The handful of Greeks I’ve known had very different personalities, backgrounds, etc. But the one thing they had in common was a sharp disdain of Germany - and it had nothing to do with recent debts; these were lingering feelings over WW II. It certainly is still playing a part in the current EU/Greek dispute, except now war’s being waged with economic pursestrings instead of guns.
There are other economists out there you might find cogent and reality-based. I’ve found Michael Hudson, Steve Keene, and others to be a refreshing change from the usual (as in “only”) source of economic ‘wisdom’ that’s on most major media - the Chicago School.
/Oh, you can check out 3CR’s Renegade Economists podcast. It’s one place to start.
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I’m tempted to say that it’s a broken windows fallacy. But I guess there’s some validity in slow growth.
Perhaps the limiting effect might have been positive. I just would rather have it done through fiscal policy, rather than the republican party’s inherent racism.
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Germany is the largest, wealthiest and most powerful proponent of EU austerity. I could sympathize with the German politicians, a little, if it were not for their masters’ perfidy. I spent the early 2000s in Cleveland, Ohio. I therefore had a ringside seat to the spectacle of Deutsche Bank… on a predatory mortgage lending safari in the American Midwest. They were not engaged in judicious behavior – not there and then. I suspect they were equally profligate in southern Europe.
The investment banking elite of northern Europe – both UK and the Continent – benefit enormously from the ‘Murkin-only’ myopia of the U.S. financial media. They fucked a myriad of small timers in small regional markets just as hard and sloppy as Goldman Sachs did, and round about the same time. Both here and no doubt in southern Europe.
Now, they and their political water-carriers play the part of injured, much put-upon lords of virtue. It’s deeply disgusting to anyone who has even limited knowledge of how they tossed their people’s money around 8 years ago.
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People are intentionally cruel because it makes them happy, or at any rate, somewhat less miserable than before the act of cruelty.
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Many comments here are equating the Greek situation with the mortgage bubble in the US, but they are vastly different. In the US, people that got screwed by the banks were, mostly, asking to be allowed to walk away from the bad investments they were duped into signing for. In Greece, the government (and the people, mind you) actively cooked books (or avoided paying taxes) to continue receiving EU money. When this came to light, they did not ask to simply be forgiven those debts (walk away), but instead asked for more to fix the mess they created. They were forgiven a large part of previous debts, had interest in parts reduced to zero, and were given more with low or no interest.
Now, the Greek government is asking that these later debts be written off as well? Well, it’s no wonder that the rest of the EU isn’t going along. Fool me once, and all that.
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Perhaps, but austerity is also about dismantling the military-industrial, prison-industrial, and national security states … modern government is highly inefficient in a 360deg radius.
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“Fool me once” is fine, but crushing the Greek economy is going to ensure you (where “you” refers to us as hypothetical EU leaders) lose your money. Rational options include:
- Don’t help the Greeks any more and accept you probably lose your previous money because without a functioning economy they can’t pay you back, and also suffer the fallout of the broken economy. Or instead:
- Lend more to the Greeks and help their economy grow in the hopes that restoring a functioning economy might enable them to pay you back.
It makes no sense to instead do: - Lend more to the Greeks under the condition that they implode their economy so they won’t be able to pay you back.
Yet (3) seems to be the plan, because no-one wants to openly front up to the consequences of doing (1), and institutions are too blinkered with decades of inertia of outdated economics to concede that their idea of (2) is actually a (3) according to more reality-based economics (and reality itself).
And they are egged on by people who are outraged over being fooled-me-once and want some comeuppance inflicted, and also supported by people who rationally but mistakenly think that austerity (3) is a means to stop the book-cooking and deliver a (2), and also supported by people who intuitively apply a household-budget view of the situation (“Not enough money? Tighten your belt!”) - which is fair-minded, but mixing up micro and macro economics.
By all means conditions could be imposed that crack down on corruption and book-cooking, but austerity fails on that count too. Austerity is not the solution.
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What has your little rant about german bankers in backwater Ohio to do with my post?
I do think the reporters were trying to make it an interesting interview with some challenging questions.
On the question of austerity vs. deficit spending: by the books, austerity is asinine as lorq says. By the books, a “helicopter drop” of cash leads to an increase in total income (growth).
In reality, in this particular case, the way Greece is set up right now, it is likely the growth would not carry on into the next year.
An austerity crunch may provide the pressure required to reform Greece.
[quote=“Purplecat, post:17, topic:53483”]
Even the nominally centre-left have swung full force behind the consensus that deficit spending in a depressed economy is a Really Bad Thing, despite all the evidence to the contrary.[/quote]
Deficit spending does work build up the economy, if the targeted economy has a foundation to build on. In a corrupt, dysfunctional state the “helicopter money” increases today’s consumption and then goes down a hole (as far as year+1, year+2 are concerned).
Afghanistan is good example for this. Would you lend (or give) Afghanistan money for immediate consumption, and expect your gift to lead to sustainable growth? Why / Why not? The same applies to Greece.
Having worked inside Greece both pre and post Euro, I can confirm that many individual business owners do operate with what can easily be called ‘poor’ economic character. As measured by the metrics used by accountants, bankers, and lawyers at least.
Institutional tax avoidance by many means is no secret, it’s a Greek way of life, and a point of pride. Any small business owner who paid what they technically should was a schmuck. Shops and businesses run double book accounting. Cash registers are modified to run and record different amounts depending on how well business is going. Cash-in-hand and off-the-books transactions happen everywhere, and almost no citizen is surprised or disturbed about it.
I once met one young sad and honest business owner who was trying his hardest to follow what he thought was the right and legal way. He was being crushed by less-contentious competition on one side, and onerous pay-outs and regulations on the other.
