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I was listening to the PBS NewsHour last Wednesday as I was preparing dinner, when I heard something that made me drop my onions.

Not believing my ears, I had to find it on the web to see if I'd actually heard it right, and I found it here the next day.  Let me give you the phrase from the report that stunned me:

And this extraordinary admission: "The financial system," he said, "is stronger than the will of the people."

Leading up to Wednesday and Thursday's parliamentary approval of austerity measures that follow last year's failed austerity measures, Papandreou faced so much opposition from his own party that he could not have passed the measures unless he reorganized his parliament - which he did.  

Greece now faces further layoffs, lower wages, higher taxes - and perhaps most stunning of all - privatization of Greek assets.  They have lost their sovereignty, and may now lose ancient treasures, transportation grids, who knows what else?  They've set up a privatization agency under austerity plans agreed with the European Union and IMF and must sell off five billion euros in state assets this year alone.

Now I don't pretend to have much more than a modest grasp on economics, but I have heard some debate on all this.  One point of agreement is that this bail-out is not going to be enough. Little discussed is that defaulting is actually an option - and the option the vast majority of Greeks favor.

Advocates of default point to Argentina's economic collapse in the 90's as an example why default right now is better than default later:  Argentina tried the austerity route, which threw them into abject poverty before they finally defaulted.  

The world didn't collapse.  There are wonderful stories of the people, the workers, just carrying on, running the factories and the businesses after their corporate overlords fled the country with as much cash as they could stuff into their suitcases.  The people arose to the occasion, taking over top management functions by teaching themselves how to market, do accounting, manage inventory.  It took a while to recover, but Argentina flourishes today.  Let's take a lesson from them, as we deal with the continuing global economic "crisis"

And what would happen if Greece defaulted?  Banks would lose money?  The banks that pulled off the Great Heist of 2008 would lose money?  OMG the sky is fallling!

I imagine most Kossacks are at least passingly familiar with Naomi Klein's Shock Doctrine.  If you aren't, you might want to snag a copy, because Shock Economics is precisely what is happening both here and abroad, and it's all about reducing us to nothing as the wealthy suck more and more of the planet dry.

This is a symptom, parasitism, of the fatal illness Capitalism is now suffering. An economic system that depends on continual growth and expansion simply cannot survive in a finite world with finite resources.

The financial system is stronger than the will of the people.  Doesn't that mean "democracy is dead"?  Doesn't that mean, "we the government you elected are going to force you, the people, to bow to your corporate overlords?"

We cannot let this stand.

How to fight it is the question.  How to prepare for it is another.  In the meantime, don't listen to the "end of the world" "crisis" crap designed to fear us into accepting austerity (ours, not theirs!) solutions.  

Originally posted to Gustogirl on Sun Jul 03, 2011 at 06:48 AM PDT.

Also republished by Anti-Capitalist Chat.

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  •  Tip Jar (321+ / 0-)
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    Government of the people, by the people, for the people, shall not perish from the earth - Abraham Lincoln

    by Gustogirl on Sun Jul 03, 2011 at 06:48:04 AM PDT

      •  Argentina: STOP the stupid comparisons.... (20+ / 0-)

        Here's why:

        Argentina's debt was held by foreigners and foreign banks.  No bank in Argentina got hurt with a default.  Greek banks hold a ton of Greek debt and will implode with a default.

        Argentina could fund it's primary deficit, which was quite small.  Greece must borrow to fund its deficit.  Many here will argue just how big the primary deficit is, but suffice it to say it is significant and no one really knows if it is getting bigger or smaller.  And no external authority is going to fund it.

        Argentina's unemployment rate went to 50% after the default.  

        Argentina has significant agricultural exports and was able to return to health based, in large part, on those economic flows.  Greece has no comparable economic engine.

        Ten years later, Argentina STILL has not been able to borrow foreign capital.  

        •  Thanks, Balto (14+ / 0-)

          This "to the barricades" mentality is the left's version of the Tea Party. The idea of Greece defaulting is essentially saying "let's just disband Greece as a country." Greece has huge financial problems that have to be addressed. But the problem central to all of this is the idea of monetary union without political union. Parts of the USA will probably always receive more from the national economy than they contribute but that doesn't matter because of the political unity of the country. Not so with Greece and there lies the problem. The Euro was a very bad idea for Greece and not such a good one for some others.

          •  There was a bunch of horse trading (8+ / 0-)

            that went on to get Greece into the EU in the first place.  A lot of very complicated political deals were made and it looks like they are getting a bunch of blow back now.  

            However, I am counting on the Greek people to kick, scream, and raise hell over all of this to a point that finally inspires the rest of us.  

            It gets on my nerves, and you know how I am about my nerves...

            by ciganka on Sun Jul 03, 2011 at 01:17:52 PM PDT

            [ Parent ]

          •  umm (12+ / 0-)
            Greece defaulting is essentially saying "let's just disband Greece as a country.
            um no, its not saying that at all, its saying just the opposite, its says, Let greece get back its sovereignty.

            here let Thomas Jefferson clue you in on things

            I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.
            Thomas Jefferson, (Attributed)
            3rd president of US (1743 - 1826)

            Bad is never good until worse happens

            by dark daze on Sun Jul 03, 2011 at 05:58:07 PM PDT

            [ Parent ]

            •  Always glad for your clarity, DD n/t (0+ / 0-)

              Government of the people, by the people, for the people, shall not perish from the earth - Abraham Lincoln

              by Gustogirl on Sun Jul 03, 2011 at 10:08:21 PM PDT

              [ Parent ]

            •  I really don't think you get it (2+ / 0-)
              Recommended by:
              Balto, Anne Elk

              Let's say Greece defaults.

              First, all of the Greek banks become instantly insolvent - they own huge amounts of government debt.  That means all depositors are ruined.  The same applies to life insurance companies, annuities, and corporate pensions.

              Can the Greek government bail them out?  Of course not - they can't just print Euros.  So they have to bail from the Euro and create the "New Drachma".

              But how do they get that into circulation?  The normal method would be to convert bank accounts forcibly from Euros to New Drachma.  But the banks have all just gone under.

              No problem - just pay back their bonds in New Drachma, right?

              Well, first off, plenty of Greek companies, banks, etc. owe money outside the country in Euros, dollars, etc.  If you have just converted all Euros in Greece to New Drachma how do they pay?  They can't - they all have to default.

              Foreign creditors, of course, have no obligation to accept this.  They can sue in their courts and get orders allowing them to seize any funds in transit to those companies or individuals.  All of a sudden, the vast majority of Greek companies are effectively cut off from the international banking system - any funds sent to them from overseas will be seized before they enter Greece.  There goes international trade.

              Well, who needs the world... let Greece work things out on its own, right?

              Greece already runs a primary deficit - they spend more than they take in taxes.  After the devastation of default, abandoning the Euro, and being cut off from most external trade their economy would be in a shambles and tax receipts would be even lower so their deficit would be even higher.  But who the heck would be willing to loan the Greek government money?  The only solution would be to print more and more New Drachma.

              Well, we all know where that goes - Zimbabwe or Weimar Republic Germany style hyper inflation.  Let's see how long it takes them to print a Quadrillion Drachma bill.  (That is actually an understatement - Zimbabwe eventually devalued by a factor of 10^25.  Yup...1 followed by 25 0s. )

              In the end, of course, it doesn't matter.  Once you can't borrow you need to have a balanced budget or your economy and most likely your government collapses.

              Given this, Greece is taking the least painful route, despite its extreme pain.

            •  It can't get back its sovereignty (1+ / 0-)
              Recommended by:
              cris0000

              It lost it when it lied its way into the Euro.

          •  No, You are confusing economics with political (6+ / 0-)

            existence. Unless some country invades Greece with an army, to enforce the claims of its private creditors, Greece will continue to exist as a political entity and national community.

            Perhaps the EU would send NATO in, or the UN would send in an armed force, Greece is still a sovereign nation and can repudiate its debts.

            OTOH, it's clear that the bankers have decided democracy must end in Greece, as an example to the rest of the world: do what we want, or we will destroy you as well.

            This is the Chicago school style of economics. How appropriate a name for a bunch of economic gangsters, doncha think?

        •  Edward Hugh takes a closer look at Argentina (20+ / 0-)

          and finds that things didn't turn out as well for them as commonly supposed:

          Now in 1998, just before Argentina entered its depression, Chilean GDP was some 79 billion dollars, while Argentina's was 299 billion dollars. Now let's fast forward to 2010, Argentina's GDP at the end of last year was 370 billion dollars, and Chile's 203 billion. That is to say, between 1998 and 2010 Argentina's GDP (as measured in dollars, we'll come back to this) increased by 24%, while Chile's increased by 156%. As they say in Spanish "no hay color" (there is simply no comparison).

          Does this whole debate sound familiar to anyone? Anyone remember when Italians were paying themselves in million lira notes? In fact, it was precisely to break the Southern European countries from the high inflation, high interest rates, periodic devaluation dynamic that the Euro was thought to be such a good idea in the first place. It hasn't worked as planned, but that doesn't mean that the most traditional and the most simplistic solutions are necessarily going to be the best ones.

          Now in 1998 Turkey had a dollar GDP of $269 billion, and by 2010 this had become $742 billion. That is it had nearly tripled. Yet Turkey's dollar GDP dropped sharply in 2001 following a substantial devaluation of the Lira. Conclusion, competitive devaluations are sometimes useful, so what makes the difference?

          Turkey devalued as part of an IMF programme (it was actually recommended, in the days before the heavy hand of the EU took management control at the IMF), while Argentina broke the peg and devalued in order to get out of one. Turkey was not only able to benefit from the reform pressure instigated by the IMF (the stick), but also by the promise of EU membership under certain conditions (the carrot). Indeed, curiously, EU cultural reservations about Turkish membership have probably lead to far stricter reform hurdles than were either applied to the current members in the South or the East, and Turkey is undoubtedly the great beneficiary of this strictness.

          "What matters is whether Greece becomes Turkey (oh, what a historical irony) or Argentina. If the powers that be can agree on an ordered restructuring of Greek debt, and a controlled exit from the Eurozone, then Greece has some possibilities of turning the situation round. If exit is forced on Greece in order to escape the clutches of both the EU and the IMF then the move will be, as I suggest in my title, simply the last exit to nowhere. And especially in a historic context of ageing populations and rapidly rising elderly dependency ratios, ratios which will only rise further if thousands of young people exit Greece in the search for work elsewhere, as young Argentinians did in 2002/3. That's another difference most people who make this comparison don't mention: when Argentina devalued the country still had a fertility rate which was slightly above replacement level. Greece has just had more than 30 years with a total fertility rate in the region of 1.3. So while Argentina could look forward to years of demographic dividend and rapid "catch up" growth, if things go wrong Greece can only look forward to an ever older population and ongoing social and economic decline"

          This is heartbreaking.

          "It is, it seems, politically impossible to organize expenditure on the scale necessary to prove my case -- except in war conditions."--JM Keynes, 1940

          by randomfacts on Sun Jul 03, 2011 at 11:09:16 AM PDT

          [ Parent ]

          •  exactly (17+ / 0-)

            The price that foreign capital imposes is a form of colonization, as well as extortionate interest rates. It can be difficult to get along without it, but the country that goes cold turkey will maintain ownership of its own assets and build up its own industries.

          •  Thank you (35+ / 0-)

            because in case anyone missed the point of this article, it is that the head of a nation just confessed that the financial system trumps democracy.

            I'd rather be poor and democratic than propped up and beholden to the vampire squid.  

            The suffering of default is going to be worse once they've sold off assets to privatize.  They need to hang on to what assets they have.

            Government of the people, by the people, for the people, shall not perish from the earth - Abraham Lincoln

            by Gustogirl on Sun Jul 03, 2011 at 12:06:58 PM PDT

            [ Parent ]

            •  Well - what is happening in our country? (4+ / 0-)
              Recommended by:
              adrianrf, Gustogirl, Justina, Siri

              Wall Street bailed out and propped up, Main Street suffers.  Austerity for teachers and other middle class workers, not one penny of the shared sacrifice in taxes for the rich or corporations.  We get less, CEOs get more.  Wages are down, profits and stock prices are up. Unemployment/underemployment continues unabated.  But the always destructive GOP has expended tremendous effort on forced birth, immigrant bashing, and deficit hysteria.

              "I've learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel." Maya Angelou

              by ahumbleopinion on Sun Jul 03, 2011 at 08:02:26 PM PDT

              [ Parent ]

              •  Get thee to a library and pick up (1+ / 0-)
                Recommended by:
                Siri

                Shock Doctrine by Naomi Klein.  She's deciphered the blueprint.

                Hang on, it's only going to get worse.  

                Government of the people, by the people, for the people, shall not perish from the earth - Abraham Lincoln

                by Gustogirl on Sun Jul 03, 2011 at 10:49:16 PM PDT

                [ Parent ]

            •  Remember Clinton saying he wanted to die and come (0+ / 0-)

              back as the bond market so he could really be in charge?

              What is surprising about the fact that politicians have to operate within the constraints imposed by economic reality?

          •  I'm not trying to make policy points... (4+ / 0-)

            Just trying to correct some perceptions about why the Argentinian precedent often cited here is not relevant.

            •  No matter how bad the primary deficit is (10+ / 0-)

              If you can't afford your debt, it's better to walk away sooner rather than  later.

              •  Unless... (0+ / 0-)

                ..you cling to a belief that Santa Claus exists and is heading for Greece early this year.

                •  Why do you keep doing this? (6+ / 0-)

                  Why not acknowledge that Greece's primary deficit was 3.2% in 2010, and that their arms purchases exceed that primary deficit. If push comes to shove, Greece can get by.

                  The previous poster is right that a complete destruction of Greece's economy through austerity will do more harm to Greece in the end.

                  This article in Spiegel makes excellent points about how ridiculous the adjustment has been:

                  http://www.spiegel.de/...

                  There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

                  by upstate NY on Sun Jul 03, 2011 at 05:30:23 PM PDT

                  [ Parent ]

              •  Yes. But if paying is feasible even at incredible (0+ / 0-)

                cost then that is usually a better choice.

                •  actually not, the forced privatisations (2+ / 0-)
                  Recommended by:
                  Euroliberal, Gustogirl

                  will lead to increased unemployment and still not net greece sufficient money; they will never be able to pay off the debt. It is far more sensible to abrogate it and leave the eurozone. Everything that would enable greece to get back on its feet, including decent wages, jobs in the public sector, and a social welfare state which provides needed effective demand is being curtailed. There is no way that the economic austerity measures will enable Greece to recover. Quite honestly, the monetarist foundations upon which the euro is based are what is causing this problem. Irrespective of the debt being denominated in euros, there is really nothing that they can do to get the money back if greece abrogates the debt.

                  So impoverishing the greek population in order to cover the demands of the IMF, EU and eurozone is an incredibly stupid policy. The Greeks should never have accepted it. If they said no, they could have negotiated a better deal (the power was in their hands to say no). At this point, they are better abrogating it and leaving the eurozone.

                  There comes a time when not playing the games imposed by the IMF and neo-liberals is better than allowing them to destroy the standard of living of the majority and create extended unemployment in a country which already has unemployment levels in the double-digits. Why should the people pay for the incompetence and corruption of previous greek governments and goldman sachs?

                  "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

                  by NY brit expat on Mon Jul 04, 2011 at 02:19:02 PM PDT

                  [ Parent ]

                  •  Perhaps... so please explain what you think would (0+ / 0-)

                    be the consequences of default and exiting the Euro.

                    How would you do it - what accounts, debts, etc. would be redenominated in New Drachmas and which would stay Euros?

                    What would be the impact on Greek assets abroad?  (ie. Greece is a major shipping power and there are Greek vessels all over the world vulnerable to seizure if creditors sue their owners.)

                    What would the impact be on Greek trade?

                    What would the impact be on the Greek domestic economy?

                    Do you agree that Greece would be cut off from international credit markets?

                    Do you expect Greece to continue running a deficit?  If not, then how will they balance their budget?  At what cost?  If so, then who will loan them the money?

                    •  Greece is not a major shipping power anymore (1+ / 0-)
                      Recommended by:
                      Gustogirl

                      although shipping is still one of its primary employers (and one of its major industries).

                      Leaving the euro does not mean exiting the EU; they are different things. There is no law that states that those that withdraw from the Eurozone have to leave the European Union (and there are many states that do not have the euro as their currency in the EU), so there will be no problem.

                      They will not necessary be cut off from international credit markets, interest rates will of course be higher if they need to use them.

                      A Drachma which is kept low in value will keep tourism at the current levels (the low pound has helped the UK on that) and will keep drawing europeans to the country as well as people outside the EU. Outside of the eurozone, they could use Keynesian policies to a greater extent which will help the economy during a crisis period far more than the privatisations, lower wages and destroyed state sector. It will help the domestic economy and hopefully enable economic growth and more control over monetary and fiscal policy. They do not need to balance their budget outside of the demands of the manner in which the euro has been established; most countries do not balance their budget. Greece has serious problems with tax avoidance and tax evasion; remedying this and attaching the wealth of the upper classes will enable more revenue to be available to the government.

                      We need to stop thinking of things in the manner dictated by the right and financial markets. Why should trade be affected? Why should international assets denominated in euros be affected? People hold assets in many different currencies. The question is of the value of assets in the country, not international assets. I am not saying there will be no difficulties, but the ones that you are raising are by no means insurmountable. However, they will never be able to pay back the loans of the IMF, Euro group and EU; the policies demanded by these groups will impoverish the greek people and destroy the greek economy irrevocably.

                      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

                      by NY brit expat on Tue Jul 05, 2011 at 04:04:11 AM PDT

                      [ Parent ]

                      •  I see lots of hand waving, no answers (0+ / 0-)
                        Leaving the euro does not mean exiting the EU; they are different things.

                        Note straw man - I never said it meant leaving the EU.  

                        That said, it very well might.  For example, what will the Greek government do if people and companies whose Euro assets in Greece got converted to New Drachma sue in the European Court of Justice?  If the ECJ ruled against Greece Greece would either have to pay up (unlikely to be possible) or to defy the ECJ.  If they defy the ECJ can they stay in the EU?  I have no idea.

                        They will not necessary be cut off from international credit markets, interest rates will of course be higher if they need to use them.

                        That's a pretty amazing claim.  Can you cite any countries that defaulted and were still able to borrow new money in international credit markets?

                        Why should trade be affected

                        Well, do you think people outside of Greece will accept New Drachma?

                        Will people inside of Greece have Euros?

                        In addition, there will be many people and companies who are owed money by Greece, Greek companies, and Greeks.  

                        They will be scrutinizing all inward flows of money to Greece and attempting to seize any going to their debtors.  For example, if a Greek company is trying to buy goods using an LC issued by a Greek bank (which has presumably defaulted on its bond payments in Euros when the Greek government converted its Euro assets to New Drachma) then that bank's foreign bond holders will try to seize the payment from the seller's correspondent bank to the Greek LC issuing bank.

                        In addition, outward goods flows will also be vulnerable.  If Greek companies ship goods on any terms other than FOB or ex-Warehouse they will be vulnerable to seizure by creditors as soon as they leave Greek territory.

                        A country that suddenly reneges on its financial obligations to its citizens and those of other countries can't just turn around and say "OK, we're done.  Now back to business." The rest of the world won't let it.

                        Why should international assets denominated in euros be affected?  People hold assets in many different currencies.

                        What are "international assets"?  Do you mean assets in Greece held by foreigners?

                        Do you understand what it means to exit the Euro?

                        It would be a process much like entering the Euro but in reverse.  The government would announce that all bank accounts are automatically converted to New Drachma, that all Greek contractual obligations that are currently payable in Euros are now payable in New Drachma, that the Euro is no longer valid tender in Greece, and that all citizens with Euros cash in Greece are required to convert them to New Drachma.

