An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
Oh, please...Varafoukis made it impossible because of his ridiculously hollow position. Tsipras, the same. They had no "hand" and that's because they dealt the shitty cards to themselves.
Doug Henwood posted on FB: I emailed Yanis Varoufakis last night and asked how he was holding up. To my surprise, he answered: "[W]e certainly are facing a coup. The wall of lies is becoming absurdly tall."
I guess you can read anything you like into that.
I was not impressed with Varoufakis' "performance," but got the impression that Tsipras was pulling the strings.
I think Tsipras deserves most of the blame here because he's the one who sets the direction. I have never really been able to figure out what Syriza's economic plan is.
It seems to me that Syriza should have used the precious publicity opportunity of the election victory to make a statement to the world somewhat as follows:
1. Our economy is a total basket case.
2. Greece has depression-level unemployment - a 39% employment to population ratio. It doesn't need just a few more jobs. It needs massively more jobs.
3. Greece's per capita GDP is chronically low, even pre-crisis - it's half that of some other European countries.
4. Gross capital formation in Greece is an abysmal 12% of GDP, among the very lowest figures in the entire world!
5. Given all that, we are announcing today the Ginormous Economic Plan to completely overall the Greek economy and turn this sorry excuse for a European economy into a 21st century miracle powerhouse. We're going to show them that socialists can kick economic ass when they really put their minds to it.
[Insert here radical plan to overhaul economy from top to bottom - what Greece would do if it weren't in debtors' prison and had more control of their own destiny.]
6. In order to execute the Ginormous Economic Plan, we need to get the debt monkey off our back. So Germany and friends, please piss the fuck off and stop standing in the way of the Ginormous Economic Plan.
7. We're going to get this shit done one way or another. With the Euro or without the Euro; with friendly debt forgiveness or not-so-friendly default; with help from Europe and America or help from Russia and China.
THEN Greece could go to the other left parties in Europe and say, "Follow our lead." (Hint: you can't get people to follow you if you don't know where the fuck you're going.)
THEN Greece would have some actual leverage to bring to bear.
Instead, they got some heterodox and not-so heterodox Keynesian bullshit about rebalancing and whatnot. And a lot of fuzzy talk about ending "austerity" without any clarity about what the new non-austere plan for robust spending and investment actually consists in.
I'm thinking now that Tsipras has no clue what is actually wrong with his country. His whole rap seems to be nothing but, "Please forgive some debts so we can keep paying the pensions in our corrupt county." He's just a glorified alderman.
Greece had a precious window of opportunity when the whole world was paying attention, and instead of using that window to go big, they used it to engage in a lot of vague and lame wheedling, and show the world that they are amateurs merely guessing what's wrong with Greece.
That's the left in a nutshell. They are appeasers and wedded to certain ideological ideas has hard as the right.
When you believe in open borders, one world government, one currency all together in a Big Hug Club where there is no negativity whatsoever then being exposed to the real world is a bit of a shock.
What this episode has shown is that extreme reasonableness doesn't work in the European Union. They can't be persuaded. They have to be fought and defeated.
All we've done in Europe is changed having to fight Germany with guns and bullets into having to fight them with monetary weapons instead. Nobody is prepared to admit that though.
I suggest we play Chess instead and let the money go where it will.
He should have used the NIA framework (which the EZ uses as their top level management metric ("debt to gdp" etc.) so you are "talking their language"...) to put together "capital controls" or import quotas so Greece could retain enough EUR balances for settlements and savings/capital to result in an acceptable economic outcome for Greece domestically...
They would have to target the "big ticket" import items.. petro/petro chemicals/autos... these items would have to be strictly controlled and rationed...
I think the problem was that the Troika has a plan for the structural transformation of the Greek economy. The plan has been in place since 2012. A lot of Europeans seem to support that plan, and the harsh, draconian means of imposing it on the Greeks, because they basically think the Greeks are corrupt bunglers who can't manage their own economy without some external grownups in charge.
