dagblog - Comments for "Greece: Only the 'No' Can Save the Euro"

I just read this in the Times

trkingmomoe — Mon, 06 Jul 2015 03:54:10 +0000

I just read this in the Times by Krugman. Just catching up with the news. I thought this would add just a little more depth to our discussion.

Of course, Greece no longer has its own currency, and many analysts used to claim that adopting the euro was an irreversible move — after all, any hint of euro exit would set off devastating bank runs and a financial crisis. But at this point that financial crisis has already happened, so that the biggest costs of euro exit have been paid. Why, then, not go for the benefits?

Would Greek exit from the euro work as well as Iceland’s highly successfuldevaluation in 2008-09, or Argentina’s abandonment of its one-peso-one-dollar policy in 2001-02? Maybe not — but consider the alternatives. Unless Greece receives really major debt relief, and possibly even then, leaving the euro offers the only plausible escape route from its endless economic nightmare.

And let’s be clear: if Greece ends up leaving the euro, it won’t mean that the Greeks are bad Europeans. Greece’s debt problem reflected irresponsible lending as well as irresponsible borrowing, and in any case the Greeks have paid for their government’s sins many times over. If they can’t make a go of Europe’s common currency, it’s because that common currency offers no respite for countries in trouble. The important thing now is to do whatever it takes to end the bleeding.

http://www.nytimes.com/2015/07/06/opinion/paul-krugman-ending-greeces-bleeding.html?&moduleDetail=section-news-2&action=click&contentCollection=Opinion&region=Footer&module=MoreInSection&version=WhatsNext&contentID=WhatsNext&configSection=article&isLoggedIn=false&pgtype=Blogs

Honestly, I don't think

Oxy Mora — Sun, 05 Jul 2015 04:36:56 +0000

In reply to I know you did not mean it

Honestly, I don't think Iceland is a credible example of how a currency change might affect Greece. Iceland has it's own currency and was able to partially resist the swap of private debt for IMF debt. ( Iceland has 300,000 people.)

I know you did not mean it

trkingmomoe — Sun, 05 Jul 2015 01:21:02 +0000

In reply to Thanks, you are much more

I know you did not mean it was a crappy choice but I thought some one would like to know more about it.

I am sure there are some wealthy people behind those economists. There has been plenty of misinformation being passed around. The new government in Greece is Socialist Democratic and lean towards a Keynesian approach. The people knew that when they voted them into office. The Troika wants this government to fail.

Iceland crashed in 2008 but decided to put the bankers in jail and rejected a bail out. They decided to go it alone and reject advice of lowering their standard of living. It was hard at first but they sorted it out. They built their new economy from scratch and in a couple of years was back where they were before they crashed. Had they taken the bailout they would be in the same shape as other small European countries sitting in a depression. They were heavily criticized for this as being morally wrong but as it turned out in the long run better off.. Austerity is a failure. Their economy was based on tourists also. They were not part of the Ero but Milton Freedman had convinced them in 1980 to set up banking under his ideology. He traveled there and helped set it up. It was a real house of cards that was the first to crash the summer of '08 to a worthless pile.

I wish the best for the Greek people. This has had to be really hard for them and they still have so much more to go through.

Thanks, you are much more

Oxy Mora — Sat, 04 Jul 2015 22:23:23 +0000

In reply to Yes there is a lot of

Thanks, you are much more steeped in this than me.

A large group of Greek economists have written an open letter to Stiglitz, Krugman an Co. to butt out. They want a yes vote.

I didn't say it wasn't a crappy choice.

Peter, you nailed it,

Oxy Mora — Sat, 04 Jul 2015 22:08:51 +0000

In reply to Oxi, it is reassuring to see

Peter, you nailed it, paternalism and German ancestry---in fact Goering name in the family tree. In any case I amend my "way of life" and substitute "is not unheard of". Much of the evasion comes from the "self-employed"---that could be farmers, prostitutes, or even private equity guys like Romney, don't know.

I know about tax collectors, so maybe I should be more generous in my view---I was only saying what I would do if I were a citizen there and had a few modest assets, age has a way of making one concerned about chaos.

In Vermont, a new governor decided to crack down---it turned out that the capital gains from Ben and Jerry's sale to Unilever could only keep the state solvent for a couple of years---hired some goons to go after cheats. I got a letter that I owed $20 K in back taxes along with some dentists who were told that the free tooth brushes they had been giving away for twenty years should have had sales tax collected. A guy who owned a chicken shit farm was hit with nearly $50 K in back taxes. I nearly had a heart attack, hired an accountant and lawyer (there's some extra employment), who told the tax mafia to shove it---which they did, without ever having to explain how wrong they were. So I should be more generous in my outlook. By the way, the governor was a Democrat, still governor. Dumb move on his part, right.

Intellectually, from where I sit, I think no. If I were there and had skin in game, I would vote "yes".

Yes there is a lot of

trkingmomoe — Sat, 04 Jul 2015 19:16:25 +0000

In reply to The Greek referendum this

Yes there is a lot of confusion on this crises. I started to follow it in April after I found this you tube video from the Institute of New Economic Thinking. Stiglitz is the director on the institute and some fascinating work has come out of there. I have been checking in with them often.

