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Greece: Of paupers and taxes

by talos Tue Feb 19th, 2013 at 01:45:23 AM EST


Via the Guardian: "Athenians reach out for a bag of oranges during a free distribution of fruit and vegetables by farmers outside the Agriculture Ministry. The farmers are staging the event to protest against high production costs, including rising fuel prices"

It used to be the case that I would need some time and effort to select incidents that would be telling enough and substantially reported in the media enough to give readers a taste of the societal collapse and the democratic decay that is occurring in Greece under the yoke of the troika and its willing executioners among the political elites. These days its simple enough: just check the past few days' headlines.

Social implosion
On the societal collapse side Alex Politaki in the Guardian, describes the situation on the ground: Greece is facing a humanitarian crisis, deep and unprecedented during peacetime in the West:
"...There are three more indicators that point to a humanitarian crisis. First, the number of homeless people has risen to unprecedented levels for a European country: unofficial estimates put them at 40,000. Second, the proportion of Greek beneficiaries of NGO medical services in some urban centres was recorded at 60% of the total in 2012. This would have been unthinkable even three years ago, since such services were typically provided to immigrants, not Greeks.

Third, there has been explosive growth in soup kitchens and general food distribution. The levels are not officially recorded, but the Church of Greece distributes approximately 250,000 daily rations, while there are unknown numbers of rations distributed by municipal authorities and NGOs. By recent government order, municipal rations will be expanded further because of rising incidence of children fainting at school due to low calorie intake. There will also be light meals provided to young students...

front-paged by afew


A recent survey by the Hellenic Confederation of Professionals, Craftsmen and Merchants [GSEVEE - Warning: Bad English], put some further numbers behind this:

  • ...Half the population is in danger of finding themselves economically marginalized (fail to meet tax obligations, owe loans, and buy goods of inferior quality in order to meet their obligations). 

  • 93.1 % of the households have seen their incomes reduced several times during the crisis period.

  • 40% of the households have at least one unemployed member.

  • 72% of the households expect new income reductions during 2013

  • 40% of households delay paying debts in order to meet obligations, while 50% lacks sufficient income to meet their obligations

  • 42.5% of households search for products and services of lower quality and look for enterprises that are willing to offer such products and services

  • The heavy tax burden on products and services combined with the shrinking and over-taxation of incomes "softens" tax morals thus threatening to reduce public revenues too.  47% of the population, and rising, condones various methods of sales tax and VAT evasion

  • Only 12.6% of households stated as main source of income their businesses. The main income contribution for households comes from pensions (42.6%)

  • 70% of households have cut back on food expenses, while 92% reduced expenses for clothing - footwear

All this is happening against a backdrop of record unemployment (reaching over 60% among youth), a tanking GDP, along with health indicator reversals previously unheard of in the western world, as after "three years of austerity cuts... infant mortality has grown by 4 percent"... (and I think the correct number is 14%)

Looting the Poor as Economic Strategy
The collapse of Greek society is evident to all but the elites and their government: After the finance minister Yianis Stournaras blamed the decline of heating oil consumption on citizens having bought reserves of heating oil before the new tax hikes - despite the widely documented shutting down of central heating in the majority of Athens flats and houses - and Finance Ministry general secretary Giorgos Mergos  statement about 580 Euros (before taxes) being "too high" a minimum salary, one is certain that the people in charge have a rather inaccurate idea and no willingness to correct it about what is happening in Greek streets and homes.

The latest outrage is that the government is threatening to confiscate property, wages and bank accounts of any person owing the tax revenue office more than 300 Euros. This, at a time when the tax burden has become so absurdly high in Greece that half the population does not believe they will be able to pay all of their tax, basic utility and loan obligations in 2013. Keep in mind that these are taxes on last year's incomes - and last year's incomes are significantly higher for a large majority of Greeks than this year's (and it has been the case 4 years now in a row); new taxes have also been levied either as emergency contributions, or special fees, or on small, non-income bearing property that used to be non-taxable. Indirect taxes have soared. A significant portion of people are "tax-evading" nowadays as the GSEVEE survey shows, simply to be able to survive or because they have literally no money. There are furthermore persistent rumors and leaks from majority MPs that the troika is pressuring the Greek government to withdraw the legal protection against foreclosure of people's residences that has been mandated until the end of the year. This will mean mass evictions.


