Galbraith on Greece

[gnk]

Re: Pilger on Greece

Merkel stated recently that the most important currency - trust, was lost. What did she mean by that? Here in Greece, one sees what Tsipras says to the domestic audience, and what he says to the EU. They are very different messages, but I'm sure its not lost on the EU leaders, especially Germany's. But it's not just words. Tsipras defiantly started spending, after saying the prior memorandum was void. What did he spend money on? New government hires, re opening of the public broadcaster ERT (he hopes to have a mouthpiece) a lunch allowance for some of the highest paid government employees - the Public Power Company. All for votes and influence, and without taking into consideration financial ability. He also met Putin several times. Needless to say, its a long list.

So why do I mention this? Tsipras said he would kick the Troika out of Athens because Greece lost its dignity with the Troika. I remember watching news reports of officials from the Institutions, visiting Athens, carrying briefcases, and being hounded by the media. An embarrassing image for most Greeks. But you know what? No Greek government had implemented most structural reforms - just cuts. So... this time it is different. Officials from the "Institutions" (Troika) will be visiting constantly now. They will judge Greece on every piece of legislation, every expenditure before they make disbursements. It's a Memorandum with TEETH. Funny how that developed - Tsipras was the forcing function for a stricter and more scrutinized program - what was needed all along.

And no political party will challenge it again. There will be no extreme left (they tried and failed abysmally), or extreme right (they're lunatics and people here know it) taking over in a future election. The people want Tsipras to move to the center and to get rid of the unpopular extremists - he has done it. In that regard, I disagree with Galbraith's recent article of a possible Golden Dawn rise. We'll see in the next elections. But the grandstanding against the memorandum without a viable alternative, cost many politicans their popularity.

I think it's worth one last try.

Schaeuble's Grexit threat is a bigger Sword of Damocles. But now it is aimed at both the Greece government and the Anglo-American banking interests.

Merkel and Schaueuble, I think, may be more cooperative than most believe. They were and are the most legitimate forcing function - an unpopular belief, I know.

Do I think further delays will make the crash harder still? Wrong question. There is only one type of final crash. It will be avoided so long as the method of avoidance does not cost the EU more than it is worth.

[Chris Coles]

Re: Pilger on Greece

All I wish to add to this discussion is; when will we move away from debate about the failures of government and the related failures of every nation's banking institutions; and back to the only thing that will provide a long term remedy - small scale equity investment into creating prosperity; particularly, right down at the base of the European economy?

The greatest failure is the long term belief that "government" drives a successful economy through their investments and associated actions. Surely THAT is now shown to be an illusion?

[gnk]

Re: Pilger on Greece

Interesting Schaeuble interview.

[don]

Re: Pilger on Greece

by Chris Martenson via PeakProseprity.com,

You really have to be paying attention to see what’s truly going on these days. The keepers of the system, that is the banking elites, now openly control everything -- though you'd never know that by listening to the media.

Consider this:

Eurozone backs €7bn bridging loan
Jul 16, 2105

Eurozone ministers have agreed to give Greece a €7bn (£5bn) bridging loan from an EU-wide fund to keep its finances afloat until a bailout is approved.

The loan is expected to be confirmed on Friday by all EU member states.

In another development, the European Central Bank (ECB) agreed to increase emergency funding to Greece for the first time since it was frozen in June.

The decisions were made after Greek MPs passed tough reforms as part of a eurozone bailout deal.

How generous of the finance ministers of all those EU member states to agree to a “bridge loan” that will help Greece "keep its finances afloat". This should provide the people of Greece with a bit of breathing room, right? Maybe access to their bank accounts (finally!), perhaps?

No, not at all. Here’s what the entirety of the “”loan”” will go towards instead:

The bridging loan means Greece will be able to repay debts to the ECB and IMF on Monday.

Ummmm…that “money” will not ever go anywhere near Greece.

This is all merely electronic window-dressing for entirely esoteric bookkeeping purposes. Servers will blink at one location in Europe as digital 1s and 0s are transmitted to another. The electronic balances at the ECB and the IMF will change, but not much else.

The people of Greece will see none of it. Nor will they see their bank accounts unfrozen.

This act of banker "largess" is, of course, of, by, and entirely for the bankers. It has nothing to do with Greece or its people, about whom the banker class cannot care less.