                        Now, let's say you're a foreigner with a Euro bank account in a Greek bank.  Are you suggested that Greece would make an exception for you?  So they would only screw Greek citizens but not foreigners?  Good luck with that.  We can all warm our hands around the bonfires as rioting Greek bank account owners burn government officials at the stake.  So, of course, you would sue in the ECJ, right?  You might very well lose - your relationship with your Greek bank may be totally controlled by Greek law - but the ECJ has overridden national law before so you might not.

                        Now, make it more interesting.  You're a German company that is owed Euros by a Greek company.  The Greek company says "Sorry, no Euros.  We'll give you  New Drachmas."  This is exactly the reverse of what they said when Greece converted to the Euro for Drachma denominated debts, but in reverse and everyone accepted it then.  This time, of course, you bust a gut laughing and then say "See you in court."  The German court almost certainly rules that you are owed Euros, not New Drachma, and then you take the German court judgement to Greece for enforcement and the Greek government refuses.  Hello ECJ.

                        Now, while you are waiting, you still want your money.  You find out that the Greek company is buying stuff from a US company.  So you take your German judgment to a US court and get an order to seize the assets of the Greek company.  You present that order to the Greek company's Greek bank's correspondent bank in New York and seize the US company's payments to the Greek company while they are in transit.  So much for Greek international trade.

                        Do you begin to get the picture?

                        •  do you understand the difference (1+ / 0-)
                          Recommended by:
                          Gustogirl

                          between private and public debt? The problem in Greece is one of public debt and they are not responsible for private debt. Repayment can be made in euros, why is that a problem; comapnies make payments in foreign currency all the time which you would know if you dealt with this ... do you really think that germany will invade greece to collect private debt or even public debt for that matter?

                          "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

                          by NY brit expat on Wed Jul 06, 2011 at 07:47:51 AM PDT

                          [ Parent ]

                          •  You have no idea what default or leaving the Euro (0+ / 0-)

                            would mean.

                            To start with, how would a company buy Euros?  With the contents of its bank account?  But Greek banks are the biggest holders of Greek government bonds.  If Greece defaults Greek banks become insolvent.  Where's your bank account then?

                            If the government recapitalizes with New Drachma it has to immediately devalue the New Drachma, otherwise everyone will convert all their New Drachma to Euros and move them out of the country.  So can the Greek company still afford to make its payments?

                            It goes on from there.

                            Let me ask you - if it is so easy why do you think Greece hasn't already done it?

                          •  No one said default would be easy. (0+ / 0-)

                            Many have said default is inevitable - you cannot get blood from a turnip.

                            Those who advocate default believe this and are arguing that it is better to default now rather than default after austerity measures have made everyone even poorer still and assets have been sold off (along with sovereignty) at fire sale prices.

                            Even better, if Greece announces its plans to default, what are the chances that haircuts won't be offered across the board to prevent this?  Because that is what is needed, and they aren't offering.  

                            The austerity program is legal pillage.  Once stripped and violated to the bone do you think they'll keep Greece on as a protected member of the EU?  They will have rendered Greece into a paralyzed, gangrenous limb that must be removed.

                            Someone has to take a loss.  The questions are "Who?" and "When?".    

                            Government of the people, by the people, for the people, shall not perish from the earth - Abraham Lincoln

                            by Gustogirl on Wed Jul 06, 2011 at 10:49:37 AM PDT

                            [ Parent ]

                          •  OK... so I've laid out what I think would happen (0+ / 0-)

                            in the event of a default and why.  In short, a total economic collapse of Greece.

                            Can you lay out what you think would happen?

                            First, do you agree that all Greek banks would immediately become insolvent and the Government's only way to recapitalize them would be to issue a fiat New Drachma currency?

                            Do you agree that they would follow the normal process for devaluations, etc. and re denominate all bank accounts, debts, and other obligations in Greece from Euros to New Drachma (just as the US changed all gold contracts to USD contracts when we went off the gold standard?)

                            Do you agree that since the purpose of the New Drachma would be to devalue no one would want to hold it since it would not be seen as a reliable store of value so people would hide Euros abroad or in mattresses and refuse to convert?

                            Do you agree that foreign banks and companies would not agree to let Greek banks and companies pay off Euro debts in New Drachma?

                            Do you agree that they would sue in courts in other Europeans countries and in the ECJ and almost certainly get judgments in their favor allowing them to seize Greek assets abroad including goods and money in transit?

                            Do you agree that Greece would be totally unable to borrow money from anyone?

                            Do you agree that Greece is already running a primary deficit and that the economic impact of default, devaluation, leaving the Euro, and cutting off trade would kill tax revenues and increase the need for social services making their deficit even larger?

                            Do you agree that a deficit would not be possible after default and exiting the Euro (since they couldn't borrow money) unless they just printed New Drachma, leading to hyperinflation?

                            Do you agree that they would be heading for a Zimbabwe level economy without the natural resources if this happened?

                            Now, when you think about a future like that, how far would you go to avoid a default?

                            I think selling the Parthenon would be cheap at the price.

        •  forgot to mention... (7+ / 0-)

          Argentina had its own currency, which it devalued, instantly making its exports more competitive in global markets.   Greece, tied to the Euro, not at all possible....

          •  Beyond devalue (2+ / 0-)
            Recommended by:
            tegrat, newpioneer

            Argentina's currency was linked to the dollar and then came thecorralito.

            •  but it still hat its own currency (1+ / 0-)
              Recommended by:
              Wham Bam

              not so in Greece.

              The wave of instant bankruptcy that would hit Greece when it left the Euro now is immesurable.

              Argentina could force devaluation on its citizens - and mainly seize the properties of poor and middle class families - while Greece has no such option. As soon as they even start moving towards a "new drachma" or something,  the run on the Banks will bring them down all.

              Oh, yeah, and foreign trade will fall to zero.  All Greek companies' debt to non greek banks or suppliers will still be in Euro - without them having any chance of earnbing those Euros. Bankruptcy.

              There are no good options left in the short run.  They were told, they made promises, but instead of keeping them, instead of understanding why they were told, they started to cook their books like mad, and now the bill comes in.  

              •  You're tying default with leacing the euro (5+ / 0-)

                whereas there is no automatic trigger that says a country that defaults must leave the euro.

                The cooking the books story is just a canard meant to whitewash the massive transfer of taxpayer money to Euro banks.

                It allows good cover to distract the European populace.

                There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

                by upstate NY on Sun Jul 03, 2011 at 05:33:04 PM PDT

                [ Parent ]

              •  no while the currency was nominally independent (1+ / 0-)
                Recommended by:
                Gustogirl

                it was constitutionally tied to the US dollar. The Greeks can return to the Drachma and there will be no problems concerning the extensive use of Keynesian fiscal policy measures and the euro will restabilise. It will be better for all in the intermediate and long run.

                "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

                by NY brit expat on Mon Jul 04, 2011 at 02:21:14 PM PDT

                [ Parent ]

          •  It is possible (1+ / 0-)
            Recommended by:
            NY brit expat

            if Europe issues eurobonds that pay off the debt and if those bonds are serviced by a central authority that derives its revenue from each nation's treasury.

            There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

            by upstate NY on Sun Jul 03, 2011 at 05:31:24 PM PDT

            [ Parent ]

            •  Sure... but why should the Germans agree to pay (0+ / 0-)

              for Greece's profligacy?

              It's not going to happen.

              •  I have been listening to you and it is evident (2+ / 0-)
                Recommended by:
                Euroliberal, Gustogirl

                to me that you really do not understand the situation sufficiently to warrant your making so many comments in this diary.  You seem to think that it is perfectly plausible for the greek population to pay for the corruption and incompetence of the previous greek government. Why should them pay? Why should they agree to higher levels of unemployment in a country in which there is high unemployment, lower wages, lower pensions, less of a welfare state? Satisfying the demands of international financial sector, the bond-markets and the IMF would impoverish a country where already there are massive gaps between a tax-avoiding upper class and the rest of the country. In fact, most guaranteed tax revenue actually comes from state workers as tax avoidance and evasion is normal in Greece; so reducing the incomes, privatising nationalised companies will actually not lead to increased revenue.

                "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

                by NY brit expat on Mon Jul 04, 2011 at 02:27:00 PM PDT

                [ Parent ]

                •  Well, what is the alternative? (0+ / 0-)

                  Can you explain what you think would happen if Greece defaulted?

                  One thing I've noticed is that the people who advocate default don't have much interest in discussing what the results of that might be.

                  •  see my earlier response to you ... (0+ / 0-)

                    "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

                    by NY brit expat on Tue Jul 05, 2011 at 04:06:04 AM PDT

                    [ Parent ]

        •  You're Wrong, and here's Why... (10+ / 0-)

          (i) Argentina depositors did get hurt, as did Argentinian pension funds that had bought Argentine debt.  Depositors woke up one morning to find that their dollar deposits had been converted to pesos at a government decreed f/x rate.

          (ii) You're right about the primary deficit.  But you'd be surprised at how rapidly you can adjust.  In Mexico, after the Dec94 devaluation, McD's franchisees went from sourcing 80% of their ingredients from the US, to 20%.  McDonalds realized that it could no longer continue to import ingredients, and this created opportunities for Mexican industry.

          In Greece, people will go from using P&G and Colgate, to domestic brands, probably overnight.

          (iii) Greek unemployment will increase, but decline rapidly.  Argentina was one of the fastest growing economies in all of Latin America after it abandoned the dollar.

          Euro defenders have yet to convince me that Greece can materially grow with the Euro as its currency.  In 2001, it was more expensive to buy a Coke in Buenos Aires than Manhattan.  Argentina had to devalue to restore competitiveness.  

          And today, so does Greece.

          And those who oppose a default/adoption of the Drachma, are simply putting off the inevitable.

          Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. http://www1.hamiltonproject.org/es/hamilton/hamilton_hp.htm

          by PatriciaVa on Sun Jul 03, 2011 at 11:48:40 AM PDT

          [ Parent ]

          •  Tell me this (4+ / 0-)

            You've got your life's savings in Bank X.  Bank X announces that next week, it'll be pulling some crazy maneuvers to devalue the accounts of its customers so it can deal with its overleveraged position.  Are you going to tell me that the second you learned of this, you wouldn't pull your assets out and never look back?

            That's exacty what will happen.  Which means complete and total economic collapse at all levels.

            I've seen a couple half-thought-out "solutions" here on Daily Kos, all of which basically equate to stealing current investments.  What a plan -- good luck seeing another dime of foreign investment (or even domestic) within the next century after pulling that one.

            •  Greek depositors already fleeing... (8+ / 0-)

              First four months of year, deposits fleeing at a 17% annualized run rate.  And that's thru April.  

              Greek banks under siege

              By Colin Barr June 8, 2011: 6:34 AM ET

              If Europe didn't have enough problems, Greece now has a full-fledged bank run on its hands.

              http://finance.fortune.cnn.com/...

              In Argentina, depositors also withdrew their dollar deposits, slowly at first, then, with every passing day, more rapidly, until the government froze deposits.

              Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. http://www1.hamiltonproject.org/es/hamilton/hamilton_hp.htm

              by PatriciaVa on Sun Jul 03, 2011 at 12:31:18 PM PDT

              [ Parent ]

            •  But the debt is insupportable, unsustainable, (6+ / 0-)

              and unpayable. So the scenario you describe happens either today, or tomorrow, or next year, but it will happen.

              The only difference in this case is you transfer today what assets you have left to the bankers, so they are not available when you -- quite inexorably -- have to rebuild from scratch. The longer you put it off, the harder it is to move forward.

              The tooth is abscessed. You can put its treatment off until later by taking a palliative today, but the cure later will require even more extreme measures and greater suffering. That's the interest you pay for putting it off.


              Until we break the corporate virtual monopoly on what we hear and see, we keep losing, don't matter what we do.

              by Jim P on Sun Jul 03, 2011 at 03:59:49 PM PDT

              [ Parent ]

              •  This is the only reasonable argument for default (0+ / 0-)

                That the only thing worse than defaulting now would be defaulting in a year.

                But is that true?

                Say that Greece spent that year cutting costs and improving tax collection so that it had a primary surplus?

                And then it defaulted?

                Would it be better off?

          •  OK.. (4+ / 0-)

            1) accept your point, but how significant overall was this?
            2) it took 2 years for mexico's economy to start growing again.  And that was after US intervention.  And of course you neglect to mention that the peso cratered - could be why McD decided to source domestically.  With Greece tied to the Euro, they don't have that option.
            3) As noted before, Argentina actually had an economy, Greece has tourism, and.......

            Not sure what is going to be the driver of higher employment.

            But I agree with you on the key point, Greece should have never moved to the Euro, and unwinding it is going to be really ugly.

            •  Mexico boomed after Devaluation (4+ / 0-)

              Yes, GDP declined by 6% in 1995, after the December 1994 devaluation.

              But by 4Q95, it had begun to grow.

              In 1996, Mexico grew 5.5%, and 6.5% in 1997.

              How much is Greece expected to grow this year?

              In 2012?  In 2013.

              Does anyone believe that, with the Euro, Greece can grow anywhere near 5% during the next decade?

              Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. http://www1.hamiltonproject.org/es/hamilton/hamilton_hp.htm

              by PatriciaVa on Sun Jul 03, 2011 at 12:36:59 PM PDT

              [ Parent ]

              •  Mexico (1+ / 0-)
                Recommended by:
                Bluefin

                also had NAFTA, also had a booming US economy with 3x its population right on its border, also had a booming world economy in the late 1990's. Argentina had a booming world economy in the mid-2000's and a booming commodity market since its devaluation.

                What does Greece have? If it goes down and takes down the rest of the PIIGS and the euro, and sends the EU back into recession, it will not have anybody to export to. The US is bracing for austerity. China is tightening. The ECB is still raising interest rates despite near zero M3 growth. The Middle East is in chaos. Argentina and Mexico had some pretty big teats to suck on. Greece won't have any.

                "It is, it seems, politically impossible to organize expenditure on the scale necessary to prove my case -- except in war conditions."--JM Keynes, 1940

                by randomfacts on Sun Jul 03, 2011 at 12:41:31 PM PDT

                [ Parent ]

                •  So what's ur Solution??? (4+ / 0-)
                  Recommended by:
                  Balto, ciganka, Involuntary Exile, joesig

                  The Germans and other countries of northern Europe refuse to agree to a permanent fiscal subsidy for their southern neighbors.

                  And since they are sovereign countries, they have a right to do so.

                  So many EuroPhiles are so certain they are correct, especially the OverPaid Bureaucrats in Brussels, that they disregard public opinion.

                  If Germans don't want their tax dollars going to Greece, shouldn't they have a right to feel this way?

                  Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. http://www1.hamiltonproject.org/es/hamilton/hamilton_hp.htm

                  by PatriciaVa on Sun Jul 03, 2011 at 12:50:56 PM PDT

                  [ Parent ]

                  •  I have (2+ / 0-)
                    Recommended by:
                    Virginian in Spain, upstate NY

                    no love for the euro, I think it was a mistake. But a default now would not help Germany.

                    No one is asking for a permanent fiscal subsidy. My own position is for the ECB to take the lead and take on Greek bonds itself, but not so much that Greece is not still forced to clean itself up in the long run. It just needs time to do so. Later on when things are stable, it can still choose to leave the euro, but leaving under these circumstances would not help any European country.

                    "It is, it seems, politically impossible to organize expenditure on the scale necessary to prove my case -- except in war conditions."--JM Keynes, 1940

                    by randomfacts on Sun Jul 03, 2011 at 01:22:10 PM PDT

                    [ Parent ]

                  •  The Germans would have a right but they'd be (0+ / 0-)

                    poorer for it in the end. The eurozone has given the continents strong countries massive efficiencies in moving goods across borders. It's much more difficult without the currency union. Plus, they're in it now, and going back on the project will only result in massive recession upon the zone's collapse.

                    Besides, the money isn't going to Greece--it's going to the banks.

                    There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

                    by upstate NY on Sun Jul 03, 2011 at 05:36:11 PM PDT

                    [ Parent ]

                •  so things suck all over (13+ / 0-)

                  ... how does that make austerity a better idea?  If things are going to suck no matter what, might as well not sell your children into slavery.

              •  Mexico boomed as it became a full-fledged (1+ / 0-)
                Recommended by:
                Gustogirl

                narco-state.
                That may be Greece's' future.

                "Double, double, toile and trouble; Fire burne, and Cauldron bubble... By the pricking of my Thumbes, Something wicked this way comes": Republicans Willkommen auf das Vierte Reich! Sie Angelegenheit nicht mehr.

                by Bluefin on Sun Jul 03, 2011 at 02:40:24 PM PDT

                [ Parent ]

                •  There's an element of Truth..... (1+ / 0-)
                  Recommended by:
                  Gustogirl

                  ...to what you say.

                  Many medium-sized cities depended on all-cash transactions, especially for cars and homes.

                  When the government began to crack down on cash transactions above a certain threshold, many car dealers reported a 60%+ decline in sales.

                  Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. http://www1.hamiltonproject.org/es/hamilton/hamilton_hp.htm

                  by PatriciaVa on Sun Jul 03, 2011 at 03:04:37 PM PDT

                  [ Parent ]

          •  cognitive dissonance (11+ / 0-)

            While I agree with your comments, your sig is a direct contradiction of your comments.

            Centrism is about upward transfer of wealth and protecting the bankers against the rest of us.

            To Rubin, "financial system stronger than the will of the people" is the best of all possible worlds, which is why he went from Goldman Sachs to the Clinton Administration and went on to run Citigroup after he left office.

            Peak Oil is NOW! Looking for intelligent energy policy alternatives? Try here.

            by alizard on Sun Jul 03, 2011 at 01:32:07 PM PDT

            [ Parent ]

          •  Or Europe could institute (0+ / 0-)

            some centralized policies, which it will have t do regardless to stay together.

            There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

            by upstate NY on Sun Jul 03, 2011 at 05:34:13 PM PDT

            [ Parent ]

        •  I think you are missing the point about... (9+ / 0-)

          ...Argentina. The point was flipping the finger at the powers that be, particularly the IMF and the financial hitmen. No one has argued, at least not that I have seen, that things got rosy or that they are rosy in Argentina but at least now they are more of their own masters and they are growing nicely. They would have suffered either way. The difference is that under the old regime the populace would have suffered a lot more.

          As for Greece and the euro, they can always leave the euro. The euro is cheap relative to Germany's economy. The economy that would get hurt the most by the peripherals leaving the euro would be Germany and the more developed economies because the cost of their exports would skyrocket under a much stronger currency.

          Just the other side of the story.

          "Capitalism has defeated communism. It is now well on its way to defeating democracy."
- David Korten

          by basquebob on Sun Jul 03, 2011 at 11:49:33 AM PDT

          [ Parent ]

          •  Agree with most.... (3+ / 0-)

            Except by leaving the Euro, Greece will not leave behind it's liabilities.  It will not be able to borrow until it reaches some kind of agreement with the lenders.  This is what Argentina tells us.   So not sure I agree with your analysis of Germany getting hurt more.  I do agree that Germany has benefitted mightily from having dogs like Greece in the Euro.

            •  If not more... (6+ / 0-)

              ...it definitely gets hurt too. Greece would have a hard time, if it could at all, get financing, true. But the point is to not re-enslave yourself. Where it would help Greece is that it could inflate itself out of this morass faster. Some think that to be a terrible idea but I, my opinion, beats indented servitude. Bond holders took a risk and participated. Sometimes the price of risk is that one gets left holding the bag. To me one of the most ludicrous things that has happened in this last crisis is that somehow governments are obligated to cover the risks of the bondholders. It also has shown how mis-priced risk is all around.

