Spitfire List Web site and blog of anti-fascist researcher and radio personality Dave Emory.

For The Record  

FTR #861 Greek Tragedy, Part 4

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This program was recorded in one, 60-minute segment. 

Daedalus and Icarus: Deflationary Spiral

Introduction: Once again, we look at the ongoing political and social catastrophe unfolding in Greece, resulting directly from the twin demons of the European Monetary Union and the financial collapse of 2008.

Before examining recent developments in the Greek tragedy, we review some important Greek history.

The program begins with an excerpt from AFA #1, about the re-institution of fascist elements in Greece by the Allies at the end of World War II, deemed necessary to “fight communism.”

Liberated from Nazi occupation to a large extent by fierce guerilla warfare waged by a popular resistance front grouped around Marxist socialist guerillas, Greece was the scene of a fierce civil war in the postwar years resulting directly from the predetermined British military and political hostility toward the ELAS organization.

Next, we return to analysis of the present crisis, and how it resulted from the error and tragedy of the past.

In FTR #’s 746788855we looked at the Greek economic/political crisis against the background of long-term (two hundred years or so) German plans for the economic and political colonization of Europe as a vehicle to effect world domination. It is against that same background that we examine the purchase of Greek regional airports by a German company. (Never forget that, as seen in FTR #305, corporate Germany is controlled by the remarkable and deadly Bormann capital network.)

This is a very real form of forced occupation, using economic instead of military pressure.

German austerity advocates inspecting Greek assets

The sale of Greece’s airports is just part of an enormous 50 billion Euro sell-off of Greek assets–assets which would be fundamental to the economic and social rehabilitation of that unfortunate nation.

Ravaged by what we called “Clausewitzian economics,” Greece has been crushed by the German austerity doctrine, echoed by the so-called “troika”–the European Commission (a German puppet organization at present), the European Central Bank (which has shown some signs of relenting) and the IMF (which has belatedly admitted the fundamental error of its ways).

recent article in Forbes underscores the flawed accounting underlying the lethal fiscal policy imposed on the citizens of the “cradle of democracy.”

As discussed in a recent New York Times article, the Greek debt has been calculated using an unconventional accounting paradigm to arrive at the conclusion that Greek debt is “175%” of GDP. The Greeks are in need of adopting the “Ipsas” accounting standard.

In fact, it is 18%, when calculated using the standard “Ipsas” accounting method. Germany’s on the other hand, is 46%, when calculated under that standard!

In addition to Germany’s self-serving and capricious adherence to established EU and EMU accounting standards, Germany bears partial responsibility for the Greek crisis because of its aggressive, corrupt pursuit of sales to Greek buyers. German businessmen are avoiding criminal charges stemming from their conduct of business in Greece.

Ending with a speculative weighing of the future in the context of the past, we evaluate the concept of slavery in the context of what is taking place in Europe.

Program Highlights Include: 

  • Discussion of the concept of “voluntary slavery,” as minted by Ron Paul aide Walter Block.
  • Discussion of how enthusiasm for slavery worked against the Southern white working class and for the “1 percenters” who owned the slaves.
  • Review of a Greek proposal to address the problem of massive youth unemployment buy having young people work for free.
  • Review of the EMU and EU as the culmination of German designs for imperialism dating back to the nineteenth century.
  • Review of the theories of Carl von Clausewitz and how his theoretical constructs have played out in post-World War II Europe.

1. The program begins with an excerpt from AFA #1, about the re-institution of fascist elements in Greece by the Allies at the end of World War II, deemed necessary to “fight communism.”

2. In FTR #’s 746, 788, 855, we looked at the Greek economic/political crisis against the background of long-term (two hundred years or so) German plans for the economic and political colonization of Europe as a vehicle to effect world domination. It is against that same background that we examine the purchase of Greek regional airports by a German company. (Never forget that, as seen in FTR #305, corporate Germany is controlled by the remarkable and deadly Bormann capital network.)

. . . In the early 1980s, as Chair of the Association of European Border Regions (AEBR), [German Finance Minister Wolfgang] Schäuble had organized the first economic initiatives [and not just] toward France. Theodor Veiter [6] a former Nazi specialist for border subversion was one of Schäuble’s advisors as chair of the AEBR. . . .”

