MURDER, POLITICS, AND THE END OF THE JAZZ AGE
by Michael Wolraich
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9 myths about the Greek crisis An insider's take on the conventional wisdom to ignore.
By trkingmomoe on Sun, 07/05/2015 - 12:06am |As I post this the Greeks are getting ready to vote. I mentioned in an other thread below that James Galbrath has been an informal adviser to Varoufakis. Here is an other article that came out at the end of the week by him. He politely calls them myths but they are really misinformation. It is a good read even if you disagree with him.
I have had a close view of the process, both from the U.S. and Athens, after working for the past four years with Yanis Varoufakis, now the Greek finance minister. I’ve come to realize that there are many myths in circulation about this crisis; here are nine that should be challenged.
URL:
http://www.politico.eu/article/myths-greek-crisis-imf-loan-bailout-tsipras-referendum-information-war-default-debt/
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"No one can ignore the message of determination of a people taking its destiny in its own hands," Greek Prime Minister Alexis Tsipras said Sunday after casting his vote.
Che Guevera: The revolution is not an apple that falls when it is ripe. You have to make it fall.
"Today democracy conquers fear," Alexis Tsipras.
Will his political future be diminished to an image on college students t-shirts? Or recorded among the great leaders of Europe? This week may determine the outcome.
by NCD on Sun, 07/05/2015 - 11:24am
Progress can be achieved with narrow margins but I don't know if Revolutions can be. But as of now he has the country split down the middle.
It seems to me that he's operating on two vastly different fronts. Whatever he eventually negotiates with the Troika, he must then make happen internally. Internally, he has the problem of a terribly weakened economy, unemployment, and the gigantic issue of liquidity. From what I read, the supra problems are cronyism, corruption, tax evasion, and now of course flight of capital by the wealthy to Swiss bank accounts.( As a special ironic twist, I read somewhere that corruption exists between Greek officials and German arms manufacturers). Despite the hubris on the German side, it seems to me that he must still demonstrate that he can impact the supra problems---both to the Troika and to the Greek populace at large. Enough sacrifice has been made by the little folk, there has to be sacrifice from the landed gentry. Can he do this and can he do it in time to encourage a better deal before lack of liquidity forces him into a new currency----about which I know nothing, but my instinct is that it is the worst possible outcome.
I was going to ask someone as erudite as yourself what you see as the parallels, or not, of the Greek plight to the problems of Germany post 1929. It seems to me in a dangerous situation of no liquidity, possible rampant inflation, etc. the odds favor a swing to the extreme Right, along with the EU being the scapegoat.
by Oxy Mora on Sun, 07/05/2015 - 1:42pm
If I was erudite....(fill the blank) hahahaha.
Germany in the 20's was under the Versailles reparations and controls, which I believe the US never ratified as some top US economists realized it was a purely French and Brit revenge, would not work, and Wilson, who was President when the Treaty was passed was basically 'out to lunch' and distracted, the French guy leading it called Wilson naive. Wilson didn't act to back up his grand 13 points (Iforget the precise number).
Greece is a dysfunctional nation and not an advanced industrial/military powerhouse like Germany was and is. I don't know what a right wing government could do that would be 'more bad' than a left wing one, except perhaps blame minorities. Greece needs a practical technocrat to get things settled, they say the Greek economy was starting to expand a bit until Syriza came into power.
Something will likely be worked out with the EU but not without a lot more chaos, and without Tsipras, the guy is making promises and demands on other people while calling them names, expecting doing so will make them open their checkbooks for him.
Some articles say Greek banks may seize deposits as Cyprus did a few years ago, link, link, which would help them keep afloat and ATM's running.
Experts say it would take 1-2 years to go to a different currency, although it is possible....and would be extremely painful and disruptive to the people and business.
by NCD on Sun, 07/05/2015 - 2:12pm
Much obliged.
by Oxy Mora on Sun, 07/05/2015 - 2:11pm
I see somewhat of a parallel with our own banking crisis of a few years ago. The corrupt profiteers on the casino side of banking says pay off our debts or the whole thing comes down and that would include the vital side of the banking system. If we had been given a vote before the bailout and the question was framed as one choice is to pay off the gamblers who will be made whole and put right back in the game with billions more of our money to gamble some more but protected against losing with even more of our money, we might have voted hell no even if that risked bringing down the essential part of the banking system. The problem seems to always get described as too many bad borrowers and as if there are no bad lenders.