              "Capitalism has defeated communism. It is now well on its way to defeating democracy."
- David Korten

              by basquebob on Sun Jul 03, 2011 at 01:03:28 PM PDT

              [ Parent ]

            •  I agree with you on the Euro call and the Germans (1+ / 0-)
              Recommended by:
              basquebob

              The mark was strong and I thought the Germans were foolish to give up their currency just to front the Euro.  In fact, I think that if Greece did leave the Euro that the Euro would actually go down because of the politics of it - there would be a loss of confidence in the EU as an institution that can hold things together.

              It gets on my nerves, and you know how I am about my nerves...

              by ciganka on Sun Jul 03, 2011 at 01:23:56 PM PDT

              [ Parent ]

              •  Depends who leaves... (0+ / 0-)

                ...and how they leave. In the short run after that event what you are saying is probably what would happen. After things stabilized it would be, actually it would have to be a very strong currency because the economies backing it up would be strong economies. The tricky thing would be surviving the initial shock. Who knows if that is not what they are trying to engineer that except the insiders of course.

                In any case, a strong Deustche Mark would have hurt Germany more in the current global environment. We know how many Mercedes, just an example can be sold for $50K. The question is how many of the same Mercedes can you sell for $75K. One would imagine fewer and we don't know where the point of inflection lies. I am sure that Germany is happy in not having to find out at this time.

                "Capitalism has defeated communism. It is now well on its way to defeating democracy."
- David Korten

                by basquebob on Sun Jul 03, 2011 at 07:54:14 PM PDT

                [ Parent ]

            •  Argentina's bonds were not adjudicated (1+ / 0-)
              Recommended by:
              basquebob

              in Argentinian courts but in New York and London. With Greece it's the reverse. 90% are issued under Athenian jurisdiction.

              There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

              by upstate NY on Sun Jul 03, 2011 at 05:37:52 PM PDT

              [ Parent ]

        •  I've heard that if Greece renouced its defense (2+ / 0-)
          Recommended by:
          Gustogirl, esquimaux

          spending, it would solve Greece's economic problems. Does Greece need an army?

        •  It was still the right decision for Argentina. (1+ / 0-)
          Recommended by:
          ozsea1

          Argentina doesn't especially need foreign capital, since it's at least somewhat attractive to foreign direct investment.  Argentina was very lucky in that its default was followed almost immediately by a multi-year (and still going) boom in commodity prices, but you make your own luck to some extent by boldness and Duhalde is one of my heroes for surveying the situation and deciding there was no future in kicking the can down the road.  

          It's better to curse the darkness than light a candle. --Whoever invented blogs, c.1996

          by Rich in PA on Sun Jul 03, 2011 at 02:18:42 PM PDT

          [ Parent ]

        •  Argentina Doesn't Need To Borrow Foreign Capital (0+ / 0-)

          They are paying down debt, the economy is growing at a rapid rate, and direct foreign investment has been substantial. Argentina is certainly not directly comparable to Greece, but the consequences of Argentina's default have certainly not been all bad. The economy has grown by leaps and bounds (sustaining a 9% growth rate from 2003-7) and its debt has an S&P rating of B.

        •  In addition, if Greece defaults why not Portugal (0+ / 0-)

          or Ireland or Spain or, the US, for that matter?  If there is no adverse effects for a country that defaults what would stop any country with a large enough debt balance from just simply not honoring their obligations?  What would happen for any governments ability to borrow money?  What would happen to all the people that lent the money?

          No, let's not play brinksmanship with defaulting in a global economy.

          We cannot solve our problems with the same thinking we used when we created them. Albert Einstein

          by theotherside on Sun Jul 03, 2011 at 06:13:47 PM PDT

          [ Parent ]

          •  The default happened already (1+ / 0-)
            Recommended by:
            adrianrf

            Greece's debts are unpayable. The austerity measures are making things worse for Greece.

            They are corroding the economy.

            There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

            by upstate NY on Sun Jul 03, 2011 at 07:38:08 PM PDT

            [ Parent ]

        •  on the other hand, (0+ / 0-)

          Argentina is now regularly mentioned in the lists of top 10 places for expats and retirees, so there's a lot of outside money flowing into the country. Their tourist industry is thriving, and everyone I know who's been there says it's a good place to be.

          Yesterday's weirdness is tomorrow's reason why. -- Hunter S. Thompson

          by Mnemosyne on Sun Jul 03, 2011 at 07:32:02 PM PDT

          [ Parent ]

        •  Greek banks hold 40bn of 300bn euros total debt - (1+ / 0-)
          Recommended by:
          adrianrf

          about what Germany does, and way less than France.
          Link
          Greece's choice is whether to absorb all the loss themselves or to let foreign banks bear their part. If a foreign bank chose to risk buying Greece's sovereign debt - they should bear the burden of their own bad judgment.

    •  One factual correction (22+ / 0-)

      The Shock Doctrine is by Naomi Klein, not Naomi Wolf.

      "Tu vida es ahora" ~graffiti in Madrid's Puerta del Sol, May, 2011.

      by ActivistGuy on Sun Jul 03, 2011 at 09:44:32 AM PDT

      [ Parent ]

    •  If this isn't THE quote... (25+ / 0-)

      ...that summarizes the new truth of the last decade,
      I don't know what is:

      The financial system is stronger than the will of the people. --George Papandreou, Prime Minister of Greece, 29 June 2011

      There are two political aisles: Center-Left and Center-Right. It's impossible to cross them both. Republicans know this and govern accordingly; Democrats don't.

      by Jimdotz on Sun Jul 03, 2011 at 10:04:33 AM PDT

      [ Parent ]

      •  Not the banksters fault this time (6+ / 0-)

        Blaming the banksters is wrong in this case.

        Greece pays out social benefits that they have no money to pay.
        There is no complete description of all social benefits in Greece and the number of citizens who benefit from them is not clear. "It is not clear whether those on benefits really need them." This is what the Minister of Employment and Social Security Louka Katseli admitted.http://www.grreporter.info/...

        Greek official corruption is major.

        Tax evasion is major.  The lack of honest tax collection is part of the corruption.

        Greece had already been selling off or borrowing against public facilities to pay for the social benefits that their tax money didn't cover.  Selling assets to pay current expenses is unsustainable policy.

        •  money is a made up by man creation (3+ / 0-)
          Recommended by:
          Johnny Q, Marie, psyched

          taxes are just another bribe to get govt services and the rich don't pay taxes but they do bribe the politicians directly.

          •  Tax evasion in Greece (7+ / 0-)

            by the rich is but a small part of the problem....

            Corruption and bribes also have a hand in the disaster that is the Greek economy.

            As he finishes his story the finance minister stresses that this isn’t a simple matter of the government lying about its expenditures. “This wasn’t all due to misreporting,” he says. “In 2009, tax collection disintegrated, because it was an election year.”

            “What?”

            He smiles.

            “The first thing a government does in an election year is to pull the tax collectors off the streets.”

            Must read from Vanity Fair:  Beware of Greeks bearing bonds

            "Canada is a Northern European welfare state in the worst sense of the term, and very proud of it" Stephen Harper, Prime Minister of Canada, part time vampire

            by marigold on Sun Jul 03, 2011 at 12:22:41 PM PDT

            [ Parent ]

            •  yes when you hear (6+ / 0-)

              that the rich don't pay taxes you have to ask why. Corruption from the politicians, just like in the US. And it's still corruption if the politicians "vote" to lower the rich's taxes.

            •  Great article that you cited there. n/t (0+ / 0-)

              It gets on my nerves, and you know how I am about my nerves...

              by ciganka on Sun Jul 03, 2011 at 01:26:01 PM PDT

              [ Parent ]

              •  The article is full of misconceptions (1+ / 0-)
                Recommended by:
                Gustogirl

                and outright erroneous information as it tries to put the onus on the average Greek citizen instead of where the problem really lies.

                There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

                by upstate NY on Sun Jul 03, 2011 at 05:40:48 PM PDT

                [ Parent ]

                •  I would disagree with you, but then I read it from (0+ / 0-)

                  a different point of view.  

                  It gets on my nerves, and you know how I am about my nerves...

                  by ciganka on Sun Jul 03, 2011 at 10:10:16 PM PDT

                  [ Parent ]

                  •  I thought the article (0+ / 0-)

                    pointed out that the whole system in Greece has problems ie taxes not collected (meaning little or no revenue); no way of knowing who owns what property (land titles are not clear) and making the point it's not just one part of Greek society that is creating the problem; it's Greek society in general that is creating the problem.

                    Doesn't matter if you're rich or poor there.

                    Everyone is contributing to the economic disaster that is Greece.

                    The same writer did a piece on Iceland that is also a must read.

                    Fishermen/women became bankers.

                    And messed up big time.

                    "Canada is a Northern European welfare state in the worst sense of the term, and very proud of it" Stephen Harper, Prime Minister of Canada, part time vampire

                    by marigold on Sun Jul 03, 2011 at 11:31:42 PM PDT

                    [ Parent ]

                    •  Lewis left out the real cause of Greece's (2+ / 0-)
                      Recommended by:
                      Gustogirl, Euroliberal

                      troubles and put the onus on the little people all through erroneous anecdotal information. That's the problem I had with the article.

                      It's basic assumptions are easily disproven. Take even tax evasion. It's a problem for Greece internally but Greece's evasion (25%-30%) would not be eradicated to zero as Lewis assumes. It would drop to the European average. That's a few more billion a year.

                      But even then, Greece already collects more tax to GDP on a real basis than most of Europe. Any adjustment in tax evasion would simply drop taxes for the high rates they are paying now.

                      Lewis found basically welfare queens and such, and plastered them up there the way Ronald Reagan did.

                      There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

                      by upstate NY on Mon Jul 04, 2011 at 06:56:32 AM PDT

                      [ Parent ]

                    •  Well where I live on the Balkan Peninsula (1+ / 0-)
                      Recommended by:
                      Gustogirl

                      the government is scamming everyone and everyone is scamming the government.  There is a great deal of corruption at every level, but for the majority of the people it is nickel and dime survival based cunning.  

                      Much like the way our current situation in the US is moving, there is a handful of people that are getting nearly all of the resources and the rest are scrambling to survive.  

                      You might say I read the article with the necessary grain of salt.  

                      It gets on my nerves, and you know how I am about my nerves...

                      by ciganka on Tue Jul 05, 2011 at 05:04:49 AM PDT

                      [ Parent ]

        •  yes, but ... (8+ / 0-)

          ... the combination of austerity and bailouts means that Greek citizens pay the full price, and foreign creditors collect every penny, even though they received high rates of interest because the loans were perceived as risky.

          The banks should bear a part of the pain.

        •  There's a lot of blame to go around (8+ / 0-)

          just because Greece has problems, it doesn't mean the banksters are excused.

          "It is, it seems, politically impossible to organize expenditure on the scale necessary to prove my case -- except in war conditions."--JM Keynes, 1940

          by randomfacts on Sun Jul 03, 2011 at 11:25:31 AM PDT

          [ Parent ]

        •  Goldman certainly had a hand in it. (11+ / 0-)

          They cooked the books for Greece, banking on this failure that would allow them to privatize Greece.

          There are other problems, yes.  But banksters had a hand in all of it.

          Government of the people, by the people, for the people, shall not perish from the earth - Abraham Lincoln

          by Gustogirl on Sun Jul 03, 2011 at 12:10:43 PM PDT

          [ Parent ]

          •  The goldman thing is way overstated (0+ / 0-)

            All countries were doing that currency swap in Europe. Germany did 50 billion of it. All countries were aware of it, the Greece Goldman deal was announced and published in the trades. A year after Greece got in, Eurostat changed the laws so that such deals counted as debt. Greece getting in with a 4% deficit also became moot when the 3% cap was lifted a year later after Germany and france blew through it. greece would have gotten in in 2004 instead of 2002.

            There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

            by upstate NY on Sun Jul 03, 2011 at 05:42:35 PM PDT

            [ Parent ]

  •  Papndreou is a clown (5+ / 0-)

    He is a puppet PM who has essentially no supporters left in his country this moment.   He is a joke.

  •  Translation... (57+ / 0-)

    "The financiers of the western world own your country,  everyone in Greece is now nothing more than a indentured slave".  

    "OK, GOP you take the millionaires and tea baggers, and I will stand with the police, fire fighters, teachers and union members, guess who is gonna win... "

    by Nebraskablue on Sun Jul 03, 2011 at 07:05:26 AM PDT

  •  Credit is as much about the future (8+ / 0-)

    as it is about the past. Greece could indeed say fuck you to its creditors, even though there would be real damage to European banks and other countries. But Greece knows that if it did that, it would be cut off from any future debt issuance, and it needs to issue more debt. You can't tell people "fuck you" when you need to borrow more money from them.

    I'm in the I-fucking-love-this-guy wing of the Democratic Party!

    by doc2 on Sun Jul 03, 2011 at 07:17:45 AM PDT

    •  If you're never going to be able to pay the debt (27+ / 0-)

      you really should say "fuck off".  Especially since all the new debt is going to pay off old debt.

      If they absolutely have to sell off assets, the government should at least get the money.

      •  Even if they walked away from (6+ / 0-)
        Recommended by:
        Kathy S, vets74, FG, randomfacts, Balto, Cliss

        all their debt, they still would run a deficit and need to borrow money, almost immediately. They are basically like a child dependent on others at this point. So advising them to default is just not an option. Their leaders understand this, which is why they are doing what they have to do. The protesters are acting out emotionally, but with very little rationality.

        I'm in the I-fucking-love-this-guy wing of the Democratic Party!

        by doc2 on Sun Jul 03, 2011 at 07:27:18 AM PDT

        [ Parent ]

        •  how so? (6+ / 0-)

          without taking sides on pro-default or anti-default (because there are many more options) I don't think that the math is on your side.

          Debt+interest service is at 15% of the budget and rising while the deficit is at 10%. If default is total, wouldn't that automatically erase the deficit?

          •  It would erase the debt. (3+ / 0-)
            Recommended by:
            Sparhawk, dannyinla, randomfacts

            But in that budget of yours part of the revenue is new debt issuance. So if Greece wiped out all their interest payments, but also stopped borrowing new money, they would - almost immediately, as I said - face a deficit.

            I'm in the I-fucking-love-this-guy wing of the Democratic Party!

            by doc2 on Sun Jul 03, 2011 at 07:41:29 AM PDT

            [ Parent ]

            •  Right (3+ / 0-)
              Recommended by:
              randomfacts, Gustogirl, SingleVoter

              Greece is running a 10% current account deficit. That means that default means that around 10% (actually 9.09%) of their economy vanishes instantly in case of a default. Not only that, but secondary order effects from the structural deficit being erased all at once might mean that they lose 20% of their economy.

              That's a hell of a blow (pardon the Greek pun). Like, riots in the streets kind of thing, mass unemployment, etc. Think of how painful it is when the economy contracts even a few percent over a year in a typical recession.

              (-5.50,-6.67): Left Libertarian
              Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

              by Sparhawk on Sun Jul 03, 2011 at 10:02:12 AM PDT

              [ Parent ]

          •  Default wouldn't be total (5+ / 0-)

            I've been hearing 50% haircuts.

            But with Greece having a 2% budget deficit last year, and assuming it may be lower now, I'd say the deficit could be erased by eliminating weapons purchases, which Greece would not have to do anymore if it exited the austerity program.

            But, this may all be totally irrelevant regardless since the knock-on effects of default are unknown.

            There's no point discussing what you owe in a certain currency if that currency ceases to exist.

            If the Euro goes down to toilet due to a Greek default, then every country would simply convert their debts to their national currency at par. This would literally mean that the debt would be reduced to practically zero under your scenario.

            But that's only assuming the euro collapses. Which it will in the event of a Greek default.

            There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

            by upstate NY on Sun Jul 03, 2011 at 07:50:20 AM PDT

            [ Parent ]

            •  Even a 20% default/"haircut" does the job. (1+ / 0-)
              Recommended by:
              Gustogirl

              Or structure to screw the Goldman bastards. 50% to them.

              Angry White Males + Crooks + Personality Disorder psychos + KKKwannabes + "Unborn Child" church folk =EQ= The Republicans

              by vets74 on Sun Jul 03, 2011 at 08:31:12 AM PDT

              [ Parent ]

            •  Interesting... (3+ / 0-)
              Recommended by:
              Gustogirl, Calamity Jean, JesseCW
              I'd say the deficit could be erased by eliminating weapons purchases, which Greece would not have to do anymore if it exited the austerity program.

              Another of those EU requirements? Please explain...

              [The artists formerly known as Quill Mike Eat Brains]

              by WOIDgang on Sun Jul 03, 2011 at 10:04:07 AM PDT

              [ Parent ]

              •  Watch this from 4:10 on (6+ / 0-)

                and read this:

                http://www.reuters.com/...

                "No one is saying 'Buy our warships or we won't bail you out', but the clear implication is that they will be more supportive if we do what they want on the armaments front," said an adviser to Prime Minister George Papandreou, speaking on condition of anonymity because of the diplomatic sensitivity.

                Greece spends more of its gross domestic product on the military than any other European Union country, largely due to long-standing tension with its neighbor, historic rival and NATO ally, Turkey.

                "The Germans and the French have them over a barrel now," said Nick Witney, a former head of the European Defense Agency.

                "If you are trying to repair Greek public finances, it's a ludicrous way to go about things."

                There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

                by upstate NY on Sun Jul 03, 2011 at 10:37:17 AM PDT

                [ Parent ]

                •  Thanks! (1+ / 0-)
                  Recommended by:
                  upstate NY

                  Cohn-Bendit's the same well-intentioned and self-destructive blow-hard I knew back in '68; as to this issue, I was curious to know what kind of pressure was put on Greece to buy armaments from the EU, not simply from a couple rogue states. In my neck of the woods, which is the area of culture, it's far more direct, far more above-board, and just as destructive of any one given country's economy.

                  Cordially,

                  [The artists formerly known as Quill Mike Eat Brains]

                  by WOIDgang on Sun Jul 03, 2011 at 12:44:03 PM PDT

                  [ Parent ]

                  •  I notice Verhofstadt in the video (0+ / 0-)

                    I heard that Verhofstadt has signed onto a document proposing a more perfect union, it will be published tomorrow, the kind of document that many eurosceptics doubt will ever come to fruition.

                    There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

                    by upstate NY on Sun Jul 03, 2011 at 01:10:14 PM PDT

                    [ Parent ]

            •  If a Credit "Event" occurs..[CDS again} (8+ / 0-)

              which a default certainly is classed as; then the billions of dollars of bets against the Greeks would kick  or trigger the Credit Default Swaps. Since anyone can bet against the debt, the default would be magnified by 1-2 orderes of magnitude.

               The US banks are on the hook for 41 Billion. It would be easy to suggest that all are hedged including the German banks. However, zero transparency in this derivative of mass destruction included not regulating the sellers of Credit Default Swaps to see if they have enough capital to pay off the bets. This was something Geithner and freinds fought tooth and nail for when Dodd Frank was being formulated. No Regulation of CDSs

              Is Geithner just a drooling moron following orders or worse?

              As a reminder: This is why the US taxpayer took the "House's Book" and paid off all the bets or nullified the CDSs by buying the Collateralized debt obligations at par which contained all the trash mortgages.

              The main reason the Greek default which is inevitable was kicked down the road a few months. Someone is going to have to Nullify those Credit Default Swaps by buying the Greek debt at par or again the Banks will demand taxpayer bail outs worldwide as assured  destruction will occur if we don't. They will drive the worlds stock markets down in concert just to show the POWER of the squids.