But, they hide this disdain under and increasingly thin and condescending veneer of graciousness. Take, for example, the recently-announced 'generosity' of the powers that be -- that is, the banking powers that be -- which will permit the long suffering depositors to…*cough*…deposit more money into the banks:

Greece: Banks Can Reopen ... for Deposits
Jul 17, 2015

Greek banks will reopen Monday after a three-week closure, the country's deputy finance minister says, though withdrawal restrictions will stay in place. Bank customers "can deposit cash, they can transfer money from one account to the other," but they can't withdraw money except at ATMs, the official says, and a withdrawal limit of 60 euros ($67) a day will stay in place, he said, though Greek authorities are working on a plan to allow people to roll over access to their funds so that if they don't make it to a bank machine one day, they can take out 120 euros the next day.

Yeah, depositing more money into the Greek banking system is exactly what all 12 remaining Greek idiots are clamoring to do...everybody else just wants their money back, thank-you-very-much.

Obviously, the only rational response of anybody in Europe watching this charade of theft continue would be to sell gold, right? (which has happened vigorously ever since the Greek crisis began) Because, you know, nothing says “confidence” quite like selling your gold so you can then park that money in a bank that may not let you withdraw it again.

Of course, we here at Peak Prosperity hold to the view that everything, and we mean everything, in our ””markets”” is stage-managed.
And that especially includes gold. The central banks are demanding and commanding complete fealty to their story line, no exceptions tolerated. We are at that all-or-nothing moment in history when everything either works out perfectly or it all falls apart.

Savers have to be punished so debtors can be saved.

Why? Because if debtors are rescued, that makes it possible for more debts to be issued in the future..

And why is that important? Because the banking system needs ever more loans in order to survive.

Why do we slavishly feed a banking system that is rapacious, insatiable and always threatening calamity whenever it doesn’t get exactly everything it wants, when it wants it? That is a question nobody in power is willing to address.

Why not? Because there's no good reason to do it -- unless you're a bank, or one of the many proxy agents (like politicians) receiving kick-backs from the banks.

We have a banking system that feeds on the blood, sweat and tears of the public. But the public's collective output is no longer ‘enough’ to subsidize everything that central planners have promised. So with a stagnating/shrinking pie – surprise! – the group that writes the rules, the banks, has decided that they should be the ones to get as much of it as possible.

Naturally, this will not work for very long. History is replete with examples why it can’t. Just consider the root meaning of “bankrupt” which has an interesting history:

The word actually comes from Italian banca rotta, a broken bench (not a rotten one, as the false friend of Italian rotta might suggest — it’s from Latin rumpere, to break). The bench was a literal one, however: it was the usual Italian word for a money dealer’s table. In his dictionary, the great Dr Johnson retold the legend that when an Italian money trader became insolvent, his table was broken.


To “break the banker’s table” means to smash the money lender’s physical place of business after they have taken or lost all of your wealth. It’s speaks of an act of anger by the betrayed. And that’s where the banking system finds itself again and again over time, for the exact same reasons all through history -- today being no different in anything but scale and complexity.

Conclusion

You have to read past the headlines today because they quite often say exactly the opposite of what’s actually happening. Like today’s description spinning GE’s 2Q, $1.38 billion earnings loss as a 5% rise in profits.

The bankers and financiers are badly overplaying their hands, again, and people are starting to catch on to the scam.

Real wealth is tangible things produced with tangible effort. Loans made out of thin-air 'money' require no effort and are entirely ephemeral. But if those loans are used to acquire real ownership of real assets, then something has been exchanged for nothing and one party is getting screwed.

That’s what has just happened in Greece. And expect it to happen increasingly elsewhere, as Charles Hughes Smith and I recently discussed in this week's excellent Off The Cuff podcast.

If you had asked me ten years ago if there was any chance of Greece becoming a failed state within a decade, I would have said ‘No, no chance.’ But here we are. In ten years, I suspect, we’ll be marveling over all the other failed states as the rot proceeds from the outside in. Again, Charles does a wonderful job articulating why in his recent report More Sovereign Defaults Are Coming.

There’s simply too much debt and too little cheap oil for there to be any other trajectory to this story. Boneheadedly, our leadership is so out-of-touch that their best response to this set of predicaments is to sacrifice the populace of an entire developed nation (for generations to come) just to keep the status quo stumbling along for a bit longer.

We need to all prepare for the inevitability that, as the rot proceeds, the people of Greece will not be the only casualties of the banks' attempts at self-preservation. They'll try to throw all of us under the bus before taking any losses themselves.

[astonas]

Re: Pilger on Greece

Merkel stated recently that the most important currency - trust, was lost. What did she mean by that? Here in Greece, one sees what Tsipras says to the domestic audience, and what he says to the EU. They are very different messages, but I'm sure its not lost on the EU leaders, especially Germany's. But it's not just words. Tsipras defiantly started spending, after saying the prior memorandum was void. What did he spend money on? New government hires, re opening of the public broadcaster ERT (he hopes to have a mouthpiece) a lunch allowance for some of the highest paid government employees - the Public Power Company. All for votes and influence, and without taking into consideration financial ability. He also met Putin several times. Needless to say, its a long list.

So why do I mention this? Tsipras said he would kick the Troika out of Athens because Greece lost its dignity with the Troika. I remember watching news reports of officials from the Institutions, visiting Athens, carrying briefcases, and being hounded by the media. An embarrassing image for most Greeks. But you know what? No Greek government had implemented most structural reforms - just cuts. So... this time it is different. Officials from the "Institutions" (Troika) will be visiting constantly now. They will judge Greece on every piece of legislation, every expenditure before they make disbursements. It's a Memorandum with TEETH. Funny how that developed - Tsipras was the forcing function for a stricter and more scrutinized program - what was needed all along.

And no political party will challenge it again. There will be no extreme left (they tried and failed abysmally), or extreme right (they're lunatics and people here know it) taking over in a future election. The people want Tsipras to move to the center and to get rid of the unpopular extremists - he has done it. In that regard, I disagree with Galbraith's recent article of a possible Golden Dawn rise. We'll see in the next elections. But the grandstanding against the memorandum without a viable alternative, cost many politicans their popularity.

I think it's worth one last try.

I agree that it is worth trying, if only because the alternative is so dire. I wish I shared your optimism on the boldface passages above, though I concede that you are better placed to know. Real reform, from this more distant vantage, still looks like a considerable challenge. I do hope for your sake and the sake of Greece that you are correct.

The threat of Grexit is really the penultimate pressure that Europe can apply (exceeded only by actual exit) and if this does not result in the memorandum of understanding being implemented in fact, rather than merely in name, I don't know what could.

A large majority of ordoliberals now believe, even after the package was accepted officially by the Greek parliament, that the chance of the reforms actually happening in practice are still very low. Tsipras' vocal ambivalence in signing what he described as a bad deal would appear to give all the political cover needed for administrative foot-dragging, if not outright obstructionism. Perhaps, as you suggest, the reforms will be seen as more sensible, and less punitive, than previous ones. But with the #ThisIsACoup movement gaining in visibility, that hardly seems to be a given.

The Troika supervisors returning is a good sign. But remember that even when they were in place previously, very few of the promised structural reforms included in prior memoranda actually wound up realized. Passing a law is one thing. Building a durable enforcement structure is another. Isn't anti-Troika sentiment far higher now than ever before, and particularly in government bureaus, which might lose benefits or headcount? The view in the press from over here certainly suggests that this is the case. Will regulators again meet an impenetrable wall of patriotic bureaucratic resistance, or has this, too, been dramatically weakened under the threat of Grexit?

Schaeuble's Grexit threat is a bigger Sword of Damocles. But now it is aimed at both the Greece government and the Anglo-American banking interests.

Yes. And furthermore, it is worth noting that the two swords are connected. Genuine Greek reform spares the Anglo-Saxons pressure as well. Finally, pressure is being applied to the wielders of real power, however indirectly. One would hope that this alignment of interests might result in Anglo-Saxons finally getting out of the way, and enabling reforms rather than impeding them. The structure of this iteration of bailout is, as you point out, more ordo- and a little less anglo- than before, which might be taken as a sign of exactly that.

All other indications from Anglo-Saxon-banking host states, however, do not yet appear to indicate any signs of a capitulation. Hollande certainly enjoys grandstanding, though, and it is easy to give too much credence to such words. Perhaps it's still too early; we'll just have to keep close watch.

Merkel and Schaueuble, I think, may be more cooperative than most believe. They were and are the most legitimate forcing function - an unpopular belief, I know.

Your assessment of their alignment is in my opinion dead on. They have to display slightly different public positions due to their respective roles: Head of Government vs. Finance Minister. But they really are deeply aligned political allies. Given a chance to rebuke Schaeuble's continual reminders of Grexit as the best longterm option, Merkel pointedly refused to do so. His more recent quieting is instead almost certainly a result of the Dijsselbloem's criticism regarding continued questioning of a finished deal, and thus a nod to Germany's need to remain consistent with its broad international coalition of allies in the EG. A 15/19 nation voting block is very powerful, but only if you can keep them all looking good enough with their voters at home to make continued mutual support viable.

Schaeuble and Merkel were colleague and protege to Helmut Kohl, during his efforts to reunify Germany and found the EU, respectively. They both thus fully understand the structural weaknesses that resulted from rushing the latter process, and there really aren't any German politicians in office more committed to its survival than they. Furthermore, it is worth noting that Schaueble is currently even more popular in Germany than Merkel, and to the extent she supports him, her own popularity continues to improve. Thus, neither a substantial, nor politically self-interested, split is at all likely.

But while they are both firmly committed to the survival of the Euro, they may well still have to fight very hard with France and Italy over whether a gardener's pruning shears are what is needed, to shorten a twig that is under attack by parasites. Those parasites have very different levels of influence in different European governments. For this to work, the next step will have to involve making it increasingly unpopular in France to support French bankers, and unpopular in Italy to support Italian ones, even if the cost DOES fall more heavily on another nation's taxpayers.

That still seems to me quite a challenging sale to make. Even if such an anti-banker message might otherwise be well received there, its origination in Germany at this point could make it an entirely toxic political view to espouse. Nationalism is hardly dead in old Europe. (Golden Dawn's 80% negatives notwithstanding.)

Do I think further delays will make the crash harder still? Wrong question. There is only one type of final crash. It will be avoided so long as the method of avoidance does not cost the EU more than it is worth.

This is a very fair point. When what you have to lose is everything, it can't really get much worse with time.

On the question of when it costs the EU more than it is worth, though, it seems to me that 15/19 nations have already said that the crossover point happened before last week. Only France, Italy, Greece, and Cyprus disagreed.

But that isn't as overwhelming a majority as it might sound. It turns out that all four dissenters are actually pretty crucial in this case. That's because the ultimate decision is taken by the political branch, meaning the European Council, which has its own interesting voting procedure. Here the (obviously Anglo-Saxon) UK could very well act to block significant movement, if a less-than-unanimous Eurozone presents a statement for vote to the European Council. For this reason, predicting the path of the Anglo-Ordo struggle in Europe going forward will involve heavy use of vote-tallying spreadsheets or calculators, not just for the Eurogroup, but also for the European Council.

In this case, the above-linked calculator shows me a very curious result. If all nations in the EC except for the UK, France, and Italy vote for a proposal, it still passes with a qualified majority. But if you add Cyprus to the list of "no" votes, it gets rejected. Tiny little Cyprus is just enough to stop Europe from crossing the line. However, one final wrinkle may also prove a complication in making predictions:

There is one important caveat - as a concession to Poland, at any point until 31 March 2017 a state can request a specific vote is done by the old rules (on the left above) even though the new rules are now the norm.

. If you use the old calculator ("pre-Nov 2014" on the calculator website) you still get approval even without Cyprus. But Greece and Cyprus together bring you back to an overall "no". I think this sort of differentiation could wind up being crucial when it comes to how special interests will go about lobbying for their cause in advance of EG and EC votes.

I could well imagine, for example, that there's some Greek and Cypriot politicians getting VERY rich right about now, and suddenly finding themselves to be amazingly good friends with American, British, French, Italian, and Swiss bankers that had really never shown much interest in them before November of 2014. If I were a reporter with the resources and connections to look into such things, that's an investigation I would be hitting quite hard at this moment.