I wish Emma Zahn would weigh in.
by A Guy Called LULU on Sun, 07/05/2015 - 2:11pm
The buy low sell high hedge funds were betting on a yes vote. They bought up cheap discounted Greece paper.
They will assuredly litigate forever to realize profits. They only have millions, tens or maybe a hundred millions or so at stake.
by NCD on Sun, 07/05/2015 - 2:18pm
I read somewhere that the hedge funds, worldwide, control $2T.
by Oxy Mora on Sun, 07/05/2015 - 2:21pm
LULU, I was reading about (must have missed it at the time) of the caper that Goldman Sachs played in collusion with the Greek authorities---in playing the swaps and derivatives game in order to assist Greece in hiding their real deficit from the European banks. Of course that wasn't the fault of the current government but I agree with you that it's always about the bad borrowers---moral hazard, as they say in the board rooms.
Great question about whether we would have voted for that bailout. Kinda changes my point of view, I would have voted hell no, Berne, Baby, Berne.
by Oxy Mora on Sun, 07/05/2015 - 2:19pm
I've also read that Germany was ecstatic about all those loans because it gave Greeks, and Italians and Spanish, the cash to buy German goods. It fueled it's export market and they raked in tons of profits until the whole thing collapsed. Then they offerred billions in bailouts to "Greece" in the form of loans, 90% of which were used to bail out the banks who made the bad loans. Gernany in essence bailed out it's banks, just as the US did, but they did it with Greece as the intermediary bearing the costs of that bailout.
by ocean-kat on Sun, 07/05/2015 - 3:17pm
That logic is like blaming the Mercedes dealership for your inability to make the payments on your fancy imported car. All economies run on credit to a very large extent.
At some point your credit runs out.
See link below on Syriza's Chavez-ista philosophy on their economy, Venezuela style, without the oil.
Keep in mind despots like confusion, chaos, and finger pointing at someone else.
They like hard times because the populace is easier to incite, direct and control.
by NCD on Sun, 07/05/2015 - 3:41pm
At what point are lenders required to do due diligence in making loans? How much should they be protected from default when they give loans that they know are beyond the means of the borrower to repay? Especially when they skirt what few regulations exist with fraudulent paper work? These are the essential question we faced when the housing crisis brought about our current recession. We decided not to prosecute any fraud. We decided to make the banks whole.
If banks of that Mercedes dealership makes loans to people without the means to repay they have little recourse beyond repossessing the car. That they would likely take a loss on bad loans causes them to loan cautiously. If the government guarenteed repayment on all defaulted car loans everyone would be able get a loan to drive a brand new mercedes down the street.
As for the linked article I thought was crap. As was clearly pointed out all the problems with that gold mine preceded the election of Syriza by years. Yet it was heavily skewed to attack Syriza. II was just a propaganda piece, fear mongering by waving the dreaded Venezuela in our face.
by ocean-kat on Sun, 07/05/2015 - 4:18pm
I think the mechanism was a kind of swap---private debt becomes public debt, and in the context of the EU and the Euro, turned out to be a very bad deal for Greece.
by Oxy Mora on Sun, 07/05/2015 - 3:39pm
My unscientific sample reads that most Greek business owners, union workers (below) and producers in Greece supported the bailout.
It really seems like Tsipris is stoking catastrophe to tighten his hold and control of the nation, and not for the better. As I related, despots love bad times, and don't mind if they make them worse.
He may believe he can turn the nation around, but he will never change or give up on his ideology, see article below on relations with Chavez-ism.
Recent articles have said doctors and skilled workers are leaving in droves. For Syriza, that is just fine. Let the educated go, they are harder to control.
by NCD on Sun, 07/05/2015 - 3:57pm
And the EU let them have the Euro when they knew what was going on with the books.
by trkingmomoe on Sun, 07/05/2015 - 3:25pm
NCD, with a "no" vote margin like 60-40, I think your question is largely answered. He now has significant leverage to negotiate.
And, I think this referendum has enormous significance for the future---especially in terms of bank over-reach.