              Then I think of Iceland who was faced with the same situation and told the banks to eat shit and die along with their govt. Nothing happened of major consequence. The banks withered and died and Iceland is still motoring along just fine. Of course they are much smaller. Yet, I think the template they have laid out , which everyone seems to ignore, should be looked out.

              Iceland showed us the only affordable answer to the Banks incessant demands for more taxpayer capital is a big FUCK YOU and here is your jail cells. The Taxpayers have found it much cheaper to house bankers in prisons as they sell off all the assets of the bankers and anyone else who committed a crime in the world wide heist that continues even now.

              Special Note On GS: I couldn't have been more happier when Goldman Employees lost their jobs in favor of "cheaper labor" when I read the "welcome to Main Street Bitches" comment. Yet I can't help wondering what the biggest Criminal Enterprise in the world is up too...

              ...until it occurred to me that spreading the black plague that Vampire squids do requires following the money. Singapore is wealthy. Not for long. If I lived in Singapore I would be very scared of a significant presence of Goldman Sachs trained people. 1000 Employees may not seem like much, but it is far more per capita than we have here. That's a shit load of vampires and these are not clerical jobs.

              Ask yourself, Since when was GS concerned with saving one Billion when they could easily steal it in a day or when they pay a substantial part of their pre-tax profits out in bonuses. A 1 Billion cut in Bonus money would have been trivial.

               Follow the money and remember who these fucks are.

              •  I would concern myself much less (2+ / 0-)
                Recommended by:
                randomfacts, Rei

                with CDS at this point than the fact that the ECB has recapitalized the banks, and that therefore any run on Greek banks in the event of a default would hurt the ECB badly, and that this compounded by further runs on banks in the periphery would trigger the collapse of the eurozone.

                In my view, the collapse of the eurozone is a much more serious economic event than any insurance owed directly as a result of defaulted Greek debt.

                There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

                by upstate NY on Sun Jul 03, 2011 at 10:39:40 AM PDT

                [ Parent ]

                •  Greece gets about 6 billion Euros/year (0+ / 0-)

                  in net EU transfer payments.

                  It would take about 50 years of redirecting those Euros to the ECB to pay off a 300 billion/debt.

                  •  Link, show the link (0+ / 0-)

                    Greece was awarded 20.2 billion over 7 years from Europe. It's in the middle of the program now. That's less than 3 billion a year.

                    BUT, no European country manages to secure all the billions allotted to it. Most only secure less than 50% because matching funds are required.

                    Greece has so far received 4.9 billion in funds over the first 5 years of the program.

                    Thus, Greece doesn't receive 6 billion a year, it actually receives less than 1 billion a year from Europe, and that's not counting the small amount that Greece contributes to the structural fund.

                    There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

                    by upstate NY on Sun Jul 03, 2011 at 12:13:32 PM PDT

                    [ Parent ]

                    •  linky (0+ / 0-)
                      in 2009, EU transfers accounted for 2.35% of GDP.
                      GDP (2010 forecast): €236 billion (about $315 billion).

                      http://www.traveldocs.com/...

                      That's roughly 5.54 billion.

                      •  Traveldocs is hopelessly confused about EU (0+ / 0-)

                        transfers and how they work.

                        This is what they write:

                        "EU transfers to Greece continue, with approximately $24 billion in structural funds for the period 2000-2006. The same level of EU funding, $24 billion, has been allocated for Greece for 2007-2013. These funds contribute significantly to Greece's current accounts balance and further reduce the state budget deficit. EU funds will continue to finance major public works and economic development projects, upgrade competitiveness and human resources, improve living conditions, and address disparities between poorer and more developed regions of the country. The EU plans to phase them out in 2013."

                        The amount allocated is NOT the amount one country takes in. No European country takes in all transfers because to take them in, you need matching funds. The highest rate for taking in allocated funds is around 60%. Greece is in the 15% range.

                        Read this:

                        http://www.news1130.com/...

                        There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

                        by upstate NY on Sun Jul 03, 2011 at 04:39:32 PM PDT

                        [ Parent ]

                      •  More on why Traveldocs is wrong (0+ / 0-)

                        http://www.thespec.com/...

                        Of the €20.2 billion in development funds budgeted to help Greece catch up with the richer regions in the 27-country EU between 2007 and 2013, only €4.9 billion has actually been paid out. The rest is still sitting unused in EU coffers as Greece struggles to show it can put them to work efficiently and come up with its 50 per cent of the funding for any proposed project.

                        There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

                        by upstate NY on Sun Jul 03, 2011 at 04:41:02 PM PDT

                        [ Parent ]

                •  They can only punt for so long (1+ / 0-)
                  Recommended by:
                  Gustogirl

                  No matter what accounting system your on eventually you have to answer to Jesus. The ECB is already hurting and to pretend otherwise is a exercise in self deception. It's really just a time frame which countries and when will they default. Once one goes, it could very easily push the rest. Add the volatile mix of derivatives in there and the demands of the elite to have their bets paid off around the world and it becomes much more than some pain.

                  Take it now under some semblance of control or totally lose control later. The world , including us, have learned nothing about the derivative disaster that has sunk this economy. The bankers have more control than before so the size of the next disaster will make the first one look like a bad warm-up act where everyone is disturbed by the noise of the band and ignores it.

                   Recall that nothing has changed in the derivative market of substance. The CDSs debacle here didn't make the connected more careful, because they knew they owned the money origination starting in 2008. This time the greed has really kicked in.

                  Your mistake is assuming there is still a painless fix.

              •  The "Iceland Myth" rears its head again (1+ / 0-)
                Recommended by:
                SingleVoter

                It's like a whack-a-mole game; every time you knock it down, it pops up again somewhere else.

                1) Iceland's main conflict was with other nations, not banks.  One of said natios (Britain) being a long-time strategic rival.

                2) Iceland did bail out their domesic banks, with nearly a year's GDP.  They let the big banks go into receivership, split them up between "old" (foreign) and "new" (domestic), bailed out new and left old to rot.

                3) Iceland dealt with their domestic debt crisis (by far the smaller crisis) in two ways.

                3a) One, they DID pass large, painful austerity measures; and

                3b) Two, they devalued their currency.  For a country almost entirely dependent on imports, that's like a massive across-the-board salary cut.

                4) Far larger of a crisis, the international conflict over Icesave, is still out there, working its way through the EFTA.  A negative ruling would be utterly devastating.

                5) And do you know who was pushing for a settlement to avoid this?  Their new leftist government that is so praised here!

                The Daily Kos myth of what happened in Iceland is nothing like what actually happened in Iceland.

                •  Re; Iceland (2+ / 0-)
                  Recommended by:
                  Gustogirl, Euroliberal

                  Take your "whack a mole" bullshit and stuff a sock in it.

                  They let the big banks go into receivership, split them up between "old" (foreign) and "new" (domestic), bailed out new and left old to rot.

                  A large portion of the bailout here went to foreign owned banks. Taking the large offenders into receivership was the wish of the people here but was ignored by the politicians.

                  Is Iceland destroyed right now? No. But that was what was promised if they bonds weren't paid by the Citizens of Iceland.

                  As far as bailing them out, I would use a different terminology as in the massive reorganization like you get here in bankruptcy where the drivers of the disaster mobile have the keys taken away.  The mistake we made and everyone else made, that Iceland didn't, was letting the Masters of Disaster gain more power.

            •  Default is not like hand grenades or horseshoes... (2+ / 0-)
              Recommended by:
              Gustogirl, Cliss

              It is binary....you default or you don't.  

              What you are talking about is a settlement agreement, not a default..which can take a decade to resolve.

              And as we have discussed before :)  no one really knows what kind of primary deficit Greece is running now.

              Finally, really don't think the euro will collapse.  Greece will get drop kicked even further, and the IMF, et al will recapitalize the Euro banks.  

              The only difference with what is happening now, is that the IMF, et al hopes they can give the banks enough time to regain health through retained earnings.

              Of course, as you have mentioned, the knock on effects are unpredictable......

              •  The French and German banks could (0+ / 0-)

                sell preferred shares to the ECB or to German and French pension funds to rebuild their capital.

                To sell Greek assets for say a fourth of their realistic value right away to economic vultures shortchanges Greece and its creditors.

                The Greek railway should just be told to operate as best it can on commercial revenues received.

              •  They do know the Greek primary deficit (0+ / 0-)

                That's the whole point of Eurostat moving in with the IMF. It's pretty simple. Add the money you're getting from the EU/IMF to tax collections, deduct the money going out to service loans, and that's your budget. What's so difficult about that?

                Explain to me how Greece will get knocked out of the euro.

                Have you thought this through? How is it going to happen?

                There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

                by upstate NY on Sun Jul 03, 2011 at 12:10:04 PM PDT

                [ Parent ]

                •  Where do I say Greece is leaving the Euro? (1+ / 0-)
                  Recommended by:
                  Gustogirl

                  All I am saying is that a Greek default is inevitable, today or next year.   The EU is hoping for next year when the banks are stronger.  

                  •  I don't think it's inevitable (0+ / 0-)

                    if the eurozone comes together with eurobonds and the like.

                    It's inevitable in the current system and/or outside the eurozone.

                    I read your words "kick Greece to the curb" as kicking Greece out. Greece isn't going along with the EU so that the EU will dump it in the last second.

                    There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

                    by upstate NY on Sun Jul 03, 2011 at 12:33:19 PM PDT

                    [ Parent ]

          •  Euroliberal - why would default erase the debt? (2+ / 0-)
            Recommended by:
            FG, randomfacts

            It wouldn't.  See my comment in this stream.

            "let's talk about that"

            by VClib on Sun Jul 03, 2011 at 08:15:03 AM PDT

            [ Parent ]

        •  What you're missing is that the (22+ / 0-)

          destructive nature of the austerity cuts is actually making it more difficult for them to get to the budget surplus, never mind the fact that they are being forced to purchase arms with a lot of the money.

          There are a lot of economists (noted ones) who see the value of a Greek default.

          There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

          by upstate NY on Sun Jul 03, 2011 at 07:46:59 AM PDT

          [ Parent ]

        •  They'd have an austerity budget (2+ / 0-)
          Recommended by:
          Gustogirl, Sychotic1

          Just not as bad as the one they've already got.

          Besides,  past performance of our banksters says the greedy fools.  Even after a default they're be someone who'll lend to Greece.  They'd probably even get a rate below 10%.

        •  Default, then sell assets instead of borrowing. (4+ / 0-)
          Recommended by:
          Gustogirl, Sychotic1, satanicpanic, Cliss

          But these steps follow leaving EU.

          A debacle there is inevitable, otherwise.

          Angry White Males + Crooks + Personality Disorder psychos + KKKwannabes + "Unborn Child" church folk =EQ= The Republicans

          by vets74 on Sun Jul 03, 2011 at 08:29:38 AM PDT

          [ Parent ]

          •  And after they leave EU they will get (2+ / 0-)
            Recommended by:
            randomfacts, Cliss

            hyperinflation. Not much fun.

            •  They aren't going to leave the EU (2+ / 0-)
              Recommended by:
              Euroliberal, randomfacts

              Why does everyone keep saying this?

              There is no forced exit mechanism in Maastricht.

              There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

              by upstate NY on Sun Jul 03, 2011 at 09:10:51 AM PDT

              [ Parent ]

              •  If they don't get Varoufakis/Holland (1+ / 0-)
                Recommended by:
                Gustogirl

                then why stay ?

                Why not devalue ? And negotiate defaults ?

                Let the CDS boys croak.

                Angry White Males + Crooks + Personality Disorder psychos + KKKwannabes + "Unborn Child" church folk =EQ= The Republicans

                by vets74 on Sun Jul 03, 2011 at 09:27:41 AM PDT

                [ Parent ]

                •  Because any movement toward leaving (3+ / 0-)
                  Recommended by:
                  Euroliberal, randomfacts, vets74

                  the zone immediately takes the pressure off the EU to do something smart--like the ModPros you cite.

                  They'll wait until the Eurozone core throws in the towel.

                  Besides, it will be much much better for Greece to default if the euro has ceased to exist rather than to default outside the euro.

                  If the currency ceases to exist then every country is allowed to convert their debt into their new currencies at par value.

                  Greece will owe someone 350 billion drachmas.

                  This is why Greece will hold out to the end.

                  There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

                  by upstate NY on Sun Jul 03, 2011 at 09:39:37 AM PDT

                  [ Parent ]

                  •  But they're not "holding out." (3+ / 0-)
                    Recommended by:
                    randomfacts, Gustogirl, Cliss

                    They sure as Hell ought to.

                    Angry White Males + Crooks + Personality Disorder psychos + KKKwannabes + "Unborn Child" church folk =EQ= The Republicans

                    by vets74 on Sun Jul 03, 2011 at 10:37:48 AM PDT

                    [ Parent ]

                  •  show me... (0+ / 0-)

                    Where in the indenture it says....

                    If the currency ceases to exist then every country is allowed to convert their debt into their new currencies at par value.
                    •  If the eurozone collapses (0+ / 0-)

                      what do you think happens to the euro?

                      Say Greece is the last country with the euro.

                      What's the difference between a euro and a drachma at that point? Nothing.

                      What we're talking about here is the surplus countries peeling off one-by-one.

                      There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

                      by upstate NY on Sun Jul 03, 2011 at 11:46:35 AM PDT

                      [ Parent ]

                      •  So you agree your statement is wrong? (0+ / 0-)
                        •  It's right (0+ / 0-)

                          I'm always right.

                          Actually I don't even know what you're referring to.,

                          On this diary, I've made maybe 132 statements.

                          There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

                          by upstate NY on Sun Jul 03, 2011 at 12:34:30 PM PDT

                          [ Parent ]

                        •  Ipso facto it's right (0+ / 0-)

                          If the euro doesn't exist, then Greece's obligations change.

                          Do you think that bonds contain language envisioning the total obliteration of the currency?

                          "In the event that the world ends in nuclear annihilation, you will repay the creditor..."

                          There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

                          by upstate NY on Sun Jul 03, 2011 at 12:36:08 PM PDT

                          [ Parent ]

                          •  Force majeure? (0+ / 0-)

                            What you are referring to, I think, is a force majeure clause, which would allow a borrower to escape obligations in the case of war, riots or acts of god.  

                            I don't know if any of the indentures have those clauses, or if they did, if they would be enforceable.  Borrowing too much money, or other acts of stupidity, are probably not covered.

                          •  Let's try this again (0+ / 0-)

                            The euro doesn't exist.

                            What happens to the debt.

                            In what currency is the debt denominated?

                            There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

                            by upstate NY on Sun Jul 03, 2011 at 02:16:46 PM PDT

                            [ Parent ]

                          •  In the Great Depression (0+ / 0-)

                            the US government abolished gold clauses in contracts.

                            http://en.wikipedia.org/...

                            The President soon afterward issued Executive Order 6102, requiring the surrender of all gold coins, gold bullion, and gold certificates to the government by May 1, 1933 in exchange for their value in U.S. dollars at the rate of $20.67
                            The Gold Reserve Act of 1934 abrogated gold clauses in government and private contracts and changed the value of the dollar in gold from $20.67 to $35 per ounce.
                          •  This is a myth (0+ / 0-)

                            perpetrated by gold dealers in order to inflate the price of gold coins.

                            This myth was perpetuated by right wing radio - especially Glen Beck - on behalf of GoldLine (I think that's the name), his sponsor that is now under investigation and indictment.

                            Just because it's in wiki doesn't make it so.

                            Here's a conservative source.

                            Government of the people, by the people, for the people, shall not perish from the earth - Abraham Lincoln

                            by Gustogirl on Sun Jul 03, 2011 at 03:34:02 PM PDT

                            [ Parent ]

                          •  Sorry..I reject the premise... (0+ / 0-)

                            The Europeans are not going to let the Euro collapse.  Full stop.  If by some odd chance it does happen, we will have a lot bigger problems.  Like trying to find whale oil to light our caves.

                          •  Like I said at the beginning... (0+ / 0-)

                            the Europeans are not going to let the euro collapse, therefore Greece should reject the austerity measures.

                            There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

                            by upstate NY on Sun Jul 03, 2011 at 05:50:28 PM PDT

                            [ Parent ]

                  •  Euro won't cease to exist. Look at EMU currency (0+ / 0-)

                    crisis about 20 years ago. Back then everyone still had their own currencies so it was easier. A couple of countries broke the peg to DM but most countries kept it. The same may happen now: Greece and maybe smb else quitting euro and the rest of euro countries staying.

                    •  What we're talking about here is that Greece will (1+ / 0-)
                      Recommended by:
                      FG

                      not quit the euro. There is no ejection mechanism.

                      This is why economists and Soros and a great many others have said that Germany will quit the euro first--or be forced into establishing a reserve bank and pan-Euro treasury.

                      There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

                      by upstate NY on Sun Jul 03, 2011 at 11:48:06 AM PDT

                      [ Parent ]

                      •  I didn't realize there is really indeed no exit (0+ / 0-)

                        mechanism from euro. A lot of people (not just on this blog) are talking about Greece quitting euro as an option. And how can Germany quit euro if it's impossible?

                        •  There is an exit mechanism (1+ / 0-)
                          Recommended by:
                          FG

                          It was just put into place when they redid the Lisbon treaty. It's voluntary. There is no FORCED expulsion however. That's why I mention Greece.

                          There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

                          by upstate NY on Sun Jul 03, 2011 at 04:35:06 PM PDT

                          [ Parent ]

                          •  Thanks. When I thought about Greece leaving (0+ / 0-)

                            euro (if it happens), my assumption was that it would be voluntary.

                          •  Greece has little incentive to leave the euro (1+ / 0-)
                            Recommended by:
                            FG

                            right now. In a few short months, the eurozone will have to decide what to do about maintaining the currency. greece just needs to hang out for a few months.

                            There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

                            by upstate NY on Sun Jul 03, 2011 at 05:51:30 PM PDT

                            [ Parent ]

              •  Leaving EU is an extreme measure that is (0+ / 0-)

                not necessary for anything anyway. People mean leaving the eurozone.

            •  Would also get more competitive (0+ / 0-)

              as the devalued local currency would make exports cheaper abroad and imports more expensive at home.

              "Never separate the life you live from the words you speak" -Paul Wellstone

              by WellstoneDem on Sun Jul 03, 2011 at 11:15:58 AM PDT

              [ Parent ]

              •  In theory, yes. But if they indeed end up (1+ / 0-)
                Recommended by:
                randomfacts

                with hyperinflation, it will kill all these advantages. If they could leave the euro without ending up in a big pile of crap (unlikely), it would be a good solution.

              •  Greek exports and imports (0+ / 0-)
                Exports (2009 estimated)--$21.37 billion: manufactured goods, food and beverages, petroleum products, cement, chemicals...

                Imports (2009 estimated)--$64.27 billion: basic manufactures, food and animals, crude oil, chemicals, machinery, transport equipment...

                http://www.traveldocs.com/...

                •  Ah, but in any economics class (0+ / 0-)

                  shipping and tourism have the same impact as exports. They bring in foreign currency. That's why there are accounting methods which consider shipping and tourism an export.

                  So, Greece would be hurt by leaving the euro since it receives income over and above that $21 billion from outside the country.

                  There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

                  by upstate NY on Sun Jul 03, 2011 at 05:53:31 PM PDT

                  [ Parent ]

        •  That's a rather patronizing way of looking at (22+ / 0-)

          the anger in the Greek streets. They're witnessing the imminent fire sale of their country's primary assets. If tomorrow the Chinese sold off every last Treasury bill, and the US had to liquidate its assets, d'ya not think one or two Americans might take to the streets?

