This book was a dangerous but small dose of self-affirmation. I'm even more convinced now of the folly of the Eurozone (the common currency, not the Union necessarily), the corruption of the ECB and IMF (and the ineptitude of their leaders), and the criminality of their attacks on Greek sovereignty on behalf of creditors.

Many of the principles Graeber outlines in Debt are live in color here in Galbraith's insider account of the crisis, including the fact that markets can only be sustained when the state, which formed the market in the first place, is stronger than the market and its participants. The Eurozone does not meet this essential criterion and is therefore destined to change materially - smaller, weaker financial sector; unified tax system that facilitates flows from surplus to deficit areas; a strong central bank focused on prosperity rather than servitude to the financial sector, etc. In short, its leaders will, in Galbraith's words, come to understand "that the goal of economic policy cannot be to satisfy the gods of the bond market. It is to provide economic opportunity-full employment, education, health care, and decent pensions-to the people," or it will continue to collapse.




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A world-class lesson in counterproductivity

James K. Galbraith is a self-described dissident in economics, banished to the University of Texas at Austin. This is somewhat ironic considering his father was the iconic establishment economist of his era. The younger Galbraith is highly respected around the world, just not so much in the USA. It reminds me of Noam Chomsky, who is similarly held in the highest esteem everywhere but at home.

Galbraith was in Athens for the Greek elections that brought Syriza to power. He was an unpaid advisor to the new government all through its negotiations with the Eurozone, the European Bank and the IMF. This book is a collection of his articles, e-mails, speeches and other communications to various players in the State Department, the European Union and the Greek government – from that precise time. It is a blow by blow description of how Europe went wrong and how that path would damage both Greece and the EU. And it’s not over.

Galbraith quickly realized that Europe was not out to save Greece, but to cripple it permanently. They apparently thought this would keep it subservient and prevent it ever rattling their gilded cages again. It was obvious to him that the path of least resistance for Greece was not austerity. Shrinking the GDP, increasing unemployment and loading up on new debt was not the way to reduce debt and restore stability and prosperity. But that is exactly the path demanded Merkel, Schauble and the rest of the Germans, the leading economic power at the table. They even required Greece to run a huge surplus, which is as self-defeating a policy (in a time of 25% unemployment) as could be imagined, Galbraith says.

One thing I had not read before was Galbraith’s ideas if Grexit came to pass. He recommended a 1:1 valuation for the New Drachma at the start, and stamping the 19 billion in paper euros stored at the Bank of Greece to provide cash in the country. This would have had the effect of relaxing the need to hoard euros, while giving the country time to order new currency notes and reprogram ATMs to accept them.

Galbraith dissects the final Brussels memorandum itself in no uncertain terms, showing how each paragraph is a lie, a cynical, hypocritical and misleading contradiction of what would actually happen, and a shameful crippling of a fellow Eurozone country. Like everything he writes, it is clear, cogent, accessible and depressing. This whole affair was handled the precise opposite of the way it should have been. The book documents it realtime.

David Wineberg ( )