“Greece Sells Air­ports to Ger­mans as Bun­destag Pre­pares for Day of Reck­on­ing” by Mehreen Khan; The Tele­graph; 8/18/2015.

The Greek gov­ern­ment has rowed back on a promise to halt the fire sales of the country’s strate­gic assets by approv­ing the sale of its air­ports to a Ger­man company.

Oper­at­ing rights to 14 regional air­ports, includ­ing those on pop­u­lar hol­i­day des­ti­na­tions such as Crete, will now fall under the con­trol of Fra­port AG, the oper­a­tor of Frank­furt airport.

The €1.23bn deal rep­re­sents a sig­nif­i­cant climb­down for Alexis Tsipras who had denounced attempts by the Troika to force var­i­ous Greek gov­ern­ments to de-nationalise the country’s ports, elec­tric­ity net­works and airports.

But the embat­tled prime min­is­ter has been forced into a num­ber of con­ces­sions in return for an €86bn aid pack­age to keep the coun­try in the euro for the next three years. The deal comes as Germany’s Bun­destag pre­pares to vote on the pack­age on Wednesday.

Bid­ding for the air­ports was won by the Ger­man firm in Novem­ber but the process was sus­pended by Syriza amid claims the ten­der broke com­pe­ti­tion rules. Fra­port will oper­ate the air­ports for the next 40 years under the licence agreement.

For­mer finance min­is­ter Yanis Varo­ufakis has attacked the sales for entrench­ing the country’s oli­garchic elites and hurt­ing the government’s cof­fers through under-priced sales.

In a line-by-line cri­tique of the demands, he dubbed the pri­vati­sa­tions as “a major dis­as­ter in every con­ceiv­able way – from the prices fetched to the rate at which the pri­vati­sa­tions that occurred were over­turned by the Euro­pean com­pe­ti­tion com­mis­sion and the Greek Coun­cil of State”.

The sale comes as a host of euro­zone par­lia­ments are prepar­ing to rat­ify the terms of the new res­cue pack­age — Greece’s third bail-out in five years.

Germany’s Angela Merkel is bat­tling to fight down a rebel­lion in her rul­ing Chris­t­ian Demo­c­rat party. As the eurozone’s largest cred­i­tor state, Ger­many holds a block­ing minor­ity vote on Euro­pean Sta­bil­ity Mech­a­nism loans.

Although the pack­age is likely to gain the nec­es­sary votes, more than 60 of Ms Merkel’s par­lia­men­tar­i­ans voted to reject new bail-out talks in July. The rebel­lion is set to esca­late to around 100 out of her 311 MPs.

The Chan­cel­lor has sought to con­vince scep­ti­cal law­mak­ers that Greece will be able to carry a the raft of oner­ous eco­nomic reforms in return for a first dis­burse­ment of €26bn due to be made by Thursday.

Dis­quiet in Berlin has also grown over the posi­tion of the Inter­na­tional Mon­e­tary Fund, which is only likely to release its own funds to Greece in October.

3. The fire-sale for Greek assets figures to total around 50 billion Euros and will make Greece subservient for some time to come, as the assets being sold are fundamental to the restoration of that country’s economic health.

“Greece Is for Sale – and Every­thing Must Go” by Nick Dear­den; Global Justice; 8/19/2015.

I’ve just had sight of the lat­est pri­vati­sa­tion plan for Greece. It’s been issued by some­thing called the Hel­lenic Repub­lic Asset Devel­op­ment Fund – the vehi­cle super­vised by the Euro­pean insti­tu­tions, which has been tasked with sell­ing off an eye-watering €50 bil­lion of Greece’s ‘valu­able assets’.

The fund was a real stick­ing point because the Euro­pean insti­tu­tions wanted to move it to Lux­em­bourg, where they could keep a bet­ter eye on it. Any­how, it’s still in Athens, and this doc­u­ment, dated 30 July, details the good­ies on sale to inter­na­tional investors who fancy buy­ing up some of the country.

