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Portugal and Ireland – the betrayal of Democracy

The language we use to talk about things doesn’t restrict our thoughts but it does influence them.  Which means whoever manages to set the terms and language in which an argument or issue is discussed, has already managed to greatly influence the range of possible understandings and outcomes, even before the debate begins.

For instance, the language of bank and sovereign ‘bail-outs’ has, it seems to me, a powerful and pervasive influence on how we understand what is being done to banks and nations, and the range of outcomes we consider possible.

The coverage of what is currently happening in Portugal and Ireland are good cases in point.  The Financial Times headline today is “Portuguese banks rise on bail-out request”,  The article reports in terms of, 

“…the country’s request for financial aid from the European Union….”

The out-going President, Mr Sócrates himself described what was going on as,

“The government decided today to ask the European Commission for financial help,”

This is all about ‘requests for help’. But let’s take a small step back to remember what actual events led to the present.  The facts are that the reason Mr Sócrates resigned is because there was no majority support among the democratically elected Representatives of the Portuguese people, for the draconian austerity measures he was trying to impose. Hence his government collapsed and he resigned.  That the elected representatives were  reflecting the popular will on this matter was already clear from the large numbers of Portuguese people who had protested and been on strikes.

If either of these had not been the case Mr Sócrates would still be in power successfully pushing through his austerity agenda.

So the train of events are, that a coalition government tried to impose austerity measures upon the people. The people, right or wrong, didn’t like it and said ‘No’. A contest of wills was played out between government and governed.  In the mean time global events rolled on and it become evident that bank and government estimates of economic growth for Portugal and many other struggling nations, such as GB, were wrong. Growth, it has become clear, will be much lower. In Portugal the economy will contract.

These facts mean that even more austerity cuts would be required to achieve the debt reduction Portugal had already been told it had to achieve.  Add together the worsening economic situation and the evident popular and political unrest, and the Bond Market (AKA the Big Banks and Funds) quite rightly estimated that the risk of Portugal NOT being politically able to do what it had been told it had to, was increasing. So, they increased what they charged Portugal to lend it money/buy its bonds.  This week the rate became so absurd that Portugal was irreversibly on the debt death-spiral, getting poorer and further in debt with every euro it borrowed.

We can argue about whether the Portuguese people were to blame for their misfortune, whether their governments were to blame, their banks or the tooth fairy, but it matters less than the fact that the people simply said NO to the coalitions plans.   Just as the Irish had done a few weeks earlier.

Two nations in deep financial trouble. Two governments brought down by popular opposition to their plans. In Ireland there was an election in which the winner promised to review the austerity and bail-out agreements made by the defeated party with the EU and the IMF.

In Portugal there is no fast election. There is a ‘caretaker’ government. Unelected and therefore without a democratic mandate or basis for any decision. An interesting and dangerous position for the people – an opening for the banks and financial class.

Both situations have been enveloped in the language of ‘asking for help’ and ‘receiving help’.  But are these phrases the best way of understanding what is actually going on?

The people of Ireland did NOT vote for a party or a slogan of “We will ask Europe and the IMF for ‘help’ in ignoring your opposition and pushing on with austerity measures similar to the ones you, the people, already rejected.” Any party that had said that would have been laughed at. Yet this is what the ‘help’ on offer seems to be.  The previous Irish government couldn’t quite force the EU, IMF dictated measures upon the Irish people. The Irish people spoke rather clearly, despite the paucity of real choice they were offered at the ballot box, but the EU, IMF and Banks seem not to have heard.

The promise was to re-negotiate the conditions of the ‘bail-out’ and make senior bond holders share the pain. The ‘help’ the EU has provided to the in-coming Irish Government, is to say “No, that is not up for discussion. End of story.”  Which allows the new government to go back to those who elected it and say, ‘Sorry. We tried, but the big bad EU shouted at us and told us we just had to get on with it.”

The ‘Help’ that is being offered is not ‘help’ to put into practice what the people democratically decided. It is ‘help’ to ignore the people and push on with the bankers, EU and IMF plan anyway. “Help’ to make it appear that the unpopular decision is no longer a matter of democracy nor even within the power or right of the people to decide. The ‘help’ is to remove these most important and future-defining decisions from the people they will affect and from the democratic process entirely. The ‘help’ is to run an end-game around democracy and allow finance and its unelected, un-accountable dictators to impose by force whatever ‘democracy’ could not deliver for them.

It seems to me that the entire Democratic process is being used, as little more than a side show – an entertaining distraction arranged for the unruly mob, by the suited little Ceasars of the European financial elite.

