I've known about this for a while, and haven't found the right explanation. So thank you Matt Taibbi, from a post that keeps on giving.
I focused on the hubristic, feet-never-touch-the-ground aspect of banker life in this post. Now I want to look at what Taibbi says about Greece.
Greece is most people's designated Tabloid Demon, one of whom no good can be said and all wickedness is assumed — Michael Jackson's doctor, for example, or OctoMom.
(Tabloid Demons are the opposite of Tabloid Saints, those of whom no ill can be said. Any number of cute white actresses with philandering husbands fill that bill. A Tabloid Saint who deals drugs won't get called out; a Tabloid Demon who saves crippled kittens will do so unnoticed.)
Greece is the "known bad actor" in the European drama. What "everyone knows" about Greece is that the government was corrupt, the people lazy and spendy, and by running debt high they destroyed their country. What "everyone knows" is that the undeserving of Greece deserve all the austerity they're getting, and let the rest of the world take note.
Well, in that list of Greece's sins, one statement is actually true — those in positions of power, in the government, were indeed corrupt. And the corrupt are easy targets — and eager partners — of looters.
Enter Jamie Dimon & JP Morgan Chase. Taibbi tells the tale, starting with what Chase did to Jefferson County, Alabama, home of Birmingham (my emphasis throughout):
[Jefferson County] is now in bankruptcy proceedings primarily because Dimon’s bank, Chase, used middlemen to bribe local officials – literally bribe, with cash and watches and new suits – to sign on to a series of onerous interest-rate swap deals that vastly expanded the county’s debt burden. ... Jamie Dimon handed Birmingham, Alabama a Chase credit card and then bribed its local officials to run up a gigantic balance[.] ... As a result, the citizens of Jefferson County will now be making payments to Chase until the end of time.What they did to Birmingham, they did to Greece:
Having seen how well interest-rate swaps worked for Jefferson County, Alabama, Chase “helped” countries like Greece and Italy mask their debt problems for years by selling a similar series of swaps to those governments. The bank then turned around and worked with banks like Goldman, Sachs (who were also major purveyors of those swap deals) to create a thing called the iTraxx SovX Western Europe index, which allowed investors to bet against Greek debt.The world of propaganda news — the world of "what everyone knows" (the propagandist's best friend) — won't change because you now know what the bankers did to Greece.
In other words, banks like Chase and Goldman knowingly larded up the nation of Greece with a crippling future debt burden, then turned around and helped the world bet against Greek debt. ... [D]oes a human being do that deal?
Operations like the Greek swap/short index maneuver were easy money for banks like Goldman and Chase – hell, it’s a no-lose play, like cutting a car’s brake lines and then betting on the driver to crash – but they helped create the monstrous European debt problem that this very minute is threatening to send the entire world economy into collapse, which would result in who knows what horrors.
Yes, the government was eagerly corrupted. But an addict needs a seducer, a leech, an enabler, someone to bleed his wallet in trade for his supply. That leech, that predator, is the international branch of the U.S. banking system.
It's the leech that caused the crisis in Greece; and the leech that marketed the evils of one bad addict as the reason the entire continent needs to go on food stamps for a generation or so.
Sweet deal, being a banker. Sort of a racket, wouldn't you say? On some planets, they call it organized crime. On others they call it a public-private partnership.
Either way it's looting.