Socialists win Greece

[Glaucus]

Well, if you're saying that the EU expanded too quickly, then I agree. From what I understand those who were pushing for rapid EU expansion were those who wanted it to fail: the US and the UK. But I think what's more at issue here is the expansion of the Eurozone which is different really. With the Eurozone strict requirements were made but Greece cooked the books to sneak it's way in. We now know that Greece was in reality not eligible to enter in the first place. I think part of the problem with the Eurozone is that it doesn't enforce the requirements strictly enough and even it's biggest members, France and Germany, have violated them at times. Rules are only as good as they are enforced, and that's where the Eurozone has problems. This crisis may change that, but who knows.

 

[Glaucus]

They were either over eager or were planning on squeezing Greece once in and thought they could do it without hurting themselves.

Squeezing Greece doesn't make much sense. It's like when you sue someone; you only bother to sue people with deep pockets, or those who are well insured. Greece is neither. Also, we should also remember that Greece was about to default on a bond repayment (issued in April of 2000, before it entered the Eurozone), meaning those being repayed were common investors. If anyone is being squeezed right now it's the rest of Europe not Greece.

 

[FluffyMcDeath]

Squeezing Greece doesn't make much sense. It's like when you sue someone; you only bother to sue people with deep pockets, or those who are well insured. Greece is neither.

Europeans didn't go to Africa and stuff black people on ships because the black people were rich. They did it because they could get the black people to work for them for practically nothing.

 

[Glaucus]

Europeans didn't go to Africa and stuff black people on ships because the black people were rich. They did it because they could get the black people to work for them for practically nothing.

well if it was cheap labor they wanted, paying them in Euros was the dumbest idea ever.

 

[FluffyMcDeath]

Europeans didn't go to Africa and stuff black people on ships because the black people were rich. They did it because they could get the black people to work for them for practically nothing.

well if it was cheap labor they wanted, paying them in Euros was the dumbest idea ever.

That's funny, but it's not really the point.

 

[Glaucus]

Well I'm not sure what you're trying to say then. If Greece isn't being squeezed for money or for cheap labor, then what? And also, why Greece? If they want to squeeze someone who's got nothing, what's wrong with all those poor Eastern block nations?

 

[smithy]

Well I'm not sure what you're trying to say then. If Greece isn't being squeezed for money or for cheap labor, then what? And also, why Greece? If they want to squeeze someone who's got nothing, what's wrong with all those poor Eastern block nations?

It has nothing to do with Greece, or money. It's about centralising power in Brussels and weakening national governments. The euro is a political, not an economic, project designed for the aforementioned aim. A crisis was widely predicted back at the euro's launch in 1999. But that first crisis would be used as an opportunity to demonstrate that the current mish-mash of a single currency and interest rate, with national taxes and economic policies wasn't sound. And a reason to centralise tax and economic policy in Brussels.

Too many countries in the euro, like Greece, have been spending way beyond their means. And EVERY country (not just Greece) fudged the figures to join in the first place, meaning too many countries are members that shouldn't be, which is causing the criss to get out of hand. And German taxpayers, who have been bankrolling all of this, seems like they've just woken up to what's going on.

 

[FluffyMcDeath]

If Greece isn't being squeezed for money or for cheap labor, then what? And also, why Greece? If they want to squeeze someone who's got nothing, what's wrong with all those poor Eastern block nations?

It IS being squeezed for money and cheap labour and cheap whatever else they can get. Remember that Euros or dollars or anything else isn't really money. Labour is money, land is money, etc.

And they ARE squeezing the eastern block. Romania is battening down for "austerity".

 

[FluffyMcDeath]

It's about centralising power in Brussels and weakening national governments. The euro is a political, not an economic, project designed for the aforementioned aim.

Precisely. And what's being done to Greece is the country equivalent of slave breaking - or more like taking a nice naive wholesome country girl, getting her hooked on crack and then making her your ho. That's all it really is.

 

[FluffyMcDeath]

I'll say it again. Greece needs to default. It's not like it will devalue their currency because they don't have one, they have the Euro which is mostly German and French.

When there is an interest rate it is supposed to compensate for risk. If the debtor is "risky" then the rate is high (which, ironically increases the risk). If the debtor defaults, well, that's part of the risk. Too bad, the party that loaned the money lost the bet. Stop crying and take your haircut.

On the other hand, if the country cannot be allowed to not pay then it cannot not pay therefore there is no risk and so the interest rate should always be prime. Any downgrade by any ratings agency is irrelevant so first give back all the excessive interest that should never have been paid and then we'll talk.

Bottom line, the lenders always look at the yield and forget the risk. Not to let that bite them in the arse is a disservice to them. Else how will they ever learn?

 

[Glaucus]

Precisely. And what's being done to Greece is the country equivalent of slave breaking - or more like taking a nice naive wholesome country girl, getting her hooked on crack and then making her your ho. That's all it really is.

