Privatisation of Public Assets; A Way to a More Competitive Economy or an Exercise in Orwellian Doublespeak

Since 2010 the European Commission, the IMF and the Greek and European economic and political elites with the theoretical backing of the neoliberal ideologues have imposed a cruel internal devaluation on the Greek nation that has generated an economic collapse of the Greek economy unlike any seen in Europe since WWII. This misanthropic austerity demands cuts in wages and pensions, increases in taxation, total relaxation of any collective agreement, redundancies for public sector employees and severe cuts in funding for an already underfunded health system.

This agendum of internal devaluation is supplemented with a programme of sale of public assets via privatisation programmes. The neoliberal dogma argues that this ‘structural reform’ aims at ‘reducing the government’s deficit and debt’ and to induce ‘competitiveness’. Orwell would have been impressed by this exercise of doublespeak.

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Trump and the myth of protectionist disaster

Of the many reasons for a rational person to look upon the Trump presidency with anxiety, ‘protectionism’ frequently appears at the top of the list in the mainstream media. The Independent quoted an executive of a large mining consortium warning us of “global trauma” should the new president fulfil his promise to introduce tariffs.  Some progressive commentators seem to share the protectionist anxiety. In response to Trump’s declaration that “protection will lead to great prosperity and strength,” the Guardian’s Jonathan Freedland told his readers that this assertion is “in defiance of the historical experience that says protection leads, in fact, to crisis and world war.” Given the seriousness of these warnings, their validity bears investigation.

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Did the Irish economy ‘recover’?

For several years now, mainstream economists and Right wing policy-makers have been arguing that the Irish case constitutes proof positive of the ultimate correctness of austerity and labour market liberalisation policies. The economy of this small island was hit incredibly hard by the financial crisis of 2008/09. Fortunately, so goes the Right wing story, Irish politicians saw the light and implemented the standard neoclassical recipe: draconian austerity and the liberalisation of the labour market. These policies, the Right wing fiction continues, have been a gigantic success: by 2015 Ireland was the fastest growing economy in the EU. Ireland was also the fastest growing economy in the EU in 2016. What is true about this? Did the Irish economy “recover”?

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Trump bashing: neoliberalism hits back

Pro-Americanism in Europe changed since Trump won the election. Those who believed that Europe would always faithfully follow America’s course have been proven wrong. The anti-Trump movement is active in many countries and in all media. Its political direction is clear. The problem with the Trump bashing is that the “liberals” criticise absolutely everything that Trump does. In proceeding like this, they lose the ability to reflect upon certain positions and policies.

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Abandoning the euro to save Europe

Without a European sovereign, no real budget; and without a budget, no viable economic policy. As long as Europe does not emerge from this dilemma, the euro area will remain stuck in the vicious circle of stagnation, resentment and conflicts of responsibility. If fiscal federalism is out of reach, then it is crucial to be able to adjust exchange rates to boost growth and employment by leaving the monetary union.

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Towards a new European Monetary System – Not the solution to everything, but better than the status quo

The European Monetary System (EMS) that existed between 1979 and 1998 attracts increasing attention among those who oppose the European austerity regime. A discretionary exchange rate regime such as the EMS would better fit to Europe’s heterogeneous economic conditions than the Euro does, but it would surely not eliminate all transnational tensions within today’s Eurozone.

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New UNCTAD report calls neoliberalism an epic failure and argues for global Keynesian stimulus policies

The new United Nations’ report The World Economic Situation and Prospects, 2016, a joint product of the United Nations Department of Economic and Social Affairs (UN/DESA), the United Nations Conference on Trade and Development (UNCTAD) and the five United Nations regional commissions, shows in essence that the mainstream neoclassical policies of the last thirty to forty years have been radically wrong and that they are bringing the world to the brink of economic collapse. Another debt crisis is unavoidable, unless we quickly and radically change course.

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Why 5.2 percent income growth still leaves us in the doldrums

John Komlos, professor emeritus at the University of Munich and author of “What Every Economics Student Needs to Know and Doesn’t Get in the Usual Principles Text,” explains why the superb news from the census report released last week doesn’t feel so superb for many Americans.