So the ministry of finance is planning to tighten the screws: it announced plans to send warning letters to 2.5 million citizens, threatening to take away property (which BTW they can't sell to raise money anyway since the real estate market is dead as a doornail, and any sale is now taxed at a much higher "objective value" than its actual market price) or commandeer bank deposits and salaries, unless their owners come to some sort of settlement with the tax service. Now since the actual tax laws have become ever more regressive, richer folks can and will easily arrive at some such deal. Poorer people, including many pauperized, unemployed or even homeless will most likley not be able to afford any deal and this can lead them, even if they have nothing that the taxman can take, to prison! Even for owing as little as 3000 Euros according to the plan. So the ones most heavily targeted and affected will be the poorest, usually those with the least tax or fine debts and a real difficulty to pay up. The numbers however that the Greek Government is publishing show that cracking down on the least indebted will bring significantly fewer rewards than targeting the big fish: While 2.3 million tax-payers owing each under 3000 Euros have a total debt that adds up to 1.1 billion Euros, the top 6.270 debtors owe the Greek tax office over 35 billion Euros! This at the same time that the Lagarde list of Swiss bank account holders is causing serious trouble to the political and financial elites, despite it being just the tip of the iceberg of chronic millionaire tax-evasion...
To top all this off, the ministry of finance has circulated a proposal to have everyone over 18 file a tax report (including high-school and university students) even if they remain dependents. They, along with every living Greek no matter how destitute, will be taxed based on a fictitious income of 3000 Euros, which the government claims they must be making if they are surviving. This is literally a tax on breathing, and it means that kids living with their parents (and remember, that's a lot of people in Greece, youth unemployment is over 50%) will be taxed 75 Euros unless they can show expenses receipts that add up to 750 Euros for the year. In reality it's a double taxation of their parents' incomes. Of course, more poignantly, this means that even the 40.000+ homeless must either show 750 Euros worth of expenses or else face paying 75 Euros in taxes. Yes this is insanity... and guess what? After all this tax revenues are plummeting:
Despite big tax hikes as part of austerity measures demanded by international lenders, tax revenues fell precipitously in January, with the Greek Finance Ministry reporting a 16 percent decrease from a year earlier, and a loss of 775 million euros, or $1.05 billion in one month.

This is an economic policy leading to a failed state - a debt colony with pauperized natives. And Greece is just the guinea-pig for the rest of the EU South and beyond...


All this is of course not compatible with democracy: my next diary will detail recent events in the slide towards undemocracy under the iron fist of a government of right-wing extremists...
[A first draft of this diary was posted at Histologion]

Display:
Beyond normal comprehension. A class war massacre.
by das monde on Thu Feb 14th, 2013 at 11:18:24 PM EST
within the last 2 years, I believe. The word from the US govt to Europe was to crash the Greek economy (don't know why; For the fun of it? As a warning to other govts.?) or the US would crash Europe's. Probably has something to do with protecting banks but that's just a guess.

Today Greece, tomorrow the rest of us.

Have a good day.

P.S. Here's a thought. Once Greece is totally destroyed maybe the ultrawealthy will swoop in and make it an enclave. A place to live while they destroy the rest of us.

The good news ... it's only a life sentence. You eventually leave this planet of idiots.

by THE Twank (yatta blah blah @ blah.com) on Fri Feb 15th, 2013 at 12:09:32 PM EST
And yet...
I keep hearing people explaining to me how Germans are justifiably fed up with paying for everyone else, that public finance should at long last be put under control by all the non-virtuous. Then when I try to point out that this does not match the recent years records, I will be told that in Greece there are entire villages full of Porsches that did not pay a single euro in income tax over the past few years.

I don't know where they got the story, but it must have been in one of the very serious sources as totally independent people reported it.

Well, I can't easily prove a negative (other than checking Greece's accounts to check that no village paid zero on income tax, or visiting all those who did to check that they are not full of Porsches), but when I did very briefly go to Greece last year, I saw anything but a country enjoying a rich life on German funds. It looked undoubtedly poor -and yet I did not leave rather touristic areas. I shudder to think what it would have been had I had time to see the remote areas.

But they just know that those villages are all over the place. That Greece (and Spain, and Portugal) must be whipped into good behaviour.
I find it entirely plausible that the EU circles of power could let it go all the way to total humanitarian disaster (and I mean worse than Russia in the 1990s -after all, Russia had its own currency AND a lot of mineral resources) without ever reassessing their fantasies. Unless Greeks are finally allowed to revolt. But they sure are doing their best to make that unlikely, if not impossible.


Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Fri Feb 15th, 2013 at 12:52:03 PM EST
This is the Porsche urban legend put to rest by Diomidis Spinellis who ran the Finance Ministry Information Systems'administration for 2 years and who should know (also: possibly registered here at the European Tribune IIRC).

One of the annoying aspects of this whole crisis is that urban legends and various exaggerated claims like this, originate often from the neolib economic / political establishment, people who have no clear idea of what is happening in Greece outside Athens' and Thessaloniki's poshest neighborhoods, and have never been in the vicinity of the poorest members of their society without being surrounded by armed bodyguards...

The road of excess leads to the palace of wisdom - William Blake

by talos (mihalis at gmail dot com) on Fri Feb 15th, 2013 at 01:09:30 PM EST
[ Parent ]
Even the poshest neighbourhoods never matched the posh bits of London or Paris - or Dublin. It's  a justifying myth, easy to believe because it justifies being total selfish dicks.
by Colman (colman at eurotrib.com) on Fri Feb 15th, 2013 at 02:07:38 PM EST
[ Parent ]
I find it entirely plausible that the EU circles of power could let it go all the way to total humanitarian disaster (and I mean worse than Russia in the 1990s -after all, Russia had its own currency AND a lot of mineral resources) without ever reassessing their fantasies. Unless Greeks are finally allowed to revolt.
Ever the optimist, you forget that a Greek revolt will be taken as evidence that those swarthy southerners cannot rule themselves, not to a reassessment of received wisdom.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sat Feb 16th, 2013 at 01:30:19 AM EST
[ Parent ]
Oh, no, I didn't forget that. I'm quite sure that a revolt would strengthen their myths.

But it might avert a total humanitarian disaster if it happens soon enough.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Sat Feb 16th, 2013 at 04:11:39 AM EST
[ Parent ]


Austerity can only be implemented in the shadow of a concentration camp.
by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 16th, 2013 at 04:52:24 AM EST
[ Parent ]
Well, indeed.
That's the horror that refusal to reassess your fantasies under any circumstance tend to lead to. I am not, by nature, inclined to wish for revolution, but I also reckon that if you give an entire people no option other than violence, quite a few will choose it.

And I would find it hard to blame them when they do.

I know you've covered that extensively recently.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Sat Feb 16th, 2013 at 05:20:57 AM EST
[ Parent ]
For that matter, a complete humanitarian catastrophe is at this stage no longer avoidable. It's been what? Four years by now? Interpolating from the Russian experience with austerity, you'd expect austerity to kill around one percent of your population over a decade. Depending on how you estimate and how you count causes of death, austerity-related complications are probably the third or fourth leading cause of death in Greece over the course of the present depression.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 16th, 2013 at 10:35:16 AM EST
[ Parent ]
Yes, I'm aware of that. I just fear it could get much worse than what's already there.

The 1% over a decade is probably back-loaded so we haven't seen much of it yet. Plus the impact in Greece could end up being bigger than in Russia.


Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Sat Feb 16th, 2013 at 12:51:25 PM EST
[ Parent ]
Even if excess mortality increases linearly (meaning that five years of austerity would give only a quarter of the aggregate excess fatalities of ten years), that would still make austerity the third or fourth leading cause of death (after cardiovascular conditions, cancer and maybe infectious disease) over the course of the present depression.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Feb 16th, 2013 at 02:41:49 PM EST
[ Parent ]
So that's where all our welfare queens went.  And they traded in their Cadillacs for Porsches?  Maybe there's something to this whole austery promotes growth thing after all.

Now where are we going and what's with the handbasket?
by budr on Tue Feb 19th, 2013 at 09:16:07 AM EST
[ Parent ]
The treatment accorded an old mare in Crime and Punishment is being visited upon an entire nation. It is easy to understand why so many just can't see what is happening. It would be too painful to accept so they just ignore it, fine moral creatures that they are.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Feb 16th, 2013 at 01:02:44 AM EST
that the bad investments of the rich countries that were made in Greece are going to remain bad and in fact are lost. What is the point of continuing these sadistic policies; there's nothing more to be bled from Greece.

How can this be stopped? Is it time for a leader of one of the large countries to declare that the euro is a failed experiment and call for an orderly breakup.

As someone who knows little of economics I do know that this crisis has brought out the worst in all parties.

Hey, Grandma Moses started late!

by LEP on Sat Feb 16th, 2013 at 04:42:05 PM EST
the bad investments of the rich countries that were made in Greece are going to remain bad and in fact are lost. What is the point of continuing these sadistic policies
Why, revenge must be exacted.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sat Feb 16th, 2013 at 04:57:52 PM EST
[ Parent ]
It is beyond revenge now; it's called sadism. In the U.S. it would be illegal as being cruel and unusual punnisment at least as it was defined more than 12 years ago.

Hey, Grandma Moses started late!
by LEP on Sat Feb 16th, 2013 at 05:13:38 PM EST
[ Parent ]
You don't understand. The German words for guilt and debt are the same: Schuld.

The Greek are guilty because they are indebted. They must be punished. It's a moral duty to punish them.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Migeru (migeru at eurotrib dot com) on Sat Feb 16th, 2013 at 06:17:39 PM EST
[ Parent ]
Any idea of the origins of that? No wonder it all so screwed up. Is there any institution in Germany, like the Accademie Francaise, that can ordain a new word for "guilt'? That should solve the crisis.

Hey, Grandma Moses started late!
by LEP on Sat Feb 16th, 2013 at 06:28:44 PM EST
[ Parent ]
Same in Swedish (skuld), where the words for clean and raindeer are also the same: ren. Still those kan be seperated by context, and it is the same with guilt and debt. I think the same is true for Germany. To the extent that we are having a problem with German public opinion, it is that it reflects what the German chattering classes has been claiming during the crisis. And as long as Greeks don't vote in German elections they are a risk free group to blame.

When it comes to the driving force here, I would say it is the wish among the EUropean political and economical elite to visit some shock doctrine on the population. The purpose with destroying the safety nets in Greece are the same as they were in Chile, in Poland, in Russia and everywhere else the shock doctrine has been applied: a radical economic transformation of society that benefits a local and international elite (division of spoils is a question of power relations). It is in turn driven by a combination of personal interest, class interest and misguided idealism (reforms are necessary, strenghten competetivness etc).

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!

by A swedish kind of death on Sun Feb 17th, 2013 at 04:29:00 AM EST
[ Parent ]
A swedish kind of death:
I would say it is the wish among the EUropean political and economical elite to visit some shock doctrine on the population.

That doesn't say much for the success of the European experiment.

Hey, Grandma Moses started late!

by LEP on Sun Feb 17th, 2013 at 04:49:57 AM EST
[ Parent ]
I don't think they are doing this on purpose. They are just neoliberals. They believe that neo-classical economics is a "science" and most likely Rehn&co think themselves as some form of altruists. And believe they are making "sacrifices" etc.
by kjr63 on Tue Mar 5th, 2013 at 06:32:19 PM EST
[ Parent ]
The origins of that are old indeed. Consider: Matthew 6:9-14
9 After this manner therefore pray ye: Our Father which art in heaven, Hallowed be thy name.
10 Thy kingdom come, Thy will be done in earth, as it is in heaven.
11 Give us this day our daily bread.
12 And forgive us our debts, as we forgive our debtors.
13 And lead us not into temptation, but deliver us from evil: For thine is the kingdom, and the power, and the glory, for ever. Amen.
14 For if ye forgive men their trespasses, your heavenly Father will also forgive you:


I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Feb 17th, 2013 at 04:48:07 AM EST
[ Parent ]
"Debts" is supposed to mean "sins." Are you saying that the Greeks are paying today for this mistranslation back in the third century or whenever.

Or is borrowing from a German bank and not repaying euivalent to a "sin" in the scripture according to Merkel?

That might make a good tag line ;)

Hey, Grandma Moses started late!

by LEP on Sun Feb 17th, 2013 at 05:04:30 AM EST
[ Parent ]
According to Graeber it was always so:

What is Debt? - An Interview with Economic Anthropologist David Graeber « naked capitalism

In Sanskrit, Hebrew, Aramaic, `debt,' `guilt,' and `sin' are actually the same word. Much of the language of the great religious movements - reckoning, redemption, karmic accounting and the like - are drawn from the language of ancient finance


A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!
by A swedish kind of death on Sun Feb 17th, 2013 at 05:46:05 AM EST
[ Parent ]
It is not a mistranslation.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Feb 17th, 2013 at 06:21:24 AM EST
[ Parent ]
In English, as well as French, "debt", "guilt" and "sin" are not the same thing. So if France were the stongest country in the eurozone, rather than Germany, we might not be having this crisis?

