Are you proposing an unbalanced budget as a way out of zombie economics and long term prosperity? To live beyond one’s means is to live in FALSE prosperity that will not last long, as the present situation in Europe shows starkly. Moreover, a false prosperity encourages and incites a stampede of speculative bubbles that with algorithmic precision blow up in a bust. You are confusing austerity as a ‘drug’ and austerity as a ‘poison’. As a drug it cures your insanity to live beyond your means; as a poison it exacerbates the illness of recession by depriving you of the stimulants of a Central Bank that could weaken the virus of recession and cure it gradually, if one uses the funds wisely to reinvigorate the REAL economy and boost entrepreneurial creativity and innovation, as the leader of the Opposition in Greece, Antonis Samaras, last May, proposed in his Zappeio Address.

Hence, your “zombie” austerity turns into a boomerang and hits you with all the force of Newtonian gravity in your confused austerity.

The following exchange between me and Professor of  Economics Yanis Varoufakis at Athens University took place on his blog

December 24, 2011 at 15:32 #

We have forced every sea and land to be the highway of our daring. Pericles

In the present storm-laden dark sky of Greece, a glittering new star has made its appearance which like a beacon of the sky is attempting to navigate the battered ship of Greece into calmer waters and save it from shipwreck. This new star is the leader of the Opposition of the New Democracy Party, Antonis Samaras, who since he has become its leader two years ago, has displayed unprecedented qualities of leadership and economic and political insight and daring, in this critical economic situation that Greece traverses, that only a statesman of Periclean dimensions could exhibit.

The criticism of Samaras from early on as leader of the Opposition of the Papandreou government, which he has depicted as amateurish and inept, has been totally justified. His early warnings that the policies of the socialist government of Papandreou were wrong and the torrent of taxes that the latter rained upon the middle classes would be disastrous for the economy. In October 2009, when Papandreou began his premiership, public debt was 298 billion euros, 125% of GDP. Today it has reached the whopping amount of 360 billion euros, 165% of GDP. Gross National Product in 2009 was 238 billion and presently has shrunk to 218 billion. According to OECD estimates it will decrease even more by 6% in the near future and unemployment will increase to 18.55%, affecting tragically younger people.

Further, Samaras predicted that the first EU Memorandum that imposed draconian austerity measures on Greece would neither decrease the budget nor would it put the economy on a track of recovery. As an economist he cogently argued that in conditions of deep recession austerity measures would exacerbate the economic crisis not dampen it. He was severely criticized and reprimanded when the New Democracy Party voted in parliament against the extreme austerity measures. Moreover, he had the moral strength and political insight not to be tempted to fall to the seductive calls of Papandreou to participate in a unity government to deal with the national crisis. Samaras gave as his strong reasons that since the PASOK Government was refusing to change its economic policies, that followed the blueprint formulated in the European Memorandum without attempting to modify it in certain crucial parts that could deter the further weakening of the economy, and which had failed the country, he, and his party, would not take part in a coalition government merely for the purpose of being an “accomplice” to these flagrantly wrong policies.

Samaras made a series of proposals that he encapsulated in his “Restart of Greece” by which the country could avoid the shoals that would cause its economic sinking. Last May in his Zappeio II Proposal the Leader of the Opposition presented a number of policies that could put Greece on the road of economic recovery and its corollary, the ability to pay off its debts. His restart programme would necessitate a “shock treatment” but with positive results. (a) A severe cut in public spending and on pensions, only above the level 700 euros. (b) A reduction of taxes on household income and businesses and a decrease in VAT in all sectors of the economy particularly in tourism which is pivotal to the Greek economy. (c) The abolition of all means test for the acquisition of a house and on capital repatriation so to inject money in the financial system. (d) The legalization of all buildings constructed without permits-there are more than a million-which will bring substantial increases in state revenue. (e) The state is to pay off all its debts to private individuals thus increasing market liquidity. And banks to commit to the real economy 20% to 30% of the guarantees they receive. This will further increase liquidity in the market and be an incentive to stop capital flight. (f) The state must not make any cuts to the Public Investment Programme with its high multiplier effect that is a powerful instrument to combat recession. (g) The acceleration of denationalization of public owned entities, which the Papandreou government was slow to implement, and the stimulation of the development of property which is the economic engine of the country. All these relief measures will increase state revenue and the Restart programme will balance the budget within just over three years, and start paying off Greece’s debt.

