Louis Proyect: The Unrepentant Marxist

March 22, 2012

The New York Times’s neoliberal crap on Greece and Italy

Filed under: Greece,Japan,media — louisproyect @ 6:38 pm

Last Sunday I attended a workshop titled Understanding the Essential Economic Role of the N.Y. Times at the Left Forum that included Robert Chernomas and Ian Hudson, the co-authors of The Gatekeeper: 60 Years of Economics According to the New York Times, a chapter of which appears on New York Times Examiner: An antidote to the “paper of record”. Chris Spannos, who founded NY Times Examiner, was the third speaker. Chernomas’s talk consisted of a reading of the same chapter that includes this observation:

The ability of the media to shape stories and issues has long been recognized. The press became known as the Fourth Estate precisely to acknowledge that while the first three estates (nobility; clergy; and commoners, which in those days meant the middle class with property) had a formal voice in democracy, the press was the institution most able to advocate for and frame political issues. Over time, those discontented with what they saw to be the cozy role of the mainstream press in supporting the status quo coined the term the Fifth Estate to describe forms of media that challenged the powers that be. In this context we will demonstrate how the Times can be seen as the preeminent example of the Fourth Estate, using its prestige and formidable skills to advocate for the U.S. capitalist class as a whole by helping to frame political issues.

Almost as if on cue, the N.Y. Times offered up two articles on the following morning that confirmed its role in “using its prestige and formidable skills to advocate for the U.S. capitalist class as a whole by helping to frame political issues.”

On the front page, you could have read an article by Suzanne Daley that was titled A Tale of Greek Enterprise and Olive Oil, Smothered in Red Tape. Judging solely by the title, you can figure out that this is the expected neoliberal diatribe against regulation. Daley’s lead paragraphs:

It was about a year ago that Fotis I. Antonopoulos, a successful Web program designer here, decided he wanted to open an e-business selling olive products.

Luckily, he already had a day job.

It took him 10 months — crisscrossing the city to collect dozens of forms and stamps of approval, including proof that he was up to date on his pension contributions — before he could get started. But even that was not enough. In perhaps the strangest twist of all, his board members were required by the Health Department to submit lung X-rays — and stool samples — since this was a food company.

“I laugh about it now,” he said. “But it wouldn’t be so funny if I didn’t have a very good job with very good pay. It would have been an absolute nightmare.”

With Greece’s economy entering its fourth year of recession, its entrepreneurs are eager to reverse a frightening tide. Last year, at least 68,000 small and medium-size businesses closed in Greece; nearly 135,000 jobs associated with them vanished. Predictions for 2012 are also bleak.

But despite the government’s repeated promises to improve things, the climate for doing business here remains abysmal. In a recent report titled “Greece 10 Years Ahead,” McKinsey & Company described Greece’s economy as “chronically suffering from unfavorable conditions for business.” Start-ups faced immense amounts of red tape, complex administrative and tax systems and procedural disincentives, it said.

Even if it occurred to Daley that small and medium businesses were closing because unemployed workers lacked the money to buy their products, her editors would have surely deleted any reference to that in her article. My guess, however, is that she believes her own bullshit.

Filing numerous reports from Greece since the financial roof caved in, Daley finds fault with just about everybody and everything except private property and the profit drive. On October 10, 2010, the problem once again was red tape:

Antonios Avgerinos, 59, a retired army pharmacist, always wanted his own pharmacy here. And why not? Greek law ensures that pharmacists get a 35 percent profit on all drugs sold, even over-the-counter medications.

But Greek law also limits just about everything else about pharmacies. They must be at least 820 feet apart and have a likely market of no fewer than 1,500 residents. To break into the business, an aspiring pharmacist generally has to buy a license from a retiring one. That often costs upward of $400,000.

”It is an absurd system,” Mr. Avgerinos said recently. ”But it has been that way my whole life.”

Maybe not for much longer.

As the government of Prime Minster George Papandreou struggles to get the nation’s financial house in order — reducing the size of its bloated civil service, chasing after tax evaders and overhauling its pension system — it has also begun to tackle a much less talked about problem: the cozy system of ”closed professions” that has existed here for decades, costing the economy billions of dollars a year.

In reality the Greek economy has cratered not because of such regulations but because the Greek bourgeoisie and its friends at Goldman-Sachs decided to keep the interest rate of Greek bonds artificially high as Mark Weisbrot points out:

In fact, this whole crisis and recession could have been prevented very easily if the European authorities had simply intervened to maintain low interest rates on the Greek debt a year and a half ago. It is possible that some restructuring might still have been necessary, but the cost would still have been very small relative to the available resources of the European authorities. Because they refused to do this, and instead shrank the Greek economy, increased its debt burden, and allowed its borrowing costs to skyrocket – the crisis spread to the weaker countries of the eurozone, including Italy.