What a fascinating process.
by Oxy Mora on Sun, 07/05/2015 - 2:57pm
We will see if he even can negotiate. I hope so for the sake of Greece.
If he is truly a despot, he will try to string out the crisis as long as possible, no quick deals.
by NCD on Sun, 07/05/2015 - 4:01pm
That is truly an insightful comment.
The head of the opposition party, the New Democrats, has resigned. Another New Democrat said it's time to close ranks, negotiate. Next 48 hours crucial, the country literally has run out of cash.
Merkel's finance minister has said Greece may have to leave the Euro Zone "temporarily".
The country would have to revert to the Drachma, devalue it, try to export something or other and get the internal wheels turning. Then, presumably, re-enter later.
by Oxy Mora on Sun, 07/05/2015 - 4:51pm
I could have used demagogue instead of despot.
Demagoguery comes first, then when the economy craters comes the despotism, the picking of who gets a nice piece of whatever pie remains in the economy.
Wiki on demagogues (which term originated in ancient Athens politics, demos - people, ago - manipulate):
As to the lies part, Tsipris and his economic team have said 'all deposits are safe', 'the banks will open'. He has no control over what happens to the banks at this point.
Syriza officials have said Greece has pharmaceuticals for 4-6 months when I have seen reports from pharmacies in Greece this week saying they are out of some drugs and nearly out of many others, and from hospitals saying they cannot restock surgical supplies. Doctors are fleeing the country.
Calling the EU/IMF 'terrorists' fits the bill for hysteria stirring also.
by NCD on Sun, 07/05/2015 - 5:39pm
From your link, "In all, nearly 300,000 people have left Greece since 2010, "
I've been reading about the brain drain for years. So is the problem austerity or Syriza? Syriza had only 4.6% of the vote and no power in 2010. In 2012 it was the main opposition party with 27% of the vote. It wasn't until January 2015 that Syriza took power. And you want to blame Syriza for the brain drain that's been going on for 5 years before they had any power in the government at all?
by ocean-kat on Sun, 07/05/2015 - 6:56pm
To negotiate one requires a negotiating partner. This is like republicans complaining about Obama not being able to negotiate with them when in fact the republican position is similar the the Troika's. Do what I say exactly the way I say it.
I've seen nothing from the troika that even hints at an unacceptable compromise, it's not compromise at all. When the trouble began they demanded a little austerity and estimated it's effect as a mild recession with a quick rebound. Instead Greece went in to a severe recession with no rebound. The troika then demanded more austerity and predicted a bit more recession with an even quicker and larger rebound. Instead they got a depression and no rebound. Now they want even more austerity. Who would vote for that?
Tsipras doesn't have to do anything to string out the crisis. Accepting the deal from the EU would have strung out the crisis indefinitely.
As long as the troika refuses to negotiate there will be no deal. Greeks have just voted against total surrender which so far seems to be all the troika will accept.
by ocean-kat on Sun, 07/05/2015 - 5:18pm
So the IMF etc doesn't negotiate and is not a partner ? Who says? Tsipris and ocean-kat?
As of March 23, 2015, the IMF had arrangements with 8 countries in Europe.link
Greece first developed nation to default on international obligations. link
by NCD on Sun, 07/05/2015 - 5:36pm
Well, not just me, most keynesian economists like Krugman, Stiglitz, Galbraith. Krugman has been recommending Greece withdrawal from the EU for years, long before Syriza due to EU being unwilling to negotiate and forcing depression causing austerity on the Greek population. Surely you're aware of the standard arguments that have been going on for years since the crash in 2007 between the Keynesians and the austerity pushers? You seem to favor austerity but you must have seen the many articles by the Keynesians. Just skim through Krugman's blog for a few weeks and you'll see where I get many of my ideas from.
by ocean-kat on Sun, 07/05/2015 - 6:40pm
They also have hurt Spain, Portugal and Italy. Spain and Portugal had a surplus and balanced budgets when the housing melt down happen from bad lending practices to speculators in the coastal areas by Europeans. Their banks had to be bailed out in the collapse. Forced austerity has shrunk their economy and their debt is growing. I don't know what happened in Italy but the Troika was successful in forcing the Italian PM out of office to keep Italy in line with their austerity models. That has turned out to drive them into a deep depression. The Troika tried to do the same things to force the new Greek government to fail. They cut Greece's money flow way down to a trickle in February and the new government had just took office in January. At that point they did not have any reason to do that only to bully Greece and topple the new left wing party.
