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Spiegel Interviews Tsipras: "If Greece Is Destroyed, It Would Be Merkel's Fault"

Tyler Durden's picture


The person who has caused global stock markets so much consternation by daring to play chicken with Germany until the bitter end conducts a  no holds barred interview with Germany's Spiegel. There is little love lost between the Syriza leader and the Germans, who were quite surprised to find a political leader who is willing to play blink with Germany, with the ECB, and the developed world until the very end, or June 17, whichever comes sooner. Tsipras' bottom line: "We're trying to convince our European partners that it's also in their interest to finally lift the austerity diktat." Alas, the European "partners", as evidenced by Lagarde's Guardian interview this weekend, have an image of Greece as a bunch of lazy tax evaders, who only seek to mooch on the German teat, resulting in 60% of Germans now pushing for Greece to be kicked out of the Euro, consequences be damned. Nothing new there. What is curious is Tsipras' answer to the question everyone wants to ask: "If Greece ultimately exits the euro, you will also bear some of the blame. You promised your voters the impossible: retaining the euro while breaking Greece's agreements with the rest of Europe. How can such a plan find success?" His response: " I don't see any contradiction in that. We simply don't want the money of European citizens to vanish into a bottomless pit...we think these resources should also be put to sensible use: for investments that can also generate prosperity. Only then will we in fact be able to pay back our debts." Presumably this means that Greece infrastructure projects will not be commanded from the same location in the Athens ministry of finance which houses the now legendary following data room.

Yet the line that will draw the most ire out of the already exhausted German taxpaying public is the following:

"if our economic foundation is completely destroyed and the decisions of an elected Greek government are not responsible for it but, rather, certain political forces in Europe. Then they too will be guilty, for example Angela Merkel."

Well, in the US, it is all Bush's fault; in Greece, it appears to be Merkel.

Anyway, here is the full Spiegel interview, full of so much confusion, chaos, contradictions on all sides, that we urge a Blood alcohol level of at least 0.1 before commencing reading.

SPIEGEL: Mr. Tsipras, is Berlin really as bad as you always say back home in Athens whenever you rail against theevil Germans?

Alexis Tsipras: Berlin is my favorite capital city in Europe. It's too bad that I'm always here only briefly. I'd like to have more time.

SPIEGEL: You might be Greece's prime minister the next time you come to Berlin. If that happens, will Greece still be a member of the euro zone?

Tsipras: Of course. We'll do everything we can so that Greece can retain the euro. We're trying to convince our European partners that it's also in their interest to finally lift the austerity diktat. We need policies that don't destroy the Greek economy but, rather, allow for renewed growth. If the austerity course isn't changed, it will result in the complete destruction of the Greek economy. That would indeed be a danger to the euro.

SPIEGEL: But even some parts of Syriza, the leftist alliance you lead and which came in second place in the May 6 election, have been calling openly for a return to the drachma.

Tsipras: That's only a minority. In each party, no matter whether big or small, there are different orientations, different opinions. Then there will be a vote, and the majority decides. What's more, this minority among us isn't in favor of an exit from the euro, for example; it just wants to ensure that Greece can also survive, with the help of another currency, for example, if others have completely ruined our national economy.

SPIEGEL: Which "others" do you mean? The Greek economy is already in a shambles.

Tsipras: What I mean by that is if our economic foundation is completely destroyed and the decisions of an elected Greek government are not responsible for it but, rather, certain political forces in Europe. Then they too will be guilty, for example Angela Merkel.

SPIEGEL: Are you seriously claiming that the reforms which Europe is demanding as a precondition for loan assistance are the reason for Greece's miserable situation?

Tsipras: If we are once again pushed and blackmailed into an austerity program that has so obviously failed, then it won't be long before Greece is in fact no longer capable of paying its creditors. The result will be a halt in payments, one into which we were practically forced. This would not only be dangerous for Greece, but for the entire European economy. These days, the financial systems of all countries are so closely intertwined with each other that one can't limit the crisis geographically. It's a problem of all countries and of all national economies.

SPIEGEL: If Greece ultimately exits the euro, you will also bear some of the blame. You promised your voters the impossible: retaining the euro while breaking Greece's agreements with the rest of Europe. How can such a plan find success?

Tsipras: I don't see any contradiction in that. We simply don't want the money of European citizens to vanish into a bottomless pit. The fact that there is financial assistance is the principle of European solidarity and a mark of being part of a community. That's good. But we think these resources should also be put to sensible use: for investments that can also generate prosperity. Only then will we in fact be able to pay back our debts.

SPIEGEL: For you, other people are always the scapegoat. It's other people's fault that the economy is languishing, so other people also have to rescue it …

Tsipras: That's not correct; we naturally also take a critical look at ourselves. We bear significant responsibility for our situation. We've accepted politicians who have destroyed our country's manufacturing base and created a corrupt state. We have elected the very people who have stashed their money away abroad and not only allowed tax evasion to occur, but also fostered it. Of course we are responsible for that; we allowed it all to happen. But we also have the responsibility to change exactly that right now.

SPIEGEL: Given your dependence on financial support and your rejection of vital structural reforms -- such as that of the public administration -- already agreed on, how do you propose doing so?

Tsipras: We're not opposed to reforms. We're only saying what so many economists, what many German newspapers and what even former German Chancellor Helmut Schmidt are saying -- and what the OECD has now reconfirmed in a study: The austerity policies we've been implementing for two years -- the policy of solely relying on drastic belt-tightening -- have failed. We now find ourselves in the fifth year of the recession. This year too, our economy will once again contract by at least 6 percent.

SPIEGEL: Is that the complete truth? Even Alekos Alavanos, your old mentor and the former Syriza floor leader in parliament, has called on you to finally be honest with your fellow Greeks.

Tsipras: Alavanos left the party some years ago because he didn't share our conviction about remaining within the euro zone. It's fairly odd that I now have to justify myself for the fact that we -- like the vast majority of the population, incidentally -- want to stay within the euro association.

The political reality is simple: The austerity programs, as constructed thus far, have failed, partly because they've been based on a false model, namely, that of domestic devaluation. But we're not an exporting country. It is much more the case that most of what we produce, we consume. Our ability to compete doesn't only depend on labor costs, as so many people say; they also depend on other parameters, such as the infrastructure and the mind-set of people and politicians. We really do long for a bit more meritocracy …

SPIEGEL: The concept of merit-based remuneration hasn't made it all that far in Greece. Instead, there's widespread corruption, cronyism and clientelism -- not exactly an advantage when it comes to competitiveness.

Tsipras: I am aware of the problems the Greek state has. It was systematically run down by the politicians of ours who were in power. And many Greeks share in the blame: They've supported this system; they've sustained it by continually electing the same politicians. But this can't be the cause of the crisis but, rather, at most it is a symptom. The financial and debt crisis isn't purely a Greek problem -- otherwise, there wouldn't be high government deficits in other countries, as well, such as in Italy, Spain, Portugal and Ireland. So there must be other causes. That's why we have to analyze the structure of the community, its architecture. Also that of our common currency, the euro.

SPIEGEL: Do you see in François Hollande, France's newly elected Socialist president, a new ally in the battle against the austerity diktat coming out of Germany?

Tsipras: Hollande is clearly a great white hope for us. Now, ideas and arguments that haven't been listened to will once again be heard and discussed, such as a stronger role for the European Central Bank or the introduction of euro bonds. We can't just treat symptoms, or we really will stumble over Greece. That doesn't help anyone. If our country exits the euro zone, all of Europe is in danger. We mustn't fool ourselves about that.

SPIEGEL: The most recent talks in Athens aimed at forming a government failed because you refused to join in any coalition. At the moment, opinion polls indicate that your Syriza alliance is running neck and neck with the conservative Nea Dimokratia (New Democracy) party. Who would you like to partner with after the new elections on June 17?

Tsipras: We would, of course, like to have a left-wing coalition. And we'll do everything we can to make things add up in our favor this time.

Interview conducted by Julia Amalia Heyer and Manfred Ertel


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Mon, 05/28/2012 - 13:23 | 2469620 Manthong
Manthong's picture

Is this Tsipras guy related to Krugman?

Mon, 05/28/2012 - 13:34 | 2469646 Harlequin001
Harlequin001's picture

absolute madness...

Mon, 05/28/2012 - 13:38 | 2469660 Ahmeexnal
Ahmeexnal's picture

Only a matter of days until Merkel's charred remains are found near the entrance to her bunker.

Mon, 05/28/2012 - 13:43 | 2469682 Colombian Gringo
Colombian Gringo's picture

Yes, covered in Tziki sauce.....

Mon, 05/28/2012 - 14:49 | 2469850 Matt
Matt's picture

Everyone knows that living within your means is a failure and is punitive. Everyone should be allowed to borrow as much as they want, and pay back their debts with more debts. No one should ever have to pay over 3 percent interest. Greedy savers should be happy to get a 1 percent real return on their money, after the targeted 2 percent inflation rate. 

Mon, 05/28/2012 - 15:45 | 2469976 Goldilocks
Goldilocks's picture

Courtesy of  Cathartes Aura,


The Story of Your Enslavement (13:10)

Mon, 05/28/2012 - 16:51 | 2470093 wisefool
wisefool's picture

Stefan is brilliant. my favorite quote of his is "what ever the question, freedom is the answer!"

Mon, 05/28/2012 - 19:49 | 2470380 He_Who Carried ...
He_Who Carried The Sun's picture

God, for how long must I listen

to these lunatics, read their BS

and deal with its fallout in the markets?

Please, have mercy...

Tue, 05/29/2012 - 02:15 | 2470879 prains
prains's picture

it's hard to floss your teeth with nipples that big but worth a try

Mon, 05/28/2012 - 15:53 | 2469989 Arnold Ziffel
Arnold Ziffel's picture

Do mean the 0.001% "High Yield" Savings account?


Tue, 05/29/2012 - 06:41 | 2470993 AnAnonymous
AnAnonymous's picture

Everyone knows that living within your means is a failure and is punitive.