Hey, Grandma Moses started late!
by LEP on Sun Feb 17th, 2013 at 06:38:25 AM EST
[ Parent ]
The Eurozone is a creature of Austrian economics and the Eurozone crisis is a creature of German central bank orthodoxy.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Feb 17th, 2013 at 06:46:11 AM EST
[ Parent ]
I agree. But let us speculate that France's economy was larger than Germany's.

Of course, there is also the UK, which is not in the eurozone, where austerity cannot be attributed to language. Why do, you think the UK government has gone there?

Hey, Grandma Moses started late!

by LEP on Sun Feb 17th, 2013 at 07:49:26 AM EST
[ Parent ]
The UK has gone the Austerity way because of common sense conservative economics. Reagan/Thatcher revolution and all that.

France is as committed to fixed exchange rates as Germany is. During the previous Great Depression, France was the last Western European country to abandon the gold standard. France precipitated the end of Bretton Woods by sending a warship to Fort Knox to repatriate their gold. For 20 years after Bretton Woods, France preferred a fixed exchange rate system with periodic devaluations to floating exchange rates. French politicians spearheaded the Euro - Germany had to be dragged into it kicking and screaming. France allegedly introduced the 3% deficit and 60% debt limits in the Maastricht Treaty, and had no objection to introducing the German prohibition of monetary financing as a bargaining concession to the German sensitivities.

Tell me again how it would all be different if France called the shots?

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Migeru (migeru at eurotrib dot com) on Sun Feb 17th, 2013 at 07:57:22 AM EST
[ Parent ]
I don't feel that the current French government is so keen on running Greece into the ground and if France were calling the shots Greece would be in far better shape. Hollande seems to feel powerless against Merkel; I think he could get a lot more from her if he fought harder.

Hey, Grandma Moses started late!
by LEP on Sun Feb 17th, 2013 at 08:04:01 AM EST
[ Parent ]
Hollande also wants to appear "fiscally responsible" and his government was committed to destroying the solvency of the French private sector. Now that they have plunged France into a recession they regret they won't be able to meet the 3% deficit target this year, but they remain committed to the longer term targets.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Feb 17th, 2013 at 09:47:49 AM EST
[ Parent ]
Migeru:
his government was committed to destroying the solvency of the French private sector.

Why do you say that?

Migeru:

Now that they have plunged France into a recession

France has been in recession for a lot longer than the last eight monts.

Hey, Grandma Moses started late!

by LEP on Sun Feb 17th, 2013 at 10:04:51 AM EST
[ Parent ]
I should have said that France has been flirting with recession for a lot longer than the last eight months.

Hey, Grandma Moses started late!
by LEP on Sun Feb 17th, 2013 at 10:22:53 AM EST
[ Parent ]
Sarkozy's conservatives flirting with recessionary policies was par for the course, them being conservatives. Hollande has been a disappointment. Predictable, but a disappointment.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Feb 17th, 2013 at 10:34:43 AM EST
[ Parent ]
Migeru:
[Hollande']s government was committed to destroying the solvency of the French private sector.
Why do you say that?
I believe you may have been off the blog last August, when I wrote The Eurozone's giant sucking sound
Take, for example, France:

If France were to bring its Government deficit below 3%, it would destroy the ability of the French private sector to net-save, assuming the current account deficit stays on trend (and it should: Germany's 6% current account surplus is as stable as if it were a successful policy target, and the Eurozone's neutral current account balance is consistent with the ECB pursuing a non-interventionistic foreign reserve policy).

Six months later, Ayrault has conceded the "unexpected" recession prevents him from meeting the 3% target.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Feb 17th, 2013 at 10:47:12 AM EST
[ Parent ]
To read you, France did call all the shots...
by afew (afew(a in a circle)eurotrib_dot_com) on Sun Feb 17th, 2013 at 08:08:37 AM EST
[ Parent ]
France is the only EU country to have sustained an empty chair crisis, too.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Feb 17th, 2013 at 08:12:35 AM EST
[ Parent ]
Old De Gaulle brinkmanship.
by afew (afew(a in a circle)eurotrib_dot_com) on Sun Feb 17th, 2013 at 08:48:11 AM EST
[ Parent ]
So, we discount De Gaulle because he was De Gaulle, Pompidou because he was Pompidou, Giscard because he was Giscard, Mitterrand because he was Mitterrand, and Delors because he was Delors, and conclude "France" has nothing to do with anything?