          People subject to austerity measures are tired of paying for the mistakes of their supposed social "betters." This is true in the UK, where college students are bearing the brunt of austerity; it's just as true in Michigan and Wisconsin, where public employees have, for some unknown reason, become the face of fiscal profligacy. Teachers and firemen! And it's of course the teachers, firemen, transportation workers, shop merchants, and ordinary citizens of Greece who are being asked to pay for the clusterfuck that Greek politicos and New York investment bankers created.

          Nothing requires a greater effort of thought than arguments to justify the rule of non-thought. -- Milan Kundera

          by Dale on Sun Jul 03, 2011 at 08:48:07 AM PDT

          [ Parent ]

          •  Well said. (4+ / 0-)
            Recommended by:
            Tookish, Gustogirl, Johnny Q, Cliss
            They're witnessing the imminent fire sale of their country's primary assets.

            Yes... and this is why many Athenians want Greece to leave the EU. To prevent this from happening further. And, one can presume, this is exactly why the EU wants to keep Greece... so they can continue to pillage it.

          •  It would depend on what was on TV (0+ / 0-)
          •  Exactly! (2+ / 0-)
            Recommended by:
            Johnny Q, Cliss

            And how much say are the Greeks going to have in setting a sales price for, say, the Parthenon?

            These assets are going to be ripped off, far more than sold.

            Government of the people, by the people, for the people, shall not perish from the earth - Abraham Lincoln

            by Gustogirl on Sun Jul 03, 2011 at 11:05:14 AM PDT

            [ Parent ]

          •  "unknown reason" (0+ / 0-)

            Heating in cold climates costs more than air conditioning.

            This makes ordinary people want to move southward.

            Unions are strong in Michigan and Wisconsin.

            Union power makes businesses want to stay away and move away (southward).

            Over time, the economies of Michigan and Wisconsin have weakened. Their governments have to make spending adjustments as a result of economic weakness.

            The Michigan governor also wants to give businesses extraordinary low tax rates in hopes of overcoming their fear of unions, which have been exceptionally strong in Michigan since the 1930s.

      •  TJ - default does not mean the debt is gone (4+ / 0-)

        Greece was lent euros and must pay them back, now or at some point in the future even if they default. As part of the EU they have euro based liabilities. Even if they defaulted they could not walk away from the debt. It might be restructured, but it would still be owed or they would be tossed out of the EU. At that point no one would loan them any money and all governments need the ability to borrow, even if just for short term cash flow swings. Greece just allowed its liabilities to get to a point where it did not have the tax revenue to support its obligations.  

        "let's talk about that"

        by VClib on Sun Jul 03, 2011 at 08:13:38 AM PDT

        [ Parent ]

    •  Greece could say FU (9+ / 0-)

      and get by.

      It's primary balance is down from 3.5% last year, 2% this year, scheduled for under 1% next year.

      Meanwhile, arms purchases are still 5% GDP.

      It's a lot more complicated however than the Greek primary deficit issue. It's about whether the euro would collapse in such a scenario, kill the European economy, and therefore make Greece's current budget (which is clawing its way back to par) totally irrelevant.

      There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

      by upstate NY on Sun Jul 03, 2011 at 07:45:28 AM PDT

      [ Parent ]

      •  No they could not. Either their (3+ / 0-)
        Recommended by:
        vets74, randomfacts, Cliss

        own need to borrow would kill them or a European collapse (as you point out). Or both. There's a reason their leaders are ignoring the wishes of the ignorant masses (who vote in elections). They have to.

        I'm in the I-fucking-love-this-guy wing of the Democratic Party!

        by doc2 on Sun Jul 03, 2011 at 07:47:35 AM PDT

        [ Parent ]

      •  Would the euro (5+ / 0-)
        Recommended by:
        esquimaux, upstate NY, Tookish, Cliss, ozsea1

        have to collapse if they abandoned this austerity nonsense and started taxing corporations and the wealthy at rates more akin to those of more prosperous decades?

        We should have let the TBTF's fail.  They still might fail, and that might (gasp) be a good thing.

        Government of the people, by the people, for the people, shall not perish from the earth - Abraham Lincoln

        by Gustogirl on Sun Jul 03, 2011 at 08:07:47 AM PDT

        [ Parent ]

        •  The tax evasion question is a problem (13+ / 0-)

          for Greece more than it is a solution for European debt. Greece collects 40% of its GDP in taxes, which is 4% under the European norm. But when you back out 10% of GDP in the form of shipping revenues which are untaxed (because ships can dock in any port) then the Greek tax collection number is HIGHER than most of Europe.

          This literally means that Greece is collecting enough taxes despite rampant tax evasion (25%-30%). It also means the middle class is paying perhaps the highest taxes in all of Europe. If Greece managed the fix its tax evasion, you would see the tax rates drop down to spur the economy, but the amount collected relative to the overall debt would still be the same. Besides, this is a very difficult question since the tax evasion money is squirreled away in secretive banks in Switzerland and Luxembourg.

          No one can actually say how solving Greece's tax evasion would benefit the country. It's impossible to gauge for how much corruption and dysfunction is caused by the lack of unity and harmony when you know the rich aren't paying their fair share. That pollutes the body politic. One might argue that Greece would be a more productive place if you had more cohesion among the populace, but it's impossible to gauge that.

          Besides, I would caution everyone not to focus on Greece so much when looking at the European crisis. The idea that tiny Greece threatens the euro is a total myth and distraction from what is really going on: the behind-the-scenes recapitalization of banks by the taxpayers.

          Greece is a distraction.

          People should ask this question first and foremost: how could tiny Greece possibly threaten the world economy? It's absurd.

          But here we are. The reasons it's a threat reveal not a problem in Greece, but a problem in Europe as a whole.

          There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

          by upstate NY on Sun Jul 03, 2011 at 08:16:42 AM PDT

          [ Parent ]

      •  Where are you getting this figures? (2+ / 0-)
        Recommended by:
        Gustogirl, Cliss

        Someone should tell Megan McArdle, because she says Greece's primary balance is 5% of GDP (not that she would know, but her position as a writer for the Atlantic makes it notable if you disagree with her assessment by such a large margin). A 2% primary balance doesn't seem right to me. If that were the case, the EU could lower Greece's burden substantially just by reducing its interest rate on German/IMF loans.

        "It is, it seems, politically impossible to organize expenditure on the scale necessary to prove my case -- except in war conditions."--JM Keynes, 1940

        by randomfacts on Sun Jul 03, 2011 at 10:51:38 AM PDT

        [ Parent ]

        •  According to Daniel Gros (0+ / 0-)

          who I trust more than McArdle, it was 3.2% in 2010, down from 9.X% in 2009. 2011 is obviously not over but the projections I saw were for 2.1%. not hard to imagine given the incredible slashing of pensions and salaries.

          There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

          by upstate NY on Sun Jul 03, 2011 at 12:31:04 PM PDT

          [ Parent ]

        •  would not make a difference: (1+ / 0-)
          Recommended by:
          Cliss

          Randomfacts:  The primary deficit is before giving consideration to financing, so lowering interest rates would have no effect.

          The reality is that no one really knows what Greece's primary deficit is.  

          Those that cite slashes in services seem to ignore the corresponding reduction in economic activity, and hence government receipts.

          •  That's what I meant, Balto. (1+ / 0-)
            Recommended by:
            Euroliberal

            If the primary deficit is only 2% and the total deficit is 9% as being reported, then 7% must be interest. I would be shocked if it were that high. But if it were that high, than lowering interest rates would help reduce Greece's total deficit massively.

            "It is, it seems, politically impossible to organize expenditure on the scale necessary to prove my case -- except in war conditions."--JM Keynes, 1940

            by randomfacts on Sun Jul 03, 2011 at 01:30:04 PM PDT

            [ Parent ]

            •  Of course it's that high. (0+ / 0-)

              The Wolfgang Munchau article in the Financial Times made this point.

              http://www.ft.com/...

              The net borrowing requirement, on a cash flow basis, went up from 5.8 per cent of GDP in the period from January to May 2010 to 9.3 per cent in the same period this year. Greece is still some distance from a primary balance.

              The primary deficit is 3.2% percent. If your net borrowing requirement is 9.3%, then you're servicing the debt with 6.1%.

              There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

              by upstate NY on Sun Jul 03, 2011 at 05:58:49 PM PDT

              [ Parent ]

      •  Greek arms purchases (1+ / 0-)
        Recommended by:
        wsexson

        http://www.beinternacional.eu/...

        A large percentage of Greece's primary deficit would get reduced if these weapons contracts were cancelled or the weapon contracts sold off to other buyers.

        •  Greece also in NATO (0+ / 0-)

          Doesn't the fact that 20+ nations, three of them with nukes, will rush to its defense should it ever be attacked offer them a reason to ease up on the military expenditures?  

          A wholly owned and operated subsidiary of Two Cats Enterprises

          by Yamaneko2 on Sun Jul 03, 2011 at 05:18:32 PM PDT

          [ Parent ]

          •  They should give up those weapons purchases (0+ / 0-)

            simply because they are useless, not because they make Greece more secure. other than jet fighters, Greece doesn't need submarines that keel over in warm waters or useless surveillance systems that break down. They buy them as a form of protection.

            I'm sure NATO would not abide by a war by two of its members but I also would not say that NATO itself is a guarantee against such a war. They probably wouldn't gamble. but they sure as heck don't need the additional weapons.

            There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

            by upstate NY on Sun Jul 03, 2011 at 06:00:46 PM PDT

            [ Parent ]

    •  Not just debt issuance. (5+ / 0-)

      We don't know what kind of pressure the other countries, notably France and Germany, who have the most exposure to Greek debt, brought to bear behind the scenes.

      Iuris praecepta sunt haec: Honeste vivere, alterum non laedere, suum cuique tribuere. - Ulpian, Digestae 1, 3

      by Dauphin on Sun Jul 03, 2011 at 07:53:41 AM PDT

      [ Parent ]

    •  Too easy to blame Greek pols (4+ / 0-)
      Recommended by:
      satrap, Gustogirl, FG, Cliss

      Greece is a basket case -- it lied about its financial condition to get into the EU, and has almost no will to make changes internally -- and I don't mean by that the so-called austerity measures -- so that it would be able to operate with more autonomy over its finances.  Inability to pay or collect taxes, etc. -- read Michael Lewis, it's really depressing even if you are not Greek.  Greek people wanted to benefits of the Euro and union -- and if they no longer do, that's okay, but that would also bring a lot of unwanted pain.  Do you think all those things, the pensions and so on would be unaffected by a default?  The Greek people seem to without much justification.

      •  You know what's interesting about all of this (8+ / 0-)

        (besides the intrinsic Greek tragedy) is that the more 'highbrow' arguments about Turkey and it's entrance into the EU have been primarily based, I believe, on economic concerns.   While the real reason is likely fear of Muslim hordes, the argument that Turkey is economically unfit for the EU looks completely hilarious right now!

        From Neocon to sane- thanks to Obama- and Kos.

        by satrap on Sun Jul 03, 2011 at 08:22:46 AM PDT

        [ Parent ]

      •  Michael Lewis's work on Greece was totally (8+ / 0-)

        shoddy, if you ask me. he did a fly by night hitjob full of anecdotal info.

        Greece lied about its finances to get into the EU but that is a convenient story distraction which tries to lay the blame on the financial crisis on the Greek people. Why is it convenient? Because Spain, Italy and other countries also lied in the exact same manner. not to mention Germany pulled the same deal with Goldman for $50 billion.

        Do you know what the cutoff for Euro entry was? 3% annual budget. Greece's budget was at 4%. They were over. But a year later the entire 3% cap was gone when Germany and France blew threw it on the way to 6-% deficits. The Maastricht Treaty was revised. So I don't know why everyone is getting on Greece for its 4% deficit when the treaty was revised a year later to allow for 6% deficits.

        Beyond that, the idea of a "lie" is a curious definition since the Goldman deal was announced in all the trades, it was purchased by the National Bank of Greece and still resides on its website as Titlos SA, AND Eurostat knew about it, and all other currency swaps, and that's why Eurostat pressed in 2004 to have such deals counted as actual debt. It wasn't secretive in other words.

        I think the meme that Greece lied is convenient for bans to say, "This is fraud, we shouldn't have to pay for these losses. Greece was lying, the taxpayers should pay."

        Lastly, I'm not sure what you mean by "no changes" internally. Greece has made massive changes, more than anyone had ever dreamed they would.

        There was so much wrong with Lewis's story I wouldn't know where to begin. Besides, the Greek people are protesting something other than what you imagine they are protesting. They are against a non-sensical treatment of their debt problems. They are against being treated as guinea pigs for pan-European political power plays, where the goal is not to solve the Greek debt problem, but to extract an ounce of blood as a warning to the other peons.

        There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

        by upstate NY on Sun Jul 03, 2011 at 08:52:33 AM PDT

        [ Parent ]

        •  So what's the plan for (1+ / 0-)
          Recommended by:
          Cliss

          funding all the benefits that the Greek population wants?

          Don't get me wrong, I think Greece probably should have withdrawn from the euro and defaulted right at the very beginning of this mess, because it's clear that Germany, in particular, is administering the Euro as a currency mostly for its own benefit.  Nothing will turn that around like knowing countries will exit if it comes right down to it.  Nonetheless, if Greece had defaulted I speculate that exactly the same drama would have unfolded with Greece cutting back government largess, particularly to employees, with the same kinds of protests.  The only difference is that there would not be this grand idea that all Greece has to do is call the Eurozone's bluff about defaults and everything will go on pretty much as it did before.  

          If you want to blame a European leader for being in total thrall to the rentier class, look to Ireland, which managed its budget very well until it voluntarily assumed the debts of its own banks under the knuckle of German and French coercion and effectively saddled its own people with bailing out reckless financiers.  It's the Irish people who should be protesting in the streets over the pointless and cruel austerity, instead, it's the Greeks, whose situation is much more attributable to government mismanagement and popular refusal to live within the government's budget.

          •  First off, this is all moot (0+ / 0-)

            since rejecting austerity doesn't necessarily lead to default--unless someone decides the eurozone will collapse--and then this all becomes even more moot.

            But hypothetically, since Greece is at a 2% primary deficit right now, and it's running 5% GDP in purchases of military weaponry, then that adjustment puts them into the black.

            There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

            by upstate NY on Sun Jul 03, 2011 at 12:02:52 PM PDT

            [ Parent ]

          •  that is an odd way to put it (1+ / 0-)
            Recommended by:
            Gustogirl
            funding all the benefits that the Greek population wants?

            Want?

            Why not need or deserve according to the state's ability to provide.

            •  Have you actually read (2+ / 0-)
              Recommended by:
              Balto, Cliss

              how Greek public pensions work?  Greece should have the kind of benefits its people want, but its recent history is to give benefits that are comparable to those in Sweden without having a tax infrastructure to pay for it.  

              So the real problem isn't the benefits, it's the mismatch between expectations and revenue, much as it is in this country, with a public that is either unwilling or unable to see the connection between taxes and benefits. That's how it finds itself under the boot of other Euro countries, and it's not because Greek banks were profligate (unlike in Ireland).

              Greece also has a very hidebound or protectionist streak when it comes to business rules (for instance, in some professions, existing professionals can vote to keep competitors out of their jurisdiction), and transportation infrastructure and rules that make it more expensive to transport something domestically in Greece than internationally between China and the rest of Europe.  The Greek government has been voting to change some of these rules because they are so insidious to internal economic expansion, but it's unlikely that would turn things around in the short-term.  

              In some cases, the running joke is that the privatization of some Greek assets is likely to be so unprofitable nobody will bother (e.g., Greek railway).

              I am not a friend of the banking class but I get so tired of talking to people who want something for nothing -- it won't work here or in Greece or anywhere else.  To the extent Greece's public benefits were being propped up by artificially low financing via European banks, the game is up.  Someone is going to have to eat the loss because Greece can't pay.  Germany and France are loathsome but Greece is really much more complicit in this mess than other countries like Spain or Ireland were in the difficulties they face.  There, they really are just facing a greedy banking class being propped up at all costs by France and Germany, which, basically, are terrified of having to beg their own people to prop up their own banks because those are the voters who have the power to punish them.  It's insidious and Greece should really be looking for the Euro exit.

              •  We totally disagree about Greece's problems (1+ / 0-)
                Recommended by:
                esquimaux

                Greece's pensions averaged less than 6k a year. 19% of the population is 60 or older.

                Not all of them worked to receive a pension.

                Average retirement age is 61.9.

                So, do the math. That little in pensions when Greece collected 13% of GDP in pension tax would NOT have put Greece under.

                The corruption, the corporate boondoggles, the military weapons is what did it. You could easily account for 150 billion in corruption expenses alone, which makes this constant emphasis on pensions and social benefits ludicrous when Greece is social benefit poor.

                There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

                by upstate NY on Sun Jul 03, 2011 at 06:10:35 PM PDT

                [ Parent ]

                •  So here's the question (0+ / 0-)

                  Why does Greece have so much sovereign debt?

                  I say this seriously.  In Ireland, the quisling Irish PM saddled his people with the debts of profligate banks that his party willfully refused to regulate.  

                  In Iceland, the banks played currency arbitrage until they exploded, and Icelandic people refused to step in (now in international arbitration although I can't for the life of me figure out on what theory they should be made to pay for private excesses).

                  In Spain and Portugal, the real estate market completely imploded after exploding and now government are left to pick up the pieces as their tax base and receipts evaporate.

                  None of that happened in Greece.  It's debt is sovereign.  What was it used for?  Why was it so indebted if in fact all these things are "just a tiny fraction" of its expenditures?  Because its "budget" included borrowed money?  

                  •  Every budget includes borrowed money (1+ / 0-)
                    Recommended by:
                    Gustogirl

                    We're running a yearly deficit right now, so is every European country. Debts are paid debt down natural through growth and inflation. You simply have to take less debt when you have a surplus, that's how it's done.

                    I also don't see the point in making big distinctions between private and public debt, while putting the onus on the public debt as being morally repugnant somehow. Greece's banks were well capitalized because they didn't take part in Wall Street shenanigans. Personal or private debt was low in Greece, much lower than other countries.

                    It's important to add total debt together from all sectors and compare that to GDP to figure out how things stand.

                    But, to answer your question another way, Greece spent 14.65 billion a year on the purchase of military weaponry.

                    There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

                    by upstate NY on Mon Jul 04, 2011 at 08:00:13 PM PDT

                    [ Parent ]

  •  It's the derivatives market that's the big problem (29+ / 0-)

    When Greece defaults it's likely $billions and $billions of Credit Default Swaps have to paid off.

    Who gets the payouts?  No one knows.

    Who pays?  No one knows.

    How big are the obligations?  No one knows.  

    Yeah!  The free unregulated market.  I'd guess some of the Too Big Too Fail Banks are on the hook for big losses.  

    And why not?  They are too big to fail!  Fuck you tax payers.  

    The other big thing that's going on is the banksters of the Greek and other PIIGS debt are busy transferring their debt onto the European people.  The European Central Bank loans the Greek more Euros, the banks get cash from the sale of assets.  

    One estimate is that each European household will guarantee €1,450 Of Greek debt by 2014.  All the banksters want to do is to keep the corpses of the PIIGS alive long enough to pawn more of their losses off on the people.  

    And.......when Greece defaults the banks will fail and will have to be bailed out by the people!  

    And then more Credit Default Swaps will be paid off.  

    Repeat the questions:

    Who gets the payouts?  No one knows.

    Who pays?  No one knows.

    How big are the obligations?  No one knows.  

    Link to the what the European people will owe:

    http://www.zerohedge.com/...
     

