Greece At The Crossroads: The Oligarchs Blew It

Tyler Durden's picture

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Once one oligarchy falls, it will threaten to topple a long line of oligarch dominoes.

 
A great many narratives invoking Greece are being tossed around, but only one really encapsulates the unvarnished truth: the Oligarchs blew it. The oligarchs in both Greece and the European Union/ECB had the opportunity a few years ago to trade some of their outsized wealth and political power for stability and sustainable expansion.
 
Instead, they chose to not just cling to every shred of their outsized wealth and power but to actively increase it. Their greed and hubris has now put their entire system of parasitic wealth extraction at risk of collapse. Their political stranglehold on power has been weakened, and there's no going back: they blew it, and now it's too late. The debt-serfs have finally had enough.
 
If you enter Greece in the custom search box on this site, six pages of blog entries come up. I have addressed the situation in Greece many times; this summarizes my conclusion:
 
 
Thankfully, many in Greece have reached the same conclusion, for the same reasons:
 
 
The basic problem is that Greece Is a Kleptocracy (June 28, 2011). Greece has shown the world how oligarchies can expand their wealth and power even as their populace slides deeper into poverty. A recent article, Misrule of the Few: How the Oligarchs Ruined Greece, lays out the key dynamics.
 
Writer Pavlos Eleftheriadis pulls no punches:

"Greece has failed to address (rising wealth/income inequality) because the country’s elites have a vested interest in keeping things as they are. Since the early 1990s, a handful of wealthy families -- an oligarchy in all but name -- has dominated Greek politics. These elites have preserved their positions through control of the media and through old-fashioned favoritism, sharing the spoils of power with the country’s politicians. Greek legislators, in turn, have held on to power by rewarding a small number of professional associations and public-sector unions that support the status quo. Even as European lenders have put the country’s finances under a microscope, this arrangement has held."

The vested interests have obscured the cold reality of rising inequality by focusing obsessively on "growth" as the fix-all to inequality.
 
But this is exactly backward. As Eleftheriadis observes:

"The fundamental problem facing Greece is not slow economic growth but political inequality. To the benefit of a favored few, cumbersome regulations and dysfunctional institutions remain largely unchanged, even as the country’s infrastructure crumbles, poverty increases, and corruption persists. Greek society also faces new dangers. Overall unemployment stands at 27 percent, and youth unemployment exceeds 50 percent, providing an ideal recruiting ground for extremist groups on both the left and the right. Meanwhile, the oligarchs are still profiting at the expense of the country -- and the rest of Europe."

All the blather about "growth" is just propaganda to misdirect our attention from the real problem: the total domination of governance and finance by a class of vested interests and mega-wealthy cartels/oligarchies.
 
The solution is straightforward: default on all debt by no longer making interest payments. There is no way Greece can pay back the $240 billion of current debt, and sooner the delusion that this can be renegotiated to preserve the oligarchy is smashed, the better.
 
As for the big threat of kicking Greece out of the euro currency--since most Greeks are already impoverished, how can they get any poorer? The reality is poor countries prosper by making their goods and services cheaper via currency devaluations, and by paying a healthy rate of interest on capital so capital is attracted and invested productively, as high interest rates make speculative, marginal gambles soberingly risky.
 
The only people with enough wealth left to worry about a return to a sovereign currency are the wealthy who own the assets and who depend on handouts from the E.U.
 
As the old saying has it, you can't get blood from a turnip. The impoverished face little downside from leaving the stranglehold of the euro, and only upside from a return to a sovereign currency controlled by the Greeks rather than the E.U. or the European Central Bank (ECB).
 
The threat of expelling Greece from the euro is hollow. A return to a sovereign currency puts the responsibility for prudent management of government expenditures and debt back in the hands of the Greek people and the leaders they elect. Why is that something terrible?
 
If the new leadership of Greece pursues policies of fiscal prudence, high interest rates, zero-tolerance for corruption and freeing up the Greek economy to encourage small-scale enterprise, any decline in Greece's sovereign currency will be brief. If they pursue meet the new boss, same as the old boss policies, then the Greek people will remain shackled in poverty.
 
We have to remember that the lenders who entrusted capital to marginal borrowers took the risk and therefore have to absorb the losses. In this case, the irresponsible lenders include sovereign nations that acted to protect their own oligarchies.
 

Why? Once one oligarchy falls, it will threaten to topple a long line of oligarch dominoes.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Cognitive Dissonance's picture

"Why? Once one oligarchy falls, it will threaten to topple a long line of oligarch dominoes."

OK, everyone get out and push. On three. One....two....

J S Bach's picture

"...it will threaten to topple a long line of oligarch dominoes."

 

Oligarchs don't "topple".  They simply fly away with their loot to greener pastures, exotic islands, or a certain middle-east sancutary set up just for that purpose.

Harbanger's picture

Bankers just finance both sides to keep it fair.  Putin will save the World.

Manthong's picture

"The Hazard Room". 