The Euro has structural problems where it is designed to help the bigger economies at the expense of smaller economies. It is called diversion. On top of that you have rent seekers trying to dictate a right wing political agenda so they don't have to take a hair cut. Germany has been bailing out their banks from their treasury and putting the smaller economies on the hook for it. In other words Europe has been in denial of the real problems and what needs to be done to fix them.

Christine Lagarde became director of the IMF about 2 years ago and have been working on reforms. She has been moving the fund away from austerity and into investing into economies. She was behind the release of the report a few days ago pointing out the problems that what is currently going on is unsustainable in the EU.

Our top minds in Keynesian economics has been working with Greece since the new government came into power in January. James Galbraith has been leading the team. I look to see him get the Nobel prize for this. Stiglitz has been involved.

I know that new script was printed 2 years ago by the former government in case of complete collapse in Greece. To keep the new script stable it can be attached to the US dollar. We have been playing that role for countries since WWII. This will prevent hyper inflation. We don't know what the plans are if they vote no. Some countries outside of the Euro has pledged support and the Greek people will need to be fed. 25% of them right now are homeless. 40% of the loans that the Greek banks hold are in default because of this deep depression. There has been a brain drain going on as people leave to earn money in other countries. Some of them have gone to Germany.

My jaw dropped when I saw the list of demands on Greece in the final negotiations before the Greek government asked the people to vote on it. It was identical to the GOP's wish list. The Troika is out to make the same power grab as our own oligarchy. They are demanding a 13% tax on food, a big cut in social programs and refuse to let the Greek Government raise taxes on their rich citizens. Greece can't hire the personnel that is needed to collect those back taxes. because of the austerity reforms that the former government agreed to.

Greece is already at the bottom so they don't have much left to lose with a no vote. They can remain in the EU even with their own currency. There is no provision to tossing them out with refusing to agree with the demands.

My hat goes off for the current Greek government to have the courage to stand up to this mess and try to reform the situation.

Here is a good video from April that will help you understand the situation a lot better. It is over an hour long but you can't explain it in less time.

Oxi, it is reassuring to see

Peter — Sat, 04 Jul 2015 17:51:28 +0000

In reply to The Greek referendum this

Oxi, it is reassuring to see your Paternalistic tendencies on display, the world would certainly crumble if Maternal tendencies were allowed to affect our lives. You even threw in a little fear mongering without naming Golden Dawn.

When you write ' tax fraud and evasion is part of the Greek way of life' i might think you have arrogant German ancestry. From what i have read the tax evaders in Greece are mostly of the Professional Class, those that have money to hide not the Working Class majority of Greek people.

The Catch-22 of instituting this 'reform' and collecting these taxes is that it requires hiring many new tax collectors which the Austerity program imposed by the Troika clearly prohibits, no government hiring only layoffs. This visible impediment to recovery should make clear that the intent of Austerity is not 'reform' but Class Warfare, humiliation and asset stripping.

Only the Greek people have the right and responsibility to make a decision tomorrow and i wish them well for their decision may well decide if the Paternalists will continue to dictate their and other working people's future freedom or servitude.

The Greek referendum this

Oxy Mora — Sat, 04 Jul 2015 15:26:32 +0000

In reply to Greece: Only the 'No' Can Save the Euro

The Greek referendum this weekend could go either way and according to some writers the voters don't fully understand the choices. Frankly, neither do I.

Could this be right, a "yes" means I want the bailout that used to be on the table, but no longer is?

I can read Stiglitz and conclude, yeah, further austerity is insane because the economy will never recover sufficiently to service the debt as currently structured, so vote no and take your chances on an exit from the Euro, set up a new currency, and work your way out of debt like Argentina did---but then it is pointed out that Argentina already had a currency to devalue where Greece would have to re-invent one to replace the Euro, all of which is unknown territory at this level.

The parent in me agrees with the Troika to a certain extent (do I have the facts right, that the IMF, one of the three, is now saying debt restructuring is the only way?) with regard to the fact that tax fraud and evasion is part of the Greek way of life, needs to be corrected, and could generate 30 B Euros a year. Seems the stingy Northern Europeans have a point. But if you have a "yes vote" and there is no restructuring and the current government fails, there is not much left of the society to reform.

I think I would vote "yes" and take my chances being Merkel's bitch than be a political victim in an even more likely societal upheaval after a "no" vote and possible further rise of the extreme Right Wing. Oxy's not OXI.

BTW, Bloomberg will have live coverage of the referendum starting at 6:00 p.m Sunday.

Edit to add: The three articles I found best were the editorial in today's NYT, the recent Stiglitz article and the Bloomberg interview (found on the Bloomberg news website) with the Greek Finance Minister (who might be the most articulate and canny political speaker I have heard in the recent past.) I will try to add his name here---presumably a "no" vote would bring Merkel and Co. to the realization that they are being too parental, repent, agree to restructure the debt.

Huffington Post has been

trkingmomoe — Thu, 02 Jul 2015 20:45:49 +0000

In reply to Greece: Only the 'No' Can Save the Euro

Huffington Post has been running a Greek Crises update page. There are some good articles to dig into for those who are interested in what is going on or would like to get an understanding of the problem.

http://www.huffingtonpost.com/2015/07/02/greek-crisis-live_n_7715282.html

I worry about the people of

trkingmomoe — Thu, 02 Jul 2015 19:48:18 +0000

In reply to Greece: Only the 'No' Can Save the Euro

I worry about the people of Greece that are now going hungry because of this.