by trkingmomoe on Sun, 07/05/2015 - 11:38pm
Live Results
http://www.theguardian.com/world/ng-interactive/2015/jul/05/live-results...
by Elusive Trope on Sun, 07/05/2015 - 2:20pm
No in a landslide victory?
http://www.theguardian.com/business/live/2015/jul/05/greeces-eurozone-fu...
by Elusive Trope on Sun, 07/05/2015 - 2:24pm
10 M voters eligible, so don't understand the 30% of the vote figure.
by Oxy Mora on Sun, 07/05/2015 - 2:25pm
Probably based on the areas which have been fully counted, all the eligible voters in that area are scratched off the potential voters left.
by Elusive Trope on Sun, 07/05/2015 - 2:33pm
With nearly 50 % of the vote in, it's still 60% OXI.
by Oxy Mora on Sun, 07/05/2015 - 2:47pm
Interesting article at the UK Telegraph, pre-vote, "Could Greece become the European Venezuela" on the close relation between Syriza and Venezuela:
by NCD on Sun, 07/05/2015 - 3:09pm
That's just what Merkel needs to hear right now.
by Oxy Mora on Sun, 07/05/2015 - 3:45pm
Nonetheless, Athens and Caracas have formed close links since Syriza came to power, united by a passion for socialism and a disdain for "economic neoliberalism". The Greek prime minister, Alexis Tsipras, attended Mr Chavez's funeral in 2013, and on coming to power got a standing invite to visit Caracas, which hailed his victory as "fresh political air for Europe.”
What close links? The article doesn't say. Caracas hailed his victory and issued an invite. What was Tsipras' response? The article didn't say. He attended a funeral. So did the Crown Prince of Spain, the French ambassador, the UK ambassador, two representatives of the US government, the ambassador of the European Union, the leader of virtually every government in the Americas from Mexico to Costa Rica to Chile, high level representatives from China, Portugal, India, the Vatican City, etc.
Perhaps there are close links but this article doesn't provide any evidence. It's just a hit piece.
by ocean-kat on Sun, 07/05/2015 - 6:07pm
And so what if they have formed close relationship? For that charge to be an affective part of a hit job, and I think it is intended as such and will be affective here, then the reader would have had to have already bought into the previous hit job done on the recent Venezuelan leaders. And further, there must be an acceptance of the unstated message that any countries cooperating for their own mutual benefit but not following the U.S. dictates must be somehow a threat to us and so are, by definition, bad guys.
by A Guy Called LULU on Sun, 07/05/2015 - 6:42pm
I agree. I'm not a big fan of Chavez but that devil's mask we've put on him is silly. These insinuations only work if one has accepted that the devil's mask is true. I didn't want to get into a discussion of Venezuela when there was not even any evidence of a connection in the article.
by ocean-kat on Sun, 07/05/2015 - 8:03pm
The Venezuela connections are real, not insinuations.
Tsipris also did the Moscow 2 step. His endless negotiations for 5 months and continued uncertainty are very bad for business and employment.
He has put Greece in a steep downtrend when it was begining to expand when he took office.
He plays the demagogue game almost every week, see above, and like Venezuela makes claims of foreign subterfuge at every tick down in the economy to focus anger and blame off himself.
by NCD on Sun, 07/05/2015 - 9:02pm
That is what I got out of it that same article and it was written just before the vote. It was to scare Europe to keep them in line. There was a couple more I read that was full of misinformation about this Greek government.
Greece is the first country to challenge the absolute authority of the Troika. If anything the challenge will make them face their structural problems built in to the EU and the failed models of austerity.
Greek people are very well educated. I think they are behaving really good considering 25% are now homeless and 60% of them are hungry. That 60% said "No More Austerity." They know what this vote means and how hard it will be at first. At this point they don't have much to lose and they are not going to sell Greece in a fire sale for Euros.
by trkingmomoe on Sun, 07/05/2015 - 7:01pm