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It’s Not The Greeks Who Failed, It’s The EU

Tyler Durden's picture




 

Submitted by Raul Ilargi Meijer via The Automatic Earth blog,

In what universe is it a good thing to have over half of the young people in entire countries without work, without prospects, without a future? And then when they stand up and complain, threaten them with worse? How can that possibly be the best we can do? And how much worse would you like to make it? If a flood of suicides and miscarriages, plummeting birth rates and doctors turning tricks is not bad enough yet, what would be?

If you live in Germany or Finland, and it were indeed true that maintaining your present lifestyle depends on squeezing the population of Greece into utter misery, what would your response be? F##k ‘em? You know what, even if that were so, your nations have entered into a union with Greece (and Spain, and Portugal et al), and that means you can’t only reap the riches on your side and leave them with the bitter fruit. That would make that union pointless, even toxic. You understand that, right?

Greece is still an utterly corrupt country. Brussels knows this, but it has kept supporting a government that supports the corrupt elite, tried to steer the Greeks away from voting SYRIZA. Why? How much does Brussels like corrupt elites, exactly? The EU, and its richer member nations, want Greece to cut even more, given the suicides, miscarriages, plummeting birth rates and doctors turning tricks. How blind is that? Again, how much worse does it have to get?

Does the EU have any moral values at all? And if not, why are you, if you live in the EU, part of it? Because you don’t have any, either? And if you do, where’s your voice? There are people suffering and dying who are part of a union that you are part of. That makes you an accomplice. You can’t hide from that just because your media choose to ignore your reality from you.

And it doesn’t stop there. It’s not just a lack of morals. The powers that be within the EU deliberately unleashed shock therapy on Greece – helped along by Goldman Sachs and the IMF, granted -. All supra-national organizations tend towards zero moral values. It’s inherent in their structures. We have NATO, IMF, World Bank, EU, and there’s many more. It’s about the lack of accountability, and the attraction that very lack has for certain characters. Flies and honey.

So that’s where I would tend to differ from people like Alexis Tsipras and Yanis Varoufakis, the man seen as SYRIZA’s new finance minister, and also the man who last night very graciously, in the midst of what must have been a wild festive night in Athens, responded to my congratulations email, saying he knows what Dr Evil Brussels is capable of. I don’t see trying to appease Brussels as a successful long term move, and I think Athens should simply say thanks, but no, thanks. But I’m a writer in a glass tower, and they have to face the music, I know.

But let’s get a proper perspective on this. And for that, first let’s get back to Steve Keen (you now he’s a personal friend of The Automatic Earth). Here’s what I think is important. His piece last week lays the foundation for SYRIZA’s negotiations with the EU better than anything could. Steve blames the EU outright for the situation Greece is in. Let’s see them break down the case he makes. And then talk.

It’s All The Greeks’ Fault

Politically paralyzed Washington talked austerity, but never actually imposed it. So who was more successful: the deliberate, policy-driven EU attempt to reduce government debt, or the “muddle through” USA? [..]muddle through was a hands-down winner: the USA’s government debt to GDP ratio has stabilized at 90% of GDP, while Spain’s has sailed past 100%. The USA’s macroeconomic performance has also been far better than Spain’s under the EU’s policy of austerity.

 

[..] simply on the data, the prima facie case is that all of Spain’s problems – and by inference, most of Greece’s – are due to austerity, rather than Spain’s (or Greece’s) own failings. On the data alone, the EU should “Cry Uncle”, concede Greece’s point, stop imposing austerity, and talk debt-writeoffs – especially since the Greeks can argue that at least part of its excessive public debt ratio is due to the failure of the EU’s austerity policies to reduce it.

 

[..] why did austerity in Europe fail to reduce the government debt ratio, while muddle-through has stabilized it in the USA? .. the key factor that I consider and mainstream economists ignore—the level and rate of change of private debt. The first clue this gives us is that the EU’s pre-crisis poster-boy, Spain, had the greatest growth in private debt of the three—far exceeding the USA’s. Its peak debt level was also much higher—225% of GDP in mid-2010 versus 170% of GDP for the USA in 2009

 

[..] the factor that Greece and Spain have in common is that the private sector is reducing its debt level drastically – in Spain’s case by over 20% per year. The USA, on the other hand, ended its private sector deleveraging way back in 2012. Today, Americans are increasing their private debt levels at a rate of about 5% of GDP per year—well below the peak levels prior to the crisis, but roughly in line with the rate of growth of nominal GDP.

 

[..] the conclusion is that Greece’s crisis is the EU’s fault, and the EU should “pay” via the debt write-offs that Syriza wants – and then some.

That’s not the attitude Berlin and Brussels go into the talks with Tsipras and Varoufakis with. They instead claim Greece owes them €240 billion, and nobody ever talks about what EU crap cost the PIIGS. But Steve is not a push-over. He made Paul Krugman look like a little girl a few years ago, when the latter chose to volunteer, and attack Steve on the issue, that – in a few words – banks have no role in credit creation.

Back to Yanis. The right wing Daily Telegraph, of all places, ran a piece today just about fully – and somewhat strangely – endorsing our left wing Greek economist. Ain’t life a party?

Yanis Varoufakis: Greece’s Future Finance Minister Is No Extremist

Syriza, a hard left party, that outrightly rejects EU-imposed austerity, has given Greek politics its greatest electoral shake-up in at least 40 years.

Hold, wait, don’t let’s ignore that 40 years ago is when Greece ended a military dictatorship. Which had been endorsed by, you know, NATO, US … So “greatest electoral shake-up” is a bit of a stretch. To say the least. There was nothing electoral about Greece pre-1975.

You might expect the frontrunner for the role of finance minister to be a radical zealot, who could throw Greece into the fire He is not. Yanis Varoufakis, the man tipped to be at the core of whatever coalition Syriza forges, is obviously a man of the left. Yet through his career, he has drawn on some of the most passionate advocates of free markets. While consulting at computer games company Valve, Mr Varoufakis cited nobel-prize winner Friedrich Hayek and classical liberal Adam Smith, in order to bring capitalism to places it had never touched.

 

[..] while Greece’s future minister is a fan of markets in many contexts, it is apparent that he remains a leftist, and one committed to the euro project. Speaking to the BBC on Monday, he said that it would “take an eight or nine year old” to understand the constraints which had bound Greece up since it “tragically” went bankrupt in 2010. “Europe in its infinite wisdom decided to deal with this bankruptcy by loading the largest loan in human history on the weakest of shoulders, the Greek taxpayer,” he said.

 

“What we’ve been having ever since is a kind of fiscal waterboarding that have turned this nation into a debt colony,” he added. Greece’s public debt to GDP now stands at an eye watering 175%, largely the result of output having fallen off a cliff in the past few years. Stringent austerity measures have not helped, but instead likely contributed.