It was up to the Greeks to prove to the world that they have a better approach to the structural transformation of their country; that they have a strategy for dynamic job growth, income growth and domestic capital formation. They needed to turn the debate into a debate between "The Greek Plan" and "The Troika Plan". Then there was some hope for changing the game.
Yves Smith has a good rant today in Naked Capitalism summarizing her opinion and the situation. I though her reporting on all this had been abysmal because until now she was giving mixed signals that look like apologizing crap.
Still too much on the "grexit == doomsday" camp but otherwise pretty good summary of the situation.
The problem is that the faux-left does not believe in itself, and apparently the Greeks don't believe they are competent enough to run their own country in a competent way. Hence they are set-up for slavery, those who cannot self-govern themselves are just slaves of others who will govern them in their best interest.
The people gets what they deserve: a little afraid population (like in the West right now) is open to all type of abuses by their elites and ultimately slavery. And slavery is what they will get. I'm afraid though that the same thing is going to happen all over the place with the wealthy ripping us apart and setting up a neo-feudal regime.
I wonder if the pension issue plays a big role? If 30% of Greeks are unemployed then 70% are still employed and many of them are expecting to receive a pension someday. They'd much rather have a euro pension than a drachma pension. Look out for yourself, never mind the 30% eating out of dumpsters. :-(
"because they basically think the Greeks are corrupt bunglers who can't manage their own economy without some external grownups in charge"
Well, they are proving this to be right. A population who wants their cake and eat it too, and rules who do not believe in their own capacity and competence (probably with a reason). Failed to put a contingency plan together, failed to carry out any meaningful action, only more can-kicking and lies. PASOK2
If this is the best this failed nation can do, they are best being slaves of other external powers in everything but the name. Or maybe they get a ruthless dictatorship, or both things probably.
I think the problem was that the Troika has a plan for the structural transformation of the Greek economy.
I would replace "Greek economy" with "EZ economy." This is a neoliberal takeover move by the core against the periphery. It is essentially a plan to colonize the periphery.
Again the politics and the economics are joined at the hip in neoliberalism, which is not an economic theory but a political theory based on transnational corporatism and the market state.
I think it is cavalier to talk about "the Greeks" or the Greek people. It's like talking about "the Europeans" or "the Americans."
There are a lot of groups, POVs, interests and agendas. The only group that is organized and possesses wealth and power is the ownership class. Although they are a tiny minority, they are able to rule because the rest of the population is so disorganized and divided.
For this reason, it is also simplistic to talk about "Syriza" as a homogenous political force. It is a coalition and there are many factions that make it up.
This is why I keep harping on this being a political tussle rather than chiefly an economic one.
Neoliberalism is an economic approach to politics and policy. It has a clear agenda and the people involved, the ownership class, are deeply committed to it and have been for centuries. This is just a way of dealing with it under so-called liberal democracy to turn it into oligarchic democracy.
This is what is really going on, and until enough "the little people" get it, rise up angry and get organized, the neoliberals will keep on winning the day.
This is the problem with the so-called left and why the more militant factions on the left call for a vanguard party to take charge, get the thing organized, and focused on target. Lenin got this and so did Mao and they pulled off victories for the left. Fidel followed that lead on a smaller scale.
I am not arguing for Marxism-Leninsim-Maoism, although that is an option that has shown itself to be successful at winning in the past.
But if that alternative is rejected, then the left has to come up with something else and they haven't been able to do so.
Tom, you might be right. But Tsipras is the man in charge, and ran an election to be the leader of Greece. It's up to him to articulate a bold agenda and exhibit leadership. Clearly that requires some personal risk.
I think that Tsipras has taken a lot of risk but not necessarily the most effective based on our understanding. But Tsipras is a political animal rather than an economic one. He (apparently) selected Yanis for that job (over Costas, for example). Whether Tsipras has enough power to make decisions unilaterally, I don't know.
I assume that the Tsipras and whoever else of the political leadership is involved in such decisions gave YV a political portfolio to carry and left the economics to him. The chief instructions seem to have been no more austerity and no voluntary Grexit, which is consistent with the political mandate of the election.