[astonas]

Re: Pilger on Greece

Merkel stated recently that the most important currency - trust, was lost. What did she mean by that? Here in Greece, one sees what Tsipras says to the domestic audience, and what he says to the EU. They are very different messages, but I'm sure its not lost on the EU leaders, especially Germany's. But it's not just words. Tsipras defiantly started spending, after saying the prior memorandum was void. What did he spend money on? New government hires, re opening of the public broadcaster ERT (he hopes to have a mouthpiece) a lunch allowance for some of the highest paid government employees - the Public Power Company. All for votes and influence, and without taking into consideration financial ability. He also met Putin several times. Needless to say, its a long list.

So why do I mention this? Tsipras said he would kick the Troika out of Athens because Greece lost its dignity with the Troika. I remember watching news reports of officials from the Institutions, visiting Athens, carrying briefcases, and being hounded by the media. An embarrassing image for most Greeks. But you know what? No Greek government had implemented most structural reforms - just cuts. So... this time it is different. Officials from the "Institutions" (Troika) will be visiting constantly now. They will judge Greece on every piece of legislation, every expenditure before they make disbursements. It's a Memorandum with TEETH. Funny how that developed - Tsipras was the forcing function for a stricter and more scrutinized program - what was needed all along.

And no political party will challenge it again. There will be no extreme left (they tried and failed abysmally), or extreme right (they're lunatics and people here know it) taking over in a future election. The people want Tsipras to move to the center and to get rid of the unpopular extremists - he has done it. In that regard, I disagree with Galbraith's recent article of a possible Golden Dawn rise. We'll see in the next elections. But the grandstanding against the memorandum without a viable alternative, cost many politicans their popularity.

I think it's worth one last try.

I agree that it is worth trying, if only because the alternative is so dire. I wish I shared your optimism on the boldface passages above, though I concede that you are better placed to know. Real reform, from this more distant vantage, still looks like a considerable challenge. I do hope for your sake and the sake of Greece that you are correct.

The threat of Grexit is really the penultimate pressure that Europe can apply (exceeded only by actual exit) and if this does not result in the memorandum of understanding being implemented in fact, rather than merely in name, I don't know what could.

A large majority of ordoliberals now believe, even after the package was accepted officially by the Greek parliament, that the chance of the reforms actually happening in practice are still very low. Tsipras' vocal ambivalence in signing what he described as a bad deal would appear to give all the political cover needed for administrative foot-dragging, if not outright obstructionism. Perhaps, as you suggest, the reforms will be seen of as more sensible, and less punitive, than previous ones. But with the #ThisIsACoup movement gaining in visibility, that hardly seems to be a given.

The Troika supervisors returning is a good sign. But remember that even when they were in place, previously, very few of the promised structural reforms included in prior memoranda actually wound up realized. Passing a law is one thing. Building a durable enforcement structure is another. Isn't anti-Troika sentiment far higher now than ever before, and particularly in government bureaus, which might lose headcount? The view in the press from over here certainly suggests that this is the case. Will regulators again meet an impenetrable wall of patriotic bureaucratic resistance, or has this, too, been dramatically weakened under the threat of Grexit?

Schaeuble's Grexit threat is a bigger Sword of Damocles. But now it is aimed at both the Greece government and the Anglo-American banking interests.

Yes. And furthermore, it is worth noting that the two swords are connected. Genuine Greek reform spares the Anglo-Saxons pressure as well. Finally, pressure is being applied to the wielders of real power, however indirectly. One would hope that this alignment of interests might result in Anglo-Saxons finally getting out of the way, and enabling reforms rather than impeding them. The structure of this iteration of bailout is, as you point out, more ordo- and a little less anglo- than before, which might be taken as a sign of exactly that.

All other indications from Anglo-Saxon-banking host states, however, do not yet appear to indicate any signs of a change in direction. Hollande certainly enjoys grandstanding, though, and it is easy to give too much credence to such words. Perhaps it's still too early; we'll just have to keep close watch.

Merkel and Schaueuble, I think, may be more cooperative than most believe. They were and are the most legitimate forcing function - an unpopular belief, I know.

Your assessment of their alignment is in my opinion dead on. They have to display slightly different public positions due to their respective roles: Head of Government vs. Finance Minister. But they really are deeply aligned political allies. Given a chance to rebuke Schaeuble's continual reminders of Grexit as the best longterm option, Merkel pointedly refused to do so. His more recent quieting is instead almost certainly a result of the Dijsselbloem's criticism regarding continued questioning of a finished deal, and thus a nod to Germany's need to remain consistent with its broad international coalition of allies in the EG. A 15/19 nation voting block is very powerful, but only if you can keep them all looking good enough with their voters at home to make continued mutual support viable.

