I linked yesterday to a column by Yanis Varoufakis, the leftist organizer who briefly served as finance minister in Greece before resigning in protest. Here’s a longer interview that spells out how the 2008 financial system collapse laid the groundwork for the West’s current political crisis.
“It became more profitable, and a greater source of power, to be a financier than to be Henry Ford. Even progressives, like the Democrats in this country or social democrats in Europe, struck a Faustian bargain with financiers instead of playing the role of mediating between labor and capital.”
The link above goes to an interview by Andrew O’Hehir of Salon, who writes, paraphrasing Varoufakis:
The financial crisis of 2008 led to “a wholesale collapse of what used to be called capitalism,” which has not recovered nearly as much as most people believe. What we have instead is an almost galactic-scale system of moving debt around to conceal the various flaws and shortfalls in the system. Varoufakis calls it “bankrupt-ocracy,” in which enormous but endangered or bankrupt financial institutions wield enormous power over the rest of society. “That’s not capitalism.”
The bailout money came from the European Central Bank and the IMF, largely meaning the taxpayers of France, Germany and other prosperous nations of Western Europe. Exactly none of it went to restore social services or repair roads in Greece. All of it was used to make payments on the Greek government’s existing debt — most of which was to banks in Western Europe. So Angela Merkel and François Hollande (then the French president) and other political leaders extorted money from their own taxpayers, on the pretense that they were helping out a small, struggling nation on Europe’s southern fringe, and siphoned it directly to the biggest European banks, largely in their own countries. It was a direct wealth transfer from ordinary people to the financial elite.
Varoufakis has founded an organization called Democracy in Europe, based on populist principles akin Bernie Sanders in the U.S. and Jeremy Corbyn in the U.K. The interview is worth a read for anyone interested in geopolitics and economics.