On September 18, hip-hop artist Pavlos Fyssas, a.k.a. Killah P, was stabbed outside a bar in Keratsini, Greece.Larry Summers has an air-tight alibi. But I don't believe it.Larry didn’t hold the knife: The confessed killer is some twisted member of Golden Dawn, a political party made up of skin-head freaks, anti-immigrant fear-mongers, anti-Muslim/ anti-Semitic/ anti-Albanian sociopaths and ultra-patriot fruitcakes. Think of it as the Tea Party goes Greek.Following Fyssas’ killing, other groups of dangerous psychopathic misfits, namely the European Union and Greece’s governing coalition, moved to ban Golden Dawn.Over the weekend, Greece’s rulers arrested six members of Parliament who belong to Golden Dawn. Apparently, Greece’s political leaders prefer democracy as defined by Egypt’s General Sisi to the precepts of Aristotle and Thomas Jefferson.To my friends on the Greek Left: It’s sickening to watch you cheer the arrest of Golden Dawn parliamentarians.Mark my words: You are next.Listen up:My investigation reveals that behind the banning of Golden Dawn, besides the usual European distaste for democracy, is something far more sinister: the ruling parties are distracting the public from their own involvement in the crime.The rise in violence and hate-crimes is no surprise. The official unemployment rate in Greece is 28%, and over 60% among young men. No wonder desperate youths are wrapping batons in Greek flags and beating immigrants: When people are pressed to the wall, they hunt for their tormentors — and too often find their fellow victims to blame.Economic devastation breeds fascism. In the 1930s, the hungry and angry sought relief in hyper-patriotism, racism and pogroms. In the 1980s Reagan Recession in the USA, when factories shut down in the Midwest, the hopeless unemployed joined right-wing skinhead cults and went on a killing rampage — beginning with the murder of Jewish journalist Alan Berg and ending with the bombing of a government building in Oklahoma, killing 168 people.

Vultures Over Athens

Golden Dawn is a symptom of the nation's illness, not its cause. Unfortunately, the Brown-shirts go after easy targets — Pakistanis, Gypsies, Africans, whoever is different and easy to whack. It's a lot easier to stab a hip-hop rapper than it is to go after a hedge-fund shark.

The real culprits behind the suffering are well camouflaged. So let me name some: In Greece, we begin with billionaires Kenneth Dart and Paul “The Vulture” Singer.

Dart and Singer bought up Greek government bonds for pennies on the dollar. While the holders of 97% of Greek bonds agreed to accept a loss of 75% of their value, Dart and Singer demanded several hundred percent more than they paid. Then Dart and Singer threatened the dead-broke Greek government. If Greece did not pay this ransom, Dart and Singer would declare Greek bonds in default. Every bank in Europe holding these government debts as reserve funds would face technical bankruptcy; the value of government bonds worldwide would implode in value and the entire hemisphere would face a new financial collapse.

It was financial terrorism, and the Greek government gave in. It paid the full ransom demanded. Dart grabbed over half a billion dollars ($513 million) from the Greek treasury — and only the gods know how much Singer has pocketed. [Get the full story on Singer the Vulture, read Billionaires & Ballot Bandits and Vultures' Picnic.]

How was this vulture food paid for? With “austerity” – tightening a belt that’s already not much bigger than its buckle. To pay Singer and Dart, the Greek government announced it would fire 15,000 workers.

What’s sick is that the ruling coalition (or misruling coalition) does not say this is to cover the payoffs to the vultures. Rather, the government says it is the just punishment Greeks deserve for their “laziness and greed.” The victims’ punishment is called, “austerity.”

The Austerity Fairy Tale

My children often ask me, “Daddy, where does austerity come from?” And I tell them:

Once upon a time, there was a good fairy named John Maynard Keynes. He wanted to stop depressions, financial crises and suffering, so he conceived of the International Monetary Fund and the World Bank. He said, When a nation’s foreign exchange earnings drop (say, if the price of oil rises or Greek tourism falls because its currency is over-valued), the countries taking the poor nations’ money, rich countries like Germany and the USA, would lend it back via the IMF.

By this rule, the rich lending to the poor, the world prospered and lived happily ever after until the 1980s, when a wicked witch, known as the Iron Lady, and America’s gaga grandpa, Reagan of the Rich, insisted that the IMF and the World Bank beat poor nations with a stick called, “structural adjustment.”