Schaeuble and Merkel were colleague and protege to Helmut Kohl, during his efforts to reunify Germany and found the EU, respectively. They both thus fully understand the structural weaknesses that resulted from rushing the latter process, and there really aren't any German politicians in office more committed to its survival than they. Furthermore, it is worth noting that Schaueble is currently even more popular in Germany than Merkel, and to the extent she supports him, her own popularity continues to improve. Thus, neither a substantial, nor politically self-interested, split is at all likely.

But while they are both firmly committed to the survival of the Euro, they may well still have to fight very hard with France and Italy over whether a gardener's pruning shears are what is needed, to shorten a twig that is under attack by parasites. Those parasites have very different levels of influence in different European governments. For this to work, the next step will have to involve making it increasingly unpopular in France to support French bankers, and unpopular in Italy to support Italian ones, even if the cost DOES fall more heavily on another nation's taxpayers.

That still seems to me quite a challenging sale to make. Even if such an anti-banker message might otherwise be well received, its origination in Germany at this point could well make it an entirely toxic political view to espouse. Nationalism is hardly dead in Europe. (Golden Dawn's 80% negatives notwithstanding.)

Do I think further delays will make the crash harder still? Wrong question. There is only one type of final crash. It will be avoided so long as the method of avoidance does not cost the EU more than it is worth.

This is a very fair point. When what you have to lose is everything, it can't really get much worse with time.

On the question of when it costs the EU more than it is worth, though, it seems to me that 15/19 nations have already said that the crossover point happened last week. Only France, Italy, Greece, and Cyprus disagreed.

But that isn't as overwhelming a majority as it might sound like. It turns out that all four dissenters are actually pretty crucial in this case. That's because the ultimate decision is taken by the political branch, meaning the European Council, which has its own interesting voting procedure. Here the (obviously Anglo-Saxon) UK could very well act to block significant movement, if a less-than-unanimous Eurozone presents a statement to the European Council. For this reason, predicting the path of the Anglo-Ordo struggle in Europe going forward will involve heavy use of vote-tallying spreadsheets or calculators, not just for the Eurogroup, but also for the European Council.

In this case, the above-linked calculator shows me a very curious result. If all nations in the EC except for the UK, France, and Italy vote for a proposal, it still passes with a qualified majority. But if you add Cyprus to the list of "no" votes, it gets rejected. Tiny little Cyprus is just enough to stop Europe from crossing the line. However, one final wrinkle may also prove to present a complication in making predictions:

There is one important caveat - as a concession to Poland, at any point until 31 March 2017 a state can request a specific vote is done by the old rules (on the left above) even though the new rules are now the norm.

. If you use the old calculator "pre-Nov 2014" on the calculator website, you still get approval even without Cyprus. But Greece and Cyprus together bring you back to an overall "no". I think this sort of differentiation could wind up being crucial when it comes to how special interests will go about lobbying for their cause in advance of EG and EC votes.

I could well imagine, for example, that there's some Greek and Cypriot politicians getting VERY rich right about now, and suddenly finding themselves to be amazingly good friends with American, British, French, Italian, and Swiss bankers that by pure coincidence never really showed much interest in them before 2014. If I were a reporter with the resources and connections to look into such things, that's an investigation I would be hitting quite hard at this moment.

[gnk]

Re: Pilger on Greece

Thanks again for the excellent commentary astonas. By the way, it looks like I have been vindicated in my criticism of the current Greek government's incompetence and lack of strategy by no other than Paul Krugman:

Paul Krugman: "I may have overestimated the competence of the Greek government" Krugman on assuming that Greece had an exit plan from the Euro: “…it didn’t even occur to me that they would be prepared to make a stand without having done any contingency planning ...amazingly - they thought they could simply demand better terms without having any backup plan. So certainly this is a shock. But, you know, in some sense, it’s hopeless in any case. …it’s not as if the terms that they were being offered before were feasible. I mean, the new terms are even worse, but the terms they were being offered before were still not going to work. So I, you know, I may have overestimated the competence of the Greek government.”

Of course, I still disagree with Krugman regarding the past program.

astonas, how could one find out which politicians are cashing in - or how. I do know a well read journo in Greece.

