YouTube video

Bill Black says once again the EU decides not to target investments to help nations It forced into great depressions

Story Transcript

SHARMINI PERIES, EXEC. PRODUCER, TRNN: Welcome to The Real News Network. I’m Sharmini Peries, coming to you from Baltimore. Welcome to this edition of the Bill Black report. So this time joining us from Quito, Ecuador, for his report is Bill Black. Bill is an associate professor of economics and law at the University of Missouri-Kansas City. He’s a white-collar criminologist and a former financial regulator and the author of The Best Way to Rob a Bank Is to Own One. Bill, thank you so much for joining us. BILL BLACK, ASSOC. PROF. ECONOMICS AND LAW, UMKC: Thank you. PERIES: So, Bill, last week we saw that the European Central Bank announced a $1 trillion quantitative easing plan. Now, there is more investment plans ahead as well, and you’re going to talk about one of those today. So tell us more. BLACK: Alright. So this is called the Juncker plan after the former head of Luxembourg who is now head of the European commission, which is one of the three parts of the Troika, along with the European Central Bank and IMF. And these have been the three things that have insisted on austerity and have put the periphery of Europe into Great Depression levels of unemployment, which is where Greece, Spain, and Italy remain today as we approach 7 years after the crisis phase of the Great Recession, which is actually a Great Depression in these countries. So Germany has been getting a lot of criticism, and the troika has been getting a lot of criticism, because Germany is running a very large budget surplus. And it has lots of infrastructure needs, infrastructure of things like roads and bridges and tunnels that are badly needed. And Germany refuses to spend the money to even build the infrastructure projects that are needed, even though it’s running a very large surplus, which is economically illiterate. So Juncker has come up with this propaganda thing as a first level, which is you’re going to take really a tiny amount of money, public money, 21 billion euros. And as the folks have been following, the euro has been in freefall, so it’s close to $1 dollar per euro now. So the European economy is roughly the size of the United States, and 21 billion euros is not a very significant amount of money to spend on infrastructure at all. But there’s where the propaganda part comes in, because it’s being sold as a public-private partnership in which the federal–the government money will be used to subsidize private for-profit corporations, who supposedly will kick in about almost $300 billion once they get this subsidy. So the overall plan is supposedly 315 billion euros. So they face the obvious question. Well, the periphery, the nations I talked about, are still in a Great Depression. Clearly–and they have huge infrastructure needs–that you ought to target the money for where it was needed. And the Juncker plan says, no, expressly said, we will not, we refuse to target the money where it’s most needed. Instead, the subsidies are expected to go overwhelmingly to you huge wealthy corporations who do business and are located overwhelmingly in the richest nations in Europe, and they’re expected to build their infrastructure projects overwhelmingly in the richest nations. But remember this is a public-private partnership. So guess who’s going to own these tunnels and these roads and the bridges and such? Well, there’s very good chance that is going to end up having the private for-profit corporations owning an important part of the infrastructure. So it’s really a very subtle plan to buy Juncker, who is an ultraconservative, to ship public money to the benefit of the private sector. PERIES: Yeah. So talk about these tollbooth, what everyone experiences, especially in Europe. So the public roads are privatized, and then they actually are able to charge a toll to use the public infrastructure which they benefit from. And this is becoming somewhat the norm in Europe. BLACK: That’s correct. So they start out with more corporate welfare. It’s about a six and two-thirds percent increase in their profit margin anyway because of the subsidy. But then on top of that they get to own and charge for these public goods. And so that’s a gift that keeps on giving for the next 50 years to make these private entities richer. And Juncker gets to claim that he’s stimulating the Eurozone economy and that all will be well. And the really pernicious part is that they expressly rejected any involvement, you know, like democratic decision making, because that was evil and supposedly this is going to make sure that the money will go to the projects that are most desirable. But that act doesn’t meet desirable, of course; it means which ones have the highest profit margin. And they’re demonizing projects anywhere else as saying, well, the private sector wouldn’t learn 20 percent on those, so they must be bad projects. It is just another outrage after seven and a half years of outrageous treatment. And it’s an official proclamation in everything but express name. PERIES: And here you’re talking about the privatization schemes of public assets. This has been going on for even longer–probably even before Thatcher, for that matter. BLACK: Yes. But Thatcher was one of the leaders. But Juncker is part of the dominant group in the European Commission of ultra-favorable to business, ultra-hostile to workers. And it’s been made very clear. Remember, the project goes wherever the profit margin is highest. So if wages are higher compared to productivity, then the money doesn’t go there. In other words, it doesn’t go to the poor places unless they suppress workers’ wages even more. So this is also part of the Troika’s war on the worker in Europe. And in U.S. terms, some of the older viewers will recall when it was basically Washington, to New York City: drop dead. Well, this is Brussels to Portugal, to Spain, to Greece, to Italy: drop dead. PERIES: Right. Two questions jump out, Bill. One is: how it is it that Germany has such a huge surplus? BLACK: Well, it has a surplus because it in fact has very productive workers and it’s got–it suppressed workers wages starting not during the crisis; before the crisis. And so, Germany is, in most months–it can vary, but in most months it’s a very large net exporter. And as a very large net exporter, it gets money and revenue in, and it doesn’t spend on critical infrastructure that it needs, like roads and bridges and such, nearly enough. So this is stupid. It’s going to reduce their future productivity. But it is this incredible lock politically of this ideology in favor of austerity. And, by the way, the conservative party is in a coalition with allegedly socialist party that is inflicting this war on the workers. So all the mainstream German parties are really quite hostile to the periphery. PERIES: Right. Bill, as always, thank you so much for joining us. BLACK: Thank you so much. PERIES: And thank you for joining us on The Real News Network.


DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.

Creative Commons License

Republish our articles for free, online or in print, under a Creative Commons license.

William K. Black, author of The Best Way to Rob a Bank is to Own One, teaches economics and law at the University of Missouri Kansas City (UMKC). He was the Executive Director of the Institute for Fraud Prevention from 2005-2007. He has taught previously at the LBJ School of Public Affairs at the University of Texas at Austin and at Santa Clara University, where he was also the distinguished scholar in residence for insurance law and a visiting scholar at the Markkula Center for Applied Ethics.

Black was litigation director of the Federal Home Loan Bank Board, deputy director of the FSLIC, SVP and general counsel of the Federal Home Loan Bank of San Francisco, and senior deputy chief counsel, Office of Thrift Supervision. He was deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement.

Black developed the concept of "control fraud" frauds in which the CEO or head of state uses the entity as a "weapon." Control frauds cause greater financial losses than all other forms of property crime combined. He recently helped the World Bank develop anti-corruption initiatives and served as an expert for OFHEO in its enforcement action against Fannie Mae's former senior management.