Galbraith on Greece

[gnk]

Re: Hudson on Greece

Your Greek bona fides are peerless, GNK. I disagree with many of your opinions but recognize that they are informed by the anecdotes of your experiences in the country and by the narrative your parents drew for you out of theirs. And as I said, I appreciate the clarity even if we're not eye-to-eye on things.

I forget, was it Faulkner or Williams who said it? "The past isn't dead. It isn't even past." Too much has transpired for folks to simply kiss and make up, Greeks in particular but the condition seems universal. If there was a sincere attempt to find the truth and achieve reconciliation, we might start getting past it in what remains of our lifetimes. But we won't do that.

My views are not just second hand or anecdotal. I draw a lot from history just as you do. I just have the additional benefit of living here. You want to talk history? What about Venizelos when he gained new land for Greece, only to lose the election, and subsequently Greece lost the Greco-Turkish War? What about the Ottoman Empire? Let's go back further to Thucydides' History of the Peloponnesian War. The city states were allies so long as there was a common threat. The threat removed and the city states were back at perpetual war with one another. How far back to we really have to go? I still think 1981 is a good start.

The hard left here in Greece is actually a minority now. That history is almost irrelevant today. And Andreas Papandreou was nothing like the current hard left of SYRIZA. He was a center left politician, that just happened to like hiring voters - like Boss Tweed.

Many people that voted for SYRIZA actually don't support its Left Platform (the hard left members). They were not voting in SYRIZA per se, but voting out/against the traditional two parties. Judging from recent polls, many have come to regret that choice now.

Before I moved to Greece in the summer of 2010 and for a couple years after, I had constantly argued with my father and his brothers and other Free Market thinkers here in Greece about how Greece had gotten to where it found itself then. I used many of the arguments many are posting here. I even said that the leadership back then - Papandreou (the son), Samaras, and the Goldman Sachs banker Papademos, were Americans, they were not Greek! Greece was being manipulated by foreigners and Banks! I said. Austerity would never work, I said.

I shared these thoughts with many people here. Some agreed 100%, others explained to me what life was like during the boom times - the corruption, tax evasion, bloated salaries, etc... and others told me to wait and see, that I would surely change my mind over time.

Those that told me wait and see were right. Years of reading the local newspapers, talking to people, learning about local and national politics, personal histories of many people here and in Athens, going to government offices for paperwork... slowly my views changed. You can never understand a nation's culture unless you live it.

When I was reading about Greece from far away, having lived the bubble to bubble US economy, watching Wall Street practically own the US government and get bailed out while thousands suffered... my views were similar to yours regarding Greece. I was projecting my own country's faults onto another country. After all, irresponsible greedy elites are always to blame, right?

Being born and raised in the US, having worked for many Fortune 500 companies (yes, the rat race) I could never have imagined that somewhere in this world there existed a country where the population was in total control of the government. Unlike the US where many Americans vote against their self interest, here in Greece, the population only held onto governments that guaranteed money or neglected to enforce "inconvenient" laws.

I guess one could say that Greeks enjoyed democracy more than the average American. Too bad they couldn't control themselves and their greedy self interest. As someone else mentioned earlier in this thread, an example of the tragedy of the commons. On an individual basis, its rational, on a collective basis, its catastrophic.

Austerity was working, but keep in mind, the possibility of a new election had started to gather support in the Fall of 2014. Ultimately, three unsuccessful Parliamentary elections for the office of President of Parliament were held from December to January, with a general election at the end of January 2015:


1-Greece-private-sector-deposits-1024x523.jpg

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Greek_unemployment_rate-line_chart-largewebinline-600x382 (1).png

[Woodsman]

Re: Hudson on Greece

I am Greek American. Both of my parents are Greek - born and raised in Greece. I speak Greek. I was raised in the US, but I have visited Greece countless times in my life. I understand both cultures very well. And I love living in Greece. But it'...

Your Greek bona fides are peerless, GNK. I disagree with many of your opinions but recognize that they are informed by the anecdotes of your experiences in the country and by the narrative your parents drew for you out of theirs. And as I said, I appreciate the clarity even if we're not eye-to-eye on things.

I forget, was it Faulkner or Williams who said it? "The past isn't dead. It isn't even past." Too much has transpired for folks to simply kiss and make up, Greeks in particular but the condition seems universal. If there was a sincere attempt to find the truth and achieve reconciliation, we might start getting past it in what remains of our lifetimes. But we won't do that.

[gnk]

Re: Hudson on Greece

What remains of the Greek polity is the result of decades of violent, extralegal and antidemocratic actions by the Greek right-wing and that's their epitaph. The coalition of fascist, rightists and antidemocratic forces in Greece who made common cause with foreigners to "save" their country are alone responsible for breaking Greece.

I agree that your explanation is simple and accept that it might be sufficient for folks without a knowledge of Greek history. But beyond that, it's quite a selective view of things.

A small country in a geopolitically strategic location is rarely free of foreign involvement. That's unfortunate, but but that's reality.

Would it have been better for Greece to have been absorbed by the USSR as were the rest of the Balkans?

Since the fall of the USSR, poor people from the Balkans and Russia (including prostitutes) came to Greece for work.

Not the other way around.

[gnk]

Re: Hudson on Greece

I am Greek American. Both of my parents are Greek - born and raised in Greece. I speak Greek. I was raised in the US, but I have visited Greece countless times in my life. I understand both cultures very well. And I love living in Greece. But it's not perfect.

Where have I said that I prefer dictatorships to Greece? The current right wing party here in Greece, New Democracy, has nothing to do with a dictatorship style government. Was Eisenhower, a Republican, a dictator?

I am in no way a supporter of dictatorships. The only thing I said about the Junta in this thread and others was economically, they were the best stewards of Greece - they created many public works projects with little debt. But I would not want to live under such a regime. Karamanlis, of New Democracy who was Prime Minister of Greece after the Junta and before Papandreou, was also a good leader.

I said it before, there is a wide spectrum of politics here from right to left. If I wanted a dictatorship here in Greece, I would be a Golden Dawn supporter. Those are guys are a different type of lunacy, just as SYRIZA's Left Platform is another kind of Lunacy.

Have you ever watched Tsipras speak prior to the elections? Do you know who Lafazanis is? (Read this) What he wants? There are elements in SYRIZA that are re-living the cold war - right now, in 2015. Just recently, I was at a supermarket and was speaking to the owner. He was telling me about how evil the West is, and that Stalin was a great Leader. I know you find it hard to believe, but there are many people like that who exist here.

I think many here are so stuck on dry economic theory that they can't comprehend what I am describing here, or I am failing in my communication of what is going on here.

I think many here have romanticized the Left of many countries they have never visited or lived in, and don't want to believe that their views or beliefs may be mistaken.

There is an expression here: "First time Left!" It was commonly said by extreme leftists when SYRIZA came to power. Now that same expression is being used by those that are against SYRIZA but in a different context. First Time Left! is being used sarcastically - as in, how in the world are these guys so inept?!!!!

Recent polls show most Greeks right now prefer to stay in the Euro, even if that involves going back to the Memorandum. Why is that? What do they fear? Most Greeks, and many that voted SYRIZA that I know, are worried and do not agree with the hardcore marxist element of SYRIZA: the Left Platform.

Why is that? Do they know something you don't?

The end of the Junta marked a new beginning for Greece. Papandreou's populism and clientelism/patronage to me is just as poisonous to a Democracy as is elite rule. Both are dangerous in the long term.

[Woodsman]

Re: Hudson on Greece

[btw u.s.a. $54.7K, so in theory we could afford an economy like the nordic countries, but that seems a pretty remote possibility the way things are structured here.]

In theory.

In practice we spent $16K each to pay for a $5 trillion dollar war on terror or $8.5 million every single day in aid to Israel or $27 billion for GM, $23 billion for AIG and $91 billion for Fannie.

[jk]

Re: Hudson on Greece

sweden has a gdp/capita of about $41k [2013 dollars, ppp]
norway has a gdp/capita of about $53k
denmark has a gdp/capita of $41.5k
finland $40.5k



greece a little under $26k.

a lot depends on what you can afford.


[btw u.s.a. $54.7K, so in theory we could afford an economy like the nordic countries, but that seems a pretty remote possibility the way things are structured here.]

[Woodsman]

Re: Hudson on Greece

GNK, it's good that you are not offended by the Greek whore comment, but then again you're not Greek.

I think you have a rather unique concept of democracy. The Nordic countries must be awful little gulags, no? Because Sweden and Norway's democracy seems pretty lively from this vantage point. And while they haven't been immune from the infection of neoliberalism, the Nordic cradle to grave welfare state shows no sign of losing popularity. Year after year, OECD surveys show the Nordic social democracies and welfare states producing the happiest people in the world, so maybe its not entirely like you make it out to be? I'm not clear why "democracy dies" when a nation's citizens vote for politicians promoting a welfare state, but no need to unwind this one for me.

Now if Greece is a broken society, the fault lies with the fascists who broke it. I think here of men like Metaxas who broke Greek society by "saving" it with states of emergency, decrees of martial law, annulment of the constitution, etc. And people like Papadopoulos who before he took over Greece in a violent military coup, collaborated with the Nazis in World War II and - contrary to your assertion that the colonels "never enriched themselves" - was on the Company payroll for decades.

Yes, they do seem to be able to make the trains run on time as you noted in your praise of the colonels' efficient management. But that comes at the cost of military dictatorship, widespread repression, torture, the destruction of civil society and all the hallmarks we have come to expect when rightists gain unlimited power. Me, I'd rather keep civil society intact and wait for the train.

I'm not so sure Greece is a "different world" or that the Greek character is so deficient that its people cannot govern themselves and must be periodically saved by murderous fascist dictatorships. It used to be so convenient to blame the communist boogeyman, but that seems to have lost its potency since 1989. Moreover, search in vain for the period in which the Greek commies held political power. You won't find it because they never had it. They never created a budget, never sat a cabinet, signed an IMF loan, or controlled even a single ministry.

Yet the right wing would have us believe that all of Greece's problems can be traced back to those hardcore commies. To the fascists, that hard core apparently included the active mainstream Greek left and they too were murdered during the reign of the colonels. If the remaining sensible people got the message and withdrew from politics, leaving the field to the crazies, whose fault is that?

What remains of the Greek polity is the result of decades of violent, extralegal and antidemocratic actions by the Greek right-wing and that's their epitaph. The coalition of fascist, rightists and antidemocratic forces in Greece who made common cause with foreigners to "save" their country are alone responsible for breaking Greece.

I agree that your explanation is simple and accept that it might be sufficient for folks without a knowledge of Greek history. But beyond that, it's quite a selective view of things.

[gnk]

Re: Hudson on Greece

Clearly the "austere" government grew the deficit. It happens all the time with such neoliberals. They inspire "confidence" to the markets, so they grow the debt beyond imagination. Privatizations (with the supposed object of reducing deficit) serve for the same purpose. That's the difference between dominant economic theory and reality.
And of course there sure was the deficit created to buy German tanks and battleships. Don't forget; unmarried daughters of public servants pensions go into local market thus creating demand and GDP. Buying german tanks doesn't.

From my prior post, here's a typical Greek Government run (as opposed to privatized) entity:

The national railroad has annual revenues of 100 million euros against an annual wage bill of 400 million, plus 300 million euros in other expenses. The average state railroad employee earns 65,000 euros a year. Twenty years ago a successful businessman turned minister of finance named Stefanos Manos pointed out that it would be cheaper to put all Greece’s rail passengers into taxicabs: it’s still true... (Lewis article)

What's wrong with this picture?

Let's step back and remember we are talking about a real country with, let's say, it's own "unique" culture." Let's put the economy theory aside for a second.

Giving unwed daughters their father's pension to guarantee future votes. Looking the other way when businesses didn't pay taxes to get votes. Allowing up to 600 different jobs to be eligible for early retirement at 50-55 to get votes. Expanding the public sector well beyond what a net trade deficit country could handle to get votes. Paying unions whatever they wanted, whenever they wanted (up to 3X private sector jobs) or else they went on strike crippling the country and businesses to get votes.

See where this is going?

All for votes - and that's how Greece got to where it is today. Period.