Speaking of Italy, the very same day that Daley’s article appeared you could have read another pile of crap blaming the labor unions on Italy’s woes. In an article titled Stuck in Recession, Italy Takes on Labor Laws That Divide the Generations, Rachel Donadio uses the same exact kinds of generation gap arguments that Peter Peterson has been making for decades, focusing mostly on Social Security. Peterson, who is the obvious inspiration for Obama’s entitlement “reform” task force, makes scapegoats of the elderly (my peeps). If only they would be less piggish, the young will prosper—just as Donadio argues:

Assunta Linza, a bright-eyed 33-year-old with a college degree in psychology, has been unemployed since June, after losing a temporary job as a call-center operator. Her father, who is 60 and has a fifth-grade education, took early retirement with full benefits at age 42 from a job as a workman at the Italian state railway company.

“Everyone said that kids should study to get ahead, but I graduated with highest honors, and the only thing my degree is good for is to hang on the wall,” Ms. Linza said dryly.

The Linza family is emblematic of a yawning generational divide that experts say is crippling the Italian labor market. While older workers came of age with guaranteed jobs and ironclad contracts granting generous pensions and full benefits, younger Italians — the best-educated in the country’s history — are now paying the price. They are lucky to find temporary work, which offers few benefits or stability.

It is precisely that two-tier labor market that Prime Minister Mario Monti is proposing to correct with changes to Italian law that are the subject of intense, politically delicate negotiations. The government is proposing measures to make it easier for companies to hire and fire, and to create shorter-term contracts with greater pension and unemployment benefits, a middle ground in a divided market.

As I continued digging into Rachel Donadio’s track record, I discovered another N.Y. Times article along these lines that I posted on June 23, 2011. Apparently she has also been proffering advice to the Greek bourgeoisie just as her colleague does. In forwarding the article, I made the Peter Peterson connection:

(The NY Times is shameless. They cite an expert in this article from the Peterson Institute for International Economics about the need for drastic cuts in Greece. So which Peterson do you think this institute is named after? You guessed it. Peter G. Peterson.)

NY Times June 22, 2011

Some Greeks Fear Government Is Selling Nation


ATHENS — They are the crown jewels of Greece’s socialist state, and they are now likely to go to the highest bidder: the ports of Piraeus and Thessaloniki; prime Mediterranean real estate; the national lottery; Greek Telecom; the postal bank and the national railway system.

And then comes the mandated deeper round of austerity measures, which will slash the wages of police officers, firefighters and other state workers who are protesting in Athens, and raise the taxes of citizens already inflamed by a recession-plagued economy and soaring joblessness.

Some independent economists accept that Greece has no choice but to try a fresh round of cuts. Edwin M. Truman of the Peterson Institute for International Economics in Washington said Greece had to go through more pain because it had run a budget deficit even before making payments on its debt, meaning it needed loans to pay off its loans.

Only after Greece reorganizes its budget, tax collection and labor market and is running a surplus — not including interest payments on the debt — can economists begin to calculate how much in debt payments Greece is actually able to afford, and then figure out how big a debt restructuring it needs.

“As long as they’re running a primary deficit, they need to keep tightening the belt,” Mr. Truman said. “Rescheduling now doesn’t relieve Greece of the burden of fixing the economy to create a surplus.”

One of the main points made in The Gatekeeper: 60 Years of Economics According to the New York Times is the Grey Lady is forced to play both sides of the fence, appearing liberal and conservative at the same time:

This book will argue that the usual liberal-conservative dichotomy that has been used as the previous spectrum of media bias, while accurate, overlooks a more profound bias. Casting the debate in such a narrow fashion is, in fact, very misleading because the liberal/conservative or Democrat/Republican spectrum is remarkably limited. An economic debate that limits itself to options pursued by these two camps would be similarly limited. It is also misleading because it omits the real bias of the Times, which is that it supports the long-term interests of U.S. business involving both liberal and conservative policies.

So this boils down to writing fairly accurate articles about European suffering while at the same time cheering on the economic policies that are fueling that suffering. In order to maintain some kind of credibility, the paper has to assign reporters to cover financial collapse and the culpability of the powerful men and women responsible. That is why Goldman-Sachs director Greg Smith published his open letter of resignation on the N.Y. Times op-ed rather than the N.Y. Post.

The underlying cause of economic suffering will go unreported, however. You will find book after book reviewed in the Sunday edition that go into the most minute details about subprime mortgages, but nothing that deals with the declining rate of profit or any other structural defect—the kind of study that is published by Verso or Monthly Review. In fact a search of Lexis-Nexis turned up not a single book from these august publishers being reviewed  in the N.Y. Times.

That is what I would call a conspiracy of silence.


  1. just Greece and Italy?

    Comment by Richard Estes — March 22, 2012 @ 9:18 pm

  2. Yes, there is a conspiracy of silence on the declining rate of profit and how it has been “resolved” through organized crime.

    Comment by michael springate — March 27, 2012 @ 1:25 am

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