Debt free expansion schemes exist. They bring the same fatality as usual.

Putting the emphasis on debt is misleading.

Mon, 05/28/2012 - 15:39 | 2469967 tobus
tobus's picture

I just love the way that in those pictures, the shopping carts with all the "data" in them still have their chains attached and were clearly stolen by an enterprising bureaucrat from some poor unknowing supermarket.

Mon, 05/28/2012 - 13:54 | 2469707 Paul Bogdanich
Paul Bogdanich's picture

Merkel is the highest ranking EU political figure that is insisting that any rationalization of the debts of the debtor countries be centered around bank bailouts and in that regard she does bear responsibility.  All these politicians and bankers are enforcing a regime where only the debtor suffers and the lenders who loaned them the money for eons after it was clear the debtors could never repay should be held harmless and repaid in full.  That is wrong and that is the fundamental source of the tension.      

Mon, 05/28/2012 - 18:19 | 2470238 noses
noses's picture

In other words: You're trying to tell us that there is no difference between a credit and a donation. Care to explain that to the people who lent^H^H^H^Hdonated money to my just cause of buying a box of chocolate?

Tue, 05/29/2012 - 05:25 | 2470962 Lebensphilosoph
Lebensphilosoph's picture

Obviously you missed the Greek defaul... I mean haircuts.

Mon, 05/28/2012 - 17:03 | 2470119 bank guy in Brussels
bank guy in Brussels's picture

Does not seem like 'madness' when Tsipras says:

« ... We've accepted politicians who have destroyed our country's manufacturing base and created a corrupt state. ... »

Seems like a number of Western countries could use politicians who speak that honestly and critically.

Tue, 05/29/2012 - 06:24 | 2470981 Harlequin001
Harlequin001's picture

yes but what does he then follow it with?

Honesty and critique? I don't think so. How can you claim that and then blame it all on the Germans.

The man's just another lying cheating arsehole of a politician.

Nobody is going to accept any blame for this, it is the reason why we'll go to war...

Tue, 06/05/2012 - 05:33 | 2495065 theobserver
theobserver's picture





Mon, 05/28/2012 - 14:56 | 2469860 Cult_of_Reason
Cult_of_Reason's picture

Re: "Is this Tsipras guy related to Krugman?"

Similar thought about Krugman crossed my mind when I was reading the interview.

Tsipras definitely exhibits very similar to Krugman -- self-contradictory, detached from reality wishful thinking, unrealistically childish -- Marxist communism thinking pattern.

Mon, 05/28/2012 - 15:02 | 2469870 Ghordius
Ghordius's picture

ufff, I'm not trying to pick on you, but where exactly is Tsipras self-contradictory?

He represents state and private "small workers" - as a group, they have political preferences. it's called the political left.

ideology apart, for them austerity translates with "getting most of the shaft". in multiparty systems, it's quite common.

Mon, 05/28/2012 - 15:44 | 2469965 Zero Govt
Zero Govt's picture

Tsipras thinks it's Merkals fault

Christine Lagarde thinks it's Greek taxpayers fault ...Greek taxpayers think the batty French bitch should take a long walk off a short pier

Count Draghi thinks he's not printing enough ..the village idiots at Davos think so too

the Norwegian Wealth fund has legged it for the hills and the British are hiding in the long grass quivering while the Bank of Englands Mervyn 'retard' King is completely fucking clueless what to do next

...and the Germans think it's a fiscal debt-spending orgy problem nation by nation 

with all the spoilt brats of the public sector throwing their dummies out the pram in every direction it's nice to agree with someone (ie. the Germans) as i was losing all hope for a sound/sane political response 

Mon, 05/28/2012 - 16:08 | 2470024 Ghordius
Ghordius's picture

well, Tsipras is in a campaign, he just had nice talks with sympathizers in the German Bundestag and it looks good for him to bash Merkel.

the IMF is behaving (not defending, just stating my opinion) in the same manner since inception, though this is the first time a first world country is under it's thumb. the IMF is still the most colonialist institution of the world.

Draghi is holding well, up to now. I have no issue with him up to now (except his squiddy origin I don't hold against him). talk is cheap, thoughts too. and Davos is there for ego-strokes, mostly...

the Germans are Germans. of course they prefer principles to expediencies, otherwise you might not be able to tell them apart from the Brits. for the long run, the Germans are right. in the short run... let it be Merkel's fault. and perhaps some face-saving gestures, soon.


Mon, 05/28/2012 - 16:22 | 2470047 Zero Govt
Zero Govt's picture

so political expediency (posturing to 'look good' in front of voters) even though the policies are crap and the politicians you're dissing are actually on the right track is ok?

here we scratch the surface of why politics is a vacuum and no way to run anything in either society or the economy

Mon, 05/28/2012 - 16:36 | 2470069 Ghordius
Ghordius's picture

what am I doing here defending a leftist Greek? scratch, scratch...

ok, you might have a wonderful American Hire&Fire mentality, but the european left doesn't. where you see an apple-tree growing, they see only an apple-pie to be shared.

again, he represents workers who don't want to bear the full cost of the restructuring of the Greek economic and financial situation.

to say it in the worst, stupidest way: in multi-party europe, we have less lobbying and much more political partying, so mentally, just imagine him as a general lobbyist for worker's interests.

or, better, what they want to say is: yes, austerity, but please not all of it at the same time

Mon, 05/28/2012 - 17:04 | 2470120 Missiondweller
Missiondweller's picture

You are 100% correct.


But that is also why they fail to reform.

Mon, 05/28/2012 - 17:21 | 2470136 Ghordius
Ghordius's picture

I thought the same about the whole political left of europe until this union-boss and socialist Schroeder became Germany's Bundeskanzler and implemented the Agenda 2010 - a huge generational restructuration of the labour market that is one of the real reasons why Germany's head is above the water at the moment.

Anyway, the news here is that he is not talking the way some opinion makers are squawking about since a while.

Tue, 05/29/2012 - 06:31 | 2470986 Harlequin001
Harlequin001's picture

How can failure be anyone else's fault for refusing to lend you more money, and especially when you didn't pay the last lot back?

'Ok so our political leaders were corrupt but you should still lend us more money or it will all be your fault.

Which bit of 'Fuck right off' don't they understand?

Mon, 05/28/2012 - 17:14 | 2470131 Marco
Marco's picture

Mervyn King knows exactly what he has to do ... keep soft defaulting and stoking price inflation (aka income deflation aka austerity). He's just running out of excuses to pretend it's something else.

Tue, 05/29/2012 - 06:32 | 2470987 Harlequin001
Harlequin001's picture

He could apologise again, I'm sure that would help...

Tue, 05/29/2012 - 05:33 | 2470965 Lebensphilosoph
Lebensphilosoph's picture

Greek taxpayers? All five of them?

Tue, 05/29/2012 - 06:33 | 2470988 Harlequin001
Harlequin001's picture

Three now, apparently a small minority have become Turks...

By all accounts it's cheaper.

Mon, 05/28/2012 - 22:27 | 2470641 ElvisDog
ElvisDog's picture

I'm not a leftist by any means, but Tsipras appears to me to be the most thoughtful and well-spoken European leader I've heard in a long time. And he seems to be the only one who is at least trying to deal with reality.

Tue, 05/29/2012 - 06:38 | 2470992 Harlequin001
Harlequin001's picture

What, by denying it?

The reason Greece is in a mess is down to Greece. They joined the euro, they elected their corrupt leaders and they gorged themselves on the nations assets.

It's a bit much to try and now blame this inevitable failure on the Germans...

and I say inevitable because it is not the corruption that is the cause, but the fractional reserve fiat money system which will bring this problem to all nations. The corruption just brings the problem home sooner than it otherwise would.

Tue, 05/29/2012 - 06:49 | 2470999 AnAnonymous
AnAnonymous's picture

self-contradictory, detached from reality wishful thinking, unrealistically childish -- Marxist communism thinking pattern.


No. US citizen thinking pattern.

No matter who comes after US citizenism, they are just copy cats and will never match the master.

See for example US of A, mecca of US citizenism.

Started as slaver when declaring freedom unalienable right to human being.

Started large wealth transfer program based on land grabbing due to generous Indian sponsoring, so mesmerized by 'American' project.

Started the US land ponzi backing their future on the idea there would always be more Indian lands to be transfered even though the US superficy was measured way before the shortage happened.

Kicked the can all down the way as a kid.

Ended in maturing in the GD, several wars, including two WWs, spread of communism to Russia and SE Asia etc

Self contradictory, detached from reality, wishful thinking, unrealistic childish.

And it is just limiting to start events. Along the way, along the short history of US, one can find the very same pattern of thinking.

Due to chronology, one must attribute the behaviour to the original source. And that is US citizen.

Obviously, in a manner of avoiding realization, US citizens will kick the can on human nature. But it is not.

US citizenism.

Mon, 05/28/2012 - 21:10 | 2470514 StychoKiller
StychoKiller's picture

Tsipras:  "I wouldn't drink so much if you'd quit pissing me off every day!"  Sorry, but these alki's are gonna have to learn to brew their own hooch, and get their bank accounts seized!

Nothing is gonna change until Greece hits rock-bottom.

Mon, 05/28/2012 - 13:24 | 2469622 lolmao500
lolmao500's picture

If Greece is destroyed, it's the fault of many people :

- Goldman Sachs (for cooking the books)

- The politicians in Greece (for allowing Goldman Sachs/hire them to do so and go along with it, not to mention joining the euro-EU tyranny)

- The army in Greece (for not overthrowing these traitors)

- The people of Greece (for going along with this crap and still liking the EU/Euro)

- Merkel and Junker (for being totalitarian assholes)

Mon, 05/28/2012 - 13:28 | 2469630 THX 1178
THX 1178's picture

Most people tend to focus on one or two of these... and thus expose their bias.

Mon, 05/28/2012 - 16:56 | 2470104 narapoiddyslexia
narapoiddyslexia's picture

"You look at the financial crisis in Europe, and the fingerprints of American investment bankers are everywhere. The financial collapse encouraged the worst sort of behavior. At the same time they were making bad loans in the United States, they were encouraging the same sort of behavior at the government level in Europe. The basic problem was, historically the role of the financier was to vet risk and make sure risk was evaluated. That got perverted in recent times, and instead the financier helped disguise risk."

Quote from Michael Lewis at this link.


Mon, 05/28/2012 - 18:54 | 2470278 MS7
MS7's picture

True. But, for me at least, the point of focusing on the forces at the top who do not have Greece's interests at heart, such as Merkel and the IMF, is to say-- Hey, people in Greece, get angry at the right targets. The Greek people are responsible for electing politicians who were no good. But then they get mad at them, and might come up with conspiracy theories, such as that Papandreou was working for the US to destroy the euro, and forget about the Europeans who are pulling the strings. This is just a guess on my part, as an observer outside Greece.

Mon, 05/28/2012 - 13:33 | 2469638 GernB
GernB's picture

How about the Greek people for thinking that voting themselves other peoples money would lead to prosperity.

Mon, 05/28/2012 - 13:47 | 2469687 Ahmeexnal
Ahmeexnal's picture

Are you saying socialism does not work?

Lemme work at the Genius Bar at an Apple Store.

Mon, 05/28/2012 - 13:48 | 2469695 Joe The Plumber
Joe The Plumber's picture

Socialism is the greatest system ever invented. Too bad it stops working once they run out of other peoPles money

Mon, 05/28/2012 - 15:04 | 2469877 the tower
the tower's picture

In a fiat system all money is other people's money, it's the banks' money.

Thatcher was smart, She knew very well how to play the socialists to spend all her buddies' central banks money. After all, that's how you create wealth for a few...

Mon, 05/28/2012 - 15:13 | 2469912 malek
malek's picture

Your first line was smart, your second one not so much...

Mon, 05/28/2012 - 16:28 | 2470057 the tower
the tower's picture

Not trying to be smart, trying to keep it real.


Mon, 05/28/2012 - 16:49 | 2470091 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

Yeah all those crappy socialist countries like Denmark, Norway, Sweden, Australia, New Zealand, Canada, Switzerland, Finland, all kicking the capitalist countries asses in quality of life, standard of living, health care, retirement, education, productivity per capita...can I stop now?

Modern McCarthyism. Oohh, BAD Socialism! Good 'Merka! Bomb those darkies! Let's have some more war! Kill the poor!

F-ing idiots.

Mon, 05/28/2012 - 17:36 | 2470124 Joe The Plumber
Joe The Plumber's picture

You must be mistaking the antisocialist ZH section for socialism's evil central planning cousins, mcarthyism, crony capitalism, and neocon empire building.

Libertarians have no love for those either

Tue, 05/29/2012 - 06:52 | 2471002 AnAnonymous
AnAnonymous's picture

Crony capitalists are socialists?

Well, hopefully, the day is saved when one realizes that what matter is to know whether they are US citizen or not.

Because djeee, with the classification as performed by US citizens, you consume a lot and a lot but hey, without ever getting a grasp on reality other than consuming and consuming more and even more.

Mon, 05/28/2012 - 22:50 | 2470214 Poor Grogman
Poor Grogman's picture

Socialist countries function edit-(ONLY ) to the extent that they allow private enterprise, and private wealth accumulation to continue within the system.

Once those two engines stop working, the whole machine just grinds to a halt.

Socialism on this scale would not be possible without fiat currency and debts that "never have to be paid"

Without those to cunning devices of slavery the whole machine just grinds to a halt.


Should I go on.????

Mon, 05/28/2012 - 22:31 | 2470653 ElvisDog
ElvisDog's picture

You don't spend much time in Canada, do you? It exists in a permanent state of low-level depression (economic and psychological). The Canadian system is only kept afloat by high oil prices and an influx of hot money from Chinese oligarchs looking to buy some escape property in case they have to bug out of China.

Mon, 05/28/2012 - 22:51 | 2470679 Poor Grogman
Poor Grogman's picture

You didnt read what I wrote very well did you?

edit  sorry just reread my previous post and added key word. now please reread.

Tue, 05/29/2012 - 07:52 | 2471052 mjk0259
mjk0259's picture

Why does it cost a million dollars to buy a tiny cottage in Vancouver then? Not an oil area.

Average workers making close to $100K in the oil sands area from what I read.

Mon, 05/28/2012 - 13:52 | 2469703 hankwil74
hankwil74's picture

Has socialism ever worked anywhere for an extended period of time?

Mon, 05/28/2012 - 13:59 | 2469716 macroeconomist
macroeconomist's picture

I will write a piece for zerohedge readers about what socialism is and what it surely is not. Stop calling crony capitalism (which has to bribe the working class in order for the system to work) socialism, the largest beneficiaries of the system in Greece are the Banks and the financial sector, and THAT CLEARLY IS NOT SOCIALISM in the slightest sense.

Mon, 05/28/2012 - 14:14 | 2469758 LeBalance
LeBalance's picture

here is one by Mises.

lol. it's no pro-socialism. lol.

Mon, 05/28/2012 - 14:28 | 2469797 macroeconomist
macroeconomist's picture

I appreciate proper criticisms that allow a ground for discussion, such as Mises's critique. What I cannot really stand is 18 year-old kids calling Obama or any other asslicker of the financial elite a socialist. 

Mon, 05/28/2012 - 14:34 | 2469811 Ahmeexnal
Ahmeexnal's picture

ok, we get it. you voted for "hope and change".

Mon, 05/28/2012 - 15:19 | 2469924 macroeconomist
macroeconomist's picture

I would not one in a million chance vote for Obama if I were American mate.

Mon, 05/28/2012 - 14:57 | 2469864 Nothing To See Here
Nothing To See Here's picture

Cronyism/corporatism is a child of socialism. They're not the same but they come from the same root, which is anticapitalism.

Mon, 05/28/2012 - 15:04 | 2469881 GeneMarchbanks
GeneMarchbanks's picture

No, none of that makes any sense no matter how much you want it to. 

You're seeing capitalism taken to its final stage.

Mon, 05/28/2012 - 15:06 | 2469887 macroeconomist
macroeconomist's picture

Not in theory. From a socialist point of view, all capitalisms are crony by definition, there is an entire literature on the relationship of the state and capital showing this. So there is no capitalism like the Austrians dream of, and there will never be. This is the exact same criticisms most anti-socialists would use, that socialism will never be experienced as it is in theory, and it will always turn to dictatorship. Both sides have numerous examples to prove their point.

I sadly read some snobbish comments here from one side, totally unaware that the exact same criticism applies to their own arguments and dreams..

Mon, 05/28/2012 - 15:11 | 2469905 GeneMarchbanks
GeneMarchbanks's picture

So there is no capitalism like the Austrians dream of

There is, however, a certain simplistic pleasure in reading their phantasmagoria.

Mon, 05/28/2012 - 15:19 | 2469921 malek
malek's picture

All your posts are sidestepping certain issues, or might be conceived as an exercise in black and white thinking.

Yes, we have crony capitalism for the rich in the US,
but that cannot negate the fact at the same time we have lots of socialism for the lower classes too.
In other words the middle class is bled dry from both sides, lower and higher.

Mon, 05/28/2012 - 15:23 | 2469931 macroeconomist
macroeconomist's picture

Its' not black and white thinking at all, it's just showing the Austrians the truth

There is nothing like socialism for the lower classes and crony capitalism for the rich. That is just crony capitalism, bribing the lowest class up to the degree that the social fabric would not break down. Simple as that.


Mon, 05/28/2012 - 19:51 | 2470383 malek
malek's picture

Keep on sidestepping...

 bribing the lowest class   Using whom's money to do so?


Mon, 05/28/2012 - 21:38 | 2470412 macroeconomist
macroeconomist's picture

What sidestepping? mostly midlle-class if you'll be happy to hear that. And what does that change?It is still called crony capitalism, or capitalism at higher stages. Bother to read about how capitalism destroys middle-class as it develops to higher stages of concentration of capital, written not by one of your Austrian heroes who worship this system but by Marx himself 150 years ago?or that Marx predicted this system would surely collapse because of exactly that?

Mon, 05/28/2012 - 23:36 | 2470739 malek
malek's picture

We're inching closer to the point.

So after the middle class has been bled dry to bribe the lower class, what typical distribution of wealth do we end up with?
(You know when all are equally poor irregardless of abilities or competence, except for some small ruling class.)

Tue, 05/29/2012 - 00:20 | 2470803 macroeconomist
macroeconomist's picture

If you are expecting socialism as the answer, that is Hayek's completely wrong interpretation of the whole socialist idea. That is called peak capitalism, not socialism. That is the point when Marx said the actual socialist revolution would inevitably come, as the system cannot support itself and the masses overthrow the minority ruling class to set up socialism. That's why you and me have completely different understanding of what 'socialism' is or what is socialist. I do not think there has ever been a truly socialist state yet


Tue, 05/29/2012 - 01:15 | 2470842 malek
malek's picture

So you're saying the Sowjet Union was actually an example of peak capitalism?

This is becoming a Humpty Dumpty approach to reasoning...

Tue, 05/29/2012 - 01:33 | 2470856 macroeconomist
macroeconomist's picture

No, of course I'm not saying that, it was aiming to set up socialism initially but it turned into a giant state capitalism rather than socialism. It is not a humpty-bumpty approach to reasoning, it is a very common critique by Anti-stalinist socialists about Soviets, that it was simply an opressive state capitalism in the end, and therefore it created the same results that you can see in advanced capitalist countries today.  Like all Austrians, your understanding of socialism is extremely simple and monotonic: Where you see the Majority poor, minority rich, you label it as socialism, years of brainwashing in U.S I guess. That is the definition of capitalism, not socialism unfortunately. That is how the whole industrial world is at the moment, and they are all capitalists. A bunch of Austrians can deny that this is capitalism, but that does not change the nature of the system. As I've said a few times today, there is no capitalism like you dream of, where the state is only symbolic and not under the influence of certain capital owners. This crony relationship is central to capitalism and capital owners inevitably possess governments eventually as they monopolize and concentrate. 

