Authored by Eric Zuesse,

There is democratic capitalism, and there is fascist capitalism. What we have today is fascist capitalism; and the following will explain how it works, using as an example the case of Greece.

Mark Whitehouse at Bloomberg headlined on 27 June 2015, “If Greece Defaults, Europe’s Taxpayers Lose,” and presented his ‘news’ report, which simply assumed that, perhaps someday, Greece will be able to get out of debt without defaulting on it. Other than his unfounded assumption there (which assumption is even in his headline), his report was accurate. Here is what he reported that’s accurate:

He presented two graphs, the first of which shows Greece’s governmental debt to private investors (bondholders) as of, first, December 2009; and, then, five years later, December 2014. This graph shows that, in almost all countries, private investors either eliminated or steeply reduced their holdings of Greek government bonds during that 5-year period. (Overall, it was reduced by 83%; but, in countries such as France, Portugal, Ireland, Austria, and Belgium, it was reduced closer to 100% — all of it.) In other words: by the time of December 2009, word was out, amongst the aristocracy, that only suckers would want to buy it from them, so they needed suckers and took advantage of the system that the aristocracy had set up for governments to buy aristocrats’ bad bets — for governments to be suckers when private individuals won’t. Not all of it was sold directly to governments; much of it went instead indirectly, to agencies that the aristocracy has set up as basically transfer-agencies for passing junk to governments; in other words, as middlemen, to transfer unpayable debt-obligations to various governments’ taxpayers. Whitehouse presented no indication as to whom those investors sold that debt to, but almost all of it was sold, either directly or indirectly, to Western governments, via those middlemen-agencies, so that, when Greece will default (which it inevitably will), the taxpayers of those Western governments will suffer the losses. The aristocracy will already have wrung what they could out of it.

Who were these governments and middlemen-agencies? As of January 2015, they were: 62% Euro-member governments (including the European Financial Stability Facility); 10% International Monetyary Fund (IMF), and 8% European Central Bank; then, 17% still remained with private investors; and 3% was owned by “other.”

Whitehouse says: “Ever since the region's sovereign-debt crisis first flared in 2010, European nations have been stepping in for Greece's private creditors -- largely German and French banks -- by lending the country [Greece] the money to pay them off. Thanks to this bailout [of ‘largely German and French banks’], banks and [other private] investors have much less at stake than before.”

So: what got bailed-out was private investors, not ‘the Greek people’ (such as the ‘news’ media assert, or try to suggest). For example, a reader’s comment to Whitehouse’s article says: “A reasonable assumption is that a large part of the Greek debt to the Germans was the result of Greek consumption of German goods and services bought with the German provided credit. In that case, the Germans have lost the Greek goods and services that could have potentially been bought with the money that is owed to them.” But this is entirely false: that “consumption” was by the aristocracy, not by the public, anywhere or at any time. After all: It’s the aristocracy that get bailed-out — not the public, anywhere. (The same thing is happening now in Ukraine.)

The assumption that the aristocratically-owned press want to convey is, like the sucker there said: consumers, and not bondholders, receive these bailouts from taxpayers. They actually receive none of it. They didn’t receive the loans, and they certainly aren’t receiving any of the bailouts. In fact, the contrary: Greek consumers have been getting hit so hard by the aristocracy’s system (dictatorial capitalism, otherwise known as fascism), that they’re suffering an enormous depression — this is even a condition, a requirement, of such “bailouts.” It’s called “austerity,” and it’s imposed by the IMF. And yet, millions of suckers go for the inference that the aristocrats’ ‘news’ media convey. After all: would people such as Mark Whitehouse have been hired or keep their jobs at major ‘news’ media such as Bloomberg ‘News’ if they didn’t convey this false impression? He’s just doing his job; he’s doing what he’s paid to do. It’s enormously profitable for his employer and for “the investment community” worldwide.

The whole system is a money-funnel, from the public, to the aristocracy.

The independent economics-writer, Charles Hugh Smith — who was one of only 29 economists worldwide who predicted the 2008 crash in advance and who explained accurately how and why it was going to occur — has provided a more honest description of the sources of Greece’s depression: