Galbraith on Greece

[don]

Re: Galbraith on Greece

Touche`
One could argue it applies to Bernanke twice -once coming in as the new fool and once handing off even worse problems to the next.

Don't let the revolving door hit you in the ass, Mr. Chairman . . . .

[thriftyandboringinohio]

Re: Galbraith on Greece

Hum...Bernanke?

Touche`
One could argue it applies to Bernanke twice -once coming in as the new fool and once handing off even worse problems to the next.

[thriftyandboringinohio]

Re: Galbraith on Greece

Thanks for the thoughtful reply, gnk.

[gnk]

Re: Galbraith on Greece

Thanks gnk. It is great to have your firsthand posts from within Greece.

I have seen situations where a course has been set and a disastrous end is inevitable.
Just before the inevitable disaster the people who set the course relinquish control.
Some poor fool steps in and finds himself in charge when things blow up.
He gets the blame.

gnk, do you think this applies at all to the leftists in Greece?
Was there anything they could have done differently to avoid economic disaster?

Before Syriza came to power, the economic situation had actually stabilized and the economy was slowly improving. The elections could have been avoided, in my opinion, but I think the previous Prime Minister was overconfident, and Tsipras overzealous and aggressive. Parliamentary systems are not as stable as the system the US government has. Snap elections are not uncommon.

I think Syriza/Tsipras was worried that Samaras, the previous PM, would get a lot of credit for the rebound. So Tsipras started making outlandish promises, especially for a nation that is basically insolvent and still dysfunctional. But keep in mind, the left I speak of is not a center left party. These are marxists. Some describe themselves as Leninists, others Stalinists. Aside from their economic beliefs, they have the typical small country inferiority complex and want to "stick it to the man" i.e. major (western) world powers. These extreme leftists have never had power before, and this is their first time.

They're making a mess of things, as I had predicted. Between their amateurism, incompetence, unworkable economic theories, and poor skills at diplomacy, they are a disaster in the making. Keep in mind also, that SYRIZA is a hodgepodge of radicals that often disagree with each other, some more extreme than others. I just don't see how this government can agree on anything. Winning elections in a country experiencing a depression is one thing. Governing is entirely another matter.

I don't see SYRIZA having a future. By years end definitely, but more likely sooner they will lose an election.

Aside from the feel good rhetoric designed to appeal to the lowest common denominator, do you know what they have accomplished?

Pre election, most Germans wanted Greece to stay in the EU. Now, over 50% want Greece out. How is that supposed to make Merkel or Schauble's job easier? By alienating the German voter, they put Merkel in a difficult position.

Kammenos, the leader of the far right Independent Greeks party formed a coalition with SYRIZA. He has stated twice that if Greece were bullied Greece would allow anyone from the Middle East (jihadists he was referencing) papers so they could travel to Germany, for example. Funny thing is, just recently the Greek government prepared papers for Syrian refugees to give them citizenship and free passage to any EU country. As soon as one of these SYRIZA idiots (for lack of a better word) realized that they were in violation of the Schengen treaty, the treaty that allows free travel by EU citizens, they immediately backtracked and issued papers revoking the rights they had just given the Syrian refugees. I'm telling you, it was a complete Keystone Cops moment. A major blunder. And now, I'm guessing due to Kammenos' comments, there is a significant increase in Syrian refugees coming to Greece.

What else have they done? They want to give criminals with disabilities the opportunity to serve out their sentences under house arrest. November 17 is a terrorist group in Greece, guilty of killing Americans among others. One such member of that terrorist group will likely be given the house arrest option. This has caused a major rift between Greece, and the only major power that has pressured Germany to be lenient with Greece - the USA. Again, it's Marxist "sticking it to the man" mentality - without any afterthought of the consequences. The US has issued a statement considering this a "profoundly unfriendly act." For a so called advanced western nation, quite an accomplishment by this government! I'm both embarrassed and angered by this government's plan to give house arrest to a terrorist, as are many Greeks.

What else? To earn the votes of the youth, they want to change the higher educational system. Students will vote for their dean at Universities, they can study for as many years as they want, entrance grades will be lowered, in the event of a protest, the police can not enter University buildings, etc... How's that for making Greek youth competitive? Basically, this policy will encourage the best and brightest to leave Greece.

There is much, much more. It pains me to see the likes of Krugman or Galbraith using Greece as an example for their economic theories, or outright supporting the current government. They need to do their research and understand what is really going on. Otherwise, their reputations can suffer.

I don't think the next government after SYRIZA will get the blame. The economic situation had stabilized before the recent election and now it is getting worse again. It will be easy to put the blame on SYRIZA. And I wouldn't be surprised if the EU gives the next, more cooperative Greek government some leeway.

I'm sure many hard leftists in Greece will blame the EU for their downfall. But their disaster was their own making. Fortunately the hard right, mostly Golden Dawn-the neo nazi party, has lost numbers. Eventually, I see Greece having moderates - both left wing and right wing, in power again.

Pre crisis, Greece had a two party system. The moderate left PASOK, which seems to be slowly fading, and the center-right New Democracy. Both of these parties were guilty of rampant corruption during the bubble. As a result, both have lost to the more extreme right and left parties. New Democracy, however, is still a viable party, and the main opposition right now.

[santafe2]

Re: Galbraith on Greece

I have seen situations where a course has been set and a disastrous end is inevitable.
Just before the inevitable disaster the people who set the course relinquish control.
Some poor fool steps in and finds himself in charge when things blow up.

Hum...Bernanke?

[thriftyandboringinohio]

Re: Galbraith on Greece

Dignity based on: empty promises and aggressive, insulting tactics against allies, as well as possibly giving known terrorists leniency, among many other things, has finally proven to be a failed tactic:

The Greek Government's approval ratings are plummeting as negotiations go sour

If there's one positive that may come from this tragic episode in Greek history, it is the end of the extreme left in Greece as a serious political force.

(edit - updated first link)

Thanks gnk. It is great to have your firsthand posts from within Greece.

I have seen situations where a course has been set and a disastrous end is inevitable.
Just before the inevitable disaster the people who set the course relinquish control.
Some poor fool steps in and finds himself in charge when things blow up.
He gets the blame.

gnk, do you think this applies at all to the leftists in Greece?
Was there anything they could have done differently to avoid economic disaster?

[gnk]

Re: Galbraith on Greece

"There is a spirit of dignity in Athens that is worth a great deal more than money"

http://www.socialeurope.eu/2015/04/r...ean-government

Dignity based on: empty promises and aggressive, insulting tactics against allies, as well as possibly giving known terrorists leniency, among many other things, has finally proven to be a failed tactic:

The Greek Government's approval ratings are plummeting as negotiations go sour

If there's one positive that may come from this tragic episode in Greek history, it is the end of the extreme left in Greece as a serious political force.

(edit - updated first link)

[gnk]

Re: Galbraith on Greece

Finland could help determine whether Greece gets more help:

http://www.telegraph.co.uk/finance/e...o-project.html

Even though the press focuses mostly on Germany, as does the current Greek government, the Greek crisis has had the effect of making every EU country (but Greece) more cohesive and less patient with Greece. No country wants to cut Greece a break, and understandably so. These are all democracies and giving Greece a break is essentially asking non Greek voters to send (more) money to Greece. Some of these countries have a lower standard of living than Greece. Other countries have gone through their own Austerity programs without special treatments, and are leary of Greece getting anything extra as that would empower their own far left parties to challenge the political status quo and ask for the same. Other countries are better off or have higher retirement ages, or are just plain more competitive. What's in it for them? As of now, over 50% of Germans want Greece out, that was not the case just before Syriza came to power. This is a huge political test for Merkel.

Greece initially had a bailout in 2010. Then with new elections, had another bailout with the PSI "haircut" in 2012. Now with the recent January elections, Greece wants another deal... Has any other "austerity" country done this? None that I recall.

It has now gotten political. I'm afraid that if push comes to shove, and the EU faces a greater risk in doing whatever it takes to keep Greece, than in letting Greece go... then the decision is an obvious one. Greece needs to become more of a Western European country (many Greeks understand what I mean when I say that) and not the other way around, that is, the EU becomes more like Greece. That is not going to happen. It shouldn't happen.

I know many people of all political persuasions here in Greece. You know what the average (delusional) Syriza supporter thinks? We are making the big powers shake! They're scared! We have gained our dignity! It's typical small country psychology. Blame is shifted to foreign powers, and domestic inadequacies - corruption, dysfunctional government, etc... are overlooked.

I, on the other hand, feel embarrassed by the current government's behavior, and many Greeks (not all) can not understand why. What I am seeing is the opposite of dignity. How can a corrupt, broke country disregard reforms (self improvement), beg for money, and alienate not only the creditors, but the citizens of other EU countries whose trust is integral in getting that money? Where's the dignity in that? Where's the logic in that?

What the last election has accomplished is this: whatever economic gains Greece enjoyed have been wiped out. The Government now wants access to all quasi government accounts, pensions, and even national hospital funds. The Banking system has been experiencing a slow run. Private investments are being cancelled due to political uncertainty.

But hey, dignity has been gained.

The Greeks want "dignity" first, before money or jobs -Yanis Varoufakis

By the way, it's not just about economics. Here's SYRIZA's attempt at making Greece "competitive" via the educational system:

"Under the new regulations, students will be able to vote for their university’s rector, police will once more be banned from entering university grounds for any reason, the evaluation system for professors will be scrapped, students will be allowed to remain enrolled for as long they like without ever having to graduate, university councils will be abolished and high school students will be able to graduate with a minimum grade of 9.5/20 rather than 10/20. And these are just a few of the changes that are being promoted, which may be in tune with the overall spirit of the government but are definitely not in synch with the times." LINK

There are many, many more examples that show, in my opinion, that Syriza and Alexis Tsipras are a disaster in the making.

[vt]

Re: Galbraith on Greece

Finland could help determine whether Greece gets more help:

http://www.telegraph.co.uk/finance/e...o-project.html

[gwynedd1]

Re: Galbraith on Greece

Thailandnotes, thanks for your post and your sharing my post with Galbraith - I often find his articles very interesting. I agree that living abroad, and reading articles written by non residents with a foreign audience in mind can be frustrating at times. One often sees things in a completely different way from what is being reported abroad.

And I'm not going to say that my view is the only rational view out there. Of course many here in Greece disagree with me. We all carry our life experiences with us wherever we go, and that colors our views.

That said, I want to follow up on a few points:

MMT -

I always thought Varoufakis was an MMTer I guess I'm wrong, but then again, I have read a lot of conflicting info on MMT. My understanding with MMT is that it is a great tool for describing the system we live in, but to be used prescriptively, I think could be risky. I know I may be angering some MMT'ers by saying this, but in a fiat money world, MMT must look great to Modern Marxists.

I think it depends on what kind of disease you are trying to cure. It is a dangerous tonic when drinking from the bottle as some kind of finance for social spending. As a topical antiseptic against government bailout and rescue packages for creditors its an excellent cure. For example applying it to the 2008 open wound, it may have allowed creditors to go bankrupt along with the debtors. It would also provide assurances that there is no such thing as too big to fail banks such that da guberment can simply stop collecting certain kinds of taxes like social security withholding which would increase buying power in places of economic demand. Such could be the prescription. That is to say there is always a source of liquidity when it becomes necessary. Saving bad banks isn't necessary at all.

Though I grant you, if the masses got a taste of MMT, it may not turn out so well.

[gnk]

Re: Galbraith on Greece

Thailandnotes, thanks for your post and your sharing my post with Galbraith - I often find his articles very interesting. I agree that living abroad, and reading articles written by non residents with a foreign audience in mind can be frustrating at times. One often sees things in a completely different way from what is being reported abroad.

And I'm not going to say that my view is the only rational view out there. Of course many here in Greece disagree with me. We all carry our life experiences with us wherever we go, and that colors our views.

That said, I want to follow up on a few points:

MMT -

I always thought Varoufakis was an MMTer I guess I'm wrong, but then again, I have read a lot of conflicting info on MMT. My understanding with MMT is that it is a great tool for describing the system we live in, but to be used prescriptively, I think could be risky. I know I may be angering some MMT'ers by saying this, but in a fiat money world, MMT must look great to Modern Marxists.

SYRIZA -

I think many people that are left or left leaning ought to take caution when viewing a left wing government elsewhere. Left wing is not the same wherever it exists, neither is right wing for that matter. The political spectrum changes country to country. Labels themselves are restrictive, I know, but unfortunately we all use them as unavoidable shortcuts.

The current left in Greece has its own unique features that set it apart from the left found elsewhere. They feel a strong connection to Russia, for example. Another example: in Greece, describing yourself as marxist is not a political career killer. I have dual citizenship, and when I voted, I recall seeing three distinct Marxist parties on the ballots. One was KNE - the Marxist youth party, the other was KKE - the traditional marxist party, and the other was listed as KKE - Marxist-Leninist. I guess these communists are more hardcore than the previous two. Yes, Greece's political landscape has quite a few flavors of Marxism!

SYRIZA, as I said before was hobbled together by a politically enterprising young politician named ALEXIS TSIPRAS. Maoists, Trotskyites, anti-capitalists, greens, and even moderate social democrats are some of the groups represented in SYRIZA. Some are very pro-EU, others, not so much. To me, that doesn't sound like a cohesive government. To me, it sounds like a bunch of outsiders getting together with the primary goal of winning an election. Governing, on the other hand, was an afterthought to them.

For such a coalition Party to exist, it requires that each subgroup be promised a ministerial position (Similar to US cabinet seats.) As a result, this government is made up of factions that existed separately, pre SYIRZA, but now they actually have to work together. As the largest Party in Parliament, they bear the brunt of accepting a final memorandum or "program" because SYRIZA will not accept a memorandum from the EU as the previous governments have done, so now they use the word "program" instead.

I really don't think SYRIZA, as it exists today, will last. I just hope that only SYRIZA falls, and not the country. To be completely honest, I don't think Greece is actually functioning 100% with a government right now. The only times this government agrees on passing a law is when it involves spending money, either the government's or someone else's. Get them together to agree on a new program and that's when the fireworks start.

Violence/Protests:

These will only get worse because these violent protesters are mere punks getting a thrill burning cars, to put it bluntly. I have nothing against peaceful protests, so long as they don't impinge on the rights of others. The future will tell. But yes, its getting worse and worse. Luckily, I don't live in Athens.

I have read Varoufakis, and I agree with many of his points when it comes to describing the faults of the international monetary system. Varoufakis should be careful. He has entered the world of politics. It's an ugly world, and I fear that he could become a scapegoat when things go south. I don't think he has a connection to these political parties that comprise SYRIZA and I think they will throw him under the bus in a heartbeat if they feel they have to.

[gwynedd1]

Re: Galbraith on Greece

I will respond to the previous post by Galbraith when I have more time. Once again, I want to mention that I have a lot of respect for Galbraith, especially regarding his views on the 2008 AFC.

As for the status quo in Greece, touchring, the irony is that those that want radical change in Greece will suffer the most should they get it (Grexit/Grexident)

How? Many of the Kleptocrats in Greece have money abroad - this is not just the ruling elite, but many high end tax dodgers. Should Greece fall out of the Euro, the subsequent capital controls and sinking of the new Drachma's value would make the kleptocrats with assets abroad the next ruling elite. In the chaos that ensues, they will buy up everything dirt cheap. Meet the new boss, same as the old boss.

The radicals in Greece are ensuring a kleptocracy either way. They don't realize that the EU is the lesser of two evils (for them). Instead, they want to believe that Santa Claus exists. There is always a high price to pay for such foolishness.

The kleptocrats prefer the status quo, even if a Grexident means a possible higher reward for them. Why? Money aside, society will become highly unstable here in Greece should a Grexit occur. Not the type of country most want, even if it means more economic power.

Furthermore, most of the radicals in Greece are what I call iphone radicals. Much like the upper middle class "revolutionaries" of the 1960s. They're playing with others' lives and they don't care. The fools that follow them lack either the intellectual capacity, or the economic knowledge of what could happen to them should Greece leave the Euro.

Either way, about 60% of Greeks prefer the Euro. It's the typical universal voter syndrome that wants more government services and less taxes. Cognitive Dissonance.

Things can always get worse...

You are quite right. Ordinary Greeks are caught between their own kleptocracy and the EU. The Greek kleptocrats took the money and rolled over the liability to Greece.

[gwynedd1]

Re: Galbraith on Greece

<sup>Greece is all about an old Law:


6</sup> “No man shall take the lower or the upper millstone in pledge, for he takes one’s living in pledge.

Deuteronomy 24


The privatization of national assets to pay off debt will end Greek sovereignty. The idea that such things may become pledged for debt seems to be well addressed. Seed corn is not fit to secure credit.

[gnk]

Re: Galbraith on Greece

I will respond to the previous post by Galbraith when I have more time. Once again, I want to mention that I have a lot of respect for Galbraith, especially regarding his views on the 2008 AFC.

As for the status quo in Greece, touchring, the irony is that those that want radical change in Greece will suffer the most should they get it (Grexit/Grexident)

How? Many of the Kleptocrats in Greece have money abroad - this is not just the ruling elite, but many high end tax dodgers. Should Greece fall out of the Euro, the subsequent capital controls and sinking of the new Drachma's value would make the kleptocrats with assets abroad the next ruling elite. In the chaos that ensues, they will buy up everything dirt cheap. Meet the new boss, same as the old boss.

The radicals in Greece are ensuring a kleptocracy either way. They don't realize that the EU is the lesser of two evils (for them). Instead, they want to believe that Santa Claus exists. There is always a high price to pay for such foolishness.

The kleptocrats prefer the status quo, even if a Grexident means a possible higher reward for them. Why? Money aside, society will become highly unstable here in Greece should a Grexit occur. Not the type of country most want, even if it means more economic power.

Furthermore, most of the radicals in Greece are what I call iphone radicals. Much like the upper middle class "revolutionaries" of the 1960s. They're playing with others' lives and they don't care. The fools that follow them lack either the intellectual capacity, or the economic knowledge of what could happen to them should Greece leave the Euro.

Either way, about 60% of Greeks prefer the Euro. It's the typical universal voter syndrome that wants more government services and less taxes. Cognitive Dissonance.

Things can always get worse...

[touchring]

Re: Galbraith on Greece

I see this in every society. The status quo people and the people that want change. The people that want radical change are usually kids, young adults that have nothing much to lose if the system collapses. The people that want status quo are usually the elderly, the asset rich and business owners and civil servants and not to mention, the small group of cronies (bankers, media owners, etc). So depending on which group you belong to, you maybe against or for change.