Tue, 05/29/2012 - 07:03 | 2471009 Lebensphilosoph
Lebensphilosoph's picture

No, of course I'm not saying that, it was aiming to set up socialism initially but it turned into a giant state capitalism rather than socialism.


How convenient that is for you. 'State capitalism' was it? Ho, ho ,ho. All this screaming past one another from your moral high horses amounts to is a bandying about disparate concepts as an excuse for throwing at each other words laden with ideological meaning. What the Austrian calls socialism, you call capitalism, but that matters little when both are mere abstractions that have no existence outside of the minds through which they wander, as actuality is actuality regardless of how one conceives of it. That the legacy bequeathed to the peoples of Eastern Europe in the last century was dreamed up by the ideologues of socialism, forced upon them at the point of a sword by socialist thugs, and pointed to by socialists throughout the 'West' as an example of the wonders of socialism, remains, however revisionists try to spin the matter, a fact of history.


That is the definition of capitalism, not socialism unfortunately.


No, that is not any definition of capitalism.


As I've said a few times today, there is no capitalism like you dream of, where the state is only symbolic and not under the influence of certain capital owners. This crony relationship is central to capitalism and capital owners inevitably possess governments eventually as they monopolize and concentrate.


This is certainly true. Such is human nature, and the very same nature it is that makes the dream of a socialist state of obedient human puppets governed by motives of altruism a dream. But what of it anyway. Wherever one begins one eventually is left with its contradiction. There is no 'end of history' as in the raving visions of John of Patmos, Karl Marx or Francis Fukuyama.There have been periods of socialism and periods of capitalism, dispensations of freedom and those of oppression, ages of misery, war, famine, murder, happiness and prosperity, and each of these again in every human life, past the abstractions of state and society, and they will come and go again and again. Such is the madness of fantasies of 'progress' and the sacrificing of tens upon tens of millions of real, living human beings in the here and now, as in the socialist revolutions of the 20th century, for the sake of ideoligical visions of a future that does not even exist, and would be doomed to pass away even if it ever came to be.


Tue, 05/29/2012 - 07:39 | 2471035 macroeconomist
macroeconomist's picture

It is not me that first used the phrase state capitalism, as I've said, this has been argued by Anti-stalinists since the first day of its adoption and opposed. When the Russians had the 1917 revolution, there was no previous example of a socialist state, neither had someone theorized how a socialist state would be founded and would function. On top of that, the necessary condition for a socialist state to evolve, that is after an advanced capitalist society, was not present and the Russians had to build up capitalism first and accumulate wealth. So what you observed as socialism was what Stalin and his followers adopted and imperially forced on Eastern Europe. Agree with you on that. But by no means it was socialism as envisaged by those before.

Who decides on what socialism is?  You are simply repeating typical cheap American rhetoric of anti socialist arguments (socialist state of obedient puppets, who are no more obedient than their counterparts in opressive capitalist countries like the U.S). I discussed below on this issue but there is only one necessary condition for a successfully operating socialist system, which you could call truly socialist: Everybody gets the fruit of their labour, not more, not less, exactly what it is. This is not necessarily an altrusitic system, it is only fair. There is no need in theory for an opressive government, as this can be achieved without it. (Once again, neither Marx, nor Engels or other early theorists before Stalin has even one line in their books arguing that you need one) This is what socialism, as written and theorized, is. And it is not a rich minority opressing a poor majority (which is what you observe in capitalist countries today and correctly expose everyday here on ZH) So by the same token, what the U.S and its allies have imposed on the rest of the world at gunpoint is this disgusting capitalism which has brought misery to billions, which you all whine about here everyday and claim is not capitalism. All I'm trying to say once again that you are subject to the same criticism, Austrians are nothing but a mirror image of 'revisionist' socialists, who believe in another version of their favourite system. You are free to take whichever side you like, but at least it's good to be aware that you yourself are equally susceptible to the criticisims you direct at 'revisionist' socialists. (I would use the word libertarian rather than revisionist)

Tue, 05/29/2012 - 13:52 | 2472559 malek
malek's picture

 Where you see the Majority poor, minority rich, you label it as socialism

Yes, as the real existing socialism has always happened to been like that.

True socialism would be if everyone is equally poor.

Tue, 05/29/2012 - 06:58 | 2471008 AnAnonymous
AnAnonymous's picture

Using whom's money to do so?

In US citizen economics, the wealth is transferred from an exterior to an interior (hence the importance of borders by the way)

So the wealth has to come from the exterior.

See how the US citizens living in the US transfered from the exterior (indian lands) to bribe and build up the US citizen middle class and what happened when they ran out of exterior wealth to transfer.

As US citizens think long term, they later implemented tools so that the transfer should not be limited by US geography and shifted to transfer from the global world.

Indeed, the escape plan was space conquest. Never kicked in though. Stranded on Earth with US citizen economics running full steam.

Mon, 05/28/2012 - 16:16 | 2470032 Milestones
Milestones's picture

" The game of history is played by those at the top and bottom of the latter over the heads of those in the middle." Eric Hoffer  THE TRUE BELIEVER.            Milestones

Mon, 05/28/2012 - 15:53 | 2469993 Jake88
Jake88's picture

Socialism just doesn't work. As Margret Thatcher said, "sooner or later you run out of other people's money." Simple.

Mon, 05/28/2012 - 16:18 | 2470037 Milestones
Milestones's picture

Ladder. Shit for brain spelling.     Milestones

Mon, 05/28/2012 - 16:34 | 2470068 the tower
the tower's picture

And that money came from the banks, her buddies. Simple.

Mon, 05/28/2012 - 15:58 | 2470003 Jake88
Jake88's picture

"there is an entire literature...showing this." ??? Dude that is not an argument. There is an entire literature explaining how planet earth is run by alien reptilians.  Doesn't make it so.

Mon, 05/28/2012 - 16:04 | 2470019 macroeconomist
macroeconomist's picture

It is an argument because I can come up with tens of examples of crony capitalism while you cannot come up with one that is not crony.

And you can come up with tens of examples of socialism turning into dictatorship and I cannot come up with one that is not. That's what a literature means. 


Mon, 05/28/2012 - 18:00 | 2470205 Karl von Bahnhof
Karl von Bahnhof's picture

OK, so far we had dictature of the Proletariat, which was a failure. Dictature of the Capital, which IS failure...

What we need is simple dictature of the middle class.

Mon, 05/28/2012 - 20:22 | 2470426 Future Jim
Future Jim's picture

I agree that everything works in theory and thus proves nothing. So what actual systems past or present do you think were/are best, and why?

Do you agree that the common denominator for crony-capitalism and dictatorships is big government? Very little of either has been possible whenever government has had few legitimate powers and recognized individual freedom.

Would you agree that an absolute/extreme/100% freedom of speech is critical?

BTW, I can easily come up with examples of non-crony capitalism today, but I don't think you meant individual capitalists or businesses. I think you meant whether governments reward cronyism, which they most surely do. They reward crony unionism too for example.

Mon, 05/28/2012 - 20:41 | 2470452 macroeconomist
macroeconomist's picture

I think you have asked the million dollar question, which system is better/best? One cannot deny that capitalism has brought the most rapid development to part of humanity at the expense of the rest, and removing the motivation for innovation will slow down the progress (the Schumpeterian creative destruction process) The key must clearly be to design systems which would lie in between socialism and capitalism. There are a few attempts I have read, and the literature is still pretty alive in case you would like to contribute :)

I tried to give links to some articles, but you will need subscription, but if you try to find some essays on market socialism (I surely do not mean China or Sweden), or participatory planning, a system along thos lines might work better than capitalism/ socialism. 

I fully agree freedom of speech is critical to any system. You will see that both systems I mentioned above critically depend on that. 

Mon, 05/28/2012 - 21:11 | 2470477 Future Jim
Future Jim's picture

You say: "The key must clearly be to design systems which would lie in between socialism and capitalism." However, you do not say why, and thus it is not "clear."

You were criticizing systems that work in theory, but it sounds like you are proposing another theory.

Wouldn't cronyism between government and business be impossible if government simply lacked the power to participate in cronyism? For example, if government had no power to interfere with economics, business, and money; and no power to redistribute the fruits of one's labor; then wouldn't cronyism between government and businesses be pretty much a non-issue?

How accurate would it be to characterize your perspective as this: "Government rightly has the power to implement any good idea."

How accurate would it be to characterize your perspective as this: "When we're all on the same page, we all benefit."

Mon, 05/28/2012 - 21:21 | 2470525 StychoKiller
StychoKiller's picture

"Congress shall make NO Law abridging the freedom of Production and Trade." -- "Atlas Shrugged"

Mon, 05/28/2012 - 21:23 | 2470526 macroeconomist
macroeconomist's picture

The reason is that both systems have their merits, as we have come to discover I would say.

Yes, what we are talking about is a theory, all I'm saying is that we have tried two theories of systems in practice and they have not worked. capitalism did not come out of the blue, some people wrote about how it should be through time and their ideas were implemented. Same goes for socialism. No system is eternal, every one of them is a stage to the next one. So why not discuss and theorize and put into practice another one, which might work better than this?

I think what you are forgetting is that in capitalism, one never gets 'the fruit's of one's labour', as the system is built on the extraction of surplus from labour. That is reason of the need for the existence of a body acting as a redistributive entity, which you may call government, and which can take many shapes. The key to the libertarian market socialism is that every individual has the right to have "proper equal say" on the matters that directly affect them. Some have even gone further, suggesting that an Athenian style democracy is possible again through advancements in technology and our digital abilities (online direct voting on laws and legislations). So the government here does not mean an interest-seeking group of people who have the right to distribute rents but something much more vague and participatory and constrained, whose entire task is to ensure one really gets 'the fruit of one's labour'. Yes, a government designed in this sense, rightly has the power to implement a good idea.

Mon, 05/28/2012 - 16:01 | 2470009 Bag Of Meat
Bag Of Meat's picture

You're absolutely right. It's all about the human incentives. Both systems give people the wrong incentives, which assures a bad ending in the long term.