That last line, from a right wing paper? That’s the same thing Steve Keen said. Even the Telegraph says Brussels is to blame.

It will likely be Mr Varoufakis’ job to make the best of an impossible situation. The first thing he will seek to tackle is Greece’s humanitarian crisis. “It is preposterous that in 2015 we have people that had jobs, and homes, and some of them had shops until a couple of years ago, that are now sleeping rough”, he told Channel 4. The party may now go after multinationals and wealthy individuals that it believes do not pay their way.

 

[..]The single currency project has fallen under heavy criticism. The economies that formed it were poorly harmonised, and no amount of cobbling together could make the end result appear coherent. Michael Cembalest, of JP Morgan, calculated in 2012 that a union made up of all countries beginning with the letter “M” would have been more workable. The same would be true of all former countries of the Ottoman Empire circa 1800, or of a reconstituted Union of Soviet Socialist Republics, he found.

That’s just brilliant, great comparisons. Got to love that. And again, it reinforces my idea that the EU should simply be demolished, and Greece should not try and stay within eurozone parameters. It may look useful now, but down the line the euro has no future. There’s too much debt to go around. But for SYRIZA, I know, that is not the most practical stance to take right now. The demise of the euro will come in and of itself, and their immediate attention needs to go to Greece, not to some toxic politics game. Good on ‘em. But the fact remains. The euro’s done. And SYRIZA, whether it likes it or not, is very much an early warning sign of that.

[..] A disorderly break up would almost certainly result in a merciless devaluation of whatever currency Greece launched, and in turn a default on debt obligations. The country would likely be locked out of the capital markets, unable to raise new funds. As an economy, Greece has only just begun to see output growth return. GDP still remains more than 26% below the country’s pre-crisis peak. A fresh default is not the lifeline that Greece needs.

 

Instead, it will be up to a Syriza-led government to negotiate some sort of debt relief, whether that be in the form of a restructuring, a deal to provide leeway on repayment timings, or all out forgiveness. It will be up to Mr Varoufakis – if he is selected as finance minister – and newly sworn in Prime Minister Alex Tspiras to ensure that this can be achieved without Greece getting pushed out of the currency bloc in the process.

And whaddaya know, Steve Keen finishes it off too. Complete with history lessons, a take-and-shake down of failed economic policies, and a condemnation of the neo-liberal politics that wrecked Greek society so much they voted SYRIZA. It’s not rocket politics…

Dawn Of A New Politics In Europe?

About 40 years ago, one of Maggie Thatcher’s chief advisors remarked that he wouldn’t be satisfied when the Conservative Party was in government: he would only be happy when there were two conservative parties vying for office. He got his wish of course. The UK Labour Party of the 1950s that espoused socialism gave way to Tony Blair’s New Labour, and the same shift occurred worldwide, as justified disillusionment about socialism as it was actually practiced—as opposed to the fantasies about socialism dreamed up by 19th century revolutionaries—set in.

 

Parties to the left of the political centre—the Democrats in the USA, Labour in the UK, even the Socialist Party that currently governs France—followed essentially the same economic theories and policies as their conservative rivals.

 

Differences in economic policy, which were once sharp Left-anti-market/Right-pro-market divides, became shades of grey on the pro-market side. Both sides of politics accepted the empirical fact that market systems worked better than state-run systems. The differences came down to assertions over who was better at conducting a pro-market economic agenda, plus disputes over the extent of the government’s role in the cases where a market failure could be identified.

 

So how do we interpret the success of Syriza in the Greek elections on Sunday, when this avowedly anti-austerity, left-wing party toppled the left-Neoliberal Pasok and right-Neoliberal New Democracy parties that, between them, had ruled Greece for the previous 4 decades? Is it a return to the pro-market/anti-market divides of the 1950s? No—or rather, it doesn’t have to be.

 

It can instead be a realisation that, though an actual market economy is indeed superior to an actual centrally planned one, the model of the market that both sides of politics accepted was wrong. That model—known as Neoliberalism in political circles, and Neoclassical Economics in the economic ones in which I move—exalts capitalism for a range of characteristics it doesn’t actually have, while ignoring characteristics that it does have which are the real sources of both capitalism’s vitality and its problems.

 

Capitalism’s paramount virtues, as espoused by the Neoliberal model of capitalism, are stability and efficiency. But ironically, the real virtue of capitalism is its creative instability—and that necessarily involves waste rather than efficiency. This creative instability is the real reason it defeated socialism, while simultaneously one of the key reasons socialism failed was because of its emphasis upon stability and efficiency.

 

[..] real-world capitalism trounced real-world socialism because of its real-world strength—the creative instability of the market that means to survive, firms must innovate—and not because of the Neoliberal model that politicians of both the Left and the Right fell for after the collapse of socialism.

 

Neoliberalism prospered in politics for the next 40 years, not because of what it got right about the economy (which is very little), but because of what it ignored—the capacity of the finance sector to blow a bubble that expanded for almost 40 years, until it burst in 2007. The Neoliberal model’s emphasis on making the government sector as small as possible could work while an expanding finance sector generated the money needed to fuel economic prosperity. When that bubble burst, leaving a huge overhang of private debt in its wake, Neoliberalism led not to prosperity but to a second Great Depression.

 

The Greeks rejected that false model of capitalism on Sunday—not capitalism itself. The new Syriza-led Government will have to contend with countries where politicians are still beholden to that false model, which will make their task more difficult than it is already. But Syriza’s victory may show that the days of Neoliberalism are numbered. Until Sunday, any party espousing anything other than Neoliberalism as its core economic policy could be slaughtered in campaigning by pointing out that its policies were rejected by economic authorities like the IMF and the OECD.

 

Syriza’s opponents did precisely that in Greece—and Syriza’s lead over them increased. This is the real takeaway from the Greek elections: a new politics that supports capitalism but rejects Neoliberalism is possible.

All Europeans, and Americans too, must now support SYRIZA. It’s not only the only hope for Greece, it is that for the entire EU. SYRIZA breaks the mold. Greeks themselves would be terribly stupid to start taking their money out of their accounts and precipitating bank runs. That’s what the EU wants you to do, create mayhem and discredit the younger generation that took over this weekend.

It’s going to be a bitter fight. The entrenched powers, guaranteed, won’t give up without bloodshed. SYRIZA stands for defeating a model, not just a government. Most of Europe today is in the hands of technocrats and their ilk, it’s all technocrats and their little helpers. And it’s no just that, it’s that the neo-liberal Brussels crowd used Athens as a test case, in the exact same way Milton Friedman and his Chicago School used the likes of Videla and Pinochet to make their point, and tens of thousands got murdered in the process.

It’s important that we all, European or not, grasp how lacking in morality the entire system prevalent in the west, including the EU, has become. This shows in East Ukraine, where sheer propaganda has shaped opinions for at least a full year now. It’s not about what is real, it’s about what ‘leaders’ would like you to think and believe. And this same immorality has conquered Greece too; there may be no guns, but there are plenty victims.