Portugal’s austerity government was toppled. It had no democratic mandate for its policies. If we now find the EU and the IMF offering to ‘help’ by insisting that the rejected measures be agreed quickly and forced through anyway, using an interim, caretaker government without any mandate at all, to push on with the rejected policies then what does that ‘help’ amount to and who exactly is being ‘helped’?

The best that I can say for the situation in Ireland and what may happen soon in Portugal, is that it is a charter for cowards to get paid for betraying their people. Cowards who will do the bidding of an occupying financial power but who don’t have the courage to say that is what they are doing. They ‘will ask for help’ so that others can ‘force’ them in to ‘reluctantly agree to unpleasant but but necessary’ measures’.

What is being ‘helped’ is global finance and foreign banks. What is being helped is a financial system that  wrecked itself but wants ordinary people to pay its debts.  Democracy is being helped into its sick bed.  Even if the Portuguese people are wrong it is their right to be. Even if their decision is stupid or unjust it is their sovereign right to do it anyway. If we do not believe that then we do not believe in democracy or sovereignty.

The EU and the IMF are quite free to simply say we will not lend you the money. That is fine. What they must not be allowed to do, is go behind the democratic will of a sovereign people and do what they, the IMF and the EU, think is necessary anyway.  Necessary for whose benefit?  If the EU and the IMF decide that they just cannot let the Portuguese default or restructure then they must go back to the the Portuguese and petition them to see reason by offering a better deal.

But what I fear is going to happen in Portugal is that the EU and the IMF will collude with Portugal’s banks to say, ‘there is not time to wait for democracy, and anyway this is a matter for experts not the untutored’, and they we will sign among themselves contracts which will claim to bind the Portuguese people and any future government they elect, in perpetuity. So when it comes to it, the Portuguese people will be able to elect anyone they want as long as they realize that that government will be able to do nothing that the bankers haven’t already agreed and OK’ed.

That is the future of democracy as the financial class would like it.

16 Responses to Portugal and Ireland – the betrayal of Democracy

  1. Pascal April 7, 2011 at 2:29 pm #

    Can someone tell me why defaulting is so bad? Seriously? It used to happen all the time. Is it really a longer road of financial ruin and pain?

  2. Lars Eirik April 7, 2011 at 2:36 pm #

    Thank you for adressing the ideology issue! There are innumerable examples in the press of phenomena of the economy described in language tilted in favour of the views of the financial class. 99% of financial journalism is peddling the financial leeches view of the world.

    Concerning your posting the other day about drug money flowing into banks: Better they have drug money than our money! Bankers and drug barons, what an eminently suitable pair they make up…

  3. Golem XIV - Thoughts April 7, 2011 at 3:35 pm #

    Lars,

    I hadn't thought of it that way. It made me laugh.

  4. Pat Flannery April 7, 2011 at 4:59 pm #

    "A charter for cowards to get paid for betraying their people". Great Golem.

    What we are now seeing is the application of long-standing money lending techniques applied to developing nations, to make sure they never developed, being used against developed nations to "undevelop" them.

    Money lending has always been an instrument of conquest and control. There are no longer any national banks, only international money lenders. Unless the Irish and Portuguese people resist they will become hollowed out Third World countries, exactly as the IMF and its constituent banks intend.

  5. Fungus FitzJuggler III April 8, 2011 at 4:07 am #

    Defaulting is bad because our entire mercantilist model is based upon credit. Genuine innovation is destroyed by fake capitalism. In toher words it is required and will happen! It is bad for bankers and rentiers posing as capitalists, but good for the rest of us!

    As regards democracy, it is a mediocre form of government as it depends upon the wisdom of the crowd….. We seems to worship the mob mentality because some of us reckon we can control the mob. All I will say is that it is relatively easy to pull the tail of the tiger, but hanging on to it is not so easy and there may be unpleasant consequences, so have a patsy on hand.

    If you look around and cannot identify the patsy, look in the mirror!

  6. Hawkeye April 8, 2011 at 7:54 am #

    Pat

    You have just described the overall strategy in one sentence!

    "What we are now seeing is the application of long-standing money lending techniques applied to developing nations, to make sure they never developed, being used against developed nations to 'undevelop' them."

    That is right. The developed Western world is peddled the myth of "borrow / invest to grow", just as the developing world was suckered in post WWII. It's just a cover for the covert bilking. Our nations are getting asset stripped under our noses on a gigantic scale, for there is no room for absolute growth in this world anymore.

    It was the rational response of the elite to the impending "Limits to Growth".