We’ve attached it to this blog to give a flavour of what’s up for grabs at the moment. Four­teen regional air­ports, fly­ing into top tourist hubs, have already gone to a Ger­man com­pany, but don’t panic because stock in Athens air­port is still on the table, as well as Athens’ old air­port which is up for a 99 year lease for rede­vel­op­ment as a tourism and busi­ness centre.

Hold­ings in Thes­sa­loniki and Athens water are both on sale – though pub­lic protest has ensured that 50% plus 1 share remains in state hands. Nonethe­less, the sale will mean that mar­ket logic will dic­tate the future of these water and sew­er­age monop­o­lies. Finally there are pock­ets of land, includ­ing tourist and sports devel­op­ments, through­out Greece.

A sec­ond doc­u­ment, also attached, details the short-term work pro­gramme of var­i­ous gov­ern­ment min­is­ters, detail­ing actions they must take in order to add value to these assets. This includes intro­duc­ing toll booths on roads to licens­ing casino rights to declar­ing sites of archae­o­log­i­cal inter­est. The doc­u­ment begs the ques­tion as to why gov­ern­ment min­is­ters are even needed, it would surely be eas­ier to cut them out of the equa­tion alto­gether and let EU insti­tu­tions directly admin­is­ter the country.

Why does this mat­ter? First because makes no sense to sell off valu­able assets in the mid­dle of Europe’s worst depres­sion in 70 years. Those indus­tries could gen­er­ate rev­enues to help the Greek gov­ern­ment rebuild the econ­omy. In fact, the vast major­ity of the funds raised will go back to the cred­i­tors in debt repay­ments, and to the recap­i­tal­i­sa­tion of Greek banks.

So the pri­vati­sa­tions aren’t to do with help­ing Greece. The ben­e­fi­cia­ries are cor­po­ra­tions from around the world, though eye­brows are par­tic­u­larly being raised at the num­ber of Euro­pean com­pa­nies – from Ger­man air­port oper­a­tors and phone com­pa­nies to French rail­ways – who are get­ting their hands on Greece’s economy. Not to men­tion the Euro­pean invest­ment banks and legal firms who are mak­ing a fast buck along the way. The self-interest of Euro­pean gov­ern­ments in forc­ing these poli­cies on Greece leaves a par­tic­u­larly unpleas­ant flavour.

Most impor­tant is the inequal­ity this will entrench in Greek soci­ety for decades to come. Of course the fact that the state cur­rently holds these assets is no guar­an­tee of democ­racy. Clien­telism is rife in Greece. But the answer is trans­parency and democ­racy, just as Ger­man cit­i­zens are cur­rently try­ing to take back energy com­pa­nies into col­lec­tive own­er­ship because they see this as a pre­req­ui­site for fair pric­ing and sup­port­ing renew­able energy.

What won’t help is flog­ging off monop­o­lies to pri­vate cor­po­ra­tions who have no inter­est in Greece’s peo­ple. Work­ers will be sacked and their con­di­tions made worse, while the elite of Europe prof­its. Greece’s gov­ern­ment will have lost the abil­ity to make its soci­ety func­tion in the inter­ests of ordi­nary people.

But then, I sus­pect that’s the point.

4. Ravaged by what we called “Clausewitzian economics,” Greece has been crushed by the German austerity doctrine, echoed by the so-called “troika”–the European Commission (a German puppet organization at present), the European Central Bank (which has shown some signs of relenting) and the IMF (which has belatedly admitted the fundamental error of its ways).

A recent article in Forbes underscores the flawed accounting underlying the lethal fiscal policy imposed on the citizens of the “cradle of democracy.”

As discussed in a recent New York Times article, the Greek debt has been calculated using an unconventional accounting paradigm to arrive at the conclusion that Greek debt is “175%” of GDP. The Greeks are in need of adopting the “Ipsas” accounting standard.

In fact, it is 18%, when calculated using the standard “Ipsas” accounting method. Germany’s on the other hand, is 46%, when calculated under that standard!

It is going to be more than a little interesting to see how Deutschland, major EU financial institutions and the Greek citizenry square off over this.