Mon, 05/28/2012 - 14:08 | 2469737 GernB
GernB's picture

No im saying socialism is wrong.

Mon, 05/28/2012 - 15:50 | 2469986 Goldilocks
Goldilocks's picture

The new phone book is here...
      The new phone book is here...


Keiser Report: Reform = Crime To Favor Wall St. Crooks (E293) (25:46)

Mon, 05/28/2012 - 15:54 | 2469994 Jake88
Jake88's picture

Good plan while it lasted.

Mon, 05/28/2012 - 13:35 | 2469649 malikai
malikai's picture

Merkel really fucked up by not booting Greece sooner and instead saddling Germany with Greece's bad debt.

Mon, 05/28/2012 - 13:43 | 2469680 lolmao500
lolmao500's picture

Merkel didn't fucked up, that's the plan. To keep the scumbag EU alive, as long as possible. Put people the more and more in debt to the banksters as possible so the banksters come with a ``solution`` down the line that gives even more power to them or a big powerful central EU government. That or war. (where banks can make a boatload of money and the whole thing can pave the way for UN 2.0)

Mon, 05/28/2012 - 14:42 | 2469835 RiverRoad
RiverRoad's picture

Nobody knew better than the EU themselves what a farce this thing was from the get-go.  As long as Goldman backed it, they were all in it to make what they could out of it as long as it lasted.  The subsequent can-kicking has served to gain them time to work on their own agendas and cover/rationale for getting out as whole as possible.  It was fun while it lasted.

Mon, 05/28/2012 - 13:43 | 2469681 GernB
GernB's picture

Exactly. Each side shoud own up to its bad decisions. cut thier losses and part agreeably. Instead they keep trying to hold together the union at the expense of thier people and thier freedom.

Mon, 05/28/2012 - 18:57 | 2470280 MS7
MS7's picture

I hear Germany is profiting from the crisis. The price of the euro is down and their exports are cheap. I highly doubt they would be spending do much time and energy on tiny Greece if it wasn't to the benefit of their people or at least their banks. Mother Teresa, Merkel ain't.

Mon, 05/28/2012 - 13:48 | 2469694 resurger
resurger's picture

Good point lolmao500, the army is with or against the people on elections day when all else fails?

Mon, 05/28/2012 - 14:28 | 2469798 lolmao500
lolmao500's picture

History shows 99.9% of the time against the people. The government doesn't brainwash the soldiers for nothing, they need them loyal and being able to double-think their way into killing their own countryman for the sake of the people destroying the lives of their own family and friends. Same goes for cops. Cops and soldiers brainwashing, the biggest power of a government.

Tue, 05/29/2012 - 09:18 | 2471297 Lebensphilosoph
Lebensphilosoph's picture

Soldiers aren't people? More to the point, what exactly is 'the people' and where can I find it?

Mon, 05/28/2012 - 15:56 | 2469997 Arnold Ziffel
Arnold Ziffel's picture

You forgot to fault Global Warming, also.

Mon, 05/28/2012 - 17:01 | 2470112 JustObserving
JustObserving's picture

How about the corruption in Greece?

 just 324 residents checked the box on their tax returns admitting that they owned pools

So tax investigators studied satellite photos of the area — a sprawling collection of expensive villas tucked behind tall gates — and came back with a decidedly different number: 16,974 pools.

So 98% of the rich Greeks avoided paying their taxes which are based on owning swimming pools.

It is estimated that the Greek government lost $30 billion in taxes a year.  That would be like the US losing $1500 billion or $20,000 per family of four per year.

Mon, 05/28/2012 - 17:08 | 2470127 wisefool
wisefool's picture

snarc: We should send Timmah over there with a copy of turbotax and the IMF's checkbook.

Mon, 05/28/2012 - 17:17 | 2470134 Missiondweller
Missiondweller's picture

I love that example (I've heard it before) because it tells you everything you need to know about the Greeks and why they should have nothing to do with the EU.

Mon, 05/28/2012 - 18:58 | 2470282 MS7
MS7's picture

Is that everything you need to know about the Greeks or just everything you know about them period?

Mon, 05/28/2012 - 18:02 | 2470206 lolmao500
lolmao500's picture

That's not corruption, that's common sense. If more people had the balls to act like Greece, the governments in history would have caused much less death and destruction. No money = no war.

How do you think the US government is funding the TSA?? The NDAA? Guantanamo? The Patriot Act? The war on drugs? The war in Afghanistan? The war in Iraq? TAX MONEY. (even with all those deficits)... if Americans had as much balls as the Greeks, all that crap wouldn't be happening.

Mon, 05/28/2012 - 18:21 | 2470242 noses
noses's picture

If the USA didn't have so much money to spend on their military I'm certain someone would have kicked them out of the solar system by 1970 already. You should be careful what you're wishing – just in case it came true.

Tue, 05/29/2012 - 00:03 | 2470780 Clashfan
Clashfan's picture

Or some argue that AS is a blueprint Rand received from Rothschild that is basically being followed. So perhaps it's not stupidity or the "fault" of one side or another but simply a NWO plan to crash the economy to bring about one-world government. Greece is merely first up.

Mon, 05/28/2012 - 13:24 | 2469623 AC_Doctor
AC_Doctor's picture

Jamie Dimon's half brother...

Mon, 05/28/2012 - 13:29 | 2469626 Tirpitz
Tirpitz's picture

So, how many of the billions in 'bailout money' did go to the Greek, and how many billions to the mostly German and French banking giants?

Of course it is easier to brand the Greek as lazy than to sell the tired, exploited populace another necessary bank bailout for the tax-evading internationalist banks.

Why not write off the Greek debts in total and let them start over? And shaft the banks, for a change.

Mon, 05/28/2012 - 13:46 | 2469688 Joe The Plumber
Joe The Plumber's picture

I believe that is what greece is being offered by the choice to leave the euro

Mon, 05/28/2012 - 13:57 | 2469712 GeneMarchbanks
GeneMarchbanks's picture

Not even close. It's being offered the chance to become a Forex piñata that is so badly needed for the City as they run out of collateral to post for new gambling chips.

All this is being done with false promise of a return of tourists once the dust settles. Greeks are too savvy for such nonsense it seems.

Mon, 05/28/2012 - 14:33 | 2469809 RiverRoad
RiverRoad's picture

Get some velocity goin' under the Drachma and tourism at the right price could be a real money maker.   Certainly olives and shipping won't do it at the moment.  It was always tourism with Greece and the EU knew that when they took them in.

Mon, 05/28/2012 - 14:44 | 2469841 halcyon
halcyon's picture

Because it would help JACK SHIT.

Greece joined euro with cooked books (that they knew of) and with bad PPP disparity.

They own goddamn fault, if I may say so.

Then the people retire 10 years earlier, are SERIAL defaulters during the past 400 years (read Reinhart & Rogoff) and run one of the most corrupt states full of cronyism, nepotism and corruption.

So yes, it is also their goddamn own fault and they should get what's coming.

But no amount of zeroing their debts will help as long as their balance of payments is structurally (try to understand that term) in deficit.

They'll just keep on bleeding and be back in debt they can't handle within the next 10 years.

What next? Another bail out? Another debt write down.

No, regardless of how much it hurts, Greece needs to:

- take all bail outs possible

- default WITHIN euro

- get a 90% haircut

- declare bank holiday

- leave euro, issue new drachma

- revalue all remaining debt (unilaterally and legally, they can do this) in new drachma

- let their currency afloat and see it devalue 70-80%

- nationalize & recapitalize banks through their own central bank (print money)

- open banks for business

- see their only business (agriculture exports and tourism) shoot through the roof

- get structural competitiveness back

- pay back their debt

- re-enter loan markets after 3-5 year hiatus

- re-structure their political system and kick out the two ruling families that have ripped off the country for the past 40+ years.


That's what Greece needs to do.

Unfortunately the lazy bums that the greek are, don't have the f*cking balls to do it.

They'll just keep on saying they don't want cuts, don't want austerity, but want to stay in Euro and let somebody else foot the bill.

It will never work. Not for the greek and not for the creditors.

And it's a crying shame that even zerohedge readers don't understand these basic issues properly


Mon, 05/28/2012 - 15:08 | 2469895 RiverRoad
RiverRoad's picture

+1    Fish or cut bait.

Mon, 05/28/2012 - 16:14 | 2470029 Bag Of Meat
Bag Of Meat's picture

How can you be correct on everything else except on who's responsible? Do you seriously think that a greek farmer in the mountains of Crete with primary school education can understand what is the solution from a macroeconomic point of view??? How can you call a man working from 16yrs old every day in his fkin 100m square field a "lazy bum" ? All that man knows is  what he hears from his 9 o clock news in the propaganda tv channels (the most family owned sector in greece) , and what the politicians he's been seeing for 20 years tell him. I honestly feel sorry for them- i'm sure many of them can feel that there's something wrong but do not have the intellectual capacity or the time to find out what is truly best for them. Theyre lost in a sea of lies, fake promises , and poverty. How can you call these men cowards, waking up everyday, having to plant the fkin monsanto seeds so they can sell their products for a tenth of the market price to the agricultural cartels ?
Yes it's easier to blame all them lazy ass greeks not having the balls. Because realising they're actually in need of help from YOU requires twice those balls. 

Mon, 05/28/2012 - 17:31 | 2470160 halcyon
halcyon's picture

Look, I'm not saying *every single* greek is guilty. Of course the children are not. Of course those who don't have full mental faculties are not.

But the average voting age greek, who took the cheap money, levered off their tits, spent the money on unproductive shit and voted corrupt politicians for four fucking decades is guilty as hell.

And dem needs to face the facts as well. Not just GS. Not just the Euro-bankers. Not just the stupid MMF portfolio managers who bought their toilet paper at insane interest rate levels without doing any sort of due diligence or risk management 101.

Yes, the Greeks are guilty as hell. It's called democratic accountability. Look it up.

People get as good politicians as they deserve.