The EU is a disgrace, a predatory beast unleashed upon all corners of Europe that resist central control and, well, debt slavery really, if you live on the wrong side of the tracks.

SYRIZA may be the last chance Europe has to right its wrongs, before fighting in the streets becomes an everyday reality. Before we get there, and I don’t know that we can prevent it, hear Steve Keen: it’s not the Greeks that screwed up, it’s the EU. But they would never ever admit to that.

 

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Tue, 01/27/2015 - 16:59 | 5712707 wintermute
wintermute's picture

Greece should just print its own euros.

Tue, 01/27/2015 - 17:02 | 5712711 knukles
knukles's picture

So Vicki Nuland was right when she said "Fuck the EU", eh?
btw, i thought that was a horribly impolite thing for anybody to say, sounded so very neo-conish .... she should publicly apologize

Tue, 01/27/2015 - 17:07 | 5712747 JungleCat
JungleCat's picture

Greece printing their own euros? Now that would fuck the ECB real good.

On that topic - I would say "fuck that bitch Vicky Nuland", but it seems no one is willing to.

Tue, 01/27/2015 - 18:03 | 5713021 Haus-Targaryen
Haus-Targaryen's picture

Ghordo -- 

I hope you read the article.  

In short according to JP Morgan;

A common currency of all countries beginning with the letter "M," or a reconstruction of the Ottoman or Soviet empires would be a more workable single currency than the EUR is in its current form.  

I just want that to sink in to your brain.  

What would cause the EUR's current construction to be so -- defective?  

I'll let you answer, but the only truly honest answer is culture, which I expect you to dodge at all costs.  

Tue, 01/27/2015 - 18:18 | 5713100 0b1knob
0b1knob's picture

No one failed.  The Greeks suceeded.  Mr. Panos explains in this blast from the past.

https://www.youtube.com/watch?v=Zvl9N9GdraQ

Tue, 01/27/2015 - 18:25 | 5713130 Ghordius
Ghordius's picture

the article is interesting, the author imho a demagogue, the argumentation at part rubbish, the thrust... I like it
his heart is at the right spot, and his criticism of neo-liberal blindness is excellent
yup, countries beginning with M... it's all the same. size matters
Ruble? too small. Russian know this, hence the EurAsian currency project
just an opinion I happen to share with some, and from my studies
you believe in an optimal monetary policy, don't you?
I don't believe you can finetune neither monetary nor economic policy
but size? it damn works, and fosters entrepreneurship that try to exploit gradients therin which would not work across FX barriers

Tue, 01/27/2015 - 20:24 | 5713630 Socratic Dog
Socratic Dog's picture

Agree, his arguments are partly nonsense, but the general thrust is right on the money.  Neolibs emphasis on small government....yeah right.  Funny how he throws in crap like that, I don't really get it.

Wed, 01/28/2015 - 02:47 | 5714791 Haus-Targaryen
Haus-Targaryen's picture

My quote was mostly focusing on the JPM excerpt.  

I have no doubt that the Netherlands going back to the Guilder, or Austrians going back to the shilling would be dangerous for both currencies, as you so well put it -- the FX markets would likely end up shaking these two smaller currencies like a terrier shaking a rat.  

That being said -- grouping more than 350 million people together under one currency because the only thing they have in common is they happen to live on the world's largest peninsula is a horrible justification for a currency.  

If you split it in half the EUR would be larger with ca., 200 million people starting, while the NEURO would only have 110 million people starting, however -- the Polish, Czechs, Danes, Swedes, Baltic states, Slovakia and Hungary have a much more similar way of spending and saving money -- on a macro level -- than the Germans and French do.  Once these countries are added to the mix, a NEURO would have north of 240 million people and sufficiently large to fund off any FX attack while lacking the weaknesses the current EUR has.

Right now there are 500 million people in the EU sharing some 12 currencies.  With a NEUR/EUR split, you could cut down on the currency number signficiantly.   

Wed, 01/28/2015 - 04:00 | 5714866 Ghordius
Ghordius's picture

+1 Haus, the political and diplomatic ties that led to the EUR were always based on the alliance of the Three (G, F and I) and the Three (BE, NE and Lux)... the same core countries of the EU, and the same that draw the same consequences out of WWII

Poland is still using it's own currency, so is the Czech Republic, Denmark, Sweden and Hungary, and I don't think they will be at any time willing to change that, particularly because they do have an anchor avaliable vs the dollar... the EUR

the outlier was always Switzerland, and the CHF joined the eurozone, informally, built up an immense FX reserve chest using this very anchor as well as the "credibility of being a serious currency warrior, if needed", and then left

so I fear the whole idea of a NEURO is... academic. any alliance among sovereigns is a bit like herding cats at the very best times, and your "dream team" is a great idea... while being utterly unworkable, in the current context

"...sufficiently large to fund off any FX attack while lacking the weaknesses the current EUR has"

that's a bit of a problem, there. weakness is sometimes... very handy. it would be very difficult to bash a NEURO down, when needed. and for price stability, you need to be able to go in both directions, when necessary

Wed, 01/28/2015 - 08:11 | 5715093 Haus-Targaryen
Haus-Targaryen's picture

But Ghordo - 

The reason these countries still use their own currency (being exposed to said rat shaking) is because they all would be creditor countries as soon as they joined the EUR.  Literally the very next day for Poland, Denmark, Sweden and the Czech Republic.  Hungary would start out as a Belgian equivlant -- neither a creditor nor a debtor country, but falling into the "middle." If they could join the common currency without having to buy toilet paper from the PIIGS -- I imagine they would have done so already.  

The NEURO is an academic idea -- right now.  But in the 70s -- so was the EUR.  

The NEURO idea builds on the EUR idea -- its an improvement on the EUR, and not the failure thereof.  

Ask yourself -- what would you rather have -- one defective currency with lots of smaller non-to-less defective currencies or two non-defective currencies?  

The NEURO/EUR split would work much better than the status quo -- and I really think you know this.  But the idea that it creates a "two tier" EU, with some countries being "better" than others really puts a bad taste in your mouth. And this "bad taste" or "uneasy" feeling that I think the thought gives you is why the EMZ (and the EU by extension) finds itself in the situation that it is in.  

While it is politically incorrect and unpopular to say that "all Europeans are not the same" and "some countries management money better than others do" -- it is the truth.  Ignoring this reality and lumping all the countries together is the fundamental problem of all this chaos.  You said it best.  You cannot get a German to not be -- a German.  You cannot get a Italian to not be an Italian.  You cannot get a Frenchman to not be a Frenchman.  Moreover, all these people -- due to the human condition which cannot be changed -- will almost always act in their own self-interest.  When their self-interests align -- then the EMZ (and the EU again by extension) would be a very powerful force.  However, when they do not align -- as is the case now -- it becomes a very self-destructive force.  Expecting people to quit acting as they have to forge a new "identity" while a fun academic exercise -- is not pragmatic, as it is not possible.  Its been tried before -- most recently in Yougaslavia, then before that in the USSR, and before that with the LMU.  