“Greece’s Net Debt is 18% of GDP, Not 175%. What’s Germany’s” by Panos Mourdoukoutas: Forbes; 1/22/2015.

Before imposing another round of austerity on Greece, Germany should fix its own accounting problem — by calculating Greek debt, and its own, with accepted international standards.

As Greek citizens head to the polls this Sunday, German officials have not missed the chance to remind Greece that it must fulfill its debt obligations. This means adhering to an unprecedented austerity which has depressed the Greek economy.

The trouble is that Germany has been overestimating Greece’s debt by failing to follow the International Public Sector Accounting Standards (Ipsas),which measure liabilities and assets over time.

Ipsas standards are similar to those used by leading governments, businesses, banks and investors at all levels, according to Professor Jacob Soll. “In fact, the debt has been calculated to be larger than it actually is, or would be if one used Ipsas,”writes Soll in a recent New York Times op-ed.

Just how much is Greek debt overestimated?

The answer is to be found in www.freegreece.info. If you apply Ipsas to calculate Greek debt, the Net Debt is 18%, not 175% of GDP.

What about Germany’s Net Debt under Ipsas? 46% of GDP.

That means that Greece’s debt situation is better than that of Germany’s!

So why doesn’t Germany use Ipsas to calculate the Greek debt? For two reasons, according Professor Soll. First, they don’t apply Ipsas in their own House.“A little-known fact is that the Germans also do not use Ipsas and have notably opaque public finance standards,” he writes.

Second, by steering away from Ipsas, Germany can keep Greece on the leash while conveniently keeping Greek debt off its own books.

“One reason might be that the Germans have refused to price the debt fairly, or properly report its value, which means in the short run that they extract more austerity from the Greeks than they should, and that they also keep this loan off the budget balance sheets because it would come up as a loss under any legitimate accounting standard,” writes Soll.

In our opinion, there’s a third reason. Overestimating sovereign debt for Southern European countries stirs anxiety in foreign currency markets, depressing the Euro, and firing up Germany’s export engine.

5. With Greece still forced to pri­va­tized its top state assets, here’s a reminder of that the lovely pri­vate sec­tor that’s sup­posed to mag­i­cally rid Greece of all its inef­fi­cien­cies and cor­rup­tion has been con­tribut­ing to and prof­it­ing from Greece’s inef­fi­cien­cies and cor­rup­tion for years. And those lovely pri­vate enti­ties weren’t just Greek:

“Dozens of Ger­man Busi­ness Execs Are Try­ing to Escape Pros­e­cu­tion for Cor­rup­tion in Greece” by Yan­nick Pasquet [AFP]; Business Insider; 8/30/2015.

Siemens, Daim­ler, Rhein­metall — the cream of Ger­man indus­try — have been mired in cases of alleged cor­rup­tion in Greece, the coun­try that Berlin has repeat­edly admon­ished for the par­lous state of its economy.No date has been set yet for 19 for­mer exec­u­tives of Ger­man engi­neer­ing group Siemens to appear in Greek court, but it is expected to be one of the biggest finan­cial tri­als of the decade in Greece.

More than 60 peo­ple in total are being inves­ti­gated for cor­rup­tion in the case that US watch­dog Cor­p­Watch has labelled “the great­est cor­po­rate scan­dal in Greece’s post­war history.”

Bavaria-based Siemens, whose links to Greece go back to the 19th cen­tury, is sus­pected of hav­ing greased the palms of var­i­ous offi­cials to clinch one of the country’s most lucra­tive con­tracts — the vast upgrade of the Greek tele­phone net­work in the late 1990s.

Over­all, Siemens allegedly spent 70 mil­lion euros ($78 mil­lion) on bribes in Greece, accord­ing to Greek judi­cial sources.

The inves­ti­ga­tion is now in its ninth year with a case brief over 2,300 pages long.

Con­tacted by AFP, a Siemens spokesman at com­pany head­quar­ters in Munich said: “We don’t com­ment on that case.”

Among those sus­pected of cor­rup­tion is the group’s for­mer point man in Greece, Michalis Christoforakos.