Tsipras definitely took a political risk in visiting Putin to send a signal to the Western powers that be. It seems to have been pretty well-received by the electorate. However, it added fuel to the political flames with TPTB.
My take is that if the coalition holds, the strategy will be to maintain the principles, no more austerity and no voluntary Grexit, and to put the ball in Merkel's court since ultimately it is her decision to take. Ministers simply execute the portfolio they are handed. Schaeuble doesn't have permission to make major policy changes unless Merkel gives it to him. Schaeuble has been instructed so far to stick to the bailout conditions.
Merkel will also have to consult with the US if her decision would involve letting Greece go its own way, since there is a danger that Greece would drift East into the Russian (fellow Orthodox) and Chinese orbit, first economically and then strategically.
Unfortunately this is a game about power, wealth and control, and the people of the periphery are caught up in it more than those of the core, and some more than others in the periphery. But everyone will get their turn as the neoliberal screws tighten if this agenda is not confronted successfully, either by the left or by the right.
@Tom said "no more austerity and no voluntary Grexit, which is consistent with the political mandate of the election".
That's like saying that FDR had a mandate to simultaneously end the depression and reduce the budget deficit.
Just because a poll shows that a majority of Greeks want to stay in the euro does not mean that staying in the euro is their number one concern.
I view the vote for Syriza as a mandate for change. Instead, Greeks are getting more of the same, and support for Syriza has fallen to 46%. It seems unlikely that Syriza will survive the next election.
This is a transition point. We'll have to wait and see what the new lineup brings. All depends on whether the new negotiator has a new portfolio and which way it tilts, or just a different style with the same portfolio.
18 comments:
Oh, please...Varafoukis made it impossible because of his ridiculously hollow position. Tsipras, the same. They had no "hand" and that's because they dealt the shitty cards to themselves.
Doug Henwood posted on FB: I emailed Yanis Varoufakis last night and asked how he was holding up. To my surprise, he answered:
"[W]e certainly are facing a coup. The wall of lies is becoming absurdly tall."
I guess you can read anything you like into that.
I was not impressed with Varoufakis' "performance," but got the impression that Tsipras was pulling the strings.
I think Tsipras deserves most of the blame here because he's the one who sets the direction. I have never really been able to figure out what Syriza's economic plan is.
It seems to me that Syriza should have used the precious publicity opportunity of the election victory to make a statement to the world somewhat as follows:
1. Our economy is a total basket case.
2. Greece has depression-level unemployment - a 39% employment to population ratio. It doesn't need just a few more jobs. It needs massively more jobs.
3. Greece's per capita GDP is chronically low, even pre-crisis - it's half that of some other European countries.
4. Gross capital formation in Greece is an abysmal 12% of GDP, among the very lowest figures in the entire world!
5. Given all that, we are announcing today the Ginormous Economic Plan to completely overall the Greek economy and turn this sorry excuse for a European economy into a 21st century miracle powerhouse. We're going to show them that socialists can kick economic ass when they really put their minds to it.
[Insert here radical plan to overhaul economy from top to bottom - what Greece would do if it weren't in debtors' prison and had more control of their own destiny.]
6. In order to execute the Ginormous Economic Plan, we need to get the debt monkey off our back. So Germany and friends, please piss the fuck off and stop standing in the way of the Ginormous Economic Plan.
7. We're going to get this shit done one way or another. With the Euro or without the Euro; with friendly debt forgiveness or not-so-friendly default; with help from Europe and America or help from Russia and China.
THEN Greece could go to the other left parties in Europe and say, "Follow our lead." (Hint: you can't get people to follow you if you don't know where the fuck you're going.)
THEN Greece would have some actual leverage to bring to bear.
Instead, they got some heterodox and not-so heterodox Keynesian bullshit about rebalancing and whatnot. And a lot of fuzzy talk about ending "austerity" without any clarity about what the new non-austere plan for robust spending and investment actually consists in.