I guess Greece created so much demand that it went bankrupt? I'm all for Government spending to create demand - but how that money is spent is just as important. An overbloated pension system and government sector is not sustainable. There are also political risks in following such a policy.

Why can't a government create demand AND invest?

Building a bridge, an airport, spending on international marketing for tourism, those kind of things spur both demand and investment. That sounds sensible. But keep in mind, we're talking about Greece. Whenever there was a public works project - everyone got paid, if you know what I mean.

You have to let go of the dry economic theory and understand that this country has other problems. But I'll say this - government creating demand the easy way contributed greatly to the current culture here in Greece. As for private enterprise, good luck. The system is so dysfunctional you are forced to break the law to start a business.

I'm not some supply side hack. Personally, I believe in a balance. Greece is in its own category. More spending isn't going to fix it. Without reforms, its back to business as usual.

[Southernguy]

Re: Hudson on Greece

I'm guessing Greece had a severe recession, I remember in the US, the recession in the early 90s. Not sure why. Maybe a correction to the government books? Anyway, maybe this below helps:

[ATTACH=CONFIG]5640[/ATTACH]

As the 90s came to a close and Greece was preparing with GS to fix the books for European Monetary Union, the budget deficit miraculously narrowed.

Clearly the "austere" government grew the deficit. It happens all the time with such neoliberals. They inspire "confidence" to the markets, so they grow the debt beyond imagination. Privatizations (with the supposed object of reducing deficit) serve for the same purpose. That's the difference between dominant economic theory and reality.
And of course there sure was the deficit created to buy German tanks and battleships. Don't forget; unmarried daughters of public servants pensions go into local market thus creating demand and GDP. Buying german tanks doesn't.

[gnk]

Re: Hudson on Greece

As many of you know, I live here in Greece - 5 years now. I also have spoken to many people, all ages, all political persuasions.

The Greek Democracy "a whore" comment doesn't offend me. The fact that I can argue both sides of that debate about Greek Democracy troubles me. It means that comment is not that far fetched. In a prior post, maybe in another thread, I compared Greek Democracy to Tammany Hall, run by the infamous Boss Tweed. I think that comparison puts things in perspective.

As for the right/left paradigm - it's not what most Americans think. There are several layers. Right wing encompasses royalists, free market supporters, isolationists, all the way to neo nazis. The left wing encompasses everything from center left social democrats - think Northern European left wing to Greens to hardcore communists - Marxists, Leninists, Maoists, etc...

It's the hardcore communists that have caused the most trouble, in my opinion. I know, I'll get flack for that. But in the US, there is no real Communist party. Back during WWII, Churchill and Stalin carved up the Balkans. The deed was done. Yet the Greek communists, that felt a "spiritual connection to "Mother Russia and Orthodoxy," tried to topple the Greek government nonetheless. Don't think for a minute they were some sort of innocent freedom-fighters.

It's funny, the current Marxist component of SYRIZA wants to leave the EU and join "Mother Russia" only to be told that Russia prefers Greece in the EU, with an agreement ASAP. Yet these hardheaded Marxists persist. The truth? Neither Stalin wanted them, nor does Putin. Nobody in the world wants them. You need to watch them speak. They are truly unhinged.

There are always elements of blowback when the CIA gets involved. That's true. I feel bad for what happened in Iran with the installment of the Shah. I feel bad for a lot of what Latin America had to endure. Sure, nobody wanted the colonels in Greece - or at least few did. (However, the colonels never enriched themselves, accomplished many public works, and never put Greece in debt.)

But Greece, given its standard of living is the last to complain about foreign involvement. What about all the foreign aid Greece has been receiving since its inception, including the more recent EU subsidies for investment? I don't hear SYRIZA complaining about that. By the way, Larissa, a farming town in Northern Greece, was famous for the amount of Porsche Cayennes and Jeep Cherokees farmers somehow managed to buy.

The private sector refused to pay taxes in protest (and greed) against a public sector that was paid ridiculous amounts with extreme benefits that even covered their unmarried daughters. The social contract between public and private sector was broken.

I'll ask again, but differently. Where does Germany fit in? The CIA? The EU?

