Market panic attack, Greek edition

Never have I seen Wall Street and the stock markets this scared in my life, in anyone’s lifetime. You don’t see it in the numbers or trades, but in the periphery, the things they talk about. They’ve realized that people are starting to notice a detachment between how the markets work and how reality works. You see the paranoia in Greece and Spain. Something’s coming for them, not in the way they wanted to.

Karl Polanyi, that venerable economist, once referred to the economy as merely another social institution. Social institutions last only as long as the people believe in them. What we have seen in the past couple is an indication that people are slowly starting to the realize that the market economy, by default, does not benefit them but benefits from them. When they stop believing in the market, it starts to really panic.

The market economy has become the golden idol of the mainstream left and right since the hammer and sickle fell from the Kremlin, and loyalty to its whims is the truest symbol of elitism there is. There’s a reason the term “caviar socialist” exists, after all. But when the market, in its Molochian chaos, decides to step on a nation, the situation tends to not end very well for it.

Greece will be the first example of this. Today, the general election triggered by the Hellenic Parliament’s refusal to elect Wall Street/World Bank fat cat Stavros Dimas into the sinecure position of President will bring about a massive change. For the first time, a leftist party not directed by a single Marxist idea but rather broad range of thinking will enter government. The Coalition of the Radical Left, known by its Greek shorthand SYRIZA, will win the election. It’s only uncertain just how much.

The handwringing I noticed in the weeks leading up to this election reflects the paranoia of the markets. The Independent, that piece of toilet paper that happily wipes the ass of the market after it shits, called SYRIZA, a legitimate political party that has been in existence for more than two decades and has no militant wing to speak of, “rebels,” and its leader Alexis Tsipras a communist Harry Potter. Some call that “cheeky British humor.” I call that “pissing in your trousers.”

Bloomberg, run by a man who practically played a lapdog to Goldman Sachs and J.P. Morgan while he was Mayor of New York during Occupy, wasn’t that much better. It has flustered at the thought of SYRIZA winning the election, but at least acknowledged it happening. But it tried to soothe old Dimon and his gang of losers first by saying that former political scion George Papandreou’s new party To Kinima would prevent the markets from being troubled. Once it realized that Papandreou was merely leeching off voters of the sclerotic Panhellenic Socialist Movement/PASOK, it, along with the Financial Times, fawned over Stavros Theodorakis’ To Potami as being a “kingmaker” that will tame SYRIZA’s supposed ambitions. Now they’re saying that Tsipras might find it easier to have a coalition partner, simply because he can backpedal on his rhetoric. As if he has to do that. It’s laughable, really.

What the markets fail to realize is that a lot of this is their doing. Greece is in a mess because the markets begged for them to act like Americans upon joining the Euro, along with taking a sour bet by running a Summer Olympics that will take as much time to pay off as the Vietnam War. Then, when it was clear that this was a terrible idea, they expected the country to turn arch-conservative with its finances.

These efforts at market excess were curried by the elites, led by PASOK and the conservative New Democracy. It is elite by every standard: Papandreou is a member of a dynasty that dates back to the first Prime Minister after liberation from the Germans, and whose father was the first socialist PM in Greece after the end of the junta in the 60s and 70s. His family had emigrated to America before he was born, only to immigrate back when it seemed like a good idea. He was roommates at Amherst with his eventual rival and current Prime Minister Antonis Samaras. Both went on to even more elite schools after that: Papandreou to the London School of Economics because they tend to shun foreigners at Oxbridge, Samaras to Harvard. How posh can you get?

So it’s obvious that the power structure, despite looking like there’s some political spectrum, was built entirely on keeping the markets happy. While the Greeks enjoyed somewhat decent economic growth bolstered partly by the Olympic Games, ND cooked the books and PASOK allowed it to happen, creating an illusion of glory. The establishment had it under control, with the only release valves being the Communists under Joseph Stalin and the Popular Orthodox Rally.

Then the banks of Wall Street overcooked their books and screwed everyone over.

When Papandreou came to power in 2009, his lieutenant, the somewhat less posh Evangelios Venezelos, discovered the cooked books. The PM announced the problem and tried to get it under control, but this being the Great Recession, the odds of that happening were similar to finding water in California these days. One thing led to another, and the next thing you know, the Greeks became the storied boogeymen that were out to destroy the somehow already haggard European Union, setting off a chain of bailouts on the continental periphery. It was only by imposing severe and draconian austerity measures that supposedly were in the best interests of the Greeks that the continent was saved. The country was expected to become Germany, and suffer while they do so. The markets were relieved.

This latter narrative is what the markets, and the EU, would like to believe. In the country itself, however, we see a different narrative: If you aren’t in the elite, chances are you’re unemployed, or you know a friend who was. Maybe you know some friends who are homeless and are transient, especially if you’re young. If you have a job, you took a massive pay cut back in 2011 if you were lucky enough not to get laid off. You feel worthless. You don’t need to go far to know that, outside of your country, your nationality is now an epithet for sloth and dubiousness.