[lektrode]

Re: Pilger on Greece

Paul Krugman: "I may have overestimated the competence of the Greek government" Krugman on assuming that Greece had an exit plan from the Euro: “…it didn’t even occur to me that they would be prepared to make a stand without having done any contingency planning ...amazingly - they thought they could simply demand better terms without having any backup plan. So certainly this is a shock. But, you know, in some sense, it’s hopeless in any case. …it’s not as if the terms that they were being offered before were feasible. I mean, the new terms are even worse, but the terms they were being offered before were still not going to work. So I, you know, I may have overestimated the competence of the Greek government.”

esp since it was slugman's theories on stuff like 'if over-indulging in debt is the problem, then the solution is to double down' (esp when HIS team is in charge...) = what got em into the mess in the first place?

[touchring]

Re: Pilger on Greece

repeat

[touchring]

Re: Pilger on Greece

Paul Krugman: "I may have overestimated the competence of the Greek government" Krugman on assuming that Greece had an exit plan from the Euro: “…it didn’t even occur to me that they would be prepared to make a stand without having done any contingency planning ...amazingly - they thought they could simply demand better terms without having any backup plan. So certainly this is a shock. But, you know, in some sense, it’s hopeless in any case. …it’s not as if the terms that they were being offered before were feasible. I mean, the new terms are even worse, but the terms they were being offered before were still not going to work. So I, you know, I may have overestimated the competence of the Greek government.”

I think this might be the effect of having watched too much Hollywood movies like the 300.

[Woodsman]

Whodathunkit?

According to this report, the best laid plans of Greek SocialistMaxistCommies was foiled by the another sword and shield bearer. Whodathunkit?

In other words, if this report is true, it was not Tsipras' failure to predict how Greece would react to the Greek referendum nor was it his secret desire to lose it as previously suggestted (expecting a Yes vote and getting 61% "No"s instead), but a last minute rejection by Putin that lead to the Greek government's capitulation, and the expulsion of Varoufakis who most certainly was the propagator of this plan.

http://greece.greekreporter.com/2015...rint-drachmas/ (via the place that shall not be linked).

[jk]

Re: Whodathunkit?

it took a nixon to go to china.

According to this report, the best laid plans of Greek SocialistMaxistCommies was foiled by the another sword and shield bearer. Whodathunkit?



http://greece.greekreporter.com/2015...rint-drachmas/ (via the place that shall not be linked).

if i take this report at face value [a big hypothetical] i am left wondering why putin would have refused to play. it certainly would have created quite a splash in the west.

[gnk]

Re: Whodathunkit?

I once told a Greek friend this:

If the US and Europe really wanted to do serious damage to Russia, they would hand over Greece to Russia, and say, "good luck!"

My friend nearly fell off his chair laughing.

[astonas]

Re: Pilger on Greece

Thanks again for the excellent commentary astonas. By the way, it looks like I have been vindicated in my criticism of the current Greek government's incompetence and lack of strategy by no other than Paul Krugman:

Paul Krugman: "I may have overestimated the competence of the Greek government" Krugman on assuming that Greece had an exit plan from the Euro: “…it didn’t even occur to me that they would be prepared to make a stand without having done any contingency planning ...amazingly - they thought they could simply demand better terms without having any backup plan. So certainly this is a shock. But, you know, in some sense, it’s hopeless in any case. …it’s not as if the terms that they were being offered before were feasible. I mean, the new terms are even worse, but the terms they were being offered before were still not going to work. So I, you know, I may have overestimated the competence of the Greek government.”

Of course, I still disagree with Krugman regarding the past program.

Yep, you nailed it!

But I'd have to caution you about using Krugman as a reference point at all. He's been "shocked" so many times in this crisis that he should be able to power a light bulb just by holding it in his hands. The reason is mostly that he projects an incapability of seeing that more than a single economic perspective exists, so he always implicitly assumes that his view - extreme Keynesianism - is the only one that could possibly be imagined.

I actually don't think he's as stupid as he comes across. But the fact that he regularly chooses to disguise his advocacy for his own view as objective explanation makes him untrustworthy. He is literally lying about what is, to advance what he believes should be.