Mild corruption and exploitation of the system exists at many levels. Not enough to be worth cracking down on in any individual case (because everybody did it a bit) but it’s enough to shave precious percentages off any economic recovery.
Historically, the Greek Govt responded to poor tax revenue by (instead of improving enforcement) adding more arbitrary taxes in the hope of making up the shortfall. This gave all Greek citizens the true-ish argument that “if they paid all the taxes that were asked, they would be bankrupt” - so that became pure moral justification for tax and debt evasion. And that is now an ingrained cultural belief and behaviour. That attitude did not change when they shifted to the Euro with its new set of rules. They just figure that everything was overblown, and if they paid 40% of what they were being asked for and then fiddled the books, it would all work out fine.
The economy simply operates on different so-called rules, and is a bad bet for investment that assumes other game rules.
Even given this background and this poor economic character, I agree that it doesn’t follow that ‘punishment’ of the people would achieve anything productive. The article and other analysis describes how it won’t and can’t fix the problem that now exists.
It is - as @clayton_coffman implies here - at least as appropriate to blame/punish the banks that made the mistake of trusting the Greek accountants to tell the truth.
That sucks. Yep, the only way forward is to eat it. There is no more payback to be wrung from the stony shores of Greece unless they are able to continue operating and growing. Putting a future generation in debt because of the sins of their fathers cannot work . …Especially when the whole country has a proven track record of reacting to debts and expectations … unconstructively.
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This is what everyone needs to start saying to banks everywhere. Everyone seems to think that banks ought to be immune to economic downturns.
Job creation of jobs that pay $9/hour as I understand it. The American “recovery” was only a recovery for the wealthy.
But isn’t zeitgeist is a German word?
The austerity crunch has provided the pressure required to reform - a reform to an anti-austerity left-leaning government because austerity is shit.
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Ah, well. It inconvenienced your All-the-Greeks-Fault narrative, and therefore permitted you to open up, and reveal the sort of ethnic spleen that underlies most of the northern Europeans’ push for “austerity”.
This is my fundamental point: “[I saw] Deutsche Bank… on a predatory mortgage lending safari in the American Midwest [c. 2006]. They were not engaged in judicious
behavior – not there and then. I [expect] they were equally profligate in southern Europe.”
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But, why do you even cast it as a mistake? Why do so many here write from the assumption that the investment banking community of northern and central Europe was and is comprised of naifs? There is very little to support that view. The men who make significant investment decisions on behalf of large, powerfully funded institutions like these were not ignorant of the degenerate nature of the Greek political economy (at every level). They chose to ignore it.
Now… they are all clutching the fichus, tearing at their hair and fanning themselves vigorously while call for their smelling salts, like Mrs. Bennett after Lydia ran off to London. They knew what the were dealing with in Greece, and throughout southern Europe. They did not take appropriate precautions.
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Well, if their bonuses were tied to percentage change in growth (which is a percentage change itself) on a quarterly basis, then they are probably fanning themselves with large wads of Euros. The whole system was and is set up to push decision makers into make bad decisions.
I think the real reason that creditors are throwing a hissy fit about Greece is that they know that people will give them whatever they want. They are basically acting three-year-olds who have never heard the word “no” because they have never heard the word “no.”
But as to casting it as a mistake vs casting it as a systemic problem and a conscious decision, I think the main reason to cast it as a mistake is because those bastards would rather be smart and greedy than stupid and benevolent. I’m happy to keep thinking of them as stupid and benevolent just to spite them.
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My " All the greeks fault"- narrative? I didn’t even mention Greece. Either your reading-comprehension is lacking or you’re confusing me for someone else.
Btw there is a certain irony: you’re accusing me of using a anti-greek narrative (which I never did) all the while generalizing from an isolated anecdote.
The point is that German voters are facilitating / accepting / encouraging the sort of politics which have enabled German Banks to get away with murder while being immune to punishment.
Doesn’t look good. And I write as a German living in the UK the other really messed up financial market which is colluding to make the world miserable place.
It would be helpful if Germans: politicians and the public would not only learn the historic lesson of the Weimar Republic i.e. Inflation is really bad, but also learn the lesson what happens when national politics align themselves with vested financial interests. Hitler was in lage part possible because of the Thyssens and Krupps and IGFarben and and. I sat on the table [edit, it’s a museum exhibit now], where Hitler agreed his pact with his cooperate Financiers long before he became a populist sensation! They were desperate to collude, to ensure that the dreaded people power of the dreaded Communists wouldn’t stand a chance. A bit of history which needs to be spread far and wide!
Germany is good, much better than similar European counterparts (UK & France come to mind) in learning from history. It’s time that they revisit the bits about how early 20th century capitalists colluded in wiping out (relocating to the other side of the Atlantic) much of what was wonderful about 20th century German civilisation.
You are correct. I’d conflated your posts with aldopepi’s among others. And you have a point about the distribution of austerity-fiends; they are present throughout northern Europe (as is that ethnic spleen I mentioned). However, Germany’s size and economic strength make it the key player in this matter.
I don’t actually object much to the popular distaste for corruption in northern Europe. I think it’s a good thing. I just don’t have a lot of patience with their pretense that it only existed in the European south. Like nojaboja says – that is not historically true. It’s not true today either.
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The worlds big banks knew or should have known they were making bad loans and not only to Greece. They did it to keep their profits and bonuses growing.
They most assuredly believed that if things went to hell-in-a-hand-basket they’d be bailed out, which they were. Now they want to make sure they still get paid no matter what.
The bankers bare the responsibility for the world-wide financial crisis and should have borne the losses as well.
Here’s a possibility. Have Germany pay every cent that they owe the U.S. from WWII and we can use it to pay off Greece’s debt.