And no, I'm not saying it's any better where I live, but I'm sufre as hell not going to blame the fault of our politicians on the Greek people!

They should clean up their own shit like any responsible adults (and do notice that my version of cleaning it up includes milking the system for all it is worth, if the rest of us are too goddamn stupid to give it to them).

So yes, guilty as charged.


Mon, 05/28/2012 - 18:12 | 2470223 Bag Of Meat
Bag Of Meat's picture

I didnt say theyre retarded... i said theyre ignorant in economics not from choice, but because of circumstances (and i assume you know theres more knowledge in life than money,economics,politics...and these people know more than most). Of course theres alot of greeks that commited fraud for decades, but they were supported by the corrupt political system. And they are a minority. So i blame the the bankers,the politicians (their accomplices),and that minority of greeks. No i do not blame even those who profited just a little from this system, because had they know the price they would have to pay, they would have never taken part to the feast. I know who my enemy is, and i try to make sure everyone does.I cant plant potatoes like farmers do, and would face starvation if they werent responsible of producing my food. in the same way society relies on economists to provide the truth and solutions for the economy, and i cant hold them responsible for not being experts. If the food you bought was poisoned, would you like for farmers to say "you should have know better biochemistry and choose healthy foods" ???
And all this while keeping in mind that there are NO CERTAIN economic "answers" or solutions, and nobody can be sure about anything 100% in the economic life...

Mon, 05/28/2012 - 17:21 | 2470139 BeetleBailey
BeetleBailey's picture

Indeed Halcyon

Telling also, is this;

"I don't see any contradiction in that. We simply don't want the money of European citizens to vanish into a bottomless pit"

Nevertheless, that is exactly what is happening.

Mon, 05/28/2012 - 22:02 | 2470596 Tirpitz
Tirpitz's picture

Greece joined euro with cooked books

That was well known throughout the entire world, including the Germans and all the banks.

... are SERIAL defaulters during the past 400 years

Again, nothing new here. Neither for any creditors of reading age.

... and run one of the most corrupt states full of cronyism, nepotism and corruption.

So, which one maybe save Switzerland and Norway would be any better?

... it is also their goddamn own fault and they should get what's coming.

Well, some few reaped giant profits, many others will pay for it. As usual.

But no amount of zeroing their debts will help as long as their balance of payments is structurally (try to understand that term) in deficit.

Maybe importing a few less expensive submarine toys could help towards a more balanced trade.

They'll just keep on bleeding and be back in debt they can't handle within the next 10 years. What next? Another bail out? Another debt write down.

Ain't that exactly what vendor financing was invented for? German taxpayers paying for the rich profits of their export machinery. Too bad they don't see any of their products...

They'll just keep on saying they don't want cuts, don't want austerity

Strict austerity for the unwashed masses, but free and unlimited monies for the banks - maybe the Greek are right in demanding **some shared** sacrifices.

Mon, 05/28/2012 - 16:41 | 2470079 RoadKill
RoadKill's picture

This is a total Red Herring of an argument.  If the EU/ECB and IMF money went to pay interest and principal on debt owed to banks or bond holders THEN IT WENT TO THE GREEK PEOPLE.

This is no different than refinancing your 7% mortgage at 3%.  If the US government comes in and loans you $100k at 3% to pay off your mortgage at 7% - how exactly are the banks at fault?

The problem here is the problem with ALL sovereign debt.  The government borrows to bribe one group of people without the consent of the people it needs to pay the debt back.  The US government is doing the same thing, its borrowing to bribe senior citizens and welfare queens.  But it never got permission from you and me to borrow on our behalf – yet it needs us to repay the debt.  I say FU – its not my debt and I won’t be paying it.

Before the EU/ECB and IMF got involved the Greek government borrowed 150%+ of GDP to bribe the ND/PASOK voters.  It did so without asking the CEOs of its shipping companies or its young, entrepreneurial, educated workers if it could borrow on their behalf.  They are now leaving the country in droves (or at least their money is) and they are saying FU this is not our debt and we aren’t going to pay it.

What needs to happen is a complete accounting of who received the largess of the ND/PASOK government over the last decade.  Corporations that got subsidies should have to pay them back.  Government workers that received too many benefits and to high of salaries – should have them taken away.  People that received welfare benefits should be handed a lien against their assets.  Its their debt.  Let them pay it back.  This should not be levied against people that have worked hard and/or started companies, and have never received a single dime of government assistance.  If the people that have liens against them can’t pay them – they can declare bankruptcy.

The problem is the entire CONCEPT of government debt.  This type of collectivism is SLAVERY.  Politicians have no right to pledge our future wages and labor to and lender.  The nice thing about PERSONAL debt is that its not transferrable.  The lender knows who owes them, and if that person can’t pay, the lender loses.  If that person dies, the lender loses.  But COUNTRY debt allows the lender a claim against people that never signed on the dotted line for the loan, never got a single benefit from it, and in fact people that aren’t even born yet.  The assumption in calling something RISK FREE is that future generations will pay off the debt no matter what the burden.  We need to get rid of this concept of RISK FREE, where if the person that borrows the money can’t pay it back the lender can go after their neighbors or their neighbors unborn child.

I don’t think its fair to paint the bankers and lenders as EVIL in all of this.  They were told that if they were willing to lend at a lower rate then they would lend to an individual at, the governments would ENSLAVE future generations to pay them back.  Than bankers and lenders were STUPID to buy into this paradigm, but trying to enforce their rights doesn’t make them evil.  Nor are the people that are evading taxes and leaving Greece (or taking their money out) EVIL.  To the extent they have paid more into the system then they have taken out.  The people at fault are those (corporate or individual) that have sucked more out of the system then they have put in, and the politicians that enabled them in return for money/votes.

Now go ahead and trash me all you hippy OWSers and anti-bankster conspiratorialists.  God knows individual responsibillity is antethema to the goon crowd that has taken over ZH.

Mon, 05/28/2012 - 16:49 | 2470090 RoadKill
RoadKill's picture

Let me be VERY clear.  I have no problem with Greece defaulting.  I have no problem with the people that didn't benefit from the lagress of the last 10 years saying they won't pay.  I also have no problem with the bankers and lenders trying to defend their rights and extract as much as they can from those that did benefit from the lagress.

But from here on out any country that defaults on its debt should be prohibited from structural government borrowing.  Structural meaning they can have 1-3 year revolving loans to deal with working capital needs, but they cannot run structural deficits and run up a debt that is constantly refinanced and increased.  Every three years they have to show a net cash position for at least one month equal to the largest net debt position they ran during that 3 year period.


Tue, 05/29/2012 - 10:10 | 2471457 Boxed Merlot
Boxed Merlot's picture


Now go ahead and trash me all you hippy OWSers and anti-bankster conspiratorialists. God knows individual responsibillity is antethema to the goon crowd that has taken over ZH...

I can go along with your premise that bankers are only doing what bankers do, but you are assuming that there are in fact two distinct classes here, i.e. public sector government agents and private sector bankers.  However, when a closer inspection of this assumption is made, there is only a matter of timing when looking at the individuals involved.  They jump back and forth from one side to the other to appease their alternating cravings for political power and wealth accumulation without regard for the true misery of those left in their wake. imo.

Mon, 05/28/2012 - 13:30 | 2469635 macroeconomist
macroeconomist's picture

Again, undeserved bashing of the left by zerohedge. He's not saying it's all Merkel's fault, he's saying it will be Merkel's fault too. And HE IS RIGHT with that, bother to have a look how much Germany exports to Greece?and the rest of the periphery? Or how Germany got bailed out too, by shifting the costs of the bail-out to the rest of Europe? Of course not. Just blind bashing..

Mon, 05/28/2012 - 13:36 | 2469653 GernB
GernB's picture

Ah yes. It's Germany's fault for being industreous and making things other people want to buy.

Mon, 05/28/2012 - 13:40 | 2469669 macroeconomist
macroeconomist's picture

Another kid with no knowledge of economics..Got a better idea than third class newspaper arguments?

Yes, it's their fault to force ECB to lower interest rates and allow the real exchange rates in the periphery to appreciate, and literally suck the blood out of them with the monetary union and then turn around and say "sorry we cant do anything", while their banks get bailed out implicitly. Do you know anything about the theory and practice of currency unions and under which conditions they work? Clearly not. Do your homework kid, then we will discuss.

Mon, 05/28/2012 - 13:44 | 2469685 Joe The Plumber
Joe The Plumber's picture

The old saying is true

You cannot con an honest man.

The greeks were comPletely helpless and forced to take loans to live above their means

Mon, 05/28/2012 - 15:03 | 2469876 Nothing To See Here
Nothing To See Here's picture

Germany forces the ECB to lower interest rates? That is news to me and if even true, I would hope you would blame Keynesianism and their aggregate demand theories first for that, which have been around for what, 80 years now, instead of the Germany-lead EU construction.

Mon, 05/28/2012 - 15:13 | 2469909 macroeconomist
macroeconomist's picture

Section 3, page 12 onwards..

Mon, 05/28/2012 - 16:08 | 2470023 Jake88
Jake88's picture

Get help dude.

Mon, 05/28/2012 - 16:34 | 2470054 Joe The Plumber
Joe The Plumber's picture

I read the section. Interesting. I dont see why socialists think that achieving goals thru higher inflation is better than achieving goals through lower inflation. If anything it demonstrates that low inflation in germany led to huge productivity improvements and more competitive exports.

If everyone followed the german model we could see huge price pressures on goods and services which benefit the entire world as each focus on their comparative advantages now and as they evolve in the future

People hate the Creative Destruction that happens with productivity gains because they focus on the seen and forget the unseen

Mon, 05/28/2012 - 15:36 | 2469957 Xkwisetly Paneful
Xkwisetly Paneful's picture

It is even worse.

They had fraudulent GDP fr WWII to who knows 1970?

By some miracle of greek math their GDP was double or close to double the avg Euro over the same time period.

Why would they do that? Same reason any economic entity lies about their assets-

to borrow more money. So they are even worse than the avg euro liberal social shithole.