Wrong, Greece has been a whore for decades and this crisis is finally getting her off the smack. You have it all backwards.

 

[FluffyMcDeath]

Precisely. And what's being done to Greece is the country equivalent of slave breaking - or more like taking a nice naive wholesome country girl, getting her hooked on crack and then making her your ho. That's all it really is.

Wrong, Greece has been a whore for decades and this crisis is finally getting her off the smack. You have it all backwards.

We disagree. The credit was the bait. The crisis is the trap springing. What comes after the crisis is the trap.

 

[Glaucus]

We disagree. The credit was the bait. The crisis is the trap springing. What comes after the crisis is the trap.

On this we do disagree. I'm on Greek forums and there is certainly a lot of debate about this as well. However most Greeks blame their government (or a particular party) and some say out side influences were at fault. Here's my short and sweet post on who I blame for the crisis:

A Papandreou, Simitis, Karamanlis, the Unions, the media, the rioters and all the graft and tax evasion by the common citizen. Blaming outside influence is like blaming the cliff when you've driven off it.

In my last sentence I tried to get across that there are dangers out there, but none of them are unavoidable dangers. And I think that's the fine line you and I disagree on. Are there sharks in the water? Yes. But no one told Greece to cover itself in blood and jump into the middle of a feeding frenzy. There were plenty of things Greece could have done to avoid the trap, it was not unavoidable. There will always be those who want to cash in on the misfortune of others, this is nothing new, Greek history is full of it, there's no reason for Greeks to be naive.

 

[FluffyMcDeath]

More strikes for Greece but Romania is getting whacked too.

 

[smithy]

Precisely. And what's being done to Greece is the country equivalent of slave breaking - or more like taking a nice naive wholesome country girl, getting her hooked on crack and then making her your ho. That's all it really is.

Wrong, Greece has been a whore for decades and this crisis is finally getting her off the smack. You have it all backwards.

The only way to get off the smack is to leave the euro. With its interest rates set by foreigners for the benefit of France and Germany's economies, Greece will have a very hard time recovering with the euro millstone around its neck.

Trouble is, the powers in Brussels won't allow it - Greece would be followed by others who have suffered the euro. The single currency would become a 6-nation currency and would help derail the European Project for decades.

 

[Glaucus]

The only way to get off the smack is to leave the euro. With its interest rates set by foreigners for the benefit of France and Germany's economies, Greece will have a very hard time recovering with the euro millstone around its neck.

I can see the argument that Greece may be better off without the Euro, but to suggest that the Euro caused Greece's problems only tells me you don't understand Greece. Greece would have been in the same situation, if not far worse, if it wasn't part of the Eurozone. There were two major problems with Greece 1) The people didn't pay their taxes which meant the government had a drastically reduced income, and 2) it lied about it's financial situation so it could keep borrowing. The Euro had nothing to do with either of these, if Greece managed it's finances properly from the start it would not be in the state that it's in. Devaluing the currency alone would also have no effect on this. Today at least Greeks still have buying power, a devalued Drachma, with run away inflation would cause a lot more problems. Fact is, devaluing your currency is great only when you have no further choice, but Greece does: proper management. And this Crisis has allowed the government to pass tough new laws that have the potential to change things dramatically. It's a tough pill to take all at once, but a lot of these new laws should have been enacted over a decade or so.

Trouble is, the powers in Brussels won't allow it - Greece would be followed by others who have suffered the euro. The single currency would become a 6-nation currency and would help derail the European Project for decades.

This crisis is a test for the Euro. It will either succeed or fail here. Sure, Brussels will do what it can, but the Euro is vulnerable now and it could fail from sources outside of Greece. If it does succeed, I suspect reforms will follow. And to be honest, I'd say it's in Greece's interests to allow the Euro to fail instead of defaulting.

@Fluffy,

The protests this week were about 1/3 of the size as on May 5th, and a lot more peaceful. It seems there was a backlash against the anarchist movement due to the 3 bank deaths. If this trend continues then things might not spin totally out of control as I had feared.

Urban Guerrillas in Greece Face Scrutiny

 

[Glaucus]

Signs of progress? The shame campaign against tax evaders has so far caught some big fish. They went after doctors and lawyers and popular signers, even a cabinet minister was forced to resign when it was revealed her husband owed millions of Euros in back taxes. But perhaps most importantly is that they are shaking up the finance department itself:

Greek Finance Ministry Millionaires

Cleaning out the Augean Stables of Greece’s public finances has to start somewhere, and according to a press statement from the Ministry of Finance in Athens, it seems to have started pretty close to home. Here, in a paragraph from the release, some would say lies Greece’s government finance problem in microcosm.

[quote:1wh98ood]“According to a preliminary investigation, 70 Finance Ministry employees have real estate holdings ranging from €800,000 to €3 million in value. The average real estate holdings for these employees is valued at €1,228,337, while their average declared income is €50,834. The Finance Ministry is launching investigations into all these cases.”

[/quote:1wh98ood]Sounds like a good place to start.

