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Michael Hudson is a Distinguished Research Professor of Economics at the University of Missouri, Kansas City. His two newest books are “The Bubble and Beyond” and “Finance Capitalism and its Discontents,” available on Amazon.
PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I'm Paul Jay in Washington. In Greece, people hit the streets again, day after day, protesting new austerity measures, the result of the so-called bailout deal between Greece and the big banks of Europe. Now joining us to talk about the most recent developments in Europe and the euro crisis is Michael Hudson. He teaches economics, University of Missouri in Kansas City. Thanks for joining us.MICHAEL HUDSON, PROFESSOR OF ECONOMICS, UMKC: Thank you very much, Paul.JAY: So what's the latest in terms of what's--how this seems to be unraveling? It seems like one week we read there's a deal and everyone's heaving a sigh of relief and the markets go back up, and the next week it's all back in the tank again.HUDSON: Well, the idea of the European Central Bank making a deal with its own banks is not a deal made with Greece. The reason the Greek people are out in the streets and the Icelandic people are out in the street (for the same reason) is not the same thing as Wall Street people being out in the streets. They're out in the streets because they want to make it clear that the terms that Europe is demanding, that Greece essentially tax labor and lower wages, and what they call an internal devaluation, which we used to call class war, is not going to work. Right now the European Central Bank is proposing to create wealth on a computer keyboard, IOUs by the Central Bank of Europe that it will then lend to the French banks and to the German banks and other banks that hold Greek bonds. And then they go to Greece and say, now you have to cut Social Security, cut wages, cut pensions, and take it out of labor's hide. So the people in Greece are on the streets because they want to make it clear, whatever the government agrees to, it's a socialist government. In Europe, socialist means ultra right-wing. It used to mean what we called fascist. But they call it socialism in an attempt to fool people. The Greek people have said, look, the government now has about a 10 percent approval rating. Whatever the European Central Bank agrees with Germany and France, we're not party to. That means that if you make a deal with our government that we don't disapprove of, that more people disapprove of the socialist government in Greece than disapproved of the colonels, if you make a deal saying the colonels will pay--that is, the socialists will pay--we're not going to be part of it. For the last 400 years, there's been a basic principle in international finance, and that is an international official debt of a government has to be entered into democratically. When there was a similar demand that Europe made on Iceland, the president said, wait a minute, if we're going to push Iceland into a decade of depression and tell one-third of the population to immigrate because we're bankrupt, there has to be a vote on it. So they had a vote, and the population rejected this, twice. And in Greece the same thing. They're saying, look, if you're going to push us into a depression, if you're going to cause unemployment here, if you're going to put the class war back in business and introduce a fascist policy, then--and not let us vote, then this is a policy entered into by a dictatorship. When we take power, when there is an election, when we do have a referendum, we're going to repudiate the debt, and you bastards will get nothing. And that's--they can say that under international law. Their way--the reason they're out on the streets is to say, we're going giving you fair warning; we're letting all of the world know that this government does not represent us.JAY: So if Greece defaults, what's next?HUDSON: Not default. There's no thought of defaulting. Greece will repudiate the debt. The debt was taken into fraudulently. It was organized by Wall Street crooks to conceal the volume of the debt. And the European banks have bought this debt that can't be paid. All the Greeks have to say is a simple principle: a debt that can't be paid won't be. And that's what they're saying. They're saying, look, you're not going to push us into depression saying that's going to help us pay the debt. All it's going to do is say, you Europeans are coming in and you say, we have our fascist government there. You may call it socialist, but let's call it straight: it's fascist. And you have to sell off your Parthenon, your islands, your real estate, your water and sewer systems to our private buyers, and we're going to charge you whatever we want until all you Greeks are going to have to emigrate, you're going to have to go to some other country, 'cause there's no room for you anymore, because we're bringing on a depression, we're in a big grab of resources. And the Greek can say, do you have an army? I mean, that's what Stalin said about the Pope. He said, how many soldiers does the Pope [incompr.] have? Well, the Greeks are saying, how big an army does the European Central Bank have? You really think that you can talk to a puppet government like the colonels and say that you can just grab--.JAY: Okay. So if you were advising this new Greek government and they repudiate the debt, what's next? Do they get out of the EU? Do they get out of the euro?HUDSON: No. Once they wipe out the debt, there's no problem. Of course they should have a better tax system. Of course they should tax the rich. Of course they should tax real estate. All of that has to be done. But the European program is not saying tax real estate, tax the rich. They're saying, let's have a--let's use this crisis as an opportunity to really fight against labor. Let's cut labor salaries in half and make a bonanza for the employers, a bonanza for the financial sector and the real estate sector. And the Greeks are saying, look, you'd better have an army if you're going to grab our land, 'cause the only way you're going to achieve what you want is by an invasion. That's the only way that people in the past for hundreds of--thousands of years have been able to grab land and public infrastructure and water and sewer systems and museums.JAY: Thanks very much for joining us, Michael. Thank you for joining us on The Real News Network.
End of Transcript
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