This daring Restart programme is not an abstraction and Samaras is quite aware that to concretize it he has to convince the lenders of Greece, i.e. the EU, of the urgent necessity of making changes to the present economic policies that clearly have failed, if the goals of the Memorandum of 26^th of October, to which he is irrevocably committed, are to be achieved. This task of convincing Greece’s European partners of a change in tack has been eased, as High German officials admit now that the initial programme was wrong.

Finally, Samaras warns (not exactly in the following words) that this contagion that is threatening to engulf the European continent is not only economic and political but also social, and could lead to an explosion of European Spring protests that could not be contained and could transform radically the political landscape of the continent by the reappearance of the infernal star of the swastika in the political constellation of Europe.

But History has shown repeatedly nations at moments of great dangers, produce great and illustrious leaders that saves them at the eleventh hour from destruction and obliteration. From Themistocles to Charles Martel to Winston Churchill, the invasions of barbarians and dictators were defeated by the sagacity, imagination, and moral strength of exceptional leadership. Antonis Samaras from his words and deeds without any doubt belongs to this lineage of leadership. Greece facing the abyss of economic bankruptcy, poverty, and mob rule with the dangers that are historically inherent in such combination, i.e. the resurgence of fascism, has a unique leader in Antonis Samaras that could prevent this stupendous threat from consummating which would consign the country into the doleful state of penury and into the captivity of dictatorial regimes.            

The following proposal was sent to the leader of the Opposition Antonis Samaras on 11-23-2011.

Dear Mr Samaras,

The following proposal might overcome the impasse of the signed guarantee without Greece losing its dignity and amour propre

The German politicians, like the Minister of Finance Wolfgang Schauble, who illogically and doltishly insist and persist in their demand that the leader of the Greek Opposition, Antonis Samaras, sign the Memorandum of the 26^th of October as a condition of releasing the sixth packet of financial assistance to Greece, can be likened as an intellectually unguided German torpedo that sunk the Lusitania of Greek dignity and respect that are embodied in the democratic constitution and parliamentary institutions of the country. It was to the latter institutions and to the interim transitory government led by Lucas Papademos that the leader of the Opposition had made an explicit, unequivocal, and unconditional commitment to accept and implement (Subject to some modifications in regard to its implementation.) all the obligations emanating from the Memorandum. Therefore one is nonplussed with this EU demand for a written pledge by the leaders of the three major parties when all of them accepted all the conditions of the Memorandum unequivocally and unconditionally in Parliament and by giving their vote of confidence to the Interim Government of Lucas Papademos who was to initiate the implementation of the decisions of the 26^th of October.

Surely the Germans are not so stupid, or they could be, as to disregard this essential and irremovable commitment the major parties made to the conditions of the Memorandum and demand in its place a formalistic signature. One therefore cannot avoid the suspicion that there might be a hidden agenda behind this ostensibly doltish demand, i.e. the “Sarajevo assassination” of Greece by the Germans, its ousting from the Eurozone by forcing Greece to default and to depart from the European Union. The leader of the Opposition must eschew from falling into this trap, if indeed, such a trap is set in the wings by the leaders of the European Union. But the “assassination of Greece” from the Eurozone could trigger an internecine economic war in Europe that could not be contained, as the sires of such a sinister plan might have hoped, and would lead both to the destruction of the euro and the European Union. Thus it is incumbent on Antonis Samaras’ statesmanship to be not only the saviour of Greece but also the saviour of Europe. This could be accomplished by the following stratagem. The leader of the Opposition giving a written guarantee of the acceptance of all the conditions of the Memorandum as demanded by the troika, but not sending it to the leaders of the European Union but sending it to the Greek Prime Minister, Lucas Papademos. And the latter will convey to the European leaders the consummation of the signed guarantee by the major parties that the former demanded as the sine qua non for the release of the sixth instalment. Hence, the consignment of the written guarantee within the precincts of the Papademos Government will shun any genuflection on the part of Greece toward Europe that would stigmatize and slur the dignity and amour propre of Greece.          