It never works.  It will never work.  I realise this truth makes you uncomfortable.  No doubt -- you have some retort which is either 1) excellent or 2) has nothing to do with the topic at hand.  But the quicker you can accept this, and the people who run the various nations can accept this -- the quicker the EU can begin to recover.  If no one wants to admit reality -- then the EU will fall with the EMZ. 

Tue, 01/27/2015 - 17:18 | 5712817 Uchtdorf
Uchtdorf's picture

When Haiti had her big earthquake a few years ago, there was on the same island of Hispanola, not far from Port-au-Prince, a luxury resort which had buildings built to higher standards and which withstood the massive shaking. The vacationers there caried on, lounging on the beach, sipping their drinks, as if nothing had happened just a short distance from them. Humans, present company not excluded, are inexplicably capable of ignoring hardship when it suits them.

Do you think anybody vacationing now in the Rivera gives as much a mosquito's hiney for the suffering going on in Ukraine or Greece? This attitude is going to come back and bite us, or me, if I don't improve.

Tue, 01/27/2015 - 17:27 | 5712855 jefferson32
jefferson32's picture

Quote from Yanis Varoufakis' (new Greek Finance minister) book "The Global Minotaur" (p. 227):

A second, even brighter, scenario would be for the West to have an epiphany and, at long last, embrace John Maynard Keynes’ suggestion of an International Currency Union – the very suggestion that America rejected at the Bretton Woods conference of 1944.

Varoufakis often appears as guest analyst for news media like the BBC, CNN, Sky News, Russia Today and Bloomberg TV among others. Since January 2013 he has been teaching at the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin.

Tue, 01/27/2015 - 18:08 | 5713041 Evil Bugeyes
Evil Bugeyes's picture

The West did have a unified currency once. It was called "gold" and Keynes denounced it as a "barbarous relic".

Fri, 01/30/2015 - 09:46 | 5713337 jefferson32
jefferson32's picture

Indeed, he wanted to replace Gold with the "bancor". The dollar took that role, until now. The final push for an international currency union (SDR/dollar 2.0) is underway with the Greek tragedy.

 

Tue, 01/27/2015 - 17:30 | 5712883 froze25
froze25's picture

I don't think its that they don't care as much as they don't know that much.  The media really controls what gets put out to the masses so if they don't want it to be an issue, well its simply not put out there to become one.  We see it all the time in the US, its only if it makes it through so much social media that if the main stream continues to ignore it they look stupid so they have to cover it.  Bundy ranch rings a bell.

Tue, 01/27/2015 - 18:00 | 5713013 Ludwig Von
Ludwig Von's picture

I don 't follow the narrative of the masses and the MSM. You and me also belong to the masses. It is the people, either they want to know and go look for the information. Or they don 't want to know and go to the MSM.

Tue, 01/27/2015 - 17:00 | 5712720 stinkhammer
stinkhammer's picture

central bank largesse and unimpeded immigration of dirty tribal cultists = winning!

Tue, 01/27/2015 - 17:13 | 5712773 yogibear
yogibear's picture

"Greece should just print its own euros."

LOL, Start flooding Europe with Greek Euros.

What difference does it make if the ECB bank or Greece does it?

I would. Fuck those bureaucrats at the ECB.

I would also have continuing serial numbers of sampled existing Euros so they would have no idea which serial numbers are the Greek versions.

Another idea for the New Greek PM.


Tue, 01/27/2015 - 17:32 | 5712900 froze25
froze25's picture

If they bring in there own version of the Greek (Lincoln) Greenback.  Assassinations will start.  But I love the idea of fiat currency printed by the people themselves and cutting the central bank out of the loop all together.

Tue, 01/27/2015 - 19:00 | 5713308 fleur de lis
fleur de lis's picture

 

@Knuckles,

That was the only smart thing that ever came out of Nuland's sewer mouth.

Tue, 01/27/2015 - 19:39 | 5713459 amadeus39
amadeus39's picture

No Euro. They must print their own currency. Then they will learn about real austerity. It is immoral to refuse responsibility for one's actions. It's not called "moral" hazard for nothing. Why continue the farce of being an EU member. Be brave. Bite the bullet. Go it alone.

 

Tue, 01/27/2015 - 17:00 | 5712709 LawsofPhysics
LawsofPhysics's picture

Let me be clear;  all systems that do not allow real consequences for bad behavior will fail.

 

Bailouts anyone?

 

Tue, 01/27/2015 - 17:08 | 5712748 dirtyfiles
dirtyfiles's picture

if prolonged it sinks into everyday  every citizen life and then its to late to fix any thing

we maybe there already...

Tue, 01/27/2015 - 17:24 | 5712851 hotrod
hotrod's picture

Sharia law for loans

Tue, 01/27/2015 - 17:49 | 5712962 Captain Willard
Captain Willard's picture

It would appear that the author Mr. Meijer is unfamiliar with the laws of thermodynamics. He assumes the Greeks can conjure resources into existence ex nihilo. Perhaps you can help him.

As much as we all hate the EU, the IMF and the ECB, ZHers have to come to terms with the fact that the Greeks were clamoring to join the eurozone and cheated (I know with Goldman's help, as we've heard ad nauseum) to get in. PASOK was behind this 100%. The public supported it in referendum and in several elections. 

They proceeded to borrow like crazy. They made a mistake. The bankers/lenders made a mistake. They all must pay. 

The author's implication that some poor slob driving a truck in Holland is responsible for the plight of the Greeks strikes me as outlandish. 

 

Tue, 01/27/2015 - 17:01 | 5712724 Bell's 2 hearted
Bell's 2 hearted's picture

where is goldman sachs?

 

you know, the folks who helped the greek government  hide their deficits in order to gain entry in EU

Tue, 01/27/2015 - 17:32 | 5712896 Anglo Hondo
Anglo Hondo's picture

where is goldman sachs?    Right between goldman's legs.

Under goldman's dick, if it had one.

Come the revolution, goldman should be the first to go, followed by the lawyers.

Tue, 01/27/2015 - 17:02 | 5712730 KenShabby
KenShabby's picture

Morality? Seriously? These fucks don't care and never have and they know exactly what they are doing.

Tue, 01/27/2015 - 17:09 | 5712766 dirtyfiles
dirtyfiles's picture

its about the system functioning for their benefits

if overdone its just not working that what make them worry not etical side of this

Tue, 01/27/2015 - 19:17 | 5713361 SofaPapa
SofaPapa's picture

The trouble with all the "isms" is that they assume that leaders think in terms of the model and its effect, changing and flexible when the circumstances dictate.

