Robert Reich, served in the administrations of Presidents Gerald Ford and Jimmy Carter and was Secretary of Labor under President Bill Clinton and is currently a professor and bestselling author turned to Facebook to remind people where the Greek debt crisis originated, in his perspective.
Reich targeted Goldman Sachs, and specifically the company’s current CEO Lloyd Blankfein who he claims “cooked” and “disguised” their way to the situation today.
Reich did mention that “years of corruption and tax avoidance by its wealthy” was also a part of the problem but put most of the blame on Goldman Sachs and its executives.
His complete statement from his Facebook page:
People seem to forget that the Greek debt crisis — which is becoming a European and even possibly a world economic crisis – grew out of a deal with Goldman Sachs, engineered by Goldman’s Lloyd Blankfein.
Several years ago, Blankfein and his Goldman team helped Greece hide the true extent of its debt — and in the process almost doubled it. When the first debt deal was struck in 2001, Greece owed about 600 million euros ($793 million) more than the 2.8 billion euros it had borrowed. Goldman then cooked up an off-the-books derivative for Greece that disguised the shortfall but increased the government’s losses to 5.1 billion euros.
In 2005, the deal was restructured and the 5.1 billion euro debt was locked in. After that, Goldman and the rest of Wall Street pulled the global economy to its knees – whacking Greece even harder.
Undoubtedly, Greece suffers from years of corruption and tax avoidance by its wealthy. But Goldman Sachs isn’t exactly innocent. It padded its profits by catastrophically leveraging up the global economy with secret, off-balance-sheet debt deals.
Did any of its executives ever go to jail? Of course not. They all got fat bonuses and promotions. Blankfein, now CEO, raked in $24 million in 2014 alone. Meanwhile, the people of Greece struggle to buy medicine and food.
Doesn’t seem right, does it?