THey not only lived way above their means, if they weren't at the top of that mountain they were damn close.

Mon, 05/28/2012 - 22:28 | 2470644 Calmyourself
Calmyourself's picture

Well you dare call that knowledge of economics your just some Joe with a lot of common sense and gosh sakes that sure doesn't replace economic education, why I should call Paul Krugman's wrath down on you but he is busy kneeling in front of little Timmy at the moment..

Tue, 05/29/2012 - 08:46 | 2471180 AnAnonymous
AnAnonymous's picture

The old saying is true

You cannot con an honest man.

Do you have any reference to show that it is a saying and second it is old?

The references I found point to US citizen works of fiction.

In the mean time, one can find easily references to old sayings like it takes a thief to set up a thief etc implying a different idea.

It would be interesting to know because this 'saying', old at that, reads like another US citizen fictional mix with fiction, confusing reality and what US citizens want to convey through their cheap cultural industry.

Mon, 05/28/2012 - 13:46 | 2469689 GernB
GernB's picture

I only advocate that each sidd allow the other to be free. If currecy unions shackle the people of one country to another then they are wrong. Sorry if freedom is just too damn simplistic for modern economic theory to deal with.

Mon, 05/28/2012 - 15:09 | 2469899 Scalaris
Scalaris's picture


What the fuck are  you on about? You advocate that each side allow the other to be free? Are you underage and/or a moron?

Greek corrupt political administrations kept being elected in exchange for providing the teat of infinite government spending, while ignoring any provisioning for infrastructure, industrial or otherwise, which would have contributed in any future repayments of the increasingly accumulated debt.

And while the taps were running with cheap credit, nobody gave a fuck, not the politicians, and certainly not the citizens, who despite being as manipulatable as the dumbest ape, kept enjoying the illusion of prosperity, with the majority working for the government, and for the lower social classes to enjoy privileges through the accumulation of personal debt, which was promptly paired with the infamous practice of Greek tax-evasion.

Now all of a sudden, everyone's pining over the lazy Greeks who were doing exactly what those who were in charge wanted them to do, while forgetting that every single European bank rushed into the Greek gold mine during the past decade, either by acquiring equity into Greek banks, or buying them as subsidiaries outright, while flooding the dumb Greeks with dumb loans, without giving two shits about their repayment, when Greeks were apparently non-profligate while manning their heavy industries.

Now you have a 500kg morbidly obese person with a moron for a doctor who prescribes that fart should be the only nutritional input, because we need to exercise "prudency".

Funny that when the festivities goes on nobody remembers prudency, fiscal or otherwise, or that social masses forming voting bases are inherently dumb hordes, for that matter, but back then it wasn't the time to play the blame game.

Now that everybody and its sister remembered that certain amounts of debt need to be repaid and suddenly everyone realized that nobody has a fucking job, "drastic" decisions are needed to be taken. Nobody saw that Greece had no means to generate growth during the ample provision of credits by its creditors, or when everyone was stockpiling those elusive Greek bonds, or even when European banks went on a M&A shopping throughout South Europe (Hello Crédit Agricole, SocGen, Natixis, BNP Paribas et al.)

And now everyone's surprised that the same dumb fucking hordes are voting for a different moron, albeit a wannabe neosocialist one, who isn't fit to lead a turd in a shitstorm, and who gained all this support because he campaigned on the premise of saying fuck off to the same bankers who funnel money by the German taxpayers to the Greek people, via a stop outside their banks, where they unload 80 cents out of every Euro, before handing the rest of the peanuts left, while the same dumb hordes who voted for whoever face daily socioeconomic decline while expected to start paying their taxes just now, when they have already been unemployed for years, with depleted savings and absolutely zero incentive to do fuck all.

And all this while madam Lagarde waxes lyrical about the social responsibility of the Greek masses, unity, work, pride and all that shit, while throwing gems like "thinking more of the little kids from a school in a little village in Niger who get teaching two hours a day, sharing one chair for three of them, and who are very keen to get an education, and has them in her mind all the time, because she thinks they need even more help than the people in Athens."

Pretty neat for her to predict the future when Greece will resemble Niger, where people live in dismal conditions due to lack of a market society. Spoiler alert - rest of the Europe will follow.

Mon, 05/28/2012 - 15:13 | 2469911 halcyon
halcyon's picture

Aw man, I wish I had written most of that. Thank you.


Mon, 05/28/2012 - 17:02 | 2470115 slewie the pi-rat
slewie the pi-rat's picture

bong-ho bingo, BiCheZ!

Mon, 05/28/2012 - 16:00 | 2469968 Xkwisetly Paneful
Xkwisetly Paneful's picture

Awesome post!

How many words to describe the earth being flat?

What the fuck are you on about, those poor, poor victimized greeks?

People who come into the game with nothing and leave with something cannot be losers of the game.

It is not complicated, coming into the game with air and leaving with a higher lifestyle than what would otherwise be possible is winning at the game, not losing.

Sub prime lending at it's finest, the greeks got a hold of more money than the NPV of their collective lives at lint like interest with crappier than avg credit to begin with. I don't blame them a bit for exploiting it to the nth degree. However, there is no loss here for them. Likewise 70yrs of fraudulent lifestyle outweighs anything the bankers could ever steal.

 Otherwise it would already be fucking Niger or more accurately Greecistan.


Mon, 05/28/2012 - 16:19 | 2470039 Scalaris
Scalaris's picture

Yeah no shit oracle, hence the multiple use of the term "dumb fucking hordes", as a description of the Greek voting base.

Because that's what they are, despite what conventional wisdom dictates, 90% of the masses providing voting power in any place in the world are dumb, and while clearly there's people here to blame for this fuck up, the fact remains that these idiots, who in their own moronic blissful ignorance, stupidity or even outright conscious choice, are being treated as data on IMF's economic forecast sheets.

Yeah they are idiots who deserve what they get because it was their choice yadda yadda, but among these there are tens, hundreds, millions, who are getting royally fucked without really having any fault, nor having gained something after coming "into the game" with nothing.

And sure, I wholeheartedly concur that Greece should already be Grecistan, instead of the debt mountain it currently is, but alas it's not, and I really want to see how tight the rest of Eurozone's ass cheeks clinch if there's even a whiff of Drachma introduction, now that every single entity, public and private, is up to their necks with Greek exposure.

Or am I going to keep seeing the revolving headlines in Bloomberg from officials saying that the Chinese, US, or fucking Xanadu economies, are totally "well-shielded" from any sort of Greek contamination, 'cause good luck with that delusion.

Mon, 05/28/2012 - 17:16 | 2470133 slewie the pi-rat
slewie the pi-rat's picture


so, there!  L0L!!!

Mon, 05/28/2012 - 17:37 | 2470170 Xkwisetly Paneful
Xkwisetly Paneful's picture

There is no loss for the Grecians here. The idiots who aren't really since they exploited the situation probably better than any single other country,

have modern day Greece.   You posted yourself it would be Greecistan otherwise.

Anything paid here is the equivalent of a nominal fee at a parking garage after the leaving the game.

I say stand up and applaud!

 The same people who brought the world democracy are attacking the same system that is the current bane of mankind and are basically free rolling to boot.


Tue, 05/29/2012 - 06:53 | 2471004 Boxed Merlot
Boxed Merlot's picture

social masses forming voting bases are inherently dumb hordes...


This is nothing new...

A crowd…in its very concept… is untruth, since a crowd either renders the single individual wholly unrepentant and irresponsible, or weakens his responsibility by making it a fraction of his decision. Observe, there was not a single soldier who dared lay a hand on Caius Marius; this was the truth. But given three or four women with the consciousness or idea of being a crowd, with a certain hope in the possibility that no one could definitely say who it was or who started it: then they had the courage for it; what untruth! The untruth is first that it is "the crowd," which does either what only the single individual in the crowd does, or in every case what each single individual does. For a crowd is an abstraction, which does not have hands; each single individual, on the other hand, normally has two hands, and when he, as a single individual, lays his two hands on Caius Marius, then it is the two hands of this single individual, not after all his neighbor's, even less - the crowd's, which has no hands. In the next place, the untruth is that the crowd had "the courage" for it, since never at any time was even the most cowardly of all single individuals so cowardly, as the crowd always is. For every single individual who escapes into the crowd, and thus flees in cowardice from being a single individual (who either had the courage to lay his hand on Caius Marius, or the courage to admit that he did not have it), contributes his share of cowardice to "the cowardice," which is: the crowd. Take the highest, think of Christ - and the whole human race, all human beings, which were ever born and ever will be born; the situation is the single individual, as an individual, in solitary surroundings alone with him; as a single individual he walks up to him and spits on him: the human being has never been born and never will be, who would have the courage or the impudence for it; this is the truth. But since they remain in a crowd, they have the courage for it - what frightening untruth.

The crowd is untruth. There is therefore no one who has more contempt for what it is to be a human being than those who make it their profession to lead the crowd. Let someone, some individual human being, certainly, approach such a person, what does he care about him; that is much too small a thing; he proudly sends him away; there must be at least a hundred. And if there are thousands, then he bends before the crowd, he bows and scrapes; what untruth!

Excerpted, “Crowd is Untruth”

Soren Kierkegaard


Tue, 05/29/2012 - 08:37 | 2471153 GeneMarchbanks
GeneMarchbanks's picture

+1 for Kierkegaard

Mon, 05/28/2012 - 22:30 | 2470651 Calmyourself
Calmyourself's picture

Freedom and economics, your just going to confuse him.. Dismal science remember..

Mon, 05/28/2012 - 16:03 | 2470015 Jake88
Jake88's picture

you may have knowledge, but you certainly do not have understanding.

Mon, 05/28/2012 - 17:24 | 2470146 RoadKill
RoadKill's picture

You are a tool Macro.  And before you start in with the adhominum attacks realize I’m no child and my understanding of economics will put you to shame.