    The darkness drops again but now I know That twenty centuries of stony sleep Were vexed to nightmare by a rocking cradle, And what rough beast, its hour come round at last, Slouches towards Bethlehem to be born? William Butler Yeats

    by deepsouthdoug on Sun Jul 03, 2011 at 07:49:41 AM PDT

  •  Papandreou's admission is about something (8+ / 0-)

    else, in my view.

    He's really criticizing the EUs leadership in a backhanded way.

    Follow me on this: by knocking the financial institutions who engage in momentum runs on CDS, and also the ratings agencies, he is essentially saying: Why have Europeans handcuffed themselves to an economic policy that relies on commercial banks for investment and infrastructure? Why can't the EU be like the USA? In the USA, we fund our infrastructure investments with public loans. Not so in Europe. That's why European credit relies on the ratings agencies to determine the relative health of any lending institution and any debtor nation, and those ratings drive economic policy.

    This message is not a critique of financiers but of those who are enthrall to financiers.

    There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

    by upstate NY on Sun Jul 03, 2011 at 07:53:35 AM PDT

    •  he could be but . . . (4+ / 0-)
      Recommended by:
      Gustogirl, tobendaro, upstate NY, Cliss

      He would have made a much stronger case for the people by refusing to cave in to the bullies.

      What is happening in Greece and all over the world, including the USA is that rich are keeping their ball up in the air as long as they can.

      At the moment the rich are in control of the governments of the world.  We must remove as many of them as possible from government if we want representation of the majority. The rich represent themselves and they are NOT the majority.

      This nonsense about the debt ceiling in the USA is just nonsense. It is the personal equivalent to a person who had maxed out one credit card and goes out and signs up for another one. The Republicans pretend that the only solution is to rob Senior citizens and workers who have paid into Social Security and Medicare.

      - End War in Afghanistan Bingo!  $104 billion in one year.
      -End Farm subsidies for agribusinesses and the rich  $19bn
      - Collect taxes that have not been paid. In the USA tax evasion added $3 trillion to the deficit over the past decade alone, an average of $300 billion a year, according to IRS data. This isn’t revenue lost from legal tax write-offs, like the mortgage interest deduction. It’s not even, as the IRS notes, “taxes that should have been paid on income from the illegal sector of the economy.” That $300 billion represents the amount of revenue lost from people deliberately cheating on their taxes every year. This includes underreporting income, hidden offshore bank accounts, sham trusts, and other ways to illegally stiff the IRS.
      -Take what's left of the $100bn that taxpayers forked over to fund the IMF in June of 2009

      •  Tax evasion (0+ / 0-)

        About the only people able to evade taxes are small scale tradespeople and a few rich who evade taxes using foreign banks.

        Those rich could just as easily buy corporate stocks of foreign companies that retain earnings.

        Tax evasion is effectively no longer practical in the US. If one wants lower taxes, one must vote for politicians who will cut taxes.

        An efficient IRS has been the key to the growth of "tax-cut" Republican politics.

  •  Big article is coming out tomorrow (10+ / 0-)

    in several European newspapers with a plan on how to solve the Euro debt crisis. It is based on the Modest Proposal from economists Steve Keen and Yanis Varoufakis.

    The article is a statement endorsed by 6 of the founding fathers of the eurozone, people like Guy Verhofstadt.

    There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

    by upstate NY on Sun Jul 03, 2011 at 07:55:04 AM PDT

    •  if there's a way to do it (1+ / 0-)
      Recommended by:
      Gustogirl

      then the sooner Greece tells the EU to fuck off the sooner it get's fixed.

      •  I don't know about (1+ / 0-)
        Recommended by:
        Gustogirl

        economically 'fixed' but one thing is for sure:  A Greek withdrawal from the EU would be very beneficial for Greek social stability and it's future as a real polity; right now, Greek is being ripped apart by it's own Gov. at the behest of outsiders.  

        It would have been better off being ripped apart by an alien external force while showing internal solidarity.

        Greece as you used to know it- pre 2010- is gone.  Too many young Greeks have left or will leave, the state is selling off assets, Greece is finished.  On to Greece 2.0

        From Neocon to sane- thanks to Obama- and Kos.

        by satrap on Sun Jul 03, 2011 at 08:25:40 AM PDT

        [ Parent ]

      •  Give it 3 months (4+ / 0-)

        The end is near.

        There is a better way to do it but it's out of Greece's hands. The EU has to decide to save the eurozone.

        If it doesn't, then this is all irrelevant. Banks will collapse, the euro will collapse, and you'll have a much bigger depression/recession than we already have.

        There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

        by upstate NY on Sun Jul 03, 2011 at 08:34:14 AM PDT

        [ Parent ]

        •  Let's see (2+ / 0-)
          Recommended by:
          Gustogirl, satanicpanic

          On the one hand, we have total world armageddon.  OTOH, we have big banks getting a haircut.

          And I can't figure which way it will go.

          •  It's out of the banking sector now (4+ / 0-)

            The ECB took over most of the bank debt.

            France and Germany started with 70 billion in exposure among them. It's dropped to 10 billion for Germany and 25 billion for France.

            This is about the eurozone now, not about the banks.

            The EU leaders had the problem in front of them last year, Greece with 245 billion deficit. They now propose to throw 195 billion at the problem.

            HELLO????!!!!!!!

            245 -195 equals 50 billion-->pocket change.

            Follow the money. We're talking about the recapitalization of quasi-insolvent banks in Europe's core. It's already happened. It's over.

            Now we're looking at the ECB.

            There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

            by upstate NY on Sun Jul 03, 2011 at 09:18:44 AM PDT

            [ Parent ]

            •  Just flat wrong... (2+ / 0-)
              Recommended by:
              Gustogirl, randomfacts

              From June 27 Forbes, referencing European bank holdings of Greek debt:

              Exposure to Greek debt is large and highly concentrated, according to research by Barclays Capital.  While the European Central Bank is the largest individual creditor, with about €49 billion ($70 billion) Greek bonds on its balance sheet, “ the top 10 names account for 50% of holdings, the top 30 for 70% and the top 40 for close to 72%.”
    •  Thus, as good Koosian economists ::: (4+ / 0-)
      Yanis (Varoufakis) and Richard (Koo) argue that government austerity at a time when the private sector is in a debt crisis is counterproductive. If the private sector is reducing its expenditure by deleveraging, then the same behavior by a government intent on “balancing the budget” will amplify the depressing impact of reduced private expenditure, thus deepening the crisis. Unfortunately this is precisely what the EU proposals for the PIGS are likely to do. Richard’s historically based analysis predicts that these austerity measures will deepen the crisis, and quite possibly result in increased rather than reduced government deficits, on the experience of Japan.

      Yanis’s alternative Modest Proposal [written with Stuart Holland] is to effectively have the European Central Bank behave as a true Central Bank. At present the ECB acts more like a financial disciplinarian than a Central Bank, since the only debt it directly funds is that of the EU itself–which is at the trivial level of about 1% of European GDP–while it imposes strict standards on how much public debt member states can carry on their own books (no more than 60% of their GDP) and how fast that debt can grow (budget deficits cannot exceed 3% of GDP). Member states are responsible for issuing and financing any debt they issue themselves.

      In practice, these standards have been imposed very laxly, but in the current crisis they are being imposed with a vengeance on the PIGS, with Greece the country most in the firing line right now. Since it is almost universally acknowledged that Greece can’t meet these terms, the cost of Greek debt has blown out dramatically–further guaranteeing that it will fail to meet the conditions of the EU “bailout”–which of course is a means of paying Greek’s creditors, rather than Greece itself....

      -- written by Steve Keen

      Steve Keen's Debtwatch -- Sense on deficits & deleveraging: Koo & Varoufakis, summarizing V&H's Modest Proposal together with Koo's historical and econometric analysis.

      For those with an insufficient fear of economics-induced ischemia-related brain death :::

      One hour nine minutes.

      (I understood every intelligible word of this show-and-tell from Koo in Argentina. Please, all ye Seekers and Sinners, pray for me.)

      How's about Obama replace his economic advisers with a six-pack of Koo Guys for a couple years ?

      Angry White Males + Crooks + Personality Disorder psychos + KKKwannabes + "Unborn Child" church folk =EQ= The Republicans

      by vets74 on Sun Jul 03, 2011 at 09:19:48 AM PDT

      [ Parent ]

  •  Everything you ever wanted to know (5+ / 0-)
    Recommended by:
    pat bunny, satrap, tobendaro, Sychotic1, vets74

    about the economic crisis and more:

    I'm trying to figure out where to post this because it extends well beyond any issue around Greece; it has to do with the world economy. It's a presentation by economist Richard Koo of Nomura Securities in Japan.

    You remember that horrid football movie starring Tom Cruise? I think it was named, ALL THE RIGHT MOVES. Well, after you watch Koo's presentation, you begin to understand that the handling of the world economy since 2008 was ALL THE WRONG MOVES.

    This is the best economic analysis I have seen in the last 3 years, and it explains why we are where we are today.

    There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

    by upstate NY on Sun Jul 03, 2011 at 07:58:05 AM PDT

    •  These things are good, but (2+ / 0-)
      Recommended by:
      Gustogirl, amsterdam

      the length is intimidating to me.  I await the day that I can watch such a lecture on a big-screen TV rather than my computer.

      From Neocon to sane- thanks to Obama- and Kos.

      by satrap on Sun Jul 03, 2011 at 08:16:27 AM PDT

      [ Parent ]

    •  It took 30 years for US interest rates to recover (3+ / 0-)
      Recommended by:
      upstate NY, Gustogirl, Cliss

      After the crash of 1929.

      And the Great Recession may not be as bad as the Great Depression... but it's in the ballpark.

      So we are looking at 10 (absolute least) to 30 years of de-leveraging.

      And the only way to get to 10 is to slash all those long term liabilities held by governments and corporations.

      What are those long term liabilities? You know them. You're fighting every day to keep them.

      But that's why there is so much push to push the cost of the Great Recession on to you, the worker.

      The proper reaction is to say: Eff that noise.

    •  LOL ! (1+ / 0-)
      Recommended by:
      upstate NY

      Luv ya.

      Angry White Males + Crooks + Personality Disorder psychos + KKKwannabes + "Unborn Child" church folk =EQ= The Republicans

      by vets74 on Sun Jul 03, 2011 at 10:09:13 AM PDT

      [ Parent ]

  •  The real problem with the (4+ / 0-)

    global financial crisis, as I see it from today's vantage point, is the seldom-discussed point that financiers are much MUCH better off making hordes of profligate, unperforming loans than actually making good ones.  When their balance sheets begin to ripple in the gale, the government(s) come in to recapitalize them and drive a stake through the hearts of the lendees.

    It's obvious.

    From Neocon to sane- thanks to Obama- and Kos.

    by satrap on Sun Jul 03, 2011 at 08:10:16 AM PDT

    •  If the board of directors meets (0+ / 0-)

      a few times a year for a few hours at a time, it doesn't normally notice major flaws in compensation structures.

      And even if the board got wise, the other corporations are doing it so we must too excuse gets used.

      The incentive deductibility law passed by Congress in the mid-1990s didn't go far enough.

      We need a responsible incentive deductibility law where the payment is in the form of the own's own "cooking" and which must be the diet for at  least a decade.

      Ford made key executives buy ten times their earnings in Ford stock.

      Ford was the only one of the Big Three that didn't go hat in hand to Uncle Sam.

  •  This is not about saving the Eurozone... (11+ / 0-)

    this is about saving European and American bank exposure to Greek debt and a default's triggering cascading exposure to derivative hedges worldwide. This situation is another example of the dominance of speculative finance and how it corrupts societies and their governments. The most egregious result is not that Greece defaults now, it would be that Greece has all its infrastructure and natural economic assets upstreamed into the rentier class and then defaults anyway, after losing title to the economic resources it would need to recover from such a default. Unfortunately, this result is inevitable, given that the Greek government cannot raise enugh capital to both service its debt and grow its economy simultaneously. The Greek government should default, force the issue and restructure, it would be painful now, to wait, will make it even more catastrophic.

    "Intelligence is quickness in seeing things as they are..." George Santayana

    by KJG52 on Sun Jul 03, 2011 at 08:25:58 AM PDT

    •  That's basicallly how I think about it, too. (2+ / 0-)
      Recommended by:
      Gustogirl, Ritter

      I think Greece is in a relatively GOOD position.  While telling French and German banks to take a hike would obviously cause banks not to lend them money again for a long time, but there's no chance of war.

      If China or Iran were your lenders, it would be a different story.

      From Neocon to sane- thanks to Obama- and Kos.

      by satrap on Sun Jul 03, 2011 at 08:31:55 AM PDT

      [ Parent ]

    •  Exactly! (4+ / 0-)

      They should draw the line at privatizing assets.  That is what (should be) the deal-breaker.

      Government of the people, by the people, for the people, shall not perish from the earth - Abraham Lincoln

      by Gustogirl on Sun Jul 03, 2011 at 08:34:25 AM PDT

      [ Parent ]

    •  I tend to think the CDS part is overstated (2+ / 0-)
      Recommended by:
      Gustogirl, MrJayTee

      but of course it's secretive so no one really knows.

      I do think it's about savings the eurzone for 2 main reasons.

      One: European banks are in a parlous state, they were more overleveraged than American banks. We may see bank collapses there quite apart from worries about direct CDS exposure to Greek debt.

      Two: a bank run in Greece might spread panic to other countries with big debts causing a flight to safety to the core, and thereby forcing defaults in the periphery. At that point, the question would be, save the eurozone or not.

      I definitely agree this is not about Greece, it's about banking, but the central question especially now is, do they want a eurozone.

      After all, a lot of Greek debt has already shifted off of bank sheets to the ECB. It's not a question of losses due to direct exposure to Greece. It's a question of financial panic and the fall of the eurozone.

      There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

      by upstate NY on Sun Jul 03, 2011 at 08:43:06 AM PDT

      [ Parent ]

    •  what's amazing is that CDS exist (4+ / 0-)

      and that we are now effectively in a situation where they can never pay off.

      which means people were writing insurance policies they couldn't back up.

      why is that not criminal fraud ?

      big badda boom : GRB 080913

      by squarewheel on Sun Jul 03, 2011 at 09:48:56 AM PDT

      [ Parent ]

  •  That is a true statement. (4+ / 0-)
    Recommended by:
    Gustogirl, esquimaux, wonmug, Cliss

    The global financial system has obliterated democracy. Under what circumstances would a state, like California, ever contemplate selling the building housing its Supreme Court for profit, and under what circumstances would Greece sell off its treasures for a trifle?

    Prisons privatized in Arizona, schools under an "overseer" with "emergency powers" in Michigan, Medicare vouchers and the list goes on.

    Meanwhile, in the East, China is beating capitalism at its own game: a capitalist dictatorship. And that will be the model worldwide.

    I am waiting in my car, I am waiting in this bar, I am waiting on your essence. - Lucinda Williams

    by Bensdad on Sun Jul 03, 2011 at 08:50:21 AM PDT

  •  I haven't heard it (2+ / 0-)
    Recommended by:
    Gustogirl, Cliss

    but, since he is serving as the figurehead of public will, this is a sickeningly weak statement.

    Having identified the enemy, the financial system, why didn't he stand up to it?  Why don't we?

    Ordinary political process is dead. The Supreme Court killed it. In Chambers. With a gavel.

    by Publius2008 on Sun Jul 03, 2011 at 08:55:10 AM PDT

  •  Why can't we all pull an Argentina? (1+ / 0-)
    Recommended by:
    Gustogirl

    If telling the banks and the bond vultures to fuck off has fewer and easier consequences than they want us to think, then why don't we all do what Argentina did?  From what I've read, Argentina immediately post-default is one of the stronger pieces of evidence in favor of the "naturalness" of market capitalism: in that the major financial institutions as well as the Galtoid visionary plutocrats themselves are simply not necessary.

    If Argentina is better off today than it was before it defaulted, and certainly better off than it would be if it had played by the rules, then it would be foolish of us to persevere in our servitude.  The banksters are the only ones who benefit from sovereign debt repayments, especially if it comes at the cost of not only infrastructure and social services, but also long-term weakness of the private sector as it waits for the game to magically pick up when everyone's injured or just waiting on the bench, and even more so if the banks are all insolvent, and are recapitalizing themselves at the taxpayers' expense.

  •  Default (3+ / 0-)
    Recommended by:
    Gustogirl, randomfacts, Balto

    Argentina had their own currency so the had the ability to devalue it when they defaulted which substantially helped their debt/deficit situation,  Greece has no ability to use any monetary adjustments as they are part of the EURO.  Others are right to say that if they defaulted, they would still be operating at a deficit with their current budget levels with no ability to borrow.
    In reality, they never should have been part of the EURO alliance.  There were strict requirements for debt and deficit that of course predated the the great recession.  They fudged with their figures with the help of Goldman Sachs. There also is not a sufficient monetary or political alliance with the Euro countries to make the kinds of adjustment an individual country can make with their own currency when facing large debt/deficit in a recession.  Each of the EURO countries has their own agenda and are on different economic cycles i.e. Germany vs. Ireland.  And since German and French banks are the largest holder of the Greek debt and no one knows where are the CDOS are, no one can say with confidence what the synergistic effect of a Greek default will do to the world wide economy.  Hence he comparisons to Argentina do not match up well.
    Saying that, there is no way with more cuts and austerity that Greece will be able to repay their debt.  This just creates an endless cycle of more lost jobs, less revenue and lower GDP.  The remedy is wrong and will push them closer to default.  
    Just like the republicans notion in a fragile recovery period is making huge cuts on both the state and federal level and this will result in business booming.  I am no economist but it seems so obvious that business has the money to hire and invest but the public  isn't spending  due to loss of jobs, unemployment, fear and lack of confidence that they will stay employed.  Yet all of these cuts will increase the unemployment particularly in the public sector.  This will just lead to less willingness to spend , more fear and less confidence and hence less demand which results in less employment or lay offs. And even conservative economist are saying it.  Now is not the time  for huge cuts but instead a real plan to address mid and long term deficit spending and stimulus spending in the short term.  When Bill Gross from Pimco is calling for stimulus-you know that means something.  
    Unfortunately, we are in this awful place where the people who have the ability to make this happen-those who control the house of representatives-can't hear this, don't know this,aren't capable of knowing this or just plain don't care because it doesn't fit their ideology.  Hence we are screwed and can only hope the democrats in the senate and the president can minimize the damage.  Worse, it butts up against the debt ceiling which if it is not raised can send us and the world economy back into recession.  And, it will cause interest rates to rise which will cost consumers and the government more to borrow which will add to our deficit.
    And all of this makes me want to scream at every idiot in congress -"what is wrong with you and why are you ruining my country" !!!!

    •  I'm getting tired of people saying Greece (3+ / 0-)

      shouldn't have gotten into the eurozone.

      At this point I consider it almost a quasi-bigoted statement. It gets repeated so often though. Greece's deficit was 4%. A year after admission, the euro deficit cap was lifted from 3% to above 6% when Germany and France blew threw it. so Greece's 1% over the cap is irrelevant when they would have been admittedf the next year under the new rules.

      I think it gets repeated so often to put the blame on Greece. It's a distraction because the core countries want to avoid their voting publics coming to grips with the real problem which is the banks in the core of Europe that are being recapitalized. much easier to say, we're taking your tax money and giving it to Greece because they screwed things up than to say, we're taking your tax money and giving it to the bankers.

      Besides, to go back to your opening point, shouldn't the eurozone change its policies to allow for the sort of shock absorbers that the USA has? It wouldn't require a rewrite of Maastricht.

      There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

      by upstate NY on Sun Jul 03, 2011 at 09:24:45 AM PDT

      [ Parent ]

    •  You mean.. (0+ / 0-)

      ..CDS's, not CDO's.  