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Feb 17th, 2013 at 09:49:17 AM EST
[ Parent ]
No we don't. But De Gaulle's very personal diplomacy at the time of the Six is rather different from what followed.

If your argument is that France is and has always considered itself central to the "European project", that is not debatable. If you are saying France = Germany, no difference, then that is debatable.

by afew (afew(a in a circle)eurotrib_dot_com) on Sun Feb 17th, 2013 at 10:37:26 AM EST
[ Parent ]
I am saying, if you take a long enough view, "the European project" has been so wedded to "sound money" and "common sense economics" that it's been "not even wrong" for at least the last 80 years.

The major (i.e., policy relevant) macroeconomic strains of thought today, Aust(e)rianism, Keynesianism and Monetarism originated in Continental Europe, Britain and the US respectively. That should tell us something: Continental Europe is the home of harebrained "common sense" economics.

Yes, France had the Physiocrats, Italy has been big in Chartalism/Circuitism, there are Marxian economists all over Europe.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Migeru (migeru at eurotrib dot com) on Sun Feb 17th, 2013 at 11:01:41 AM EST
[ Parent ]
When "neoliberalism" was launched at the Colloque Walter Lippman in Paris in 1938, there's no doubt that Continental Europeans were there in number, including French ultra-liberals (mostly from the corporate sector rather than theorists), the Austrians (von Mises and Hayek), and the future German Ordoliberals Rüstow and Röpke. There were also Brits and the eponymous American convenor Walter Lippman. The Mont Pèlerin Society that grew out of the Colloque was also international in flavour, with a strong American contingent. There was considerable interaction and exchange between elements of different European countries including Britain, and the US. This is not to say that Austrianism (and ordoliberalism) weren't Continental European, but I see a more international ultra-liberal movement -- in its theorising, its support from big capital, and its effects -- than you seem to.

A second point is that, if "sound money" goes way back, the precise project of a single currency in Europe dates practically speaking from the demise of Bretton Woods, and claims (at least the legend does) a U Chicago Canadian as its "father", Robert Mundell.

Mundell: OPTIMUM CURRENCY AREAS

It was with great regret that I felt compelled to distance myself on this basic policy issue from teachers and good friends like James Meade, Milton Friedman, Harry Johnson, Gottfried Haberler, Fritz Machlup, Lloyd Metzler and Arnold Harberger and others who supported flexible exchange rates. I found myself among such diverse company as Lord Robbins, Sir Roy Harrod, Jacques Rueff, Edward Bernstein, Robert Triffin, Otmar Emminger, Rinaldo Ossola, Charles Kindleberger, Guido Carli and Robert Roosa--and some of them would later become defectors. Of course I was happy to be in the company of all the great economists of the past who, with the possible exceptions of Fisher and Keynes, were vigorously opposed to flexible exchange rates between countries with inconvertible currencies.

Among the supporters of flexible exchange rates were a couple of Austrians (Haberler and Machlup). Among the fixed-rate crowd, a couple of Brits and an American.

by afew (afew(a in a circle)eurotrib_dot_com) on Sun Feb 17th, 2013 at 12:14:51 PM EST
[ Parent ]
Fixed exchange rates are one thing. Turning internationally originated private-sector debt into a national moral story is another.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi
by Cyrille (cyrillev domain yahoo.fr) on Sun Feb 17th, 2013 at 08:12:16 AM EST
[ Parent ]
Also, I fail to see how precipitating the end of Bretton Woods could be seen as being committed to fixed exchange rates.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi
by Cyrille (cyrillev domain yahoo.fr) on Sun Feb 17th, 2013 at 08:13:13 AM EST
[ Parent ]
Bretton Woods was coming to an end anyway.
by afew (afew(a in a circle)eurotrib_dot_com) on Sun Feb 17th, 2013 at 08:46:53 AM EST
[ Parent ]
Precipitating the end of Bretton Woods by being gold bugs (repatriating gold at gunpoint - sounds like Germany in 2012!) and being worried about the US national debt seems to me to be entirely consistent with the European Position at the G20 meetings in 2009.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Feb 17th, 2013 at 09:51:14 AM EST
[ Parent ]
You are willingly exaggerating again. There was no gunpoint (!). A minor naval vessel (not a warship) was sent to sit in a New Jersey harbour to make a symbolic point.

