The Collateral Damage of Austerity

Wednesday, July 8th, 2015

By Robert C. Koehler

“Officials in France and in Brussels said on Monday that they were unhappy and dumbfounded with the no vote, but let it be known that they would hold the door open to the possibility of a compromise between Greece and its creditors.”

Dumbfounded? Why? Because the godlike power of the creditors was insulted?

Mainstream coverage of economic matters — the above quote is from the New York Times — seldom cuts very deep into the world of money, seldom questions who’s in charge, and seldom dares to suggest that an economic system ought to serve humankind rather than vice versa.

The austerity packages Greece has endured as its condition of economic bailout over the past half-decade — dictated by those who wielded financial power and were determined to profit enormously off the suffering of Europe’s economic losers — have not only further gutted the country’s broken economy and prevented any sort of recovery toward self-sufficiency, but have shattered the socioeconomic structure of life for a huge segment of the Greek population. All of which is . . . you know, too damn bad. Money is as money does. The creditors have no choice but to impose severe restrictions on Greek social spending.

As Robert Kuttner wrote recently at Huffington Post, Greece’s economic comeback, including needed governmental reforms such as more effective tax collection, “would be so much easier and more effective in the context of a recovery program as opposed to a debtors’ prison.”

Much of what I read about the situation reminds me of the way the mainstream media cover war: as both necessary and, in human terms, utterly abstract, with its consequences the stuff of separate, lesser stories, which have no bearing on the war’s national value and ongoing necessity.

The collateral damage of Greece’s austerity includes:

• An unemployment rate of more than 25 percent, and nearly double that for young people. “Meanwhile, our future flees. A quarter million university graduates have abandoned our nation. They have no choice: unemployment for those under 25 has hit 48.6 percent,” Michael Nevradakis and Greg Palast write at OpEd News.
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• Pensions slashed multiple times, “two-thirds of pensioners live below the poverty line,” according to Nevradakis and Palast.
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• Devastating cuts in healthcare, leaving nearly a million people without any, the U.K. Independent reporter last year. The article quoted Dr. David Stuckler of Oxford University, lead author of a report on the crisis in the medical journal The Lancet: “The cost of austerity is being borne mainly by ordinary Greek citizens, who have been affected by the largest cutbacks to the health sector seen across Europe in modern times.” The consequences of have been particularly devastating to the most vulnerable, with infant mortality rising by 43 percent between 2008 and 2010, and stillbirths up 21 percent, according to the article.
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• “And, for the first time since World War II, widespread starvation had returned,” Nevradakis and Palast write. “500,000 children in Greece are said to be malnourished. Students fainting from hunger in frigid schools which cannot afford heating oil is now a common phenomenon.”
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Debtors’ prison, indeed. “Imagine,” Kuttner writes, “if the Europeans came bearing genuine technical assistance, investment capital and debt restructuring as opposed to more austerity demands.”

Imagine an economic system focused on serving human, and planetary, needs. Yet in the current dying howl of capitalism, human needs are reduced to frivolous luxuries. Where’s the profit in good schools and healthy children? As the profiteers impose austerity on the vulnerable, indebtedness becomes a condition to be mocked. Yet we are all indebted. Our lives depend on the good will of others.

In the wake of World War II, for instance, Germany was forgiven most of its Nazi-era debt. “In the 1950s, Europe was founded on the forgiveness of past debts,” Thomas Piketty and other economists point out in an open letter to German Chancellor Angela Merkel, published in The Nation. This forgiveness allowed it to make “a massive contribution to post-war economic growth and peace. Today we need to restructure and reduce Greek debt, give the economy breathing room to recover . . .”

And Kuttner asks us to “consider the many hundreds of billions of dollars of official aid that went to the big banks that caused the financial collapse of 2007-2008. Their sins, and the resulting damage to the global economy, were far worse than those of Greece. Yet they were showered with official aid. That double standard is also staggering.”

A bogus moral authority seems to accompany the accumulation of wealth — a sense that one deserves it, while those without wealth deserve servitude and hopelessness. Beyond this moral authority lies the desperate need not to recognize the common humanity of those who are struggling to survive.