Is the global economy just a giant debt scam? What the financial elite doesn’t want you to know

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via salon:

Why is the world the way it is, and how did it get that way? One book I read in the past year explained more about that question than any other, and it wasn’t about Donald Trump or the rise of the far right or the endangered state of democracy — or at least not directly. Beneath the surface, it was clearly about all those things and many more.

It was also a startling and dramatic read on its own terms and one of the best-written nonfiction works I’ve encountered in recent years. It’s a witty, erudite and deeply humane chronicle by a man who almost accidentally found himself in the corridors of power, with backstage access to the Western world’s financial elite. It sometimes reads like a “wrong man, wrong place” comedy and at other times, as its author says, “is the stuff of tragedy, Shakespearean tragedy, ancient Greek tragedy.”

Why haven’t you heard about this book, which is called “Adults in the Room: My Battle With the European and American Deep Establishment,” and was written by Yanis Varoufakis, a leftist academic who briefly served as the Greek finance minister at the apex of that nation’s debt crisis in 2015? (It was published last year, but is just out in paperback.) I think that question that answers itself — and believe me, it gets answered several times over when you read the book. For essentially the same reasons, I haven’t gotten around to writing about Varoufakis and “Adults in the Room” until now, despite what a terrific read it was and how invigorating it was to talk to him when he visited Salon last year. He doesn’t fit easily into the news cycle, and his ideas don’t fit neatly into the dominant political paradigm.

First of all, volumes about the global economy by obscure European leftists don’t exactly pile up five-star reviews or fly off the shelves at Barnes & Noble: Yes, I see you holding up your copy of Thomas Piketty’s “Capital in the Twenty-First Century,” the startling exception that proves the rule. More to the point, Varoufakis’ book is practical and anecdotal rather than theoretical or abstract, and the story he tells is deeply displeasing to virtually everyone in government, finance or business throughout the Western world (meaning the economic zone dominated by the United States and the European Union).

Varoufakis never retreats into left-wing dogma and never calls his political adversaries names, and his story is far more compelling as a result. In fact, Larry Summers, the former U.S. treasury secretary and former Harvard president, is one of his mentors and ideological foils throughout the book, and they disagree about nearly everything. “You realize how bad things were if someone like Larry Summers is helping someone like me,” Varoufakis jokes.

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In any case individuals are not the problem: Not in the Greek crisis of 2010-15 in which Varoufakis briefly played a starring role, not in the tide of right-wing nationalism that threatens to tear Europe apart, and not in the Trumpified political climate of the United States. The problem is systematic, not a question of the wrong people being in charge.

Varoufakis argues that the entire Western economy has become a massive con game, on a scale thousands or millions of times larger than anything Bernie Madoff could have imagined. Furthermore, in his telling, it’s a con game run by intelligent and not necessarily malevolent people who understand perfectly well that the whole enterprise is a fraud that’s bound to come crashing down eventually. He says he knows that to be true because those people told him so, in the kinds of closed-door meetings where the uppermost level of the managerial caste discuss such things. That’s where the “Greek tragedy” enters the Greek tragedy: Those who supposedly control the system have instead become its prisoners. Or to put it another way, pay no attention to the man behind the curtain.

If anything, Varoufakis can’t resist the human drama. When I asked him whether that was a specifically Greek failing, he laughed but did not deny it. In person he doesn’t seem bitter or angry in the slightest, and looks as if he had been sent over by a casting director to play the role of a worldly European intellectual. He’s handsome, stylish and self-deprecating, and speaks English with almost no accent. (He has a Ph.D. in economics from the University of Essex and has spent much of his career teaching at universities in Britain, Australia and the U.S.)

He depicts powerful insiders whom many progressives would be inclined to view as duplicitous villains, like Summers or International Monetary Fund chief Christine Lagarde, in almost sympathetic terms. His title refers to an infamous remark by Lagarde during the final stages of the Greek crisis in June 2015, when she appeared to dismiss the left-wing government Varoufakis represented as children: “The key emergency is to restore the dialogue with adults in the room.” Despite that obvious insult, Varoufakis says he got along well with Lagarde personally.

It’s neither fair nor accurate, Varoufakis told me during our Salon Talks conversation last fall, to depict such people as scheming masterminds of the neoliberal economy, pulling the strings from atop capitalism’s equivalent of Mount Olympus. “What I experienced was people who were neither good nor bad trying to do their best under circumstances not of their own choosing,” he said, “and then using neoliberal narratives in order to justify themselves, ex post facto. The question is, if they were not in control, if they were powerful and at the same time powerless, what on Earth is going on? Who is running the shop?”

As Varoufakis says, the answer to that question is shrouded in deliberate mystery. He was among the leaders of what he calls a “prison break,” the Greek people’s short-lived attempt to escape from the crushing cycle of debt and fiscal austerity that had starved their welfare state and nearly destroyed their society. A few weeks after Lagarde’s “adults in the room” comment, the revolt was over: Varoufakis’ Syriza party capitulated to the demands of the IMF and the European Central Bank — which it had specifically promised not to do — and he resigned as finance minister.

Varoufakis argues that what happened in Greece is happening to us all, on a different scale, and that it was never about one irresponsible little country whose government spent too much money and whose citizens wanted too much free stuff. It’s a long and complicated story about how the world really works, and about the false narratives that get spun in public to conceal that. I encourage you to watch our entire conversation, embedded below — and even more so, to read “Adults in the Room.” Rather than publishing the entire transcript here, I thought it might be more helpful to summarize the main points.



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