Romney Wordsworth's picture
Romney Wordsworth (not verified) Manthong Jan 27, 2015 3:07 PM

The oligarchs were in DAVOS at the time. Their Rochefocauld's weren't set to Greek time.

MillionDollarBonus_'s picture

This the beginning of World War III. First, Germany tried to take over the world with military force, but this time they are conquering countries with austerity. Meanwhile, the hedge funds have allied with Germany in their quest to conquer Europe, and speculators continue to hammer the peripheries with an artillery of credit default swaps and short selling of government debt. Stop this madness! Ban speculation and bring back Europe’s social safety nets. NO MORE AUSTERITY!

nuubee's picture

Ban speculation

You might have more success trying to ban sunlight... not that your comments aren't hysterical.

wintermute's picture

If the Eurosystem cuts Greece off, after defaulting, then Greece should just print its own euros. As many as it needs!

chumbawamba's picture

"We Are Going To Destroy The Greek Oligarchy System"

Assuming they don't get to you first, player.

I am Chumbawamba.

weburke's picture

heck, they dont want "blood from a turnip", LAND. And the serfs are selling it. 

 and I thought the armageddin thing required a bad guy from greece...... well well.

greece without the dang greeks, is VERY ideal land for elites, lots of folks have left already, even the damned gypsies left ! Surely this is no accident. Or, as we keep saying in america, =the leaders are SO STUPID !  oh? really? evil yes, blundering? i dont think so.

more beer? https://www.youtube.com/watch?v=BWJo9onU1f8

fleur de lis's picture

Greece should join the Russians and tell the IMF, EU, etc., to get lost. 

brucyy's picture

Can't tell if this is a sarcastic comment.

 

Edit : Nevermind , i just realized who i was replying to.

new game's picture

harb... plus one, i think they missed your point!

putin and his bankers/crime syndicate, ha...

Harbanger's picture

Very few get it.  Best part is they think they're not part of the group think.

acetinker's picture

I've heard the question asked, but so far, I've heard no answer;  "Is the RCB a Rothschild/Windsor/Saxe-Coburg outfit, or not?"

That's all we really need to know.

Stuck on Zero's picture

The oligarchs will retaliate. There will be trade sanctions, uprisings, armed factions, murders, and all manner of attacks on the plebians.  Expect Balkanization unless the people submit to oligarch rule.

Harbanger's picture

Oligarchs run all sides, they're just squabbling over which plebs they control.

Captain Kink's picture

Greece, IMO, should just get with reality... I have a 4 year old son and a 10 year old son... I can't decidew hich is the more appropriate analog.... talk about a stupid, infantile tantrum... I spent more than I had! And Its your fault! (Sounds like those who blame lenders for idiotic borrowing during the mortgage bubble) Fold it up, break it up into lots and sell it off to the highest bidder. Ridiculous to imagine anything else. Whatever happened to contract? and honor? and just fucking dealing with your own shit? Blaming everyone else is a way of being anymore. count me out. And greece, poor, teenage fools, should jump at the chance to get out. At the same time, this teaches Portugal, Spain, Itally that there are consequences to profligacy. bring on the Junks... y'all are so predictable.

11b40's picture

Which part of "that which can't be paid won't be paid" do you not understand?

Greece is bankrupt.  Wipe the slate clean and let the speculating upper crust take the hit.  As the writer of this article makes crystal clear, this is the fault of reckless lending by those who believe they can never lose.  It is the fault of a relatively small group of charlatans plundering entire countries....and you are fine with that.  You tell the people of Greece to suck it up and sell the country to the very band of barbarians who are at fault.   "Everyone else" is not to blame.  A very specific and identifiable group is to blame, and I hope they get totally shafted and this thing does spill over to Spain, and Portugal, and Italy, and just maybe, France, too.  It would be a great primer for what we need to do in the good old USA.  Or perhaps you prefer to call it the "Homeland".

estebanDido's picture

Same as Venezuela, people win the election but the oligarchs own the economy, so forget it.

kchrisc's picture

"Oligarchs don't "topple".  They simply fly away with their loot to greener pastures, exotic islands, or a certain middle-east sancutary set up just for that purpose."

Precisely why the dollar is so far up.

The banksters need to repay us.

Captain Kink's picture

or they end up in prison when they horse they backed doesnt finish 

 

if you were born into Oligarchy, would you throw off the "coronation"?  y'all sound jealous more than indignant ...or morally outraged.  What, exactly is the way out?  All I hear on this site is complaints (mostly whiners) and calls for revolution (ballsy but ill-informed). 

11b40's picture

The pot simmers before it boils.  There will be a flash point.

J S Bach's picture

Beam me up, Captain Kink.

Of all the adjectives you used to describe the flustered folk of ZH, it was "jealous" that I think is the most insulting.

Our complaints against oligarchs, banksters, corrupt politicians, etc... are not based on jealousy, but abhoration (yes, I made that word up because it is perfectly descriptive).  

