Pop! goes the weasel

Coming up with a title for what is mostly going to be a series of quotes from other articles on the Greek financial crisis, what i could recall from a children's rhyme came into my head:

A penny for a spool of thread,
A penny for a needle.
That’s the way the money goes,
Pop! goes the weasel.

Not wanting to be totally off the free association wall, i looked into the original meaning and found this: 'Pop was slang for "pawn". Weasel is derived from "weasel and stoat" meaning coat. It was traditional for even poor people to own a suit, which they wore as their "Sunday Best". When times were hard they would pawn their suit, or coat, on a Monday and claim it back before Sunday. Hence the term "Pop goes the Weasel".' Trekking down to the pawn shop to exchange one necessary possession (a coat) for another (let's say, bread) doesn't seem too far afield from what their government is now instructing the Greek people to do: hand our economy over to European bankers and when they've sorted out their own mess, they'll give it back. Is that stretching things too far into simplistic fantasy land? Unfortunately, i think not.

Here come the quoted excerpts. First, Michael Hudson, author of Super Imperialism, writing in April 2011 about Iceland's financial meltdown:

The reality was an enormous banking fraud, an orgy of insider dealing as bank managers lent the money to themselves, leaving an empty shell – and then saying that this was all how “free markets” operate. Running into debt was commended as the way to get rich.

The eruption started in Greece. One legacy of the colonels’ regime [ruling junta 1967-1974] was tax evasion by the rich. This led to budget deficits, and Wall Street banks helped the government conceal its public debt in “free enterprise” junk accounting. German and French creditors then made a fortune jacking up the interest rate that Greece had to pay for its increasing credit risk.

Next, from an article yesterday in the EU Observer that puts the German and French credit picture into sharper focus:

Germany's exposure to Greek debt, at 26.3 billion in government bonds and 10 billion in private loans, including to banks, is a little over half that of that of France, and has argued that private creditors bear more of the burden of resolving the solution.

France, for it part, is owed €19 billion in government bonds and a full €42.1 billion in private loans. Three of its biggest banks this week saw their credit rating placed on review for a downgrade by Moody's as a result of this exposure.

The ECB [European Central Bank], for its part, is exposed to the tune of €40 billion in government bonds and €110 billion to Greek banks.

As i wrote yesterday, there doesn't seem to be a huge difference between what's going on here and what went on in the US when subprime lending excesses collided with totally unregulated derivatives markets. As Henry Paulson, then-US Treasury Secretary, wrote at the time, ''[T]he purpose of the financial rescue legislation was to stabilize our financial system and to strengthen it. It is not a panacea for all our economic difficulties." In other words, save the bankers' asses and hope the little people will find ways to sort out their little individual problems, like holding onto their homes, jobs and life insurance policies. One can't help but ask, 'Who are the real cowards in this equation?'

Writing in Al-Jazeera about public response to the current situation - 'Grassroot Politics Flourish in Greek Turmoil' - Hara Kouki and Antonia Vradis (presumably both Greek) report:

For the people gathered in Syntagma, the intense political manoeuvring in the corridors of parliament seems to matter little. Theirs is a mass mobilisation that draws a distinction between representational and grassroots politics. Political parties seem unlikely to come to a halt over developments in the upper echelons of power. For them, the Memorandum is not just a sum of persons or abhorrent policies, but a system of power that has misruled the country for 30 years, bringing it to the edge of collapse. It is a system of beliefs, values, expectations and political roles and identities that cannot be abolished simply by replacing the head or members of the government.

At the roots of society, people are looking for substantive structural change, not bailouts and rollovers which, by meager threads, keep the current order of business (barely) afloat. Sounds like Buenos Aires. Sounds like modern day Carthage, Tahrir Square, Pearl Square. Sounds like Wisconsin.

Politicians and corporate media pundits never seem to hesitate when it comes to telling working people that they need to tighten those belts, make sacrifices for the greater good, while they and their banking buddies jet around from one 5-star conference center to another. If these bankers are so worried about going broke, what are they hanging out in Davos for? Papandreou's political nemesis and newly appointed Finance Minister, Evangelos Venizelos, is quoted as saying "I am leaving defence today to go to the real war." Might i suggest that his first battle be dragging the PM to a local pawn shop and forcing him to trade in some of his non-essential trinkets, maybe a tailored 'Sunday best' or two (or three, four)? Toss in the Rolex, too... unlike bailouts, revolution is a timeless affair.