      Otherwise, spot on.

      •  What's the difference between Greece (0+ / 0-)

        getting into the euro with 4% and then the cap being lifted over 6% a year later?

        There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

        by upstate NY on Sun Jul 03, 2011 at 06:11:56 PM PDT

        [ Parent ]

  •  WTF (4+ / 0-)

    And why do we have financial systems or for that matter governments at all? For people, without people there is no need for either.

  •  Ian Welsh (4+ / 0-)
    The oligarchs, by making peaceful revolution impossible, have, as Kennedy pointed out, made violent revolution inevitable.  Since democratically elected representatives are more concerned with doing the will of the rich, rather than the public, and since there is no party willing to do the will of the population (or even live up to their own principles, a socialist party voting for an investor bailout is not socialist), my expectation is that during the next bailout (and another one will be needed), that representatives will be killed, to get through to them the message that no matter what the rich are offering, or threatening, there is a price for voting against the interests of the majority of the population.

    I think the oligarchs are overplaying their hand

  •  bankruptcy is handled differently (5+ / 0-)

    by the social classes. In general middle class people will use up all their assets trying to pay off their debts before filing.

    Inventor class people will file when its strategic, so after bankruptcy they can more quickly recover.

    Europe is setting things up so that Greece will be poor indefinitely.   They should default now. Screw the German and French bankers.

    fact does not require fiction for balance (proudly a DFH)

    by mollyd on Sun Jul 03, 2011 at 09:28:13 AM PDT

  •  The people of Greece need to stop the fire sale (5+ / 0-)

    by any means necessary.  This is a crisis of Enlightenment values.

    The world does not need billionaires.

    by targetdemographic on Sun Jul 03, 2011 at 09:33:00 AM PDT

    •  The ECB could be given options (0+ / 0-)

      payable with some of the Greek debt it holds.

      These options might be exercisable say within three years, unless the corresponding Greek debt is redeemed.

      Special taxes might be levied for a national asset redemption fund.

      If the Greek railway system is sold to foreigners, individual Greeks might go into the scrap iron business.

      If the Greek utilities are sold, individual Greeks might grow as fond of selling copper wire scrap as Iraqis were.

  •  A Greek default could sink the Euro (2+ / 0-)
    Recommended by:
    Gustogirl, Euroliberal

    The biggest problem with the specter of a Greek default is, I think - and I'm not an economist either, far from it - that it could cause the Euro to collapse. The scenario would be that the financial markets decide that not only Greece, but also Portugal, Spain, Ireland, and Italy are no longer credit-worthy. And at that point, everybody is going to start running like hell from the Euro, and the Euro is toast. And - speaking as a European here myself - sadly, sadly the Euro is the key symbol of what little integration we have accomplished in Europe.

    But is it fair to expect the Greeks to pay the price for all this? Honestly, no, it's not.

    "Maybe there's only one revolution, since the beginning -- the good guys against the bad guys. Question is: Who are the good guys?" ("The Professionals," 1966; Bill Dolworth (Burt Lancaster) to Hans Ehrengard (Robert Ryan).

    by brainwave on Sun Jul 03, 2011 at 09:33:08 AM PDT

    •  The Euro grows stronger (0+ / 0-)

      almost daily against the pound and dollar.

      One Greek on a foreign website was angry that his pound-denominated bonds lost almost 30% of their value in the past few years when valued in Euros, the currency he uses in daily life.

      American and British governments are so profligate that even an Euro-denominated economy in a debt crisis appears (and is) far stronger.

    •  You're asking the right questions (1+ / 0-)
      Recommended by:
      Gustogirl

      How could tiny Greece destroy the Euro?

      Something else is afoot.

      There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

      by upstate NY on Sun Jul 03, 2011 at 06:13:06 PM PDT

      [ Parent ]

      •  Test balloon perhaps? (0+ / 0-)

        That's why I thought it so important to diary what the PM said.  It isn't hitting the airwaves, but it's a major earthquake of assumptions, to decree that fhe finance industry will override democratic principles.

        We need to broadcast this more widely, IMO.

        Government of the people, by the people, for the people, shall not perish from the earth - Abraham Lincoln

        by Gustogirl on Sun Jul 03, 2011 at 10:28:45 PM PDT

        [ Parent ]

        •  Europe has been saying this for a long time (0+ / 0-)

          though. They are saying, how can we leave our finances up to the whims of ratings agencies.

          The problem is that people at the ECB, at the Bundesbank, in many positions of finance in Europe, they're all neo-liberals who trust the market over government.

          That's why Europe hasn't found the political will to say, the government can run things better than Wall Street.

          The lone voice of dissent in the wilderness (lone voice in power, that is) was Dominique Strauss-Kahn.

          Europe's movers and shakers make Bernanke and Geithner look like amateurs. You should check out Jurgen Stark--a real piece of work who lives up to his name.

          There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

          by upstate NY on Mon Jul 04, 2011 at 06:49:51 AM PDT

          [ Parent ]

          •  DSK about to be vindicated (0+ / 0-)

            But he's been Spitzor'ed.  I hope that doesn't mean he's completely out of the game, now.

            Have you heard any buzz on whether he can actually run in the next election?  I heard he'd been ahead in the polls prior to the trumped up "scandal".

            Government of the people, by the people, for the people, shall not perish from the earth - Abraham Lincoln

            by Gustogirl on Mon Jul 04, 2011 at 07:14:58 AM PDT

            [ Parent ]

            •  I don't think he can (1+ / 0-)
              Recommended by:
              Gustogirl

              Honestly, I thought it was a Spitzer situation at first, but then even after the woman was caught lying on issues, I still tend to not trust DSK's story. So the woman lied about what happened to her in Guinea in order to achieve refugee status, and her boyfriend is a drug dealer, but what about the semen they found?

              If you ask me, the prosecutors are all too happy to get rid of this case.

              I don't think he will run in France.

              There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

              by upstate NY on Mon Jul 04, 2011 at 07:43:56 AM PDT

              [ Parent ]

            •  he is toast (1+ / 0-)
              Recommended by:
              Gustogirl
              I hope that doesn't mean he's completely out of the game, now.

              a French journalist just filed suit against him for alleged rape in 2002.
              He is a dead donkey.

  •  Do not our political (5+ / 0-)
    Recommended by:
    ActivistGuy, emal, Gustogirl, Cliss, wsexson

    leaders, those who have power, say the same thing. The will of the people in the US, doesn't phase the free market fundies running our government. We just don't get the blatant rhetoric of tough shit we win you lose. We do get a lot of talk about the inevitable 'world as we find it'. We hear the wealth creation is not disparaged in America and that free market free trade's invisible hand will win the race to the top.

    Then we hear that we must pay their debt with austerity and sacrifice our economy the one we live in order to win the future. Whose future and what a future. We need to get a will instead of believing that global piracy and looting for the corps. is inevitable and that capitalism unregulated will raise all boats. The will of the people is powerful but only if they use it.

    NPR=Nice Polite Republican's. I quit listening to them with the selection of bush. They are true believers in the status quo of neocon world dominance and they really love those markets, Let's do them.I can't listen to them at all without getting totally riled up. South America, is where the Chicago Boy's started this insanity. The SA country's that reject the i shock doctrine are where we should all look for solutions to pry the vampire squid off our faces. They underestimate the will of the people, and without their consent they cannot survive.              

  •  The ECB is at fault too, (4+ / 0-)

    if the ECB simply loosened monetary policy, it could help Greece without asking for either German money nor Greek austerity. But because of a misguided focus on inflation, it is losing control of the situation.

    "It is, it seems, politically impossible to organize expenditure on the scale necessary to prove my case -- except in war conditions."--JM Keynes, 1940

    by randomfacts on Sun Jul 03, 2011 at 09:58:14 AM PDT

  •  Debts? (3+ / 0-)
    Recommended by:
    Euroliberal, Gustogirl, upstate NY

    An article on Spiegel online.....
    'Germany Was Biggest Debt Transgressor of 20th Century'

    The German media and Government have been demonizing the Greeks, but have been in that position themselves. Many say it was never paid back.

    Fuddle Duddle--- Pierre Trudeau.... Canadian politics at......A Creative Revolution

    by pale cold on Sun Jul 03, 2011 at 10:14:30 AM PDT

  •  was (2+ / 0-)
    Recommended by:
    Gustogirl, SingleVoter

    newt gingrich looking for a cheap greek island to buy before continuing his 'presidential bid'?

    http://articles.nydailynews.com/...

    Probably not but who knows?

    I wouldn't give Papandreou the benefit of the doubt regarding his alliance with the money power hell bent on destroying national sovereignty with debt servitude.  We have the same thing going on in the US such as expiration of FUTA (federal unemployment tax) after 35 years.  Compared to the QE and MIC monies, its a pittance .. but here they celebrate it as fiscal prudence.

    http://www.accountingtoday.com/...

    So when the next crisis comes and millions more get laid off, no federal unemployment benefits will be available "because fiscal restraints will require bailing out the Too Big To Fails" ... the 'little people' must suck it up in a van down by the river.

    "Let me issue and control a nation's money and I care not who writes the laws." Mayer Amschel Rothschild, 1790

    by FreeTradeIsYourEpitaph on Sun Jul 03, 2011 at 10:28:10 AM PDT

  •  The government is bailing out the banks, (3+ / 0-)
    Recommended by:
    Gustogirl, blue jersey mom, Anna M

    Not the other way around.

    The banks gambled. If they had won, they would have kept the winnings. They made a bad bet, now they want to change the rules and socialize the losses.

  •  HR'd for trolling n/t (0+ / 0-)

    Trade always exists for the traders. Any time you hear businessmen debating "which policy is better for America," don’t bend over. -George Carlin-

    by not4morewars on Sun Jul 03, 2011 at 10:35:27 AM PDT

  •  One thing to drop (0+ / 0-)

    That perpetual illusion that economic crisis proves that capitalism is dying. If an economic crisis proved that, it would have been dead a dozen times over by now.

    The basic confusion is caused by viewing capitalism as a social system. It isn't. It's an engine for creating wealth and power. And like any engine, it runs wild when it's not under proper control. Such control should be the realm of the state, but at the present time state control has been weakened by short-sighted fools. After a sufficiently large crash, we will have the state put the controls back on, until we become complacent and negligent again and the cycle recurs.

    "Diminishing resources" is a phantom as well. Of course resources are finite and diminishing, but expansion of the economy needn't take the crude form of chewing up more and more raw material. That's a very 19th century way to look at expansion. Quality, variety, and complexity can ramp up almost endlessly without using up more in the way of resources.

    I dance to Tom Paine's bones.

    by sagesource on Sun Jul 03, 2011 at 11:34:38 AM PDT

    •  I did not say a crisis is proof that capitalism is (1+ / 0-)
      Recommended by:
      Cliss

      dying.

      Nor do I see it as a social system (although it has social consequences.)

      But it isn't working the way capitalism is supposed to anymore, and when I asked myself why, I realized that many "growth opportunities" have actually been parasitism or self-parasitism.

      Who got all of Lehman Brother's cash?  How did that benefit the market?

      When we stopped being a major producer of goods in this country and concentrated on "financial services" is when all the trouble started.  Because financial services doesn't bring anything to the market - it just moves money around.  So no surprise they went to theft.

      Demand is no longer running the marketplace.  The marketplace is feeding us whatever the hell it wants to.  Planned obsolescence is now built into the economy - if we wanted to make goods that last a long time, it will crash us because the market depends on replacement purchases at a certain rate.

      This is eating yourself.  And it's eating us up.

      Government of the people, by the people, for the people, shall not perish from the earth - Abraham Lincoln

      by Gustogirl on Sun Jul 03, 2011 at 12:33:15 PM PDT

      [ Parent ]

  •  How many times are we going to be told the bankers (4+ / 0-)
    Recommended by:
    Euroliberal, Gustogirl, Anna M, wsexson

    own the place before we finally believe it.  

    S.A.W. 2011 STOP ALL WARS "The Global War on Terror is a fabrication to justify imperialism."

    by BigAlinWashSt on Sun Jul 03, 2011 at 11:48:52 AM PDT

  •  When this kind of austerity comes here (2+ / 0-)
    Recommended by:
    Cliss, Gustogirl

    it is likely to be imposed by a second-term President Obama.  Note that Papandreau and his party are "Socialist"; in Europe, our current Democratic Party would be far to the right.

    I'm very concerned about what's happening in Greece, because it is, in fact, the shock doctrine model:  in a democracy, economic matters are to be taken out of play, and if that isn't possible, then democracy will be discarded and the desired policy will be imposed by force.

    If Greek citizens decide they don't want to play ball with the neoliberal playbook, Greece may well have a dictator shortly.

    A terrible beauty is born. --W.B. Yeats

    by eightlivesleft on Sun Jul 03, 2011 at 11:51:45 AM PDT

  •  The financial system is stronger than the will of (7+ / 0-)

    people - everywhere.   The whole thing is bull shit.  One day the world is fine, and the next everybody is broke and has to cut ONLY what the people want.    Our global governments, banks, and shysters pulled off the biggest redistribution of the wealth up and out in history.    They're rich and country's are broke.  Yeah, sure.  

    GTFU or STFU: If you don't stand for something, eventually you stand for nothing.

    by dkmich on Sun Jul 03, 2011 at 11:54:21 AM PDT

  •  Can you say Medici? eom (3+ / 0-)
    Recommended by:
    Cliss, Anna M, Gustogirl

    Education is a progressive discovery of our own ignorance.

    by Horace Boothroyd III on Sun Jul 03, 2011 at 12:41:19 PM PDT

  •  "Global Insurrection v. Banker Occupation" (3+ / 0-)
    Recommended by:
    Gustogirl, Cliss, Euroliberal

    Hope is, after all, the currency of popular politics, and a coin surprisingly hard to devalue. -- Fred Anderson, Crucible of War

    by ornerydad on Sun Jul 03, 2011 at 12:55:53 PM PDT

  •  well said and well framed (1+ / 0-)
    Recommended by:
    Gustogirl

    let the truth out and let the sunshine in

    "We can't solve problems by using the same kind of thinking we used when we created them." - Albert Einstein

    by pickandshovel on Sun Jul 03, 2011 at 12:56:57 PM PDT

  •  Naomi Klein wrote "The Shock Doctrine" (3+ / 0-)
    Recommended by:
    Gustogirl, Cliss, Anna M
  •  Default + (2+ / 0-)
    Recommended by:
    Gustogirl, Cliss

    There is no doubt Greece should default. But ... there are a few other points that need to be made.

    1.If Greece defaults the banks may not be the biggest casualties. It will be whoever owns the debt, and whoever has written CDS on the debt. Most of the smart banks long ago took their losses and sold their Greek debt. A lot is now held by the European Central Bank and various country central banks, even by China. We don't know who wrote the CDSs - so some uncertainty there.

    2. Even if Greece defaults it needs to make major changes. The government is a farce. It can not collect taxes, it is corrupt to the extreme,  it has a vastly over manned and over paid public service and has lost the faith of the people. Defaulting would reduce the debt burden, but without real change the same situation will come back in another few years.

    Basically if Greece is going to default, it should default early (before everything gets sold off), but it also must realize that it needs to make massive changes - changes that will really hurt and will take a long time to implement. There is no nice way out.

    "I can live with doubt and uncertainty and not knowing. I think it's much more interesting to live not knowing than to have answers which might be wrong". Feynman

    by taonow on Sun Jul 03, 2011 at 01:49:17 PM PDT

  •  Not news. What is news is (3+ / 0-)
    Recommended by:
    Cliss, Gustogirl, Euroliberal

    a party calling itself "socialist" caving into the bankers.  It's a total disgrace.  That party, and Papendreou, will richly deserve the drubbing they will get in the next election.  They are a disgrace.

  •  Papandreou chose to let them be more powerful (3+ / 0-)
    Recommended by:
    Cliss, nicethugbert, Gustogirl

    He could have called their bluff.  They never would have let Greece default.  He can go rot.

  •  If Greece defaults, (1+ / 0-)
    Recommended by:
    ozsea1

    there will be a perid of uncertainty.  They will revert back to the Drachma.  They will probably write off the massive debt and leave it to the european banks to figure out.

    Because they're back to their own currency, they will be able to devalue it massively, and they will be able to start patching things together.  Corruption will still be there, tax evasion will still be a challenge.  There will be lots of unemployed govt. workers, but at least they stand a chance now.  The tourists will eventually return.

    The other PIIGS countries will take note.  If Greece can do it, so can we" they will reason.  And they will default.  The European banks are screwed.

    THAT's what they're so afraid of.  It's not really about Greece it's about their own exposure to risk.  Maybe that's why they're now resorting to such high-handed threats like selling out the entire country?

    "You're not leaving" no way.

    However, good news.  The Greeks have spoken.  Just watch: they will have the last word.  

    •  I don't get this. (0+ / 0-)

      Why does it follow that after a Greek default, they will revert back to the drachma?

      It doesn't.

      They would try to stay in the euro.

      There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

      by upstate NY on Sun Jul 03, 2011 at 06:17:05 PM PDT

      [ Parent ]

    •  I hope you're right. (0+ / 0-)

      At least they will still have their assets, should they default.

      The Greeks know it won't be easy.  But when the people speak, things can change.

      This austerity crap has got to stop.

      Government of the people, by the people, for the people, shall not perish from the earth - Abraham Lincoln

      by Gustogirl on Sun Jul 03, 2011 at 10:17:34 PM PDT

      [ Parent ]

  •  Why does anyone care about Greece? (2+ / 0-)
    Recommended by:
    Gustogirl, Euroliberal

    It's a small country with an insignificant economy.

    The fact that we're having this discussion about Greece is a distraction.

    LBJ said it best: Greece is a fly on an elephant's ass. Watch out or you'll get swatted.

    Think people: you're telling me the debts of this one country are going to bring down the world economy? Or the European economy? NO.

    This is a distraction. Greece is being used so that the people don't notice as the banks are being recapitalized. Sall the money flowing to Greece is just being used to shore up banks whose finances are in a terribly parlous state.

    That's what's going on.

    Otherwise, they would have let Greece default.

    European politicians and the IMF do not want the public to know the state of bank finances. Pay attention to the European stress tests on banks this month.

    What a farce.

    There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

    by upstate NY on Sun Jul 03, 2011 at 06:20:02 PM PDT

    •  You should write a diary, upstate NY. (1+ / 0-)
      Recommended by:
      Euroliberal

      It's hard to cobble together a cohesive message from all of what you're saying, but you seem both impassioned and more informed than I.

      I'd love to get schooled ;p.

      Government of the people, by the people, for the people, shall not perish from the earth - Abraham Lincoln

      by Gustogirl on Sun Jul 03, 2011 at 10:19:32 PM PDT

      [ Parent ]

      •  Gusto, I have written diaries but... (2+ / 0-)
        Recommended by:
        Gustogirl, Euroliberal

        the basic argument is simple.

        European bank finances are very poor. They don't have good balance sheets. The amount of money they've loaned all over the continent is not backed up by enough assets. Just this week we saw another big Dutch bank collapse. The banking sector in Europe is horridly bad.

        Overall, however, Europe is quite healthy. It actually has much less debt than the USA, the UK and Japan. Seriously, these Socialist countries taken together have a lot of cohesion and their economies are doing well, outside of 4 or 5 countries, mostly in the periphery.

        There are proper ways to solve the banking problems in the core and the debt problems in the periphery.

        The EU leaders however have chosen a method which simply does not work and is making things worse.

        I know this won't come off well to an American audience but Europe never instituted a TARP program, and they need a TARP program. They could, however, regulate CEO pay to banks are that are shoring up their finances. And they could overcome the big mistake the USA never made by using stimulus (i.e. frontloading the funds already meant for EU countries through the European Investment Bank). They have solutions.