“Scariest stories ever written about contemporary America” is the story that makes some of the political toddlers of America to run and cover themselves under their bed sheets. Sans political wisdom, sans political and historical insight, and hence, sans cognitive and intellectual legitimacy, they attempt to analyse the world shaking event of 9/11 and the Administration’s protagonists’ response to the crescent shaped  bolt that appeared over the blue sky of America with their childish fears. And for fear to be effective it must have its bogey ghosts. So we have Cheney, Addington, and Bolton wrapped up with white sheets in the middle of the night scaring the bejeesus out of the liberal intelligentsia with their nefarious schemes of “a massive expansion of presidential power” starting an “illegitimate war,” creating “a system for spying on American citizens…sanctioned torture”, and “pushed official secrecy to unprecedented levels.” The critics of Cheney, Addington, and Bolton never learning the abc and never reaching the omega of statecraft are shocked to see, and it’s beyond their comprehension, that in moments of national crises the expansion and concentration of presidential power is the sine qua non of strong political leadership and a necessary but temporary measure to protect a nation from malicious lethal enemies, both external and internal.

All the above measures that Clemons highlights were instigated by the Vice President solely for the protection of America. It was an unenviable task and it could only be performed by the strong in character. One must not forget that in hard times only the hard men/women prevail. And Cheney, Addington, and Bolton will be panoramic figures in American history for their political and strategic insight, strength of character, and their indefatigable efforts to shield the United States and the West from the fanatical irreconcilable enemies of Islam.

By Con George-Kotzabasis—October, 2008

The eminent economist and crown prince of punditry of the New York Times Paul Krugman laments that we are “entering a period of severe crisis with weak and confused leadership.” And I would respond that the people in the media like himself should be warning us about the economic abyss we are facing instead of being out playing their dirty politics. Only few moments after the speech of President Bush warning Americans of the imminent perils of the economy and of the absolute necessity for Congress to pass the legislation immediately, as time was a crucial factor for the success of the plan-with which Krugman himself agrees-what Krugman did? He ingloriously tried to associate the speech of Bush with the so called lies of the war in Iraq. Thus like so many other weak commentators widening the credibility gap that was already extant between the President and many Americans and confusing the latter about the veracity of Bush about the economic crisis, when Krugman himself knew that what the president was saying was the absolute truth.

Tu ne cede malis

The Arab world is no longer the plaything of autocratic rulers who govern it according to their whim and fancy, but is subject to a universal will for freedom.

Talking of illusions and delusions. If the aim of the U.S.is to get rid of Qaddafi, one cannot achieve this MAXIMAL goal “with MINIMAL (M.E.) outside help.” President Obama’s strategy forLibyahad and continues to have all the features of Pinocchio.

By Con George-Kotzabasis

A spectre haunts the White House the spectre of political dilettantism. While military intervention by mercenaries is taking place in Libya in support of the tottering regime of Muammar Gaddafi, the Obama administration is hesitating to involve itself directly in the historically momentous events of the country and tip critically the balance in favour of the insurgents. Instead, it is imbued with the predilection of Nero to play the fiddle while Rome is burning, i.e., Gaddafi starting the genocide of his own people. Libya provides not only a unique geopolitical opportunity for the U.S. to act on the side of justice and set a historic paradigm that could lead to the freedom of peoples from the autocracy of exploitative and murderous regimes in the Middle East and beyond, but doing so at the least expense of its own human and material resources.

In circumstances when the Gaddafi regime is too weak and unable to defend itself by its own military forces and is compelled to bring in foreign mercenaries to save itself, the U.S. does not have to invade the country by its own military forces but merely provide the insurgents with “antiaircraft systems so that they can enforce a no-fly zone over their own territory,” as Stephen Hadley, former national security adviser to the Bush administration, has suggested. Also, it could insert special operations teams, as it initially did in Afghanistan that defeated the Taliban within five weeks, to give guidance to the rebels and render prompt information to U.S./NATO aircraft to bomb the Gaddafi military installations and forces. And as the destruction of Libyan air-defence radars and missile batteries might be required, this could be accomplished by using missiles launched from submarines and warships. Hence American footprints on the ground would be so tiny they would be hardly visible. And yet it would be the presence of this invisible American ‘phantom’ combined with the threat of using U.S. airpower that could utterly determine the defeat of the Gaddafi loyalists and its international disorganized amateurish bands of mercenaries, and lead, with almost mathematical precision, to the overthrow of the murderous regime.

And as I have said in an article of mine only a few days ago, the remarkable weakness of the regime and its total inability to defend itself by its own armed forces, as a result of widespread defections both from its military and political ranks, and its last resort to employ mercenaries for its survival, makes its ever dwindling supporters highly vulnerable to psychological warfare. A declaration of U.S./NATO of a no-fly zone and a no-use of air-defences accompanied by a clear threat that in the event that these two conditions are violated by the loyalist forces of Gaddafi, then an unexpected decimating destruction would be unleashed upon those forces by the military might of the U.S. and NATO. This in itself could bring the crumbling of the regime. It could be the most sagacious and least costly involvement by the United States in efficacious regime change without firing a shot.

