune Buggy Attack Battalion, the chapter where Tex Watson and Charlie's girls -- Linda Kasabian, Patricia Krenwinkel and Susan Atkins -- butcher the occupants of the Polanski household on 10050 Cielo Drive in Los Angeles' Benedict Canyon the early morning of August 9, 1969, sounds of Seattle's Capitol Hill Pride celebration wafted through my open windows.

The theme to this year's Pride was "Stonewall, Never Forget." The sounds were of Steppenwolf; a guy who sounded like John Kay led a band through all Steppenwolf's big hits, including the ones that appeared in Easy Rider (1969), "The Pusher" and "Born To Be Wild." Suddenly the past wasn't gone. I was in the present but 46-years back in 1969 with the Manson Family, Stonewall and Steppenwolf. Very strange.

The present world we live in is indeed very strange. Unlike the world of 1969, there is no drug-fueled freak out and rebellion of the masses, no massification of bohemia, no disruptive culture of protest. Instead, what we have is a "freak out" by those in power as they try to maintain their domination.

The efflorescence of takfiri jihadis, seemingly spontaneous, has more to do with the constituent countries of the GCC trying to beat back the spirit of the Arab Spring. When all is said and done, the rise of ISIS is the direct result of actions by states such as Turkey, Saudi Arabia, and, yes, the United States. and the pathological desire to see an ally of Iran, Syria, toppled.

The blowback to this policy freak out is already being felt in Europe, as the European Union finds itself in stasis on how to deal with the refugees flocking to its shores from wars in Africa and the Middle East.

But no better example of the addledness of the current leadership is the attitude of the eurozone powers towards Greece. Paul Krugman has a tremendous column this morning, "Greece Over the Brink," in which he provides a pithy, succinct synopsis of the Greek debt crisis. Krugman properly places all the post-2010 blame on the troika:

Greece should vote “no,” and the Greek government should be ready, if necessary, to leave the euro. 

To understand why I say this, you need to realize that most — not all, but most — of what you’ve heard about Greek profligacy and irresponsibility is false. Yes, the Greek government was spending beyond its means in the late 2000s. But since then it has repeatedly slashed spending and raised taxes. Government employment has fallen more than 25 percent, and pensions (which were indeed much too generous) have been cut sharply. If you add up all the austerity measures, they have been more than enough to eliminate the original deficit and turn it into a large surplus. 

So why didn’t this happen? Because the Greek economy collapsed, largely as a result of those very austerity measures, dragging revenues down with it.

Krugman thinks Greece, by declaring a bank holiday and instituting capital controls, has already taken the most difficult step. He worries that a Yes vote will destroy the Syriza-led government and maintain the pestilential fiction of troika-dictated austerity. Interestingly, Krugman sees the current impasse as most radical leftists do -- a political attempt to destroy the not-sufficiently-neoliberal Syriza of Alexis Tsipras and Yanis Varoufakis:

So have I just made the case for “Grexit” — Greek exit from the euro? Not necessarily. The problem with Grexit has always been the risk of financial chaos, of a banking system disrupted by panicked withdrawals and of business hobbled both by banking troubles and by uncertainty over the legal status of debts. That’s why successive Greek governments have acceded to austerity demands, and why even Syriza, the ruling leftist coalition, was willing to accept the austerity that has already been imposed. All it asked for was, in effect, a standstill on further austerity.

But the troika was having none of it. It’s easy to get lost in the details, but the essential point now is that Greece has been presented with a take-it-or-leave-it offer that is effectively indistinguishable from the policies of the past five years. 

This is, and presumably was intended to be, an offer Alexis Tsipras, the Greek prime minister, can’t accept, because it would destroy his political reason for being. The purpose must therefore be to drive him from office, which will probably happen if Greek voters fear confrontation with the troika enough to vote yes next week. 

But they shouldn’t, for three reasons. First, we now know that ever-harsher austerity is a dead end: after five years Greece is in worse shape than ever. Second, much and perhaps most of the feared chaos from Grexit has already happened. With banks closed and capital controls imposed, there’s not that much more damage to be done. 

Finally, acceding to the troika’s ultimatum would represent the final abandonment of any pretense of Greek independence. Don’t be taken in by claims that troika officials are just technocrats explaining to the ignorant Greeks what must be done. These supposed technocrats are in fact fantasists who have disregarded everything we know about macroeconomics, and have been wrong every step of the way. This isn’t about analysis, it’s about power — the power of the creditors to pull the plug on the Greek economy, which persists as long as euro exit is considered unthinkable.

So it’s time to put an end to this unthinkability. Otherwise Greece will face endless austerity, and a depression with no hint of an end.

There is some reason to hope that the battle-hardened Greeks will vote No, even though elections are usually fear-based, lowest-common-denominator exercises. The fact that markets are down this morning but not enormously is another hopeful sign.