Nations facing destitution because of higher oil costs, currency imbalance or predatory interest rate demands were “structurally adjusted.” Structural adjustment is a cruel and debilitating potion of mass firings of public employees, cheap sell-offs of national assets and deregulation of corporate profiteering. This ripping the wings off the better angels of government is called, “austerity.”

The good fairy Keynes had warned about this evil potion, this snake oil called “austerity.” Cutting government spending during a recession, he said, will only make things worse.

And that’s what happened: In every single case, the “adjusted” nations’ economies were devastated.

Structural adjustment reached its cruel apotheosis in the early 1990s under the guidance of the World Bank’s Chief Economist, one Larry Summers.

But then, in 1997, Summers’ post was taken by Prof. Joseph Stiglitz.

In 2001, I met Stiglitz whom I’d heard was quietly expressing grave doubts about austerity and structural adjustment A la Summers. He agreed to go public. Over several hours of discussion, which I recorded for BBC TV, Stiglitz charged that IMF-imposed austerity was a little like the Middle Ages, when the patient died they would say well, we stopped the bloodletting too soon, he still had a little blood in him.

Stiglitz detailed for me the ill effects of the “structural adjustment” demands, including “free” trade, which he likened to the Opium Wars; bank deregulation, which he found ludicrously dangerous; privatization, which Stiglitz called “briberization”; and budget-cutting austerity.

The budget cuts and free-market nostrums, Stiglitz told me, were as cruel as they were stupid. And he said of those who profited off these IMF diktats, “They don’t care if people live or die.”

Stiglitz went on to win the Nobel Prize in economics for his skepticism of Markets Ã¼ber Alles.

So how, a decade after austerity, briberization and all their cruelties exposed and discredited, did Greece (and Spain and Portugal and too many others) end up under austerity’s bloody grip?

To begin with, in 2000, Larry Summers, as US Treasury Secretary, successfully demanded the World Bank fire Stiglitz and purged the Bank and IMF of austerity apostasy.

Why? Austerity may fail the public, but it’s damn profitable for those on the inside.

All you need is a riot and a few dead bodies.

The IMF Riots

Among Stiglitz’ stunning revelations to me was his description of “the IMF riot.” I showed him confidential World Bank and IMF plans for the nation of Ecuador. These included what seemed to be a warning to that nation’s finance minister that austerity could lead to violence in the streets, “social unrest” – which the World Bank recommended be crushed with “resolve”. In Ecuador, “resolve” meant tanks.

Did the IMF really write the riots into the plans?

Yes, Stiglitz said, matter-of-factly. “We had a name for it The IMF Riot”.

When a nation is “down and out, [the IMF] takes advantage and squeezes the last pound of blood out of them. They turn up the heat until, finally, the whole caldron blows up”.

And that’s what we’re seeing in Greece. It began in May 2010, when some sick, misguided berserker set fire to a bank in Athens and killed four bank employees. The killings did the trick: the Left’s protests against insane austerity and banker gangsterism came to a halt.

Still, people could see that the austerity medicine was making Greece ill. So, they put their hopes in a new party, Syriza, which, from nowhere, became the second highest vote-getter in Greece by promising to oppose austerity. Once in parliament, the faux-Left Syriza completely sold out its positions.

That leaves Golden Dawn, although diseased by racism and violently bent, it is the only one of Greece’s top four parties to stand firm against rabid austerity and the economy being chained like a beaten dog to Germany’s currency.

In 2010, the bank burning was used to discredit protests by the Left. Today, once again, the Greek government, dancing on its hind legs, begging for a biscuit from German bankers, has used a murder as an excuse to outlaw the only major party dissenting from the austerity suicide pact.

I wish I could say that the reason Golden Dawn is being banned is because of the violent bend of its racist followers. But that’s just not what’s going on here.

Dimitris Kazakis, the leader of Greece’s true progressive party, the United People’s Front (EPAM), has spoken out against Golden Dawn’s racist violence – and the greater danger of the bogus charges created to arrest members of Parliament. He scolds Greeks, reminding them that this is how the military dictatorship seized power in 1967.

So, who are the real Fascists?

Fascism, as defined since the days of Il Duce, is the official combine of government and big business. By that definition, Golden Dawn is the only non-Fascist party among Greece’s top four. And that is why Golden Dawn has been targeted for elimination.

I hope my fellow progressives will excuse me for not applauding.

* * * * * *

Greg Palast is the author of the New York Times bestsellers, Billionaires & Ballot Bandits, The Best Democracy Money Can Buy, Armed Madhouse and the highly acclaimed Vultures' Picnic, named Book of the Year 2012 on BBC Newsnight Review.

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