What follows is an edited partial transcript of my conversation with George Bragues of the University of Guelph-Humber. We discussed his new book, Money, Markets, and Democracy: Politically Skewed Financial Markets and How to Fix Them. This is his second appearance on this show, you can hear the first one here. Petersen: So your book looks at the interaction between Democratic politics and financial markets. In your introduction, you quote the Greek Prime Minister Alexi Tsipras, who claimed that "democracy cannot be blackmailed." And this was in the context of the 2015 bailout referendum that would have helped pay some of the massive Greek debt but at a cost of forcing them to adopt fiscal austerity. So, can you talk a little bit about that situation and how it played out and also what it tells us generally about the relationship between democracy and finance? Bragues: Yes, sure. That situation has its origins about a year or two after the financial crisis of 2008. The financial crisis of 2008 initially arose out of the subprime mortgage sector in the United States. It affected banks worldwide that were holding or otherwise exposed to the subprime mortgage assets. But then as one of the spillovers of this crisis we had pressure on countries in southern Europe including Portugal, Spain, and Greece. And so it all came to a head in 2010 and back then it was Nicolas Sarkozy and Merkel, Germany's chancellor---who's still around---was a player, and they came up with a framework to bail out these countries including Greece. So, as part of those bailouts, Greece had to comply with various conditions including the fiscal austerity measures that you mentioned, there was a privatization that had to be done but it didn't go so well and so in early 2015---if I remember these dates correctly---Tsipras is leading what was then a sort of outsider party, one of the two major parties in Greece. And so they thought that they would take a different approach to the previous Greek government which was to play ball with mainly Germany and instead of playing ball with Germany and trying to use measures to get their budget under control they thought that they would try to essentially threaten the breakdown of the financial system. a breakdown of the euro unless Greece were forgiven their debt or otherwise given more lenient measures. The European establishment wasn't buying into that. So this is when Tsipras went to a vote, a referendum on a bailout package. He won that vote, that is to say, the Greek people voted resoundingly against the European establishment of the time, but that ended up not really mattering. The European establishment said basically we want our debt paid, we're willing to renegotiate the debt and you have to comply with these conditions. And so that was a situation where democracy and the markets came into play. The Greek government was hoping that by creating a crisis in the markets through a democratic act, one of the most democratic acts you can imagine, which is a referendum---because in a referendum the people vote directly on a policy---that they were hoping that democracy would have its way---through the markets---would have its way. It didn't work out. So, I start my book off with that event because it nicely and dramatically---the Greek situation is still ongoing---but it nicely illustrates how politics and the markets interact. And politics today in most of the developed world means democracy and this interaction between politics and markets, while known, while recognized, I don't think its full implications have been recognized and that's why I decided to write a book. Petersen: So, with the bailout referendum---this is a massive debt---I believe it was 177% of Greece's GDP? Bragues: That's correct, yes. It's probably different now. It's probably higher now, I haven't looked at the latest numbers. Petersen: Even if they paid their entire output and didn't eat or consume anything, it would still take them almost two ye