 Voila un strategie

The “lion” appointed by President Obama to the office of Secretary of Defence Leon
Panetta, who purportedly is defending America and the West from deadly foes, in
his latest visit to the Middle East is advising Israel, from his Olympian
heights, ‘to take risks for peace.’ This advice, however, is redundant,
superfluous, and otiose and Prime Minister Netanyahu has every reason to reject
and oppugn such crass “displaced” advice. Israel had already taken risks in the
past with no benefit accruing to it, least of all peace. It had withdrawn from
Gaza and re-settled its citizens within the borders of Israel with the result
that Gaza was taken over by the terrorist organization Hamas and Israel had to
defend itself from a rain of rockets fired by the militants of Hamas; and it
had likewise withdrawn from South Lebanon only for the latter to be taken over
by the other blade of the terrorist scissors Hesbollah, that also started
firing rockets against Israel forcing the latter to invade South Lebanon to
protect its citizens from being killed. Israel had taken all these risks for
peace. But what did it get in return, a deluge of rockets. What other risks
Secretary Panetta has in mind for Israel that would bring the up till now
eluding peace to the Middle East? For the Israelis to wait until Hamas and
Hesbollah load the tips of their rockets with nuclear devices supplied in the
near future by Iran? And what precautions and preventive measures the U.S. is
taking to stop Iran from acquiring nuclear weapons?

The answer to these questions lies in the further advice that the Secretary of
Defence is giving to Israel. He tells it not to take “lone” action against Iran
in its threat to develop nuclear weapons. Preventing Iran from acquiring a
nuclear arsenal, he says, is the responsibility of major nations taking
concerted diplomatic action. But this is a “Looney” policy that the Secretary is recommending to the Israelis. It has been tried so many times in the past and it has failed resoundingly. The Islamist regime is not going to change course in its determination to possess nuclear weapons by a truckload of diplomatic carrots but only by an “armada” of bristling porcupines that will pierce its thick skin. Diplomacy can succeed with the Iranian regime only if it is accompanied by the explicit threat of arms.

Leon Panetta has the sinews of a lamb disguised under the skin of a lion. His peregrinating debut in the Holy Land and his attempt to bring, as the “envoy” of the also weak President Obama, Palestinians and Israelis to the negotiating table will prove to be an abject failure, like all the previous efforts of his predecessor Senator Mitchell, also appointed by Obama. As we have predicted, the Obama presidency is a circus of underperforming political tyros, both in the international and domestic arena and more and more Americans are realizing this and are becoming disenchanted with Obama’s performance. The “sprightly colt”, who won the race to the White House with overwhelming support only two and a half years ago, is presently underwhelmed and is conceding to be the underdog in the 2012 elections. (See Obama’s interview with George Stefanopoulos on the ABC.)

In any crisis of serious proportions consensus between the major political parties is the sine qua non for its resolution. This certainly applies presently in Greece. But the dimensions of the crisis are so Gulliverian that only a titanic struggle of will and resolution by its politicians, guided by wisdom, will at least diminish the scale of the crisis. Regrettably, however, there is a dearth of politicians in Greece of the status of Gulliver and an abundance of Lilliputians. Therefore, a different consensus is materializing among eminent economists, that Greece perforce will have to traverse a different course than that imposed by the ECB and IMF.

Deepak Lal, a former president of the Mont Pelerine Society and a prominent exponent of the Austrian school of economics, predicts a Greek default and an exit from the Euro. To avoid a Greek debt default that would lead to a Euro zone banking crisis, a stabilization program has been imposed on Greece by the ECB and IMF. But unlike other similar stabilization programs, Lal argues, two vital elements are missing: a large devaluation and a restructuring of the country’s debt. “The former is precluded by the fixed exchange rate of the Euro, the latter by the external holdings of Greek sovereign debt by European banks.” The alternative program therefore is to impose a large internal devaluation instigating a precipitous fall in domestic wages and prices through a massive deflation. It is impossible however to believe that Greek politics will allow the country to follow such a course, especially when Greece is likely to be left with a debt-GDP ratio of 150%. Hence, Deepak Lal predicts that a Greek default and an exit from the Euro is the most likely path that Greece will follow.