These are human beings.  As long as they and the other homo sapiens with whom they speak each day are doing okay (i.e. the elites), for them the world is fine.  Humans don't think primarily in ideological terms; they think in more immediate, concrete modes.  They then use the ideology to explain (even to themselves) their actions.  They are blind to their own self-interest.  As long as it works for the elites, they will not change it, no matter what "ism" is invoked or whether it damages people they are not directly connected to (the vast majority of us) or not.

Their ignorance (maybe even genuine) will not help them, however, when the glue that holds this shitshow together fails.  It's all about trust, and they are running out.

Tue, 01/27/2015 - 19:48 | 5713491 amadeus39
amadeus39's picture

Your right about trust being the glue that holds a society together. And if postings on ZH are any indication, trust is fading fast away.

 

 

Tue, 01/27/2015 - 23:06 | 5713963 Mike in GA
Mike in GA's picture

I thought he might be interesting too, until an hour into reading about his theory of everything (America is the global 'Minotaur' that devours the world's wealth) in his book.  

Sample from Nov 2012 (emphasis mine):  

"...Very quickly, the Obama administration had lost the political momentum. The obscene sight of those who had played a major role in setting the scene for the Crash (men like Larry Summers, Tim Geithner, Ben Bernanke), effectively returning to the scene of the crime as ‘saviours’, wielding trillions of freshly minted or borrowed dollars to lavish upon their banker ‘mates’, was enough to turn off even the hardiest of Mr Obama’s supporters. The result was predictable: As it often happens during a deflationary period (think of the 1930s, for example), those who gain politically do not come from the revolutionary Left. They come from the loony Right. In the United States it was the Tea Party that grew on the back of a disdain for bankers,[3] a denunciation of the Fed, a clarion call for ‘honest’, metal-backed money,[4] and a repulsion toward all government.

Ironically, the rise of the Tea Party increased the interventions of the Fed that the movement denounced. The reason was simple: Once the Obama Administration had lost its way, and could not pass any meaningful bills through Congress that might have stimulated the economy, only one lever was left with which anyone could steer America’s macroeconomy: The Fed’s monetary policy. And since interest rates were dwelling in the nether land of the first liquidity trap to hit the United States since the 1930s[5] (recall Chapter 2 here), the Fed decided that quantitative easing or QE – the strategy that Chapter 8 was described in the context of the 1990s ‘Lost Japanese Decade’ – was all that was left separating America from a repugnant depression.

 ...While QE can be branded ineffectual, for reason that follow below, the assertion that the Fed’s QE will push America onto another 1970s-like period of ever accelerating prices is ludicrous. Yet truth is not the currency in which the recalcitrant Right trades: terrifying impressions (that can be employed further to boost private appropriation of publically produced wealth) are!"

Now I think he is a typical academic lefty loon with his pet theory that America is the root of all evil and capitalism is its putrid blood.  Wow.  Where have I heard that before?   All Greece's problems are neatly laid at the feet of a capitalist system THAT PROVIDED MORE PROSPERITY TO THE WORLD THAN ANY OTHER until the left's redistributionist policies and people reached critical mass in our country.  

Okay, you lefties, you have another country to experiment with.  Let's see if this time it's different!

 

Tue, 01/27/2015 - 17:13 | 5712791 disabledvet
disabledvet's picture

They need to nationalize their Banks IMMEDIATELY.

 

They have to find out how "their own" are throwing them under the bus...not "Brussels."

Tue, 01/27/2015 - 17:24 | 5712848 rxmitch
rxmitch's picture
Paul McCartney - Tug Of War

https://www.youtube.com/watch?v=zIfPIfuTFXA

Tue, 01/27/2015 - 17:16 | 5712800 Alberich
Alberich's picture

All Europeans, and Americans too, must now support SYRIZAObama. It’s not only the only hope for Greecethe US, it is that for the entire EUWorld.

Do you see the problem here? Hope is one thing and change is another. Varoufakis may be a class act anarcho-capitalist, deadlifting 600 and prepared to piss in Brussels' briefcases, but the oligarchs have ways of making men cooperate. I could be wrong, but I'm not.

Tue, 01/27/2015 - 17:19 | 5712816 holgerdanske
holgerdanske's picture

This is what awaits us all if we don't resist. Overlording by the pigs a bit more equal than the rest.

Anarchism (look it up!) is one answer.

 

It is so easy when you can get others to do your bidding.

Tue, 01/27/2015 - 17:29 | 5712876 Joebloinvestor
Joebloinvestor's picture

The EU's biggest mistake was thinking Greeks would stop being Greek.

Tue, 01/27/2015 - 17:57 | 5712987 agent default
agent default's picture

And the French not French and the Germans not German.  The EU has all the telltale signs of a plan put together by a bunch of idiots disconected from reality.  We usually refer to them as the elies here.

Tue, 01/27/2015 - 18:40 | 5713225 jmeyer
jmeyer's picture

The " elites " have a plan, a plan to create a European Union NO MATTER WHAT even if it includes cutting off the shriveled, necrotic parts ( PIIGS ). The goal is domination by the northern Europeans. And the " elites " are planning to create a North American Union as well. The elites are central bankers and their friends. This stuff is not new info. They are very clever people. They have been at this for over 200 years.

Tue, 01/27/2015 - 18:48 | 5713257 agent default
agent default's picture

If they keep cutting there is not going to be much of a union left is there.

Tue, 01/27/2015 - 17:30 | 5712887 sainchaw
sainchaw's picture

Steve Keen is the man. he called the crash too but for some rason everyone is on peter shitts nuts.

Tue, 01/27/2015 - 17:36 | 5712915 froze25
froze25's picture

Both are good, I like Harry Dent as well.

Tue, 01/27/2015 - 17:34 | 5712908 Itchy and Scratchy
Itchy and Scratchy's picture

Socialism is da' bomb ...'till da' other dude runs outta cheese!

Tue, 01/27/2015 - 17:38 | 5712922 froze25
froze25's picture

Socialism has its place, in my opinion Health insurance (not private, not Obama Care), currency creation and management, water, electricity, roads.  Thats about it.

Tue, 01/27/2015 - 17:46 | 5712951 Itchy and Scratchy
Itchy and Scratchy's picture

Government socialism is front & center in the 3 biggest parts of the economy; Health Care, Defense, & Education.

All 3 have experienced double digit (run-away) annualized inflation over the past 25 years while delivering decreasing returns!

Tue, 01/27/2015 - 17:42 | 5712933 WTFUD
WTFUD's picture

I agree with most of the article but the part about USSA debt to GDP after their ' muddle through ' has stabilised. That's Bullshit ; The debt has been doctored and sits on books as far away as Belgium and other co-opted Captured Nations.