I'm thinking now that Tsipras has no clue what is actually wrong with his country. His whole rap seems to be nothing but, "Please forgive some debts so we can keep paying the pensions in our corrupt county." He's just a glorified alderman.
Greece had a precious window of opportunity when the whole world was paying attention, and instead of using that window to go big, they used it to engage in a lot of vague and lame wheedling, and show the world that they are amateurs merely guessing what's wrong with Greece.
(Hint: you can't get people to follow you if you don't know where the fuck you're going.)
That summarizes the problem with the left right now, and why the far right will capitalize on it to gain power in the West in the next years.
It's all so predictably and sad...
Dan,
That's the left in a nutshell. They are appeasers and wedded to certain ideological ideas has hard as the right.
When you believe in open borders, one world government, one currency all together in a Big Hug Club where there is no negativity whatsoever then being exposed to the real world is a bit of a shock.
What this episode has shown is that extreme reasonableness doesn't work in the European Union. They can't be persuaded. They have to be fought and defeated.
All we've done in Europe is changed having to fight Germany with guns and bullets into having to fight them with monetary weapons instead. Nobody is prepared to admit that though.
I suggest we play Chess instead and let the money go where it will.
He should have used the NIA framework (which the EZ uses as their top level management metric ("debt to gdp" etc.) so you are "talking their language"...) to put together "capital controls" or import quotas so Greece could retain enough EUR balances for settlements and savings/capital to result in an acceptable economic outcome for Greece domestically...
They would have to target the "big ticket" import items.. petro/petro chemicals/autos... these items would have to be strictly controlled and rationed...
I think the problem was that the Troika has a plan for the structural transformation of the Greek economy. The plan has been in place since 2012. A lot of Europeans seem to support that plan, and the harsh, draconian means of imposing it on the Greeks, because they basically think the Greeks are corrupt bunglers who can't manage their own economy without some external grownups in charge.
It was up to the Greeks to prove to the world that they have a better approach to the structural transformation of their country; that they have a strategy for dynamic job growth, income growth and domestic capital formation. They needed to turn the debate into a debate between "The Greek Plan" and "The Troika Plan". Then there was some hope for changing the game.
But there was no Greek plan - so they blew it.
Well said, @Neil.
As the saying goes, the Germans lost the war and won the peace.
Yves Smith has a good rant today in Naked Capitalism summarizing her opinion and the situation. I though her reporting on all this had been abysmal because until now she was giving mixed signals that look like apologizing crap.
Still too much on the "grexit == doomsday" camp but otherwise pretty good summary of the situation.
The problem is that the faux-left does not believe in itself, and apparently the Greeks don't believe they are competent enough to run their own country in a competent way. Hence they are set-up for slavery, those who cannot self-govern themselves are just slaves of others who will govern them in their best interest.
The people gets what they deserve: a little afraid population (like in the West right now) is open to all type of abuses by their elites and ultimately slavery. And slavery is what they will get. I'm afraid though that the same thing is going to happen all over the place with the wealthy ripping us apart and setting up a neo-feudal regime.
I wonder if the pension issue plays a big role? If 30% of Greeks are unemployed then 70% are still employed and many of them are expecting to receive a pension someday. They'd much rather have a euro pension than a drachma pension. Look out for yourself, never mind the 30% eating out of dumpsters. :-(
"because they basically think the Greeks are corrupt bunglers who can't manage their own economy without some external grownups in charge"
Well, they are proving this to be right. A population who wants their cake and eat it too, and rules who do not believe in their own capacity and competence (probably with a reason). Failed to put a contingency plan together, failed to carry out any meaningful action, only more can-kicking and lies. PASOK2
If this is the best this failed nation can do, they are best being slaves of other external powers in everything but the name. Or maybe they get a ruthless dictatorship, or both things probably.
Stupidity has a high price.
I think the problem was that the Troika has a plan for the structural transformation of the Greek economy.