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Thomas Piketty, neoclassical economics and reality

The French economist Thomas Piketty is regarded by many on the Left as something of a lifesaver. Did Piketty not clearly and unequivocally demonstrate that distribution ratios frequently change in favour of capital, because the return on capital is regularly higher than growth? The formula r > g which expresses this has become famous. Many consider this a particularly important insight because Piketty’s analysis remains strictly wedded to a neoclassical model. However the economy functions, be it Marxist or neoclassical, according to Piketty the result will always be the same: capital will win. Friederike Spiecker and I have explained on two occasions in recent years that things are far from so simple.

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Austerity: stagnating wages for 70% in the developed world. Producing, sanctioning and killing the poor and increasing the number of billionaires

A new report calculates that wages did not rise for more than half a billion people in the developed world between 2005 and 2014. Up to 70% of people in the developed countries saw their incomes stagnate. Half a billion people in 25 of the west’s richest countries suffered from flat or falling pay packets in the decade covering the financial and economic crisis of 2008-09. The report found there had been a dramatic increase in the number of households affected by flat or falling incomes and that today’s younger generation was at risk of ending up poorer than their parents. As a comparison, only 2% of households lived through the period from 1993 to 2005 – a time of strong growth and falling unemployment – without seeing their incomes rise. The report notes that a majority of people who had seen no increase in their incomes tended to be pessimistic about the future both of themselves and their children, that they oppose migration and that they are more likely than those who are advancing to support nationalist parties such as the Front National in France or support the Brexit in the UK.

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No miracles in the Spanish economy: Gaps and contradictions in the Annual Report of the Bank of Spain

As every year, in June was released the Annual Report of the Bank of Spain - BE (2015). A report that probably has less impact now than a few years ago because the BE has lost all authority over monetary policy. Competences which have now passed into the hands of the European Central Bank (ECB). However, the analysis from the BE over the economy of the previous year (2015 in this case) and the lines that it points out about the guidelines for economic policy in the future remain interesting, especially as a point of view qualified of the dominant groupthink.

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What J.M. Keynes meant by ‘We simply do not know.’

In these times of crisis and stagnation sometimes amazing things happen. The executive editor of the Financial Services of the Frankfurter Allgemeine, Gerald Braunberger, cited two extremely important quotations of John Maynard Keynes, not, as one could expect, in order to refute or denounce him, but as evidence of the state of the world that we are in (see here). It is clear that something is starting to slip. We expected this already for a long time, but previously it was not successful because all dissent was blocked by the inertia which is created by the forces of the powerful ruling doctrine.

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The looting of the Greek economy: The case of the Greek railway and Public Power Corporation

With the implementation of the third bailout agreement being fast-tracked and the groundwork being laid for a new one in the guise of a medium-term framework, the Greek economy is undergoing structural changes that, on the heels of the social insurance and tax legislation, will further impede it in relation to other developed economies. Self-employment in small and midsize businesses, private sector salaried work, and ownership of small and midsize enterprises have been crushed, only to be followed by “renationalization” of public infrastructure and public utilities for the benefit of foreign states.

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Greek Banks: A Serial Financial Crime

The bank recapitalization demanded by the end of 2015 as a condition of Greece’s third bailout agreement, despite the assurances of both the Greek government and its creditors that the main concern was the banks’ protection, achieved the absolute worst: for the country to lose the control of its systemic banks at a huge cost to the Greek public sector.

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Italy’s banking crisis

The problems of the Italian banking system have been public knowledge for quite some time, but since Brexit it seems that these problems have worsened with Italian banks having suffered a dramatic decline in their value on the stock market and the oldest bank in the world and Italy’s third-largest lender, the Banca Monte dei Paschi di Siena, facing serious troubles. As The Economist put it, "another, potentially more dangerous, financial menace looms on the other side of the Channel—as Italy’s wobbly lenders teeter on the brink of a banking crisis". This is a concern shared by other economic newspapers, such as the Financial Times or the Wall Street Journal , and world leading media.

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