But the 62-year-old, who holds dual Greek and Ger­man cit­i­zen­ship and at the height of his influ­ence rubbed elbows with the ensem­ble of Greece’s polit­i­cal elite, is unlikely to face trial.

Christo­forakos fled Greece for Ger­many in 2009, and Ger­man jus­tice has refused to extra­dite him, argu­ing that the statute of lim­i­ta­tions cov­er­ing his alleged activ­i­ties has lapsed.

Rela­tions between Athens and Berlin — already tested by the Greek eco­nomic cri­sis and Germany’s insis­tence on painful aus­ter­ity to bail out the debt-wracked coun­try — have not been helped by the Siemens case.

Ear­lier this year, Greece’s com­bat­ive par­lia­ment speaker Zoe Con­stan­topoulou said the affair smacked of dou­ble stan­dards on the part of Berlin.

“This is a ques­tion of jus­tice that shows there is dou­ble­s­peak by Ger­many,” she told France’s Lib­er­a­tion news­pa­per in a recent interview.

“Ger­man com­pa­nies have noto­ri­ously engaged in cor­rupt prac­tices in Greece but such cases are only occa­sion­ally inves­ti­gated,” the Ger­man For­eign Pol­icy think-tank said in a recent report.

In 2011, at the height of the Greek eco­nomic cri­sis, a par­lia­men­tary inquiry esti­mated the dam­age to pub­lic cof­fers at two bil­lion euros from inflated con­tract costs ulti­mately borne by taxpayers.

Lucra­tive mil­i­tary deals

Arms pro­cure­ment has been another lucra­tive field for Ger­man com­pa­nies, with Greece for years spend­ing the most money pro­por­tion­ately on defence — 2.2 per­cent of gross domes­tic prod­uct (GDP) in 2014 — among EU mem­bers, Sahra Wan­genknecht, a law­maker of Germany’s left­ist party Die Linke, told AFP.

“Ger­man com­pa­nies have reaped con­sid­er­able profit from Greece’s colos­sal arms pur­chases,” Wan­genknecht said.

For automaker Daim­ler, Greek jus­tice opened an inves­ti­ga­tion ear­lier this year on sus­pi­cion of bribery in the award of an 100-million-euro mil­i­tary vehi­cle contract.

Krauss Maf­fei Weg­mann, the mak­ers of the Ger­man Leop­ard tank, was also placed under inves­ti­ga­tion in Munich.

Mean­while, fel­low defence con­trac­tor Rhein­metall in 2012 was fined 37 mil­lion euros by a court in Bre­men, Ger­many, over a bribery case involv­ing the sale of its anti-aircraft defence sys­tem for 150 mil­lion euros.

And two for­mer man­agers at indus­trial ser­vices provider Fer­rostaal were also con­victed in Munich of shady pay­ments to clinch a Greek sub­ma­rine order, with the com­pany fined 140 mil­lion euros.

But observers note that the fines are usu­ally nowhere near the value of the gov­ern­ment con­tracts in ques­tion, effec­tively ren­der­ing them use­less as a deterrent.

6. A very omi­nous pro­posal has been floated by the Greek gov­ern­ment. (See text excerpts below.) Not only does it sug­gest the pos­si­bil­ity that the stag­ger­ing unem­ploy­ment rate among Greek youth be solved by “unpaid” employ­ment, but floats the pos­si­bil­ity that job­less young peo­ple be shipped abroad!

We won­der to where they will be shipped? What are they sup­posed to do when they get there?

All is not well in the “Cra­dle of Democracy!”

“Europe’s Mod­est Pro­posal To End Unem­ploy­ment: Slav­ery” by Tyler Dur­den; zerohedge.com; 1/24/2014.

Hav­ing spent weeks talk­ing amongst them­selves about the chronic and dan­ger­ous rise of youth unem­ploy­ment in Europe (as we warned here), the Cen­ter of Plan­ning and Eco­nomic Research in Greece has pro­posed a con­tro­ver­sial mea­sure. As GreekRe­porter reports, the mea­sure includes unpaid work for the young and unem­ployed up to 24 years old, so that com­pa­nies would have a strong motive to hire young employees.