Once a government gives benefits to the many for votes, Democracy dies. Civil Servants and Unions run the show... and the country... into the ground. The growth of the public sector was a left wing idea, supported by the full spectrum of the left. The right wing had to follow along to survive. That's the simple story.

Banksters, CIA involvement, German sales of military hardware, loans to Greece, etc.. etc... are nothing compared to the simple explanation I am trying to give.

I say this to everyone on this message board:

Right now the extreme left in Greece wants money with no strings or it will blow up the world economy. That is what they believe, that is their goal. Don't project your views that have been colored by your take on US lobbyists, Goldman Sachs, Federal Reserve, Chomsky readings, etc.... It's a different world here and you can't analyze it using the same analysis you use in the US. Greece is not the US post Glass Steagall. Greece is not Iran under the Shah. Greece is not a banana republic being run and exploited by an "Evil EU."

Greece is a broken society. However.... many are coming around now. Many leftists I know truly fear what may happen. The worst thing is that things get out of control.

I don't think this current government is cohesive enough to accomplish anything. We are headed for capital controls, and possibly elections. Syriza may well win again if it shakes off the "Left Platform" its hardcore Marxists.

For decades risk taking hardworking Greeks emigrated to other countries, succeeded, and sent money back to Greece. For once, maybe its time for the pie in the sky communists to emigrate to Russia or China, or Venezuela....

[gnk]

Re: Hudson on Greece

From your own graph it seems Greek public debt surged most during "austere" Mitsotakis governance.

I'm guessing Greece had a severe recession, I remember in the US, the recession in the early 90s. Not sure why. Maybe a correction to the government books? Anyway, maybe this below helps:

GR_DFTPLN0210.gif

As the 90s came to a close and Greece was preparing with GS to fix the books for European Monetary Union, the budget deficit miraculously narrowed.

[Woodsman]

Re: Hudson on Greece

I think there is a lesson to be learned for all nations here. It is not always the oligarchs/aristocracy/elites that can run a nation into the ground. Sometimes populism, or as the US founding fathers warned, rule by the mob, is equally dangerous...

"The mob." I appreciate the clarity, GNC. It helps put things into context.

Tell me, did the Greek government get overthrown by popular mobs and "the street?" Or was it those same oligarchs and aristocratic elites that made common cause with foreign forces to kill Greek democracy?

As I've come to understand it, it's not "the mob" per se that is at issue. But rather, whose mob. Greece is divided into two mobs and has been since the Civil War - royalist/conservative right and the liberal/socialist center-left.

Apart from his garden variety social democratic policies, Pap's biggest sin was attempting to stay neutral during the cold war and steer an independent foreign policy. Since the Brits handed the keys to the Americans, Greece was and remains awash with American military and intelligence apparatchiks. It was they along with reactionary right wing allies in the monarchy and church, who conspired to overthrow Greek democracy and replace it with military dictatorship.

Not surprisingly, it was put into motion not long after the prime minister attempt to exert civilian control over the Greek military and remove dangerous reactionary elements in the officer and senior enlisted corps. That brought the coup, initially deployed by the right wing generals at the behest of the monarch, but ultimately carried out by right wing colonels instead. It's the same playbook they ran in Iran and Guatemala in the 50s and Chile in the 70s. One trick ponies, these guys.

Who knows, maybe a new mob of military and intelligence thugs will take over Greece again?

I pity the Greeks. Since the good war ended, it seems every time a majority of Greek people express their will through democracy there's a guy with a gun and a cross ready to beat them until they do democracy the "right" way. But they don't do it alone. Recall the colonels' Company handlers waxing poetically about democracy - Gust Avrakotos goading the putschists to "shoot the motherfucker" Papandreou and the Chief of Station calling Greek democracy, "a whore." Class acts.

[Southernguy]

Re: Hudson on Greece

From your own graph it seems Greek public debt surged most during "austere" Mitsotakis governance.

[gnk]

Re: Hudson on Greece

Let GS pay the difference!

There is a difference between a bank lobbying a government and a government soliciting a bank in order to accomplish a goal.

I agree with much of what astonas has written. But one must also address the cultural issue when it comes to how the people view government here in Greece - thus there is an unavoidable moralizing component. In order to understand current Greek attitude/expectations towards government, I think a quick summary of Greece's political history from 1981 is in order.