Personally, I do not envy any of these soldiers of satan... I abhor them.  Yes... they have ill-gotten riches (as defined by their trading power), but in their pathetic infinitesimally short life-spans, this is indeed NOTHING compared to the eternal damnation which they all will experience.

We are all human, thus imperfect, and we have desires and lusts for material things which only satisfy short-term.  However... what differentiates those monsters criticized here on ZH - from decent people... is the complete and total lack of conscience or soul of the former when it comes to empathizing with those who suffer due to their predations to attain their superficial goals.  That sounds long-winded, but it rings true.

We are not "jealous".  I'm sure most of the prudent and insightful folk who frequent this site are well-prepared for whatever financial calamity looms.  Healthy "hatred" is the noun you should have used.

Al Huxley's picture

Not even, they just set up a war and use it to grab even more loot and power.  Charles is suffering from wishful thinking.

new game's picture

he forgot that the whole fucking shebang is under the control of the best/biggest banker crime syndicate tax payers money can finance run by ruthless muthafuckers...

Fun Facts's picture

Whoever controls the money and the media controls everything.

This has been the far reaching aim of the ZWO since MA Rothschild started the global ponzi scheme 300 years ago.

Today we see the result. 80 men have more wealth than half the planet.

No one should expect a good result going forward.

zorba THE GREEK's picture

That a few wealthy families have control over the government is true for many nations

especially the U.S.A. 

Fred Garvin's picture
People of privilege will always risk their complete destruction rather than surrender any material part of their advantage. - J. K. Galbraith
SDShack's picture

See definition of a Sociopath.

Bingo Hammer's picture

If the new Prime Minister of Greece and Finance Minister intend to hold to their word then they better have some really heavy duty and super professional security team around them 24/7....as even low level oligarchs will get a little twitchy if things start to change

Wolferl's picture

You´re in a delusion. That new Greek government is full of oligarchs. Nothing will change in Greece.

nuubee's picture

Welcome to Greek Oligarchy 2.0!! New and Improved management under the same ownership!! 

Harbanger's picture

What they need is a coalition of radical leftists.  That's what they voted for unless you believe all elections are rigged.

Ignatius's picture

You're like the piano player in Eyes Wide Shut, hammering on that same f*king note.

We get it, you're not a socialist nor a Che fanboy, nobody will call you a fag.

Harbanger's picture

You can't change what's true.  People say, just because you keep telling me what to do, it isn't gonna make me do it.  Right,  I'm reminding you over and over again for later, when you get fucked, and your conscience is searching for an excuse as to what happened.

Romney Wordsworth's picture
Romney Wordsworth (not verified) Harbanger Jan 27, 2015 3:22 PM

Eyes Wide Shut was a great movie. For a few moments there, I almost wanted to be a guy named Victor Ziegler. In the end, I'm more than satisfied with the other path.

Harbanger's picture

Hollywood is part of the Psy-op for plebs.  You won't find any answers, no matter how much you read between the lines.

new game's picture

save you a half of life of research- banker crime syndicate.

maybe oliver stone, but still a waist of time for anything but entertainment; that beckons the next question, really? that is the best you can do?

go take a long fucking walk amoungst nature and let your mind drift...

Harbanger's picture

If you knew how I live my life you wouldn't say that.  My mind says all of mans machinations will inevitably return to truth.

new game's picture

 i just don't know-sorry if i offended. maybe mans machinations are survival manifested in odd ways, ie vanity.

Harbanger's picture

No worries, I'm never offended.   Ego, vanity and fear define how most see the world.

LawsofPhysics's picture

WTF?  Last time I checked the oligarchs (bankers and financiers) were still getting as much free money (QE & ZIRP) that they wanted (in greece or elsewhere).  How exactly did they "blow it" again?

 

Let me see the fucking heads!  Then I might believe you.

 

"Once one oligarchy falls, it will threaten to topple a long line of oligarch dominoes." - bullshit, I don't see the oligarchs, bankers, financiers or their political puppets indicting themselves anytime soon.

Al Huxley's picture

All the 'molon labe' suckers are busy making sure nobody takes their guns, while ignoring that everything else they have is being, or has already been taken from them.

stinkhammer's picture

Barry will blow any oligarch or crack dealer he can trade cocaine with - it says so in his childrens book

Sizzurp's picture

The big danger for the ECB is that once Greece defaults, and it isn't that terrible afterall, how many others will then follow suit?  My guess is the whole thing will unravel within the year.

RabbitChow's picture

Entirely possible, since the Swiss mortgage bubble looks ready to pop.  Any non-Swiss that was sold a Swiss mortgage will want to have their mortgage restructured or default. 

Bell's 2 hearted's picture

kinda where i'm at

 

it won't be THAT bad (for the general population) ... a few sucky years (already sucky) and then years of clear sailing.

 

only ones really hurt are the elites.

 

Let'em Burn

Al Huxley's picture

Sorry, but the elites will see you dead before they 'really hurt'.

new game's picture

why don't people understand they are ruthless muthafuckers? ruthless with all the power and money- do you understand that? politly asking you to understand the enemy...