The markets, symbolized by the Euro, had betrayed you. Economists would say you deserve it, citing the overwrought Summer Olympics and that you have a hard time paying taxes. But those excuses can only last so long. While you don’t hate Europe, you don’t like the fact that it’s stepping on your head for something you don’t entirely control.

More importantly, the establishment betrayed you. PASOK first, then ND. Sure, Samaras put up a nice facade at first, attacking the bailouts and throwing out one of his most significant rivals in the party for daring to support them. But when push came to shove, he turned heel the moment it became clear that his continued control of the country would count on it. So both parties are still shamelessly praying to the golden idol.

The feeling of anti-establishment thinking has never been stronger in Greece. And there are few people who come close to leading that sentiment than Alexis Tsipras. Born mere days after the fascist junta fell, he’s as anti-elite as they come: Local to Athens, his parents were from the countryside. While active in politics, he studied engineering at a great local university and worked in construction for a while.

Tsipras has come to represent a unique strain of leftist thinking: One built on the diversity of opinion rather than a singular agenda. Unlike the American left, overtaken by social radicals intent on squabbling over who is the biggest victim in the room, he’s kept everyone on the same page. After all, everyone in the room is equally in the room is a victim, for they are Greeks beaten down by the bean-counters in Brussels and New York as well as the elites in PASOK and ND.

He cuts himself as young (only 40), charming and cunning. But more importantly, he’s actually competent as a leader: With such strains of thinking as classical Marxism, Trotskyism, feminism, ecosocialism, eurocommunism, even super minor strains of leftist thought like Luxembergism, you would think that SYRIZA wouldn’t last a few weeks as a small group, let alone 10 years as an electoral coalition and political entity. But that is a testament to Tsipras’ leadership.

He’s also a fighter, and that’s what makes him dangerous. Rather simply making a case on being a leftist party, he turned this election and the previous two into a referendum on the euro that has been stepping on them. Just by being that alone and unique in how they handle it was SYRIZA able to take over PASOK as not only the party of the left but also a legitimate alternative to what had been standard European politics.

It’s important to understand this election is not a referendum on the European Union. Outside of the neo-fascist Golden Dawn, the nationalist Independent Greeks and one or two factions of SYRIZA, everyone in Greece wants to stay in Europe. Their problem has never really been with Europe as a whole. The problem is the market economy that seems intent on ensuring the only thing Greece is allowed to do is suffer. It’s just that SYRIZA is more willing to let an exit from the euro be an option than anyone else in the room, and that’s what scares the markets. It means the Greeks don’t believe in them anymore.

Which brings me to To Potami, or The River. The current estimates are saying that SYRIZA will be a few seats short of an absolute majority (though it’s possible that they could still get it, especially if the Independent Greeks don’t get enough votes), meaning they will need to partner with another party to run the government. Golden Dawn is out of the question, the Independent Greeks are bit too rightist for their own good (though they could still join on a patriotic front), and the Communists are still run by Joseph Stalin.

Which leaves To Potami, run by talk show host Theodorakis. People are making them out to be some form of “taming” force because SYRIZA will need the votes, and To Potami would rather stay on the euro. The problem is that they are not taking into account a couple key points:

  1. Theodorakis and Tsipras are closer in belief on the bailout documents that have been harming Greece than most believe,
  2. Theodorakis has no political experience whatsoever.

The last two TV personalities that started a political party and entered a democratic parliament were Beppe Grillo in Italy and Yair Lapid in Israel. The former has let his 5-Star Movement self-immolate due to Occupy-level infighting, while the latter was eating out of Bibi Netanyahu’s hand until he realized the food was shit and called his Yesh Atid out of the Knesset. Both are polling poorly now. The odds are likely that Tsipras could easily outplay Theodorakis. If the former can control a bunch of Trotskyists and feminists with giant egos, what’s one talk show host?

ND will not win reelection this time around, that much is certain despite bailed out Goldman Sachs’ claims to the contrary. They betrayed the populace, and their partners will be either non-existent (the Democratic Left) or close to it (PASOK). They were very close to defeat the last time, and were likely only saved because their friends in Brussels still had some sway over the populace. Not anymore.

So what happens after the election? Things get fun. Over the course of the election campaign, outsiders from Europe, including World Bank snout and EU prez Jean-Claude Juncker, had made the ever ominous elitist threat that they “hope” the Greeks will make the “right decision.” ECB president Mario Draghi has threatened to prevent access to the way-too-late quantitative easing program if SYRIZA dares to try to move the foot off the country’s head.

However, the last time the Greeks were asked to be treated like this, their response was a rather simple one: “όχι!”

No wonder you can smell the markets’ fear.

(Image source)

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