You are confusing trade deficits (Exports - Imports) with budget deficits (Taxes - Gvnt Spending).  Twin deficit theory ONLY holds when you assume all other variables are constant.  For example, Taxes don’t reduce Investment or Consumption.  It’s a BS assumption.  Taxes do reduce Investment and Consumption and Gvn’t Borrowing crowds out Private Borrowing.  Fundamental basis of REAL (ie Austrian) economics instead of BS (Keynesian) equilibrium theory.

The fact that Germany MAKES things that people want to buy and Greece doesn’t - should have 0 impact on government deficits and debt.  Because individual Germans are selling things to individual Greeks.  If those individual Greeks can’t make anything that the Germans want to buy, then they will run out of money.  Blaming Germany for making things that people want to buy is idiotic.

HOWEVER, the Corrupt Greek Government borrowed money ON BEHALF of the handful of Greeks that do make things that others want to buy – WITHOUT THEIR PERMISSION.  The Corrupt Greek Government then gave that money to the millions of Greek Parasites that consume more then they produce – so that they could continue consuming things that the Germans made.  We shouldn’t be mad at the Germans for producing and selling things to the Greeks.

Now what we see is that the handful of Greek citizens that produce anything of value are refusing to pay the loans that were taken out on their behalf but WITHOUT THEIR PERMISSON.  The millions of Greek Parasites are rioting because they are being told that not only will they no longer be able to consume more then they produce – they will have to consume less then they produce (or in most cases they will actually have to go to work and produce something for the first time in their life) in order to pay back all the benefits they were given.

This brings us to the lenders - who are pissed because the Corrupt Greek Government told them they would be allowed to enslave the handful of productive Greeks and their children to pay back the loans, and they are finding out that unfortunately those handful of productive Greeks are also the smartest Greeks and the most capable of moving their money and changing their nationalities.  The lenders aren’t EVIL, they were just stupid.  We should sympathize with the lenders and understand their anger.  They lent to the Greek Parasites at 3% instead of 20% because of the guarantees they got from the Corrupt Greek Politicians.  Of course, just because we sympathize with them doesn’t mean we allow them to go after the innocent Productive Greeks.  We laugh at them for being stupid, tell them to work out a payment plan with the Parasite Greeks to wring out as much blood as they can from that stone - and then take their losses like big boys.  In this case that means raising the retirement age to 75, cutting government wages and benefits to below private wages and benefits and severely cutting all government subsidies and welfare.  This is exactly what Germany is asking for in return for forgiving significant amounts of debt and reducing the interest rate on the remaining debt to 3%!!!  MOST IMPORTANTLY WE MAKE THIS BS ILLEGAL SO NO ONE FALLS FOR IT AGAIN.

In short.  Put the Corrupt Politicians in jail.  Smack the lenders in the head for being stupid and falling for the Corrupt Politicians lies.  Make the Parasites pay back as much as you possibly can, even if it means they are going to have living standards more akin to those in Rural Turkey.  Don’t try and attack the Productive Greeks because you will need them to rebuild.  And then change things to make government borrowing ILLEGAL.  At the very least Germany France the UK and every other country should make it illegal for their banks to buy Government bonds from any country that has defaulted in the last 100 years.  This is like the 6th time Greece has defaulted.  WHY HAVEN’T PEOPLE LEARNED NOT TO LEND MONEY TO COMMU”NISTS, SOCIALISTS, GREEKS OR ARGENTINIANS?

Mon, 05/28/2012 - 19:59 | 2470362 macroeconomist
macroeconomist's picture

Ha ha ha> Perfect economic knowledge you have indeed, typical NC and Austrian bullshit of "government debt crowds out private investment". I stopped teaching that idiocy to 2nd year students, you need to do better than that). I am not confusing anything, you simply do not know what you are talking about. First of all, as an accounting identity, when there is a current account deficit, two things can happen: Either a government deficit (G>T), or a private deficit (I>S). Therefore, no country can run current account deficits for a very long time, as this would imply that eventually either the private sector would be leveraged to the level of Ponzi financing, or the government deficits accumulate (Unless you have the reseve currency of the world, which gives you a much longer time than others). I did not mention twin deficits because a current account deficit comes always as a twin deficit: i.e either accompanied by government deficit, or private deficit (Spain) or both (Greece). I do not have time to give you exact links for the data, but that is what you will see if you bother to look in whichever country you like. Oh well, German&French banks madly lent to the Greek government and households, to people they should not, seeking for short term profit. And they now want to be saved. 

It is clear that you have absolutely no data based knowledge about greek economy and just repeating popular anti_greek jargon, which doesn't really deserve a serious answer. Especially if you think the "poor" lenders were stupid (not damn greedy and short term profit maximizing parasites) and the Greek people are parasites. That is beyond being biased, and therefore not serious.

Nowehere have I said the corrupt politicians should not go to jail, or greece doesn't a restructuring. Nowhere have I blamed Germans for making things people want. But I blame them for allowing the south into the monetary union and then exerting influence on the ECB decisions, KNOWING VERY WELL that the south would not be able to compete with them and there would be a huge transfer of funds from south to north. If you believe they did not know this, I'll send you many articles written before/during the early years of the union that this would happen. 

In case you want evidence about how biased ECB behaves at the moment, here you go, posted on ZH as well before if I remember correctly.

It does not matter whether or not Germany forgives debt (or pretends to do it) What they are trying to do is to save their banks money, as other wise they will have to bail out their own banks. Better to lend it to the Greeks, so they pay the banks, and then owe to Germany. Unsecured debt to banks is suddenly owed to the IMF and EU and secured  by railways, highways, airports of Greece. What happens to the banks? Oh nothing as usual. I guess they can stick that solution up their asses.


And as I've said, you really need to read about currency unions, the criteria, institutions, and policy tools needed for a currency to work. 

Mon, 05/28/2012 - 21:39 | 2470553 RoadKill
RoadKill's picture

Ohhh no you di’int.  You got served… and if you dance back… its ON… and if its ON you gonna get F’ed in the A.  Sorry watching South Park right now.  Thought I’d bring a bit of levity to the debate.



Here is what I was responding to:

Yes, it's their fault to force ECB to lower interest rates and allow the real exchange rates in the periphery to appreciate, and literally suck the blood out of them with the monetary union and then turn around and say "sorry we can’t do anything", while their banks get bailed out implicitly.”

The way I read it, you are claiming that the reason that Greece has huge debts is because the ECB cut interest rates and Greece didn’t have their own exchange rate to FORCE them to not buy more.  Worse, you are implying that the Germans did this in order to force other countries in the currency union to buy things from them that they couldn’t afford – and thus become debt slaves.  I will agree that non-existent lending standards and the stupid availability of credit allowed Greece to run up huge deficits and debts and low interest rates allowed Greece to finance them, but that’s not causality.  They could have elected NOT to buy what they couldn’t afford.

MY claim is that the Corrupt Socialist Greek Government played THE critical role in preventing personal responsibility from kicking in.  The CSGG borrowed on behalf of the few Greeks that produce more then they consume WITHOUT THEIR PERMISSION and gave that money to the millions of Greek parasites that get over generous wages and benefits or welfare payments from the Government – allowing them to consume more then they produce.  Absent over generous wages and benefits to public sector employees; people not getting a job till they are 30, working 30 hours a week with 8 weeks paid holiday and retiring at 50; and >50% of the population receiving net payments from the government – this would not have happened.  Had the Greek government raised taxes instead of borrowing – the productive Greeks would have stopped being productive or they would have left 10 years ago.  But the CSGG borrowed money on their behalf, sold their children into slavery and lied to them about how bad it was.

However the fact that Externally Funded Budget Deficits ALLOW Trade Deficits OR Private Surpluses =/= Trade Deficits CAUSE Budget Deficits.  Unless you assume some huge conspiracy between independent actors (German Government, German Exporters and German Lenders).  But you are right that the German government faces a stark choice: give Greece $ so they can pay off their lenders OR bail out the German banks on their losses.  However, I would claim that choice A will result in the German Lenders getting less money then they could otherwise extract from the Greek Parasites, and will result in Germany bailing out the banks of 26 other countries.  Choice B will result in smaller losses.  You only pay for a portion of the bad loans German banks made to Greece (and none of the French/Nordic/Bennelux etc Banks).  And if done correctly you can force the correct parties to take their fair share of losses.  Equity and junior debt are wiped out.  Senior debt takes a moderate haircut and depositors take none.

Also, Im guessing you are an English Econ Prof – correct?  Can I ask – how does the world hitting the Keynesian end point feel?  Its going to repudiate your entire career.  Austrians FTW!

Mon, 05/28/2012 - 22:27 | 2470633 macroeconomist
macroeconomist's picture

Well, last question first, I am Turkish teaching in an English university, only Dr. yet as I got my PhD four years ago. I am not Keynesian by the way, and I do not think what is labelled as Keynesianism today is what Keynes was trying to say. (There was a letter from Keynes to Roosevelt here on zerohedge some time ago on that)  I'm closer to a Minskyian Post-Keynesian in the short run and libertarian socialist in the long run (not in the sense you use it though for Greece, that is crony capitalism, not socialism. I had a nice discussion above with some guys on that, so I do not want to repeat all that) So my career is building up yet, and I'm reading everyday to clarify my thoughts. 

I like Austrians for some of their insights, I must confess I have learned a lot about capitalism from them, I follow a lot of Austrian blogs and I teach Austrian economics in my financial crisis module but I find them equally dreamers as devoted Marxists or anarchists, longing for a system that will never be as it is in theory. Capitalism necessarily evolves to this crony state,so there is no capitalism like Austrians dream of, and there will never be. The state will always be captured by owners of capital as concetration of capital and monopolization increases, and finally financial capital will own the government. This was written 150 years ago by Marxist prophecy word by word..

It's quite late here, will write tomorrow on Greece

Mon, 05/28/2012 - 14:22 | 2469786 RiverRoad
RiverRoad's picture

Beware of Greeks accepting gifts and reciprocating with extortion.

Mon, 05/28/2012 - 14:41 | 2469831 XitSam
XitSam's picture

You act like what Tsipras says is a true reflection of his belief. It is simply posturing by a politician. 

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