- By Bill Bonner
Protesters gathered in Syntagma Square last night - remonstrating against the cruelty of life in general, and the deal the government made with its creditors, in specific.
"Greek workers taken to the cleaners as Tsipras forced to retreat on promises," says a headline the Financial Times couldn't resist.
"Austerity," the papers call it. But that is just the 'public narrative,' as we'll explain below. Really, Greece is just cutting back on the extravagant bribes and pay-offs to zombies; it's the price of keeping the whole game going. If the Greeks want more money, they have to pretend to use it prudently. If the crony lenders want to keep lending, they have to pretend that they will get their money back.
Like the zombie wars in the Mideast, the important thing is not to win. Or to resolve problems. The important thing is just to keep the money flowing.
But the zombies in Athens were generally quiet and listless last night. They knew that the deal would keep the red meat coming their way, though not as much as they wanted. And what's the alternative? To default - and actually have to live within their means?
"We hope Syriza will look after us," said a janitor. "As long as I live, I hope."
Meanwhile, in Washington, Janet Yellen was pretending to look after janitors too. "Looking forward, prospects are favorable for an improvement in the US labor market and the economy more broadly," she said. As if she would know! She went on to suggest that the Fed might move to 'normalize' interest rates later this year - if things evolve as expected.
"People need myths," said our colleague, Simone Wapler, over lunch yesterday. "They need a public narrative simple enough for them to understand."
Good vs. evil, black vs. white, red states vs. blue states...the narrative must stripped of all nuance, subtlety and contradiction. That is, it must be stripped of anything resembling real life.
The myth about the crisis of '08-'09 was that it was caused by greed and deregulation. Then, the authorities stepped in to save the day. Since then, they have carefully nurtured a 'recovery.' And when appropriate, Ms. Yellen will turn the economy over to market forces.
In these pages, we have a different narrative - still evolving, rough around the edges and necessarily full of paradox and confusion. What is really going on is a Zombie War - the layabouts, manipulators and grifters are fighting to maintain their hold on the productive economy's output. And it's getting harder and harder for them to do so. First, because there are so many of them. Second, because they've imposed so many regulations and distortions that the economy has become less and less productive.
Many of the battles you see in the news are really battles between different groups of zombies, each fighting for a larger share of the loot. Teachers want pay increases. The Pentagon wants more planes, or tanks, or pensions. Wall Street wants more cheap financing.
Of course, zombies will always be with us. And they will always want more flesh. What makes this Zombie War unique in history is that never have there been so many zombies...and never before have the depended so heavily on credit. Usually, the unproductive parts of a society are limited to the surplus production available to them. And when the surplus disappeared, so did the zombies.
Apparently, when food was short, Eskimo tribes put their old people out on the ice, where they would drift away and disappear. And in almost all cultures - as far as we know - laziness and parasitism is discouraged.
In Switzerland, for example, the work ethic used to be so strong that a young man sitting on a park bench in the middle of the day was likely to be approached by an old person waving a cane: "Young man, why aren't you at work?"
And then, along came the post-1971 money system - with its almost unlimited supply of credit. Suddenly, the sky was the limit for zombiedom. Firefighters want to retire at 45? No problem. Need a new sports stadium? Sure. More subsidies for sugar growers? Why not!
Along with the easy money came a big relaxation in attitudes. Soon, people didn't seem to mind the zombies around them...and didn't mind becoming zombies themselves. Taking welfare used to be a mark of failure and shame. "Disability" was reserved for people with genuine problems - cripples and half-wits. Million dollar paydays were regarded as unseemly, greedy or vulgar. No more. Get it while you can! And why not? The new money - credit - was splashing out on the street like an open fire hydrant. Just put on your bathing suit and join the summer fun. It appeared that society could support as many zombies as it wanted to - with no current loss to anyone else.
But wait. What about the debt?
In the mid-'80s, the Republican party lost its traditional distaste for deficit financing. Conveniently, it discovered that deficits really didn't matter to voters. There was plenty of credit. Voters were happy to have bigger Social Security payments. And they would put up with another federal agency to pretend to improve education...or health...or whatever - if taxes weren't raised to pay for it. The cost would be paid by someone, somewhere, someday - who knew; who cared.
Households and businesses found that deficits didn't matter too. People came to think that a big mortgage was actually a good thing. House prices were rising. Stocks were going up. If you wanted to get rich, you just had to get 'on the escalator.' The bigger the mortgage, the bigger the house, the more stocks you owned -- and the bigger the gain when you sold.
And so, the debt grew. From about 150% of GDP in the '50s, '60s and '70s, it rose to 350% of GDP after 2000. And the zombies ran wild, from Wall Street to Syntagma Square, siphoning off trillions of dollars' worth of real assets from the productive economy.
This is the world that the zombies and their crony allies are so desperate to protect.
Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.