  7. 46Martman April 8, 2011 at 9:18 am #

    Hawkeye
    Our nations are getting asset stripped under our noses on a gigantic scale, for there is no room for absolute growth in this world anymore.

    Never were truer words written.
    The Conservative led Coalition are about to have the final car boot sale. In which they will sell any service or publicly owned concern that private companies can make a profit from.
    All in the guise of paying off the deficit.
    By the time the British people wake up. They will find they are paying taxes for services they neither own nor control. No longer run solely for their benefit. But firstly for profits of the company and then them.
    The the Coalition have used deficit to circumvented democracy. To carry out this fire sale of services which neither advocated in the General Election. For both parties know that had they incorporated these policies in their manifestos the British public would not have voted for them. This is their real agenda and as Golem rightly points out in his headline. They betrayed democracy to carry it out.

  8. JamieGriffiths April 8, 2011 at 11:21 am #

    Oh silly, don't you see? Georgie Porgie described the problem brilliantly for us in today's papers.
    The gist is this: If we don't do whatever 'they' tell us to do we'll endanger our sovereignty, which is the only thing stopping us from having to do whatever 'they' tell us to do. Simple.

    Pat and Hawkeye – what you're describing is a form of 'creative destruction', is it not? The financial classes see that there's no potential for the realisation of a compound rate of growth of capital round these parts anymore so they'll strip it all down and realise whatever worth they can from the assets while they export all our surplus capital to emerging markets. By the time they've exhausted those for growth, this place will have gone so far downhill there'll be plenty of scope for 'redevelopment' and they'll ship all our money back over here for another go on the merry-go-round.

    What a way to run a planet.

  9. mikehall April 8, 2011 at 12:40 pm #

    Another excellent post Golem. And Pat, Hawkeye & Jamie I entirely agree with your comments.

    I am continually disgusted by the sheer cognitive disonance of mainstream media. The fact that the ruinous 'austerity' strategies are simply making the problems worse for ordinary citizens is completely obvious – more austerity = shrinking economies = less tax revenue = less ability to pay or invest = digging a deeper hole. Yet whenever this fact is mentioned, it is just glossed over…moving on…

    It seems this is a class war. The interests of the wealthy vs the rest of us. And the political leaders, senior 'public' servants (haha) are either totally on board or simply keeping quiet & banking their own comfy salaries & pensions.

    There is no 'democracy' worth a sh*t – it's a complete betrayal. And I also suspect that at the most senior levels of the world's elite, this +is+ their response to 'limits to growth'.

    I've said this before & I'll say it again. The only way to achieve real 'democracy' – that works in the interests of the majority of citizens – is to limit the wealth – for life – of all those whose vocation purports to be for the 'public' interest, to some median level of the majority. Not everyone with ability is consumed by the 'greed' motive. (As Golem's & other blogs atest.) It's perfectly doable – & neccesary. Those vocations include elected representatives, civil (public) servants & news & factual media enterprises & journalists. If wealth is their motive, let them feck off & go into business & stay there.

    It's time we recognised the truth that Ghandi spoke – there's enough for everyones' need, but not for everyones' greed – & build our societies accordingly.

  10. mikehall April 8, 2011 at 12:58 pm #

    Incidentally….

    In terms of economics and money systems, there's a conference in Dublin (free attendance) organised by Feasta, Smart Taxes Network & TASC in Dublin on May 9th.

    See here:

    http://smarttaxes.org/

    It looks excellent, with speakers from the University of Missouri Kansas City, including Professor Randall Wray.

    Running economies & monetary systems where people matter is not rocket science. I recommend anyone to go along & find out.

  11. Pascal April 8, 2011 at 1:42 pm #

    @Mike – that looks really interesting. I know it has an Irish bias, but if there was ever a similar sort of presentation London I'd be very interested.

  12. mikehall April 8, 2011 at 3:07 pm #

    @Pascal

    Randall Wray & Bill Mitchell have quite a bit of info available online.

    In particular their video blowing the myth that a sovereign currency's economy is like a household budget (it profoundly isn't, much as the elites peddle this view) is compelling. And if we go back beyond the last 3 disastrous decades of neo-liberal economics domination, budget defecits were (rightly) of little consequence, it was employment that mattered.

    One difficulty then was timely control to avoid excessive inflation because there was so much less data or data processing available.

    Put very simply, the metric & goal is employment (taking 98% of 'full' as a reasonable target). The means of control is public spending into the economy – by 'printing' or in reality, as many taps on the keyboard as necessary. More increases employment. As it reaches 98%, public spending is reduced. Any defecit is just a number on a balance sheet – a sovereign currency never need repay this.