        The problem is that they are recapitalizing banks through a backdoor that makes the problem much worse in the long run. Greece has reduced its government expenditures by a lot. It's primary deficit has dropped from 12% in 2009 to 3.2% in 2010. This was because of huge cuts. And yet, the Greek debt grows. So, if the Greek government has cut back severely, where has the money allotted to them gone?

        If European leaders could look their populace square in the eye and reveal the parlous state of their banks, maybe the populace would go along with TARP. Or, they wouldn't, they'd vote out the government, and the banks would collapse. Greece is a convenient whipping mule right now, and most of the memes used against it work toward the ultimate goal. "Greece never deserved to get into the Euro, they cheated on their finances, they perpetrated a fraud." Translation: the banks didn't know the state of Greek finances and therefore they have been deceived. "Greeks live a luxurious life while others work hard." Translation: they don't deserve to be bailed out but we have to do everything to make sure the Greek debt doesn't hurt our banks, so we have instituted this program.

        Greece started 245 billion in debt. Less than half of that was held by European banks. Less than 100 billion. The idea that a 100 billion loss could threaten Europe is quite frankly a load of baloney--UNLESS the banks themselves were already in danger of collapsing.

        This month, the EU will conduct stress tests on banks which are meant to create confidence. It will be a real dog&pony show. One commentator who looked at the tests said that Lehman Brothers would have passed with flying colors a day before it collapsed.

        There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

        by upstate NY on Mon Jul 04, 2011 at 06:41:59 AM PDT

        [ Parent ]

  •  Is democracy dying? (1+ / 0-)
    Recommended by:
    Gustogirl

    Well, no. However as we see in our own USA, voting for a thing doesn't make it true. Sorry, no ponies. Yes, reality is stronger than democracy. Global warming is happening, sorry about that 2010 vote, Republicans.

    You can't vote reality away. You can't have social services without taxes. You can't have the largest proportion of the population in the EU as government workers without taxes to support them. Yes, finance is more powerful than democracy.

    However, democracy is not dying. Things like Greece and the US economy just make it so clear that it matters how we vote. Leadership that is not corrupt, and not in the service of anyone, but rather in the service of reality, makes a difference. TANSTAFL. Hate supporting Heinlein like that, but it's true.

    One should also note the difference and the thousands of years of struggle between philosophy and religion. Philosophy isn't some abstract notion. It's the very idea that one can reason one's way to a good way to live, rather than have it prescribed for one by leadership. We see that tension in the USA today, between what we call ideologues, but are really the same thing as religious, and philosophers, whom we call pragmatists today.

    Corruption is what keeps us safe and warm. Corruption is why we win. -Syriana

    by CarbonFiberBoy on Sun Jul 03, 2011 at 06:43:07 PM PDT

    •  That's not the lesson of Greece (1+ / 0-)
      Recommended by:
      Euroliberal

      Greece has 15% of the population in the workforce, just like other Euro countries. It's got 650,000 workers.

      The media is doing a welfare queen hitjob here to distract people from the money being funneled to the bankers.

      There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

      by upstate NY on Sun Jul 03, 2011 at 07:36:39 PM PDT

      [ Parent ]

      •  Thanks for the post. (0+ / 0-)

        I checked into it further. See this site:
        http://www.oecd.org/...

        It says that you are correct, Greece actually running slightly less than the OECD-22. However, most media sites are claiming 1/3 of the Greek workforce is government. This claim began with a NYT story, later pulled. The reason for the varying figures is that Greece is socialist, so there are many government owned facilities with employees. Are postal workers government employees, the Greek postal service being a function of national government? Etc.

        An interesting feature of the OECD paper is that while Greece spends about the same as the OECD-28 on government workers, those workers produce about half of the goods and services produced by the OECD-28 workers. Hence the claim that the public sector in Greece is bloated and that the Greek government employs workers for political purposes rather than for the good of the state.

        A common media complaint is that while taxes in Greece are high, tax revenues are low because Greeks simply don't pay their taxes. I was unable to find any documentation for that claim. I'd be interested to see if anyone else can find same.

        Anyone who has ever gotten behind on their credit cards and was borrowing money to make card payments can sympathize with the plight of the Greek government. Everyone knows that can happen. It happened to me. Yeah, I made some mistakes and through hard work and prioritization I was able to dig back out of it. I don't blame the bankers, though they sure made it easy for me to do that to myself. But it was my fault, not theirs. I knew the rules.

        Corruption is what keeps us safe and warm. Corruption is why we win. -Syriana

        by CarbonFiberBoy on Mon Jul 04, 2011 at 10:18:45 AM PDT

        [ Parent ]

    •  As a computer programmer, (1+ / 0-)
      Recommended by:
      Euroliberal

      I can tell you electronic voting is peppered with vulnerabilities at every level for shenanigans. It's almost a miracle that they were so incompetent in 2000 and 200r that some of us saw it.

      Do you really think democracy is alive and well in America today?

      I get the feeling Egypt and Libya have more demonstrable exambles of democracy going on these days than we or Euro's have.

      Government of the people, by the people, for the people, shall not perish from the earth - Abraham Lincoln

      by Gustogirl on Sun Jul 03, 2011 at 10:37:54 PM PDT

      [ Parent ]

      •  Fraudsters have not enjoyed a good (0+ / 0-)

        reception here at Kos, IIRC. I and perhaps many of us prefer a more reality-based perspective. That includes Egypt and Libya. We shall see what we shall see. I have no particular high hopes of their being able to survive the assault by their ideologues.

        I wasn't really addressing the points you are trying to make. Democracy in America could certainly be improved. I think the EU has done better than we have, which is quite easy to see by observing the inequalities in the various systems.

        Corruption is what keeps us safe and warm. Corruption is why we win. -Syriana

        by CarbonFiberBoy on Mon Jul 04, 2011 at 09:10:56 AM PDT

        [ Parent ]

  •  Greece could raise taxes on the sold assets...... (1+ / 0-)
    Recommended by:
    Gustogirl

    or their revenue once they are sold.  How's that for a "F Ur Self.  Have a nice day.  Sucker!"?

    •  The whole idea was conceived (1+ / 0-)
      Recommended by:
      DBunn

      in the first place to extra a gallon of blood.

      It was never a serious proposal.

      Some things though are exposed, like the lottery that brings in 400 million a year. They want to sell it for 900 million.

      Hard to believe.

      If that goes through, Greece will have people running numbers rackets on every street corner.

      No one stops to think that these measures are not only polluting the body politic  but they are reinforcing the idea in greece that you are better off not paying taxes or trusting the gov't

      There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

      by upstate NY on Sun Jul 03, 2011 at 07:35:07 PM PDT

      [ Parent ]

      •  Yes, but they have to do something to turn........ (1+ / 0-)
        Recommended by:
        upstate NY

        the situation around.

        I think taxing these assets for real would do that.  They could cut lower bracket income taxes and increase the rest.

        That will help the people and sour the milk for the austerity crowd.

        •  It will be interesting to see what (2+ / 0-)
          Recommended by:
          Gustogirl, nicethugbert

          happens.

          There are only a few valuable assets to sell. They already sold a huge chunk of the national telecom for cheap to a German company just last week.

          I'm glad they are not selling beachfront property to resort developers. Greece has a lot of well run boutique hotels under local ownership.

          I went down to Mexico this past winter, and it was my first time at a resort. I noticed the same staff were waiting on me from 7 am all the way until 10 pm at night. They worked all day. I took a 4 wheeler through the beach and into town where the people lived. All the money passing through that resort was not being shared with the people. They were making very little money, and even the independent entrepreneurs in town were being ripped off by the resort's travel office that booked excursions. I basically sat on the beach for a week with a very bad conscience.

          This is not a good model for Greece.

          In general I think the buyers will stay away from Greece.

          There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

          by upstate NY on Mon Jul 04, 2011 at 06:46:38 AM PDT

          [ Parent ]

    •  I like it! (0+ / 0-)

      But then, I have a lifelong fondness for FU'as properly applied to the proper recipient!

      Government of the people, by the people, for the people, shall not perish from the earth - Abraham Lincoln

      by Gustogirl on Sun Jul 03, 2011 at 10:39:21 PM PDT

      [ Parent ]

  •  It's human rights vs. property rights (2+ / 0-)
    Recommended by:
    Gustogirl, Euroliberal

    End of the day, it comes down to choosing one of these two things:

    1. We take care of property rights, and let the effects on humans fall where they may.

    2. We take care of human rights, and let the effects on property fall where they may.

    The term "property" refers to anything that can be owned-- for example, debt contracts.

    Now, I'm all in favor of paying our debts. But at the same time, I propose that lending money is like any other business investment-- it might work out, or it might not. People who loan money at interest are making certain assumptions (bets) about the ability of the borrower to repay. If those assumptions (bets) turn out to be not so good, I don't see where it is the responsibility of orphans, retirees, and/or the genral public to neverthless make the lenders "whole" again.

  •  Wonder what you all think of this... (0+ / 0-)

    Coming out in Financial Times and Der Spiegel tomorrow:

    Read from Declaration on down:

    http://yanisvaroufakis.eu/...

    We agree also with the Juncker-Tremonti case that European bond issues could be globally traded and attract surpluses from sovereign wealth funds and the emerging economies whose governments have called for a more plural global currency system. These would be financial inflows to theUnionrather than fiscal transfers within it.

    But we suggest that the conversion of a share of national debt to the EU need not be traded. It could be held by theUnionon its own account. Since not traded, it would be ring fenced from rating agencies. Its interest rate could be decided on a sustainable basis by Eurogroup finance ministers. It would be immune from speculation. Governments would govern rather than rating agencies rule.

    We also suggest also that there are lessons to be learned from the 1930s US New Deal which inspired the proposal by Jacques Delors in 1993 to match a common currency by common European bonds.

    The Roosevelt administration did not need US bonds to be financed or guaranteed by member states of the American Union such asCaliforniaorDelaware, nor demand fiscal transfers from them, nor bought out their debt. Nor need the European Union do so to issue its own bonds now.

    US bonds are financed by its common fiscal policy.Europedoes not have one. But the member states whose share of national debt was converted to EU bonds could service it from their national tax revenues without fiscal transfers from others.

    Europealso has an overlooked late starter advantage. Many to most of its member states are deep in debt after salvaging banks. But theUnionitself has next to none. Even with buy-outs of national debt since May last year, its own debt is under 1% of its GDP.

    This is less than a tenth of the level from which theUSissued bonds to finance the New Deal whose success gave it the confidence to fund the Marshall Aid which recovered Europe from WW2 and from whichGermanywas a key beneficiary.

    Nor would EU bonds necessarily need a new institution.  A ring-fenced bond could be held by the European Financial Stability Facility. Net bond issues for growth could be by the EFSF or by the European Bank Group. (**) They could be serviced from revenues on project co-finance as the EIB’s own bonds are.

    Could it be that some key European players are finally coming to grips with the neo-liberal and Austrian economic agenda? Could it be that some are asserting the idea of public financing again?

    Is the worm turning?

    Guy Verhofstadt is not a lightweight.

    There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

    by upstate NY on Sun Jul 03, 2011 at 07:46:54 PM PDT

    •  Sad (2+ / 0-)
      Recommended by:
      Gustogirl, upstate NY

      I went over this thread this morning and noticed that any post that included links to actual data, pertinent and thought out information received the least amount of uprates whilst,
      any post feeding on debunked canards and tea-party slogans got much more attention.

      "A taxi driver told me that....", "I know of a Greek guy who said that.....", "welfare queen...." and anything that treats people like numbers is beteer received.

      Back to Eurotrib to get a dose of sanity.

      •  The media onslaught is powerful (2+ / 0-)
        Recommended by:
        Gustogirl, Euroliberal

        Once the meme is laid down, it becomes difficult to dislodge.

        You can keep trying to beat it back and hope it has an impact.

        In the end, though, you'll probably find that people pick the meme that appeals to them and they go all out to defend it. Jon Stewart did a hitjob last week. For many that was enough.

        There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

        by upstate NY on Mon Jul 04, 2011 at 06:29:02 AM PDT

        [ Parent ]

  •  Economics is religion (2+ / 0-)
    Recommended by:
    Gustogirl, Euroliberal

    for many of these Neo-conservative free-market types. The belief in "the Invisible Hand of the Market" has almost a spiritual awe about it.  All the problems in the world will apparently be solved if only we would  get rid of all the demon regulations and government interference.  

    Of course, when they crash they want "Socialism" to help them with their losses.

  •  Excellent diary! The Banksters have devised a (2+ / 0-)
    Recommended by:
    Gustogirl, Euroliberal

    massive (and sophisticated) global financial fraud, and are now reaping the benefits of it.  They are taking down the social safety net not only in the U.S., but also in Europe.

  •  A refutation of Grover Norquist (3+ / 0-)
    Recommended by:
    Euroliberal, Gustogirl, upstate NY

    This is the sad truth behind (one presumes, occasionally sincere) small-government advocates: if there is any private entity with more power than the democratically-elected government, you no longer have a democracy.

    It is possible to have a small government in a functioning democracy -- if the country in question is a not especially prosperous rural country, as the US was in the early nineteenth century. With the coming of industrialization and enormous international trade, small government ceased to be possible, at least, not if you wanted to hang on to democracy.

    If we wish to again have a government that is responsive to the will of the people, it must be a large government with enough power -- and will -- to crush beneath its heel private institutions that attempt to thwart the popular will. What we have at present is a national government consisting of corporate toadies who will bend over backwards to do the will of the megacorporations in whose shadow our democratic institutions are quickly dying.

    Yes we can! The president, however, I'm not so sure about.

    by eodell on Sun Jul 03, 2011 at 11:30:59 PM PDT

    •  Nicely stated. I appreciate it when someone (2+ / 0-)
      Recommended by:
      Gustogirl, Euroliberal

      can enlarge the context and see how this operates on a global level.

      People fear Soros type raids in the end, but those raids themselves are caused by banker imbalances and not national policies.

      People assume they will not have the brains to run an economy that outwits the bankers. But the bankers outwit themselves. Most of our politicians are clueless about economics so they leave the big decisions to Wall Street.

      And yet we see people like Stieglitz and Koo advising governments properly.

      There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

      by upstate NY on Mon Jul 04, 2011 at 07:02:52 AM PDT

      [ Parent ]

  •  And yet another stunning article: (1+ / 0-)
    Recommended by:
    Gustogirl

    http://www.reuters.com/...

    The Treuhand conducted its four years blitz disposal of East German assets from the former aviation ministry headquarters built for Hermann Goering's Luftwaffe.

    Launched with great promise in 1990, it left massive debts, a legacy of bitterness after 2.5 million jobs were eliminated and wide swathes of de-industrialisation.

    There are key differences between the situation of East Germany as communism imploded across Eastern Europe and the debt crisis plaguing Greece. Economists agree, however, that Germany's experience offers cautionary tales.

    They liquidated industries, sold off the assets cheap. Eastern Germany never recovered, and this was INSIDE a country where there's more cohesion than in the eurozone.

    Then look at this:

    The Treuhand was the brainchild of civil rights activists who toppled communism and opposed unity with West Germany. In early 1990 they proposed an agency to sell off state property, then worth an estimated 1.4 trillion Deutsche marks ($890 billion), and distribute the profits to the eastern public.

    But the Treuhand had only four months from March 1 to June 30, 1990 before the convulsions of monetary union between East and West Germany made its task far more difficult.

    The West German government introduced the Deutschemark at a one-to-one parity with the East German mark on July 1, 1990 instead of a much higher 5-to-1 market rate. That placed a huge burden on Treuhand industries with sky-high debt and costs.

    When companies are running, perhaps with not the most efficiency or productivity, the workers are still earning a living. And then when Germany skyrockets their currency and kills off their productivity for good, the company is sold for firesale prices. The East German currency was locked in at par with the mark, a situation that is similar to Greece's relationship with the euro.

    Are people STILL saying that it's not Germany's fault?

    There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

    by upstate NY on Mon Jul 04, 2011 at 08:59:50 AM PDT

  •  I have to go beyond the previous quotes (1+ / 0-)
    Recommended by:
    Gustogirl

    http://www.reuters.com/...

    The Treuhand was the brainchild of civil rights activists who toppled communism and opposed unity with West Germany. In early 1990 they proposed an agency to sell off state property, then worth an estimated 1.4 trillion Deutsche marks ($890 billion), and distribute the profits to the eastern public.

    But the Treuhand had only four months from March 1 to June 30, 1990 before the convulsions of monetary union between East and West Germany made its task far more difficult.

    The West German government introduced the Deutschemark at a one-to-one parity with the East German mark on July 1, 1990 instead of a much higher 5-to-1 market rate. That placed a huge burden on Treuhand industries with sky-high debt and costs.

    Ah, so the straitjacket of the currency forced these inefficient and unproductive companies to cry uncle. Subsequently, they were sold off at ludicrous firesale prices, their assets stripped.

    This of course enabled private companies to enter the landscape and establish new businesses that helped Eastern Germany come roaring back. Witness:

    Greek's parliament voted last week to set up a privatisation agency under austerity plans agreed with the European Union and IMF. Juncker has repeatedly portrayed the now defunct German agency as a beacon for Greece, as have Dutch leaders.

    The Treuhand conducted its four years blitz disposal of East German assets from the former aviation ministry headquarters built for Hermann Goering's Luftwaffe.

    Launched with great promise in 1990, it left massive debts, a legacy of bitterness after 2.5 million jobs were eliminated and wide swathes of de-industrialisation.

    Wow, horrible. It destroyed millions of jobs that never came back? No one came in to pick up business in the wake of the carnage. A horrid failure!! The people behind Treuhand deserve much of the blame for this ridiculous fiasco. Right?

    The Treuhand's failures were largely blamed on the legacy of an inefficient, bureaucratic communist economy, while its rare successes were ascribed to a group of dedicated western managers who put their careers on hold to help the reconstruction effort.

    "I'd say the Treuhand succeeded by and large in its objective and did quite a good job under difficult conditions in the early 1990s," said Ferdinand Fichtner, chief economist of the DIW economic research institute in Berlin.

    "I think it's wrong to blame the Treuhand for that and high unemployment," he added, referring to the chronically high level of joblessness in eastern Germany. It has remained roughly double west German levels since 1990 and is now at 10.9 percent.

    Gordon Gekko is running the economy.

    There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

    by upstate NY on Mon Jul 04, 2011 at 09:15:21 AM PDT

  •  Relentless (2+ / 0-)
    Recommended by:
    Gustogirl, Euroliberal

    http://www.zerohedge.com/...

    "If this was any other field of human activity, you would go to jail if you accepted, let alone made such an indecent offer."

    There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

    by upstate NY on Mon Jul 04, 2011 at 09:16:55 AM PDT

  •  He has laid bare the conflict of this century: (2+ / 0-)
    Recommended by:
    Euroliberal, Gustogirl

    one person one vote versus one dollar one vote.

  •  your post made front page of Buzzflash (0+ / 0-)

    I also cross posted it to Democraticunderground.com

    This was a crucial catch and should be the equivalent of the wealthy throwing down the gauntlet to the rest of us.

    He is essentially telling us that we are the bitch of the wealthy and there isn't a damn thing we can do about it.

  •  I'd like to buy the Parthenon (0+ / 0-)

    Do you think they are entertaining offers? Its pretty old, and falling apart, so I doubt it can command a good market value. That, and it appears to be unfurnished, has most of the original artwork missing, and isn't hooked up to utilities.

    I couldn't offer more than a few cents a square foot, but when I do move in, everyone is welcome to come for for a Parthenon warming party.

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