In 1981 Andreas Papandreou became Greece's second Prime Minister post Junta. He was Greece's first populist leader. Prior to Papandreou, right wing politics dominated Greece, often supported by the Western power du jour via the monarchy. Greece prior to the 1967-1974 Junta was a Republic with a Monarch that held some constitutional powers.

Although Papandreou did not invent clientelism/patronage in Greece - he put that policy on steroids, so to speak. Greek debt mushroomed under his leadership in the 1980s, and the the number of government employees (mostly Pasok supporters) swelled. One could find PASOK party flags even in churches during baptisms - as if to pay "respect" to the "godfather" of Greece: Papandreou and his party PASOK. I have a cousin that rode around town with a PASOK flag on his bike - he eventually got a job at the post office. Patronage and party politics took over a large segment of the population. Once such a policy invades and permeates a society, it is not easily shaken off.

After a corruption scandal in the late eighties PASOK lost the 1990 election and New Democracy eventually won and its leader Konstantinos Mitsotakis became the next Prime Minister. He only lasted three years. From wiki:

Mitsotakis's government moved swiftly to cut government spending as much as possible, privatise state enterprises and reform the civil service. In foreign policy, Mitsotakis moved to reopen talks on American bases in Greece and to restore confidence among Greece's economic and political partners. In June 1990, Mitsotakis became the first Greek premier to visit the United States in 26 years. He promised to meet Greece's NATO obligations, to prevent use of Greece as a base for terrorism, and to stop the rhetorical attacks on the United States that had been Papandreou's hallmark. Mitsotakis also supported a new dialogue with Turkey, but made progress on Cyprus a prerequisite for improvement on other issues.

Papandreou, cleared of charges arising from the Bank of Crete scandal in a 7–6 vote at theEidiko Dikastirio (Special Court), criticised Mitsotakis's government for its economic policies, for not taking a sufficiently strict position over the naming dispute with the newly independent former Yugoslav Republic of Macedonia, as well as over Cyprus, and for being too pro-American. The heightened public irritation over the Macedonia issue caused several ND parliament members, led by Antonis Samaras, to withdraw their support from Mitsotakis's government and form a new political party, Political Spring (Politiki Anoiksi). Mitsotakis's government had already restored the election system back to its original form, which allowed Papandreou's PASOK to obtain clear parliamentary majority after winning the premature 1993 elections and return to office. Mitsotakis then resigned as ND leader, although he remained the party's honorary chairman.

Thus, Papandreou politics won the upper hand and continued to influence greek politics and the greek economy for sometime. Clientelism was back on fast-track, even New Democracy, the opposition, changed course to survive, and the drachma continued to lose value.

As Greece was spiralling into debt, it joined the EU and adopted the Euro. Low interest rates and a vast flow of EU subsidies allowed the game to not only continue, but to enter a higher level.... until ultimately, Greece, economically, imploded.

I think there is a lesson to be learned for all nations here. It is not always the oligarchs/aristocracy/elites that can run a nation into the ground. Sometimes populism, or as the US founding fathers warned, rule by the mob, is equally dangerous.

How does such a nation as Greece change? Personally, I don't think such a nation can change on its own unless it completely crashes. Pumping money into Greece alone will not solve the problem. Debt forgiveness alone will not solve the problem. Greece needs to be reformed. How?

SYRIZA is basically PASOK/Papandreou reinvented. Openly critical about the West, hiring more civil servants in defiance of the current reforms, and threatening to tilt to the East, towards Russia. Which is funny, because even Russia doesn't want to rock the boat, and would prefer Greece enter a deal with the EU asap. Putin fears that a Grexit could affect the EU such that his oil and gas exports suffer due to both a new recession and a further drop in energy prices.

And so, that is how my opinion that Greece must be reformed from the outside has evolved.

It's not an evil Bankster vs. innocent Country story. There's more to it.

[LazyBoy]

Re: Hudson on Greece

The mistake that was made - and must now be resolved in some way - is that an ALREADY failed state was allowed to enter the Euro due to an extremely active (and expensive) Goldman-Sachs engineered deceit in the first place.

Let GS pay the difference!