Former Greek Finance Minister Yanis Varoufakis relates this telling anecdote from his negotiations with the troika:
It is important to remember exactly what is at stake in the Greek referendum. As Jerome Roos reminds us, austerity has decimated Greek society:
Greece has by now lost a quarter of its total economic output since the start of the crisis. Unemployment is still higher than it was in the United States during the Great Depression. Public health and other public services have completely imploded. Almost 1 million Greeks are without health insurance; 11.000 people are estimated to have committed suicide as a result of economic hardship.
Last week Guardian reported on new research conducted by economists at Cambridge University concluding that economic policies pursued since 1979 have failed to “boost growth.” The policies are described as “lower tariffs and income taxes, free movement of labour, limited legal immunity for trade unions, privatisation and light-touch business regulation.” The last item in the list follows the neoliberal mythology of the small state which gives the impression that regulation is curbed under neoliberalism when, in fact, state regulation of markets has steadily increased since the late 70s. In any case, this analysis seems to rest on a profound misunderstanding of what neoliberalism was meant to achieve.
Yesterday, President Obama sent a brief message to the White House email list making the case for Congress to pass Trade Promotion Authority. This would enable the President to negotiate the Trans-Pacific Partnership (TPP) and send Congress a trade proposal to adopt or reject, but not amend. The negotiations are taking place in secret–not a first for the self-proclaimed “most transparent administration in history”–and we have to rely on a leaked chapter (on investment) to learn anything about the TPP. The President’s email tries to brand the partnership as a trade agreement but, as Paul Krugman has previously noted, TPP is not “especially important” when it comes to trade.