“Unpaid” work sounds a lot like slav­ery to us… but it gets bet­ter; the report also sug­gested “export­ing young unem­ployed persons.”

“Cen­tre of Plan­ning and Eco­nomic Research in Greece has pro­posed a con­tro­ver­sial mea­sure in order to deal with the prob­lem of increas­ing unem­ploy­ment in the country.

The mea­sure includes unpaid work for the young and unem­ployed up to 24 years old, so that com­pa­nies would have a strong motive to hire young employ­ees. Prac­ti­cally, what is pro­posed is the abo­li­tion of the basic salary for a year. At the same time the “export” of young unem­ployed per­sons was also pro­posed to other coun­tries abroad, as Greek busi­nesses do not appear able to hire new per­son­nel.“
***

Whether it’s Europe in the 1930’s or the US dur­ing the same period (con­flicts between strik­ers, the National Guard and armed mili­tias), unem­ploy­ment can cre­ate a pow­er­ful cock­tail of unrest. But turn­ing your nation’s young into slaves does not seem like a good solu­tion to us. . . .

7. More about the proposal for de facto slavery for Greek youth:

“Con­tro­ver­sial Pro­posal for Tack­ling Unem­ploy­ment” by Niko­leta Kalmouki; Greek Reporter; 1/24/2014.

Cen­tre of Plan­ning and Eco­nomic Research in Greece has pro­posed a con­tro­ver­sial mea­sure in order to deal with the prob­lem of increas­ing unem­ploy­ment in the country.

The mea­sure includes unpaid work for the young and unem­ployed up to 24 years old, so that com­pa­nies would have a strong motive to hire young employ­ees. Prac­ti­cally, what is pro­posed is the abo­li­tion of the basic salary for a year. At the same time the “export” of young unem­ployed per­sons was also pro­posed to other coun­tries abroad, as Greek busi­nesses do not appear able to hire new personnel.

Accord­ing to the National Con­fed­er­a­tion of Hel­lenic Com­merce, unem­ploy­ment espe­cially hits the ages between 15–24. The unem­ploy­ment rate in Greece stands at 24.6% while 57.2% of young peo­ple are with­out a job. The major­ity of the unem­ployed (71%) have had no work for 12 months or more, while 23.3 % of the total have never worked. There were 3,635,905 peo­ple employed and 1,345,387 unemployed. . . .

8. Next, the program reviews the concept of “voluntary slavery,” minted by Ludwig von Mises Institute fellow Walter Block, a top aide to Ron Paul, Edward Snowden’s political idol.

“Ron Paul’s New Organization Reportedly Stacked with Extremists” by Ryan Lenz; HateWatch [Southern Poverty Law Center]; 4/26/2013.

. . . . Sill another board member [of the Ron Paul Institute for Peace and Prosperity] is Walter Block, a fellow at the Mises Institute, who, The Daily Beast said, “believes the wrong side won the ‘war against Southern secession’ and blames most of America’s problems on ‘the monster Lincoln.'” . . . .

“Interview with Walter Block on Voluntary Slavery” by Stephan Kinsella; StephanKinsella.com; 1/27/2013.

. . . . Walter believes voluntary slavery contracts ought to be enforceable in a private law society, and in this I believe he is in the minority of libertarians. . . .

9. New inter­pre­ta­tions like how the Con­fed­er­ate flag rep­re­sents a giant socioe­co­nomic con-job that was per­pe­trated by the aris­to­crats and ruined the lives of against not just the slaves but also 99% of the rest of the South­ern whites who saw their socioe­co­nomic prospects under­mined and destroyed by slav­ery to such an extent that the dam­age is still felt to this day:

“HYMAN: The Con­fed­er­acy Was a Con Job on Whites — and Still Is” by Frank Hyman; Rich­mond Times-Dispatch; 8/7/2015.

I’ve lived 55 years in the South and I grew up lik­ing the Con­fed­er­ate flag. I haven’t flown one for many decades — but for a rea­son that might sur­prise you.