Tue, 01/27/2015 - 19:32 | 5713427 commoncourtesy
commoncourtesy's picture

I agree with your comments WTFUD. Excellent article but the writer also appears to forget that the USD is the World Reserve Currency. Therefore the USD cannot be compared with other currencies, like for like. 

Cannot remember where I found the following information, but it is not my work.

The Fed can magic a 100 dollar bill out of thin air at relatively no cost. The USA is the only Debtor who can print dollars. It is what Banks around the world hold in reserve against their loans.

The USA cannot go broke as it can simply print more dollars. It is the only country in the world that does not have to pay for its imports in a foreign currency. Other Countries have to buy dollars before they buy Oil or other goods. This not an equal trade. Other Countries must produce at least as much as they consume from around the world. The USA has been able to consume as much as they want without worrying about acquiring the money to pay for it, because dollars are accepted around the world. In short for decades now, the USA has not had to produce anything to get all the dollars needed to buy all oil (and other goods) the country needed from around the world. All the USA do is borrow and print more money from the FED.
The USA is the worlds largest Debtor (google CIA world current accounts).

But now here is the problem, Creditors (Russia, China, etc...) have just started to figure out what is happening and have stopped using/accepting US dollars in repayment. The US dollar has been the world's reserve currency for decades now. Most Americans do not have a clue what the repercussions are of losing this status.

Tue, 01/27/2015 - 17:44 | 5712940 Argyrocatharsis
Argyrocatharsis's picture

Listen quite simple ....apx 2500 yrs ago the Greeks started this "higher thought-freedom of man-democracy-rule of law thingy.....pulverized the east....greeked it....got lazy....taught-coached  the romans to take over and decided to sit back and enjoy their experiment.....

Here we are some 2500 years later and these bozos in northern europe want to spoil our party?....what the %&ck?.....now we are pissed and we will join up once again in Greece and give europe one more chance PAY UP (print more money) or we will join up with the Russians(we orthodoxed them ...that was our plan B....remember Greek brain is superior).... NOW WHO has who's balls in a vice grip?

Tue, 01/27/2015 - 17:51 | 5712946 falconflight
falconflight's picture

"All Europeans, and Americans too, must now support SYRIZA. It’s not only the only hope for Greece, it is that for the entire EU. SYRIZA breaks the mold."

 

Absolute unabashed propaganda or a Krugman-type ideologue.  Syriza is communist in all but name.  Of course, Greece rarely has strayed more than a millimeter from Socialism since WWII.  Greece will continue its ordained path to anarchy.  

 

I don't care if the Greeks default, but they're delusional if they believe that once they're defaulted that there is any way back from economic destitution and political oppression considering what their newly elected 'brightest' offers.  

Tue, 01/27/2015 - 17:53 | 5712975 poldark
poldark's picture

They have not broken anything yet. Wait till they have faced the cold light of day.

Tue, 01/27/2015 - 17:47 | 5712954 dbTX
dbTX's picture

All trends move from east to west. This Greek tradegy is headed to the US, not sure how long it'll take, but it's coming. You can bank on that, pardon the pun.

Tue, 01/27/2015 - 17:48 | 5712959 Itchy and Scratchy
Itchy and Scratchy's picture

Welome back to the Drachma, 20% interest rates & 'CCC' credit rating. Pretty well much where you were before you fudged your balance sheet and borrowed the billions! Enjoy!

Tue, 01/27/2015 - 20:19 | 5713605 Clowns on Acid
Clowns on Acid's picture

Correction - "before Goldman fudged your balance sheet and showed how the oligarchs could borrow billions."

Tue, 01/27/2015 - 17:49 | 5712963 poldark
poldark's picture

I experienced the poverty in Greece before they joined the EU. It was a lot worse than it is now.

Tue, 01/27/2015 - 18:48 | 5713253 Ghordius
Ghordius's picture

Me too. But in-between it was better then now. And that's the problem

Tue, 01/27/2015 - 17:50 | 5712966 Tracerfan
Tracerfan's picture

This was an absolutely great article, thanks for sharing it ZeroHedge.

Tue, 01/27/2015 - 17:58 | 5713003 SmallerGovNow2
SmallerGovNow2's picture

Really?  Then WTF was this...

" why did austerity in Europe fail to reduce the government debt ratio, while muddle-through has stabilized it in the USA?"

Stabilized the USA?  Whhaaaaaat?

Tue, 01/27/2015 - 17:55 | 5712984 Itchy and Scratchy
Itchy and Scratchy's picture

Socialism will work just fine when they figure out how to pay back their debts!

Tue, 01/27/2015 - 21:19 | 5713869 amadeus39
amadeus39's picture

Liberals feel a great indebtedness to their fellow man, which debt they plan to pay off with your money

 

 

Tue, 01/27/2015 - 18:01 | 5713009 Evil Bugeyes
Evil Bugeyes's picture
It’s Not The Greeks Who Failed, It’s The EU

The Greeks and the EU both failed. The Greeks shouldn't have borrowed such a huge amount of money and the EU banks should never have loaned it to them.

SYRIZA may be the last chance Europe has to right its wrongs,

Syriza is just another bunch of lying politicans who came to power by promising a bunch of free stuff to be paid for by someone else. That formula never fails, especially in Greece. So Greece will exit the euro and go back to being the cheap and picturesque vacatiion spot it always was. We can be thankful that that won't change.

Tue, 01/27/2015 - 18:42 | 5713231 Ghordius
Ghordius's picture

ehm... ok... but I remember GS opening the path for... American money market funds. yes, Granny's CD account. because european sovereigns are all the same, it's an "union" and they still have...yields

Tue, 01/27/2015 - 18:07 | 5713034 mog
mog's picture

Brilliant article.

Pray God that we in Britain have the sense, guts and survival instinct to get out in May and vote UKIP all the way.

End the fraud of three parties - all the same.

Britain is effectively a one party state. Only UKIP has a different agenda. To free us from the shackles of the corrupt and undemocratic EUSSR.

The only party that gives Britain and its people a chance to restore its sovereignty, independence and borders.

 

Tue, 01/27/2015 - 18:09 | 5713045 Nussi34
Nussi34's picture

Greece is a shithole. Inside the EU, Euro or whatever or outside. Nothing will change this.

Tue, 01/27/2015 - 18:11 | 5713062 poldark
poldark's picture

" Greek taxpayer," better chance of seeing a pork chop in a Synagogue than a Greek tax payer.

Tue, 01/27/2015 - 18:25 | 5713133 SmittyinLA
SmittyinLA's picture

SYRIZA will guarantee war.

The choices: 

A: Cut spending 

B: Raise taxes 

C: Curtail immigration

D: Ignore reality do none of the above

SYRIZA picked "D" 

 Sorry folks, choice D does not exist, you can't "vote" your problems away. 

A state can't put everybody out of business with an alien cash subsidized underground economy and expect people to pay taxes with cratering income and finance their own invasion, eventually they run out of assets even if they support invasion. 