I would replace "Greek economy" with "EZ economy." This is a neoliberal takeover move by the core against the periphery. It is essentially a plan to colonize the periphery.
Again the politics and the economics are joined at the hip in neoliberalism, which is not an economic theory but a political theory based on transnational corporatism and the market state.
As the saying goes, the Germans lost the war and won the peace.
Like I said, it's possible to loss all the battles and still win the war.
I think it is cavalier to talk about "the Greeks" or the Greek people. It's like talking about "the Europeans" or "the Americans."
There are a lot of groups, POVs, interests and agendas. The only group that is organized and possesses wealth and power is the ownership class. Although they are a tiny minority, they are able to rule because the rest of the population is so disorganized and divided.
For this reason, it is also simplistic to talk about "Syriza" as a homogenous political force. It is a coalition and there are many factions that make it up.
This is why I keep harping on this being a political tussle rather than chiefly an economic one.
Neoliberalism is an economic approach to politics and policy. It has a clear agenda and the people involved, the ownership class, are deeply committed to it and have been for centuries. This is just a way of dealing with it under so-called liberal democracy to turn it into oligarchic democracy.
This is what is really going on, and until enough "the little people" get it, rise up angry and get organized, the neoliberals will keep on winning the day.
This is the problem with the so-called left and why the more militant factions on the left call for a vanguard party to take charge, get the thing organized, and focused on target. Lenin got this and so did Mao and they pulled off victories for the left. Fidel followed that lead on a smaller scale.
I am not arguing for Marxism-Leninsim-Maoism, although that is an option that has shown itself to be successful at winning in the past.
But if that alternative is rejected, then the left has to come up with something else and they haven't been able to do so.
Tom, you might be right. But Tsipras is the man in charge, and ran an election to be the leader of Greece. It's up to him to articulate a bold agenda and exhibit leadership. Clearly that requires some personal risk.
I think that Tsipras has taken a lot of risk but not necessarily the most effective based on our understanding. But Tsipras is a political animal rather than an economic one. He (apparently) selected Yanis for that job (over Costas, for example). Whether Tsipras has enough power to make decisions unilaterally, I don't know.
I assume that the Tsipras and whoever else of the political leadership is involved in such decisions gave YV a political portfolio to carry and left the economics to him. The chief instructions seem to have been no more austerity and no voluntary Grexit, which is consistent with the political mandate of the election.
Tsipras definitely took a political risk in visiting Putin to send a signal to the Western powers that be. It seems to have been pretty well-received by the electorate. However, it added fuel to the political flames with TPTB.
My take is that if the coalition holds, the strategy will be to maintain the principles, no more austerity and no voluntary Grexit, and to put the ball in Merkel's court since ultimately it is her decision to take. Ministers simply execute the portfolio they are handed. Schaeuble doesn't have permission to make major policy changes unless Merkel gives it to him. Schaeuble has been instructed so far to stick to the bailout conditions.
Merkel will also have to consult with the US if her decision would involve letting Greece go its own way, since there is a danger that Greece would drift East into the Russian (fellow Orthodox) and Chinese orbit, first economically and then strategically.
Unfortunately this is a game about power, wealth and control, and the people of the periphery are caught up in it more than those of the core, and some more than others in the periphery. But everyone will get their turn as the neoliberal screws tighten if this agenda is not confronted successfully, either by the left or by the right.
@Tom said "no more austerity and no voluntary Grexit, which is consistent with the political mandate of the election".
That's like saying that FDR had a mandate to simultaneously end the depression and reduce the budget deficit.
Just because a poll shows that a majority of Greeks want to stay in the euro does not mean that staying in the euro is their number one concern.
I view the vote for Syriza as a mandate for change. Instead, Greeks are getting more of the same, and support for Syriza has fallen to 46%. It seems unlikely that Syriza will survive the next election.
This is a transition point. We'll have to wait and see what the new lineup brings. All depends on whether the new negotiator has a new portfolio and which way it tilts, or just a different style with the same portfolio.
Post a Comment