I know the South well. We lived wher­ever the Marine Corps sta­tioned my father: Geor­gia, Vir­ginia, the Car­oli­nas. My favorite uncle wasn’t in the mil­i­tary, but he did pack a .45-caliber Thomp­son sub­ma­chine gun in his trunk. He was a leader in the Ku Klux Klan. Despite my role mod­els, I was an inept racist as a kid. I got into trou­ble once in the first grade for call­ing a class­mate the N-word. But he was Hispanic.

As I grew up and acquired empa­thy, I learned that for black folks the flut­ter of the Con­fed­er­ate flag felt like a poke in the eye with a sharp stick. And for the most pride­ful flag-wavers, clearly that response was the point. I mean, come on. It’s a bat­tle flag.

What the flag sym­bol­izes for blacks is enough rea­son to take it down. But there’s another rea­son white South­ern­ers shouldn’t fly it. Or sport it on our state-issued license plates, as some do here in North Car­olina. The Con­fed­er­acy — and the slav­ery that spawned it — was also one big con job on the South­ern white work­ing class. A con job funded by some of the ante­bel­lum one-percenters, and one that con­tin­ues today in a sim­i­lar form.

You don’t have to be an econ­o­mist to see that forc­ing blacks — a third of the South’s labor­ers — to work with­out pay drove down wages for every­one else. And not just in agri­cul­ture. A quar­ter of enslaved blacks worked in the con­struc­tion, man­u­fac­tur­ing and lum­ber­ing trades, cut­ting wages even for skilled white workers.

Thanks to the prof­itabil­ity of this no-wage/low-wage com­bi­na­tion, a major­ity of Amer­i­can one-percenters were South­ern­ers. Slav­ery made South­ern states the rich­est in the coun­try. The South was richer than any other coun­try except Eng­land. But that vast wealth was invis­i­ble out­side the plan­ta­tion ball­rooms. With low wages and few schools, South­ern whites suf­fered a much lower land own­er­ship rate and a far lower lit­er­acy rate than North­ern whites.

My ances­tor, Canna Hyman, and his two sons did own land and fought under that flag. A note from our fam­ily his­tory says: “Some­one came for them while they were plow­ing one day. They put their horses up and all three went away to the War and only one son, William, came back.”

Like Canna, most South­ern­ers didn’t own slaves. But they were per­suaded to risk their lives and limbs for the right of a few to get rich as Croe­sus from slav­ery. For their sac­ri­fices and their votes, they earned two things before and after the Civil War. First, a very skinny slice of the immense South­ern pie. And sec­ond, the thing that made those slim rations palat­able then and now: the shal­low sat­is­fac­tion of know­ing blacks had no slice at all.

How did the plantation-owning one-percenters mis­lead so many South­ern whites?

They man­aged this con job partly with a pro­pa­ganda tech­nique that will be famil­iar to mod­ern Amer­i­cans. Start­ing in the 1840s, wealthy South­ern­ers sup­ported more than 30 regional pro-slavery mag­a­zines, along with many pam­phlets and nov­els that falsely touted slave own­er­ship as hav­ing ben­e­fits that would — in today’s lingo — trickle down to ben­e­fit non-slave-owning whites and even blacks. The flip side of the coin of this pro­pa­ganda is the mis­taken notion that any gain by blacks comes at the expense of the white work­ing class.

Today’s ver­sion of this con job no longer sup­ports slav­ery, but still works in the South and thrives in pro-trickle-down think tanks, mag­a­zines, news­pa­pers, talk radio and TV news shows such as the Cato Foun­da­tion, Rea­son mag­a­zine, Rush Lim­baugh and Fox News. These sources are often under­writ­ten by pro-trickle-down one-percenters like the Koch broth­ers and Rupert Murdoch.

For exam­ple, a map of states that didn’t expand Med­ic­aid — which would actu­ally be a boon mostly to poor whites — resem­bles a map of the old Con­fed­er­acy with a few other poor, rural states thrown in. Another indi­ca­tion that this divi­sive pro­pa­ganda works on South­ern whites came in 2012. Mitt Rom­ney and Barack Obama evenly split the white work­ing class in the West, Mid­west and North­east. But in the South, we went 2–1 for Romney.

 

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