Greece now has outside donors to support mal investment in tax parasite immigration-unless they run out of chumps (that would be you German guy). 

 

 

 

 

Tue, 01/27/2015 - 21:28 | 5713907 amadeus39
amadeus39's picture

There is nothing inherently wrong with a nation declaring bankruptcy. Individuals do it, companies do it, so why not countries?. A fresh start is good for the spirit.  Moral hazard? We don't need no stinking hazard. But I wouldn't lend Greece any more money.

 

Tue, 01/27/2015 - 18:29 | 5713159 NeoRandian
NeoRandian's picture

Well when syriza fails it will be GOLDEN DAWN'S turn to shine.

Tue, 01/27/2015 - 18:44 | 5713238 Itchy and Scratchy
Itchy and Scratchy's picture

When GD fails Greece gets paved over and becomes a huge military base for the USA!

 

USA,USA,USA!

Tue, 01/27/2015 - 21:09 | 5713833 BlussMann
BlussMann's picture

If Golden Dawn is given a decent turn at the helm Greece will bloom - it will expel the African infiltrators, protect its borders and health of its people, the real Greeks, and rebuild its economy using a model that works better than any other - Fascism !! True, my low brain powered Liberal friends, deny all you like.

Tue, 01/27/2015 - 21:34 | 5713938 amadeus39
amadeus39's picture

Are you sure you don't mean Goldie Hawn?

 

Tue, 01/27/2015 - 20:11 | 5713583 Niall Of The Ni...
Niall Of The Nine Hostages's picture

The banksters know exactly what they're doing in Greece. They simply do not give a franc. Very few got where they are today by sparing a second thought for anyone but themselves.

On the contrary, the worse things get in Greece, the more likely Greek women are to be crazy enough to sign up for duty as white slaves in the fleshpots of Dubai and Tel Aviv. Once the banksters finish foreclosing on the country, every other job that needs doing in the tourist trade can be done by imported Pakistanis. The Chinese can have the ships.

Tue, 01/27/2015 - 20:41 | 5713699 robnume
robnume's picture

Bruxelles sucks! Disband the EMU now! EMU nations; Got sovereignty?

Tue, 01/27/2015 - 21:05 | 5713808 BlussMann
BlussMann's picture

Unions of States corrupt quickly, the USSA is a perfect example of what happens when a State gives up its sovereignty and integrity.

Tue, 01/27/2015 - 21:35 | 5713945 acetinker
acetinker's picture

Well Raul, I failed in following your usual cogent, linear thought process on this one.  You were all over the map.  That said, I argue with myself all the time.  I rarely reach conclusions, though.

That said, I think Greece has the potential to fracture, if not outright dismantle, the EU.

If Tsipras thinks he can reform the EU, he's dreaming.  Variouakis (sp) has the right idea, but he must know the short-term pain his plan will cause... especially if the rest of the piigs don't shortly follow suit.  They hold all the cards.  Will they recognize this?

What an interesting time to be alive!

Wed, 01/28/2015 - 00:01 | 5714405 honestann
honestann's picture

I don't know why people try to have "intelligent" articles and conversations while simultaneously ignoring all the real and ethical fundamentals that actually matter.

Like, for example, DEBT IS DESTRUCTIVE.

But that statement is overly simplistic, which I don't want to be.  So let me just toss in a couple facts that just can't be ignored, but always are.

It is impossible to have a viable, much less ethical system that includes debt... if some people can "create debt out of thin air at zero expense", then "reap unlimited rewards" by dumping that debt on others.  This is one reason fiat, fake, fraud, fiction, fantasy, fractional-reserve debt-notes are JUST PLAIN EVIL and JUST PLAIN DESTRUCTIVE.

One could imagine a system in which debt exists (though personally strongly I'd warn against such), but the quantity of debt that can created (the quantity of money that could be lent) must be limited to... the quantity of savings that owners (of those savings) were willing to risk by lending to others.  Which, of course, requires real, physical, valuable goods that cannot be created out of thin air (like "gold") be money, and utterly invalidates any form of fractional-reserve system.

But second, let's consider an even more outrageously EVIL system... a system that lets human beings borrow enormous sums of money --- then force others to pay off those loans.  Does that prospect of being able to borrow endless money to live the high life without the need to pay off your loans make you feel warm and fuzzy?  Does that sound great?

Well, that's precisely what politicians sell from dawn until midnight every day of the year.  Vote for me and we'll give you free health-care, free unemployment, free whatever-the-hell-you-want.  The unstated subtext?  Well, first, we're gonna skim 99% off the top for me and my friends, but hopefully you'll get some crumb or two "for nothing".  The other unstated subtext?  Oh, kids not yet born will have to pay for those crumbs you get, and the endless trillions me and and friends snarf up to administer these "programs".

So... all you Greeks.  No, sorry, let me start this thought again.  So... all you humans.  You're just fine with the prospect of having these sleazy human predators borrowing untold trillions of dollars to live high on the hog and throw you a few crumbs... and necessarily enslave millions of people not yet even born (much less voting) to pay off those debts?

?????  SERIOUSLY  ?????

This is A-OH-FREAKING-OKAY to you all?  Humans?  Greeks?

Because almost NOBODY ever mentions the utter depravity of such a setup, even though the level of depravity involved is off-the-scales astronomical and horrific.

-----

Anyway, I'll cut my rant short and just toss this out to the people in Greece, and their new masters if they happen to read this message.

100% DEFAULT

What was borrowed was 100% fiat, fake, fraud, fiction, fantasy... BOGUS NOTHING.

Plus, NOBODY... NOBODY... NOBODY can POSSIBLY have any way to place others into debt.  PERIOD.  This cannot happen, and any pretense that this can happen are simply Sith Mind Tricks practiced by banksters and other diabolical cretins who deserve to have their limbs slowly cut off with chain saws (saving their heads for last).

To even imagine in your wildest dreams that you will be part of ANY scheme that requires unwilling victims to pay back unjustified fake debt accumulated by OTHERS marks you as TOTALLY EVIL.

Yes, maybe you weren't born wanting to be evil.  Maybe you don't want to be as bad as the worst human beings to ever have lived.

BUT YOU ARE IF YOU PARTICIPATE IN THIS.

And so, to be even marginally human, you must do the following:

#1:  100% DEFAULT on ALL government debt.

#2:  100% DEFAULT on ALL personal debts denominated in fiat.

#3:  Require only real, physical goods be "money".

#4:  PROHIBIT all government debt forever (pay as you go).

#5:  Make all government programs "by subscription".

That's a meager start, but is a start.

Anything less leaves you a predator.

The choice is yours.

But do us all a favor.  Give up the pretense that it is A-OKAY for some people to create "money" out of thin air, and get rich by enslaving people with endless debt.  And give up the pretense it is A-OKAY to enslave and indebt others you never signed any damn loan agreement.