 

[FluffyMcDeath]

if Greece managed it's finances properly from the start it would not be in the state that it's in.

If the ho had never tasted the smack ...

If a guy has a gambling problem he has a gambling problem. If some casino owner notices this and offers the guy a free cab ride to his casino then the guy still has a gambling problem but the casino owner is an unconscionable predator. The reason why he doesn't go to jail for such a thing is that the law is made by unconscionable predators who see people with weaknesses as being unworthy of protection - BECAUSE they are weak. It is the same thing that drove the real estate boom/bust. Poor people who wanted houses were told by mortgage originators that they could get houses and that income wasn't important and that the values would always go up, etc, etc.

However, there ARE laws against fraud (because rich people have skin in the game if they get scammed) so the question is - was there fraud? If there was fraud then who perpetrated what frauds? Everyone involved should be personally liable. There should be no immunity from fraud charges just because you have a limited liability company or you are in government. Responsibility means consequence. All those politicians and leaders who say "I accept responsibility for ..." really accept no responsibility at all because they know that they are far enough up the food chain to have no consequences. Consequences are for the little people.

Now, if the Greeks are really going after the problem (i.e. the people with all the money) then that is a pretty ballsy move. I hope the Greek leadership have very good security.

 

[Glaucus]

From your latest post I can say we agree that leaders are to blame. No question about it, Greek politicians played a very dangerous game where they trade political favors for votes. What I am saying is that you can't just pin it on the politicians because the political environment that existed in Greece leading up to this crisis was such that a non-corrupt politician simply could not survive. It was impossible to get elected without support from unions or media, and both would expect massive favors in return.

The unions in Greece have serious power over the country but also the individual. When they say strike, you strike because every benefit you get, including essentials like medical care, are through the union and they can turn that off for anyone who doesn't tow the line. This also gives the unions a big bat to swing at the government and they've used it very effectively over the years. Remember, the prior New Democracy government - although never fully admitting the dire situation the nation's finances were in - was pushing for economic reforms, but PASOK got elected because it promised wage increases for Greeks and Papandreou himself promised them that the money exists. Which was true I guess, except the money existed only outside of Greece; Germany, France, IMF, etc.

So ya, the politicians lied and the people believed them but only because they too were blinded by greed. The good news is that Greeks are doing a lot of soul searching. On Greek TV shows they're talking about this and they're revealing all sorts of scams used to defraud the government by the common citizen. And for the most part Greeks are on board with cleaning all that up, I haven't seen anyone on the Greek forums defending graft and tax evasion. I even heard Greek kiosk owners have warmed to the idea of actually using a cash register and issuing receipts.

So back to my original statement that you replied to; if Greece managed it's finances properly from the start it would not be in the state that it's in. Although this is true, I'm not quite sure it could have managed it's finances any better. I think this crisis is in a way what the nation needed. To continue with the drug abuser analogy, I see the EU and IMF as an intervention here, putting Greece on the right path to recovery. My only fear is that Greece is still leaving too much power to the unions.

 

[FluffyMcDeath]

This also gives the unions a big bat to swing at the government and they've used it very effectively over the years.

This is a good thing Mike. Unions represent people more directly than governments do. Governments are for the rich, to protect them from the poor and to maintain their position over the working class. This is why unions are so often portrayed as a danger to society or to the government - because "society" means the wealthy (as far as the wealthy are concerned), and so does government. But they do make for a more egalitarian social environment. The US has really suffered from the breaking of the unions and so has the UK. Wealth concentration has accelerated just as was intended. Other organizations that threaten the political power of the wealthy are community groups such as Acorn (hence the big campaign to slur them).

On Greek TV shows they're talking about this and they're revealing all sorts of scams used to defraud the government by the common citizen. And for the most part Greeks are on board with cleaning all that up,

TV is propaganda. It is meant to influence how the population thinks and what they think about (and importantly - what they DON'T think about). The scams by the common people are not the biggest problem because the common people don't control the majority of the money. The wealthy scammers cause the majority of the damage so those are the ones to go after first - the banks for a start.

As to the question of whether the money exists or not - money is just a score card for keeping track of real things but those things can exist now and in the future (ok, so real things and potential things). There is more money than real things just because of those future things that haven't been created yet. The problem isn't that there is not enough money but that the banks have created too much of it. They want to convert that money into ownership of real things (and countries and people) because otherwise all that slosh of "money" will render money worthless leaving the monied classes low and dry.

In Canada we used to borrow from the Bank of Canada to fund government. The government would pay back with interest and the interest (after admin costs) would go back to the government. Our debt was low. In the mid to late 80's we changed our borrowing to borrow less from the Bank of Canada and more from private banks. Why did we do this? Stupidity or treachery, one or the other. I've heard that it was a stipulation for joining the G7 - but it was a recipe for slavery. Now our debt has risen to ridiculous levels and we all need to tighten our belts because our politicians were (and are) working for private banks.