... it gave very direct instructions, you could say, to then prime minister Berlusconi about privatization, lowering pensions, changing hiring and firing, regulations and laws—all things one would think should be the outcome of the political process within Italy.
All the interview is thoughtful and provocative for all of us to ponder.
Read the text here.
I liked especially this (my emphasis in bold):
EPSTEIN: Yeah. In Italy, the letter from the European Central Bank to the Berlusconi government said, you have to pursue privatization of public services. And this includes water, privatization of water. And, in fact, just months before, there had been a referendum in Italy about privatization of water, and the voters had rejected it. And now the so-called independent technocratic European Central Bank is coming in and telling them to overthrow what the people have decided and engage in privatization.
Another important goal of these kinds of so-called technocratic policies is to gut labor protection laws. In Italy there are strong protections for—in terms of hiring and firing. And what they're trying to impose are these so-called labor flexibility, with the idea that this is going to generate more economic growth and more employment. But as David Howell from the New School for Social Research, Dean Baker, and others have shown, labor flexibility does not lead to more employment and more economic growth; it just leads to lower wages and higher profits.
JAY: The other thing that seems to be very much in target or focused on is pensions in all countries, the idea, I guess, of lowering pension age and qualifications. Why is that such a big issue in Europe?
EPSTEIN: Well, it's such a big issue in Europe because that's—for two reasons. One is it's a big liability of the government, and so there is a big—a high degree of budget impact on that. But the second is trying to undermine the power of labor and forcing workers into the hands of the banks. So if you reduce public pensions, not only do you make it so that workers have to take any job they can get to support themselves and work longer, but it also gives more room for private pension plans. And as we know from the debate over privatizing Social Security here in the United States, that's been one of the long-term goals of finance. Indeed, the general push of all of these policies is to gut the welfare state as much as policy and return all of these kinds of protections to profit-making opportunities for banks and other private companies.
JAY: Is part of what's happening here—if you look at sort of the underlying economic forces at play here, I mean, one part of it is—and we've talked about this on The Real News quite a bit—the willingness and desire of various elites and financial elites to take advantage of the crisis to undo social policy, New Deal type things in the U.S., welfare safety net in Europe, and all that, and take advantage of sort of the weaker hand of labor and people during this crisis is one thing. But is there also another part of this, which is there's just so much capital with nowhere to go, that because of this unequal distribution of wealth and income, this massive amount of capital in very few hands, and the real economy not a great place to invest in, so what you need to do is pick apart what's—there is of the public sector as a place for this capital to go to? Is that part of what's going on here?
EPSTEIN: Yeah, I think that's a good—I think that's an important aspect. They're trying to destroy all of the publicly provided markets to find new markets in, particularly, a period of slow growth. And in a particular a period when they're actually pushing austerity, the size of the overall pie isn't going to grow much, so they have to chip away at previously protected parts of it.
Part of what is so evil about this whole approach is the transformation, the distortion of language that is part of it, the use of the term technocrat to hide the fact that Trichet, that Monti, Draghi, all of these people have very, very close ties to the big banks. Most of them worked at one time or another for Goldman Sachs or other big financial firms. We have the same kind of thing, of course, in the United States, where we had Larry Summers, who works for the financial sector and makes millions of dollars doing so, being put forward as a quote-unquote "technocrat". We have the Federal Reserve that has engaged, as you know, in all kinds of backdoor bailouts of the financial sector again seen as sort of a technocratic solution, but we see the revolving door between the Federal Reserve and the private financial sector, using the term fiscal consolidation for gutting public services and generating unemployment. All of this is Orwellian language, which is meant to obscure what is really going on, which is the takeover of democratic control, which, as you said, is already undermined by money, and putting it firmly in the hands of the financial sector.