So, be evil but admit it.

Or don't be evil.

Yes, humans, yes Greeks.  You were victims.  The solution is NOT for you to victimize others.  Which is what you necessarily do if you allow those predators you call government to continue borrowing in your name.  If you win this election, then turn around and enslave your kids and grandkids just like the previous predators... you are no better.  Scratch that, given the lesson you just had, you might be worse.

Wed, 01/28/2015 - 10:03 | 5715403 amadeus39
amadeus39's picture

I want to make sure I understand. Are you saying that anyone who borrows or lends anything is evil. If I help you build a barn, are you in my debt? Do you have to pay me back?  What if I simply "give" you something. Is that good or evil? Maybe Shakespeare was right: Neither a borrower nor a lender be. Don't try to live beyond your means. Don't take monetary advantage of another's weakness to want more than he can afford at present. Credit is evil. Those who profit from providing credit are evil. All bankers are evil. All mortgage lenders are evil. All people who borrow or lend money are evil. But it is good to lend a helping hand if you don't expect to be paid back. Do I have that right?

 

Wed, 01/28/2015 - 15:48 | 5716943 honestann
honestann's picture

Well, first of all, what is wise or unwise is not necessarily evil or non-evil, or prudent or non-prudent.  They are different issues and measures.

I think almost all debt is unwise and imprudent.  However, if two individuals voluntarily agree to terms on a loan, that is perfectly ethical... though at the margins the predators-that-be have made even THAT unethical in a technical way via the fraud that is "fiat".  But that's not the main area you appear to misunderstand me.

The main point I was trying to express to Greeks (and humans in general) is that being willing to participate in a loan in which YOU are not the one required to pay back the loan, you are just plain EVIL.

From my point of view, people commonly discuss all sorts of secondary aspects of issues while purposely (or by habit or brainwashing) ignoring gigantic flaws in the entire topic.  And I was trying to point one out.  The following one:

ANY human being who accepts government borrowing money to provide services for them and their neighbors has done what?  They have WILLINGLY and PURPOSELY dumped REPAYMENT of that loan upon... their kids, their grandkids, upon millions of people not yet born, and people who absolutely, positively had no input or anything to say about becoming responsible for those debts.  They WANT the government services, but they want someone else to pay for them.  Who?  Unwilling victims.

That is PURE EVIL.

Lots of us in ZH messages talk endlessly about how terrible it is for the oligarchs or predator-class to abuse the masses.  And sure enough, that is true.

But how many people look in the mirror and realize what they are doing is at least as bad, and depending on how you measure, even worse.  How so?

Most people KNOW every government service is extremely inefficient... that the cost is vastly greater than the value of services provided.  And they KNOW that 99% of the money borrowed is skimmed off by the oligarchs and predators-that-be who control the operation of "government" from within or without (lobbyists, bribery, etc).

And yet, they want MORE government services (anti-austerity), not less!  How can this be?  How can people be so stupid and evil?

Mostly by ignoring the elephant in the room.  Rather than identify clearly what they are advocating (the exact scam the oligarchs want them to support), they simply look at the situation backwards.  They vaguely imagine something like "I payed taxes, so I want more and better services for those taxes".  Or some such nonsense.

But they KNOW the racket.  They KNOW that even if they DO get a few more crumbs out of some politician or political party, that government will have to borrow LOTS more money to pay for those crumbs.  And they know SOMEONE has to repay those loans, and somewhere in their minds, they know they intend for that someone to NOT BE THEM.  Those loans will be repaid in the future, by someone else.

Think about how evil that process is.  You borrow money, you enjoy whatever products and services and luxuries you buy with that money, then you get other people to repay the loans.

How is that NOT massively evil?

Of course that is evil... massively, egregiously evil.

Everyone wants the goods and goodies, and nobody wants to pay for them.

And so, what do oligarchs and politicians and REGULAR FOLKS do?  They take out loans 100x greater than the world had ever seen before modern times, and make OTHER PEOPLE responsible for repayment of those loans.  And if some small minority of those loans become due before they themselves retire?  They say BORROW AND SPEND MORE NOW, and dump the ever larger debt upon...

Upon who?

Upon people who never asked for those goods and services, upon people who never wanted those goods and services, upon people not old enough to vote, and not even born.

How can that NOT be massively evil?  To willingly and knowingly turn other people into LIFETIME SLAVES.  And make no mistake, they are lifetime slaves.  Unless they revolt and do what they have been brainwashed from birth to NEVER CONSIDER... namely KILL THE HUMAN PREDATORS WHO ENSLAVED THEM.

Because those human predators WILL NOT RELENT.  They are fundamentally predators, and in the case of the oligarchs and politician class, they are utterly aware of their status as predators, and they LOVE the scam they run.

But WHAT ABOUT YOU ????

What about the majority of regular folks?

To be sure, they are victims of the previous generation, who dumped debts upon them without their consent.  But is the appropriate response to... do the exact same thing to other people?

!!!!!  NO  !!!!!

And that's my point to the people of Greece (and the world).  ESCAPE their scam.

DEFAULT... after all, that debt is 100% fiat.

But then, REFUSE to let government borrow more, and dump that new debt upon people who did not agree, did not volunteer, and often did not receive ANYTHING for the repayments they are supposedly obligated to make for their entire lives.

Greece has a chance to change the way they live.

They must take that chance, or they are DOOMED.

-----

My message had almost nothing to do with two friends helping each other out.  And if two people voluntarily lend and borrow things that have value (gold, silver, lawn-mowers, furniture, cars, etc), that is not evil, though maybe unwise.

Personally, I prefer what I think you implied.  If you have a friend, you can help them out when you have an efficient way to do so.  And sometime later, when your friend can help you out in some way, he will (if he truly is a friend).  True friends want to help each other, not take advantage of each other.  But sadly, in the modern world where everyone is trained from childhood to be a jerk, one must learn how to judge who is a real friend, and who is just out to pretend and gain some advantage that way.

Thu, 01/29/2015 - 06:51 | 5719126 EddieLomax
EddieLomax's picture

I think the article is just another cover for going back to socialist central planning.  Neoliberalism or whatever it was supposed to be didn't fail, what has failed though was government/politically inspired tampering with the value of money.

We puffed up housing bubbles and carried on lending to deficiet spending countries, and whever the free market tells us it is wrong we say "it is different this time and capitalism must be wrong", and go into borrowing, QE (modern coin clipping) or other schemes to try and keep reality at bay.  My best hope from this mess is that the Syriza have the balls to pull out of the EU (even the EU aid money ends up costing them with worthless infrastructue that requires money to keep running), but then becomes thoroughly discredited itself.

Perhaps then we would ask why the Germans, French and others continued to lend money even when the loans were earning 27% interest, that alone should tell any sane person that the borrower was at risk of imminent default.

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