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Saturday, November 12, 2011

[socialist-econ] Harold Meyerson: Banker's Choice

via Portside

Banker's Choice

By Harold Meyerson
American Prospect
November 11, 2011

Imagine letting Goldman Sachs and Bank of America
select our president-that's just what's happened in
Italy and Greece. 46 Donate Email Print Send to

So Greece has a new prime minister - Lucas Papademos -
and Italy looks about to have a new one, too - Mario
Monti. To which not just you and I but damn near every
Italian and Greek responds, "Who?"

Neither Papademos nor Monti has ever held elective
office, or even run for one. Neither has been a
minister, sub-minister or even civil servant in one of
their nation's ministries. Neither has developed, or
sought to develop, a public following from their
careers as economic technicians, chiefly on the
European supra-national level. Yet each is about to
lead a major nation.

Papademos and Monti are something new under the sun:
national leaders elected by the markets. Imposed, not
as pro-consels by foreign occupiers, but by the
European banking community, by the finance ministers of
the Eurozone powers - chiefly, Germany and France. Each
has an impressive resume and a good reputation with the
centrist political and economic elites of his own
nation, but there's no reason why the person on the
street of Rome or Athens should know who the hell they

But imagine if the U.S. couldn't sell its Treasury
notes (which has never been a problem, let's be clear),
and the IMF and Germany and China got together and said
that Barack Obama, Joe Biden, the Cabinet and the
Congress had to go. Imagine that they then designated
as Obama's successor, say, the guy who followed Tim
Geithner as head of the New York Fed (I don't even know
who that is), or Robert Zoellick, the American who
heads the World Bank. That's essentially what just
happened to Italy and Greece.

And the way this fits into democratic theory is - well,
it doesn't fit into democratic theory. It's closer to a
coup without tanks. To be sure, these are temporary
coups until each nation holds new elections, but
Papademos and Monti are not supposed to be mere
caretakers until the real leaders arrive. To the
contrary, they're assuming power under instruction from
the markets - the markets that have seen Italy's
financing costs rise and the value of stocks everywhere
topple - to make sweeping cuts in services and
substantial hikes in taxes, cuts so sweeping and hikes
so substantial that no elected leader would dare make
them. They've been instructed by the markets, in
essence, to lower the living standards of their

Both Monti and Papademos look to be corporate liberal
internationalists of the kind that in the U.S. end up
in the Treasury Department. Papademos went to college
and grad school at MIT and taught economics at Columbia
from the mid-70s to the mid-80s. He even served as
senior economist for the Federal Reserve Bank of Boston
in 1980. Returning to Greece in 1985 to work as chief
economist of the Bank of Greece, he rose to the post of
the bank's Governor; then served as Jean-Claude
Trichet's chief deputy at the European Central Bank
from 2002 to 2010, returning again to Greece in 2010 to
become an economic adviser to Prime Minister George

Monti went to college in Italy, but completed his
graduate studies in economics at Yale, where he studied
under James Tobin (which I suppose increases the
chances that he supports a financial transaction tax).
He was an economics professor and university
administrator in Italy from 1970 through 1994, then was
appointed to the European Commission, where he was
handed various economic portfolios, including those on
financial services and competition, in which capacity
he initiated anti-monopoly proceedings against
Microsoft and led the investigation that culminated in
blocking the merger of General Electric and Honeywell.
With Jacques Delors and Daniel Cohn-Bendit, he has
supported an initiative to deepen the European Union,
and he was the first chairman of Breugel, a Brussels-
based EU-oriented think tank. His bio on the European
Commission's website listed him as an adviser to
Goldman Sachs, and it's downhill from there: A
conspiracy theorist's dream-come-true, Monti, according
to Wikipedia, is also the European chairman of the
Trilateral Commission and a member of the Bilderberg

But there's nothing conspiratorial about what is
happening in plain view in Italy and Greece: Two
economists have been imposed from on high to make
changes to the Italian and Greek economies - really, to
fundamental lifestyles of Italians and Greeks - that
neither nation would be likely to make through the
normal democratic processes. Some of the changes we're
likely about to see would probably come in any case,
but surely not all: Democracies tend not vote
themselves into austerity-driven penury. But Italy and
Greece (the latter, need I note, the cradle of
democracy) aren't really looking like democracies just
now, or even sovereign states.

So what do we call this? A coup? An occupation? The
latest version of the 18th Brumaire? (That one's for
the Marxists.) If nothing else, it's certainly a
triumph of capitalism over democracy.

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