It's one thing to believe that your perspective is more often right and others are more often wrong. But the only way to be so consistently "shocked" is to either be out of step with reality in a bigger way, or to simply be willing to lie about what "everyone" accepts as economic theory.

astonas, how could one find out which politicians are cashing in - or how. I do know a well read journo in Greece.

Well, this is the harder question, isn't it? Unfortunately, I'm not particularly familiar with what transparency requirements or tools are available in Greece, or with what sorts of manipulations rise above the background level of corruption. That is knowledge that your journalist friend might be better able to provide. What are the disclosure requirements for campaigns? For political gifts?

Noticing that Cyprus and Greece are not merely fringe parts of Europe, but actually key votes in the ability of Anglo-Saxon banks to block major legislation in Europe, simply tells us that there is an extremely large motive for international bribery, as European Union policies concerning banking are developing. By itself it really doesn't tell us much about how it might happen.

I'm not an expert on dirty dealings, but I would expect there to be thousands of ways for such a deal to go down, and each would have its own fingerprints. To indulge such pure speculation:

A banker would probably want to start with a pleasant and plausible excuse for talking to an MP, to provide a legitimate cover.

I could imagine, for example, a banker approaching a member of parliament for help in "finding" the owner of an old numbered swiss bank account abandoned since WW2, and "believed" to belong to someone from the MP's constituency. A wink and a nudge could go a long way, and it is easy enough to give a clear indication that the poor holocaust victim would surely be happy to see it used against oppressive Germans, should no legitimate heirs be found. The account number and passcode could be handed over, and the only way to spot it would be a sudden appearance of unexplained cash being spent (or hidden in another oversees account) by the politician, or his campaign.

What would you look for? Perhaps logs kept by the office of the minister on meetings taken? Who the politician met at a party? Sudden, but opportune, campaign contributions from constituents that had no obvious alignment with the party? It could be just about anything!


But there is one narrowing of scope that we might reasonably guess at. The politician in question would have to be in a position to advance the agenda of the bankers. That in turn would depend on the specifics of what agenda is being pursued.


There's the simplest hypothesis - that Anglo-Saxon style banking has a financial interest that is first and foremost, and will lobby heavily to make money, and pursue long-term political manipulations mostly to avoid regulation, but not necessarily to the extent of trying to manipulate markets specifically to destroy nations.

Here you'd probably be looking mostly at the finance ministry, both the elected and appointed officials.


There's also another hypothesis, based on the notion that banks will manipulate anything they can for profits, even to point of destroying whole nations to secure the votes they need.

Here you'd have to look more broadly, at the cabinet, to be sure. But really anyone that either escalated the crisis and its associated anti-northern sentiment in the early stages, or that helped turn it away from Grexit at the very last second. Any of those players could be said to be playing into the bankers hands by turning Greece into a reliable anti-ordoliberal vote in the EG and EC.


As I've said, much of the above is pure speculation. A strong motivation for international lobbying and other forms of meddling does not mean that it has to exist. But thus far, Goldman and their ilk have established that their policy of influencing world events is extremely lucrative, and it is hard to imagine it stopping at national borders.

[astonas]

Re: Whodathunkit?

if i take this report at face value [a big hypothetical] i am left wondering why putin would have refused to play. it certainly would have created quite a splash in the west.

A new version of the report has come out from the same source, filling in more details:

The claim is that a trade was made: Greece is pushed to the west, and in exchange Europe backs away from the Ukraine.

Why the Greek-Russian flirtation ended so ingloriously?

What happened? Why the Greek-Russian flirtation ended ingloriously? According to one version, Russia had exchanged Athens for Donetsk and Luhansk in eastern Ukraine. Almost simultaneously with the Greek referendum the leaders of the pro-Russian areas announced local elections in the autumn that were seen as a step towards their separation from Ukraine, without any meaningful response from Angela Merkel and Francois Hollande at that. This was a plan to strengthen Russian influence in Ukraine and analysts saw the long arm of pragmatics Leonid Reshetnikov behind it. And it was not only that. According to another point of view, the Russian veteran had saved another country, Greece, about which he knows so much ..."

Speculative, to be sure. But not entirely implausible.

When Greece came knocking in Moscow, it is logical to assume that Putin would ask himself if he might be able to manipulate circumstances to get a concession or two concerning what he really cares about. Global acceptance of his annexation of Crimea, and Eastern Ukraine.