    The key is to accurately match the needed public funding to provide employment levels & ensure it doesn't overshoot & create excess inflation. It's likely that inflation a little higher (but not much) than the present system's very low 'targets' would periodically occur.

    For all but the wealthy elites this is no problem, but of course, perish the thought that the rich might lose a few percent of their trillions thru' inflation. Oh dear me no, that must not happen. So to keep them happy with low inflation, the price for the rest of us is high unemployment or 'underemployment' (that the stats massage out of 'official' figures) – in realty fluctuating between 1 in 10 and 1 in 5 of the potential workers.

    Of course, such high unemployment is not efficient & the waste of productivity & extra cost burden does mean less public services and/or lower real standards of living for the majority. But the elites don't care because this system it is so much more effective at funnelling wealth – ownership of assets – to add to their pile. That buys more influence too. And that is the story of the last 30 yrs – why we are where we are with plummeting wages, services etc., rocketing wealth for the few (even in the 'recession') and feck all 'democracy'.

    That's it in a nutshell. The trade off in choice of economic system boils down to exponential growth in wealth for the rich elite at the cost of not enough jobs, low & declining real wages & public services for the rest of us.

    Guess why there's been little or no examination of this as the whole thing nearly collapsed thru' greed & fraud?

    Near all the folks in positions as decision makers or influencers, to put it in Irish historical terms, are either Landlords or Landlords' Agents. Overlay the modern media PR (=propaganda) onslaught following & refining the work of the likes of Edward Bernays and you have modern society. The Rich, wannabee Rich & the bewildered herd trashing the planet to no real gain – in fact barrelling headlong toward a physical & spiritual armageddon.

  13. ARBITRAJ COMERCIAL INTERNATIONAL - Agentia de Arbitraj April 9, 2011 at 12:20 am #

    Given our chaotic times, you may be wondering how to protect your investments against some sudden, unforeseen event: a stock market meltdown, a crisis in the banking system or an invasion of Venusian brain gargles. You have several ways to reduce the risk of a stock portfolio. But you might consider funds that use techniques previously reserved for hedge funds, the freewheeling, lightly regulated investment pools of the very rich. The trick is finding a fund that uses hedge-fund techniques well. In finance, a hedge is a strategy designed to offset certain risks — hence the phrase “hedging your bets.” If we define risk as losing money, then a simple hedging strategy for a stock portfolio is diversification: Buy other investments, such as gold, government bonds or cash, whose value doesn't rise and fall in lockstep with the stock market. My opinion?….there : Portugal, Ireland and Greece should have defaulted, and started issuing there own currencies again, plain and simple.
    Screw the EU and their prescriptions, screw the banks, and the Euro. No national government should prioritize the needs of a bunch of thieves over the needs of its own people

  14. António Duarte April 11, 2011 at 10:50 pm #

    Just a little correction: Mr Sócrates is the prime minister of Portugal, not the president.

    About that semiotic bias, there's a very worrying recurring umbrella term used by the media here in Portugal, wich would roughly translate as "spectrum of governability". This term is used to designate three political parties: PS (third way socialists), PSD (social democrats) and CDS (conservatives). Any other political party is commonly refered to as being "outside the spectrum of governability".

    Thought is mainly language-driven and we are all – not only in Portugal – being deprived of the tools to assess our true situation, let alone change it. I have been to most of the protests that you mention and, altought people are demosntrating their disagreement, the very notion of 'what is wrong' is very vague and hard to formulate to most of us. 'Caretaker government' and 'helping hand' are the concepts behind a succession of governments that brought us to this point in the first place, ever since the fascist regime. Sadly, to most of us, the IMF will probably just be more of the same.

  15. Golem XIV - Thoughts April 12, 2011 at 5:17 pm #

    António Duarte,

    My appologies for getting such a basic fact wrong. It won't happen again.

    I had not heard this very worrying notion of a "spectrum of governability". What a pernicious term! Please let us know anything more you care to, about what is going on in Portugal. I am sure your observations would be greatly appreciated here.

  16. Portugal property for sale September 27, 2011 at 1:14 pm #

    The finance sector definitely needs more regulation. I believe bonuses in the UK are restricted but we are still seeing traders taking massive risks and losing billions. The Eurozone debt crisis is still culminating. It has moved from huge banks to entire countries. I think we are in for a scary few weeks and a not so happy Christmas if the IMF and Eurozone doesn’t come up with some serious genius.

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