So De Gaulle held to gold convertibility. The Bretton Woods system was, after all, gold-based.

by afew (afew(a in a circle)eurotrib_dot_com) on Sun Feb 17th, 2013 at 10:43:30 AM EST
[ Parent ]
to rhetorical excess. I am a repeat offender.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Feb 17th, 2013 at 11:04:40 AM EST
[ Parent ]
:-)
by afew (afew(a in a circle)eurotrib_dot_com) on Sun Feb 17th, 2013 at 11:07:02 AM EST
[ Parent ]
Or rather, I should say that De Gaulle wanted to sharply remind the US that, in a system where everyone's currencies were rough-pegged to the dollar, the dollar was supposed to be convertible.
by afew (afew(a in a circle)eurotrib_dot_com) on Sun Feb 17th, 2013 at 11:06:04 AM EST
[ Parent ]
De Gaulle's rationale was essentially that "zOMG!!11 US national debt! Twin Deficits! Gold!!!!!!1111^H^H^H^H"

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Feb 17th, 2013 at 11:09:39 AM EST
[ Parent ]
Also, it was Pompidou not de Gaulle.

I listed de Gaulle because of the Empty-Chair crisis (as evidence that France does call the shots - our own Jerome never tires to remind us that the day France threatens to pull out of the EU, Germany will fold again)

I listed Pompidou because of the end of Bretton Woods (with the gold repatriation)

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Migeru (migeru at eurotrib dot com) on Sun Feb 17th, 2013 at 11:13:55 AM EST
[ Parent ]
Migeru:
I listed de Gaulle because of the Empty-Chair crisis (as evidence that France does call the shots - our own Jerome never tires to remind us that the day France threatens to pull out of the EU, Germany will fold again)

That's my original point; if Hollande has the cajones to do so.

Hey, Grandma Moses started late!

by LEP on Sun Feb 17th, 2013 at 12:21:52 PM EST
[ Parent ]
It's not only a matter of cojones but of economic understanding, which is not in evidence in his cabinet.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Feb 17th, 2013 at 12:28:09 PM EST
[ Parent ]
Gah, that story seems to lend itself to confusion, partly because it doesn't seem to be well-documented anywhere. But Pompidou was following in De Gaulle's footsteps, and the gesture was just gesticulation. Bretton Woods was already dislocated.

As for France having been, especially in the years of the Six and then Ten, an obvious major power if not the major power in the "European project", I'm not attempting to deny it.

by afew (afew(a in a circle)eurotrib_dot_com) on Sun Feb 17th, 2013 at 12:46:36 PM EST
[ Parent ]
the dollar was supposed to be convertible.

Or at least to have a stable purchasing power, which is what the Gold Standard was presumed to insure. But we know, at least those who understand anything about Keynesian macro, that what is needed is a money supply that increases as total economic activity increases. That makes economic growth possible. Additionally, it should be possible to deliberately increase the money supply to counter private sector pull backs during times of uncertainty when all others are fearful and won't invest. Dollar inflation at least met the first requirement under the Breton Woods agreement.  

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Feb 17th, 2013 at 11:57:11 AM EST
[ Parent ]
It was literally to be convertible to a given weight of gold.
by afew (afew(a in a circle)eurotrib_dot_com) on Sun Feb 17th, 2013 at 12:17:13 PM EST
[ Parent ]
And that was threatened, in the mind of the sound money crowd, by the ballooning US government debt due to the Vietnam War buildup among other things, as well as by the US' trade balance reversing from net exporter to net importer (due in part to Germany and Japan taking over as exporters of last resort as a result of the success of post-war US global macro policy).

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Feb 17th, 2013 at 12:27:01 PM EST
[ Parent ]
Also by the increasing importance of dollars as a parallel currency in European banking (Eurodollars), called the "dollar glut". Raising fears of well-known monsters and unsound money. Who wasn't "sound money" back then?
by afew (afew(a in a circle)eurotrib_dot_com) on Sun Feb 17th, 2013 at 12:56:13 PM EST
[ Parent ]
Who wasn't "sound money" back then?

Well, if you have a Gold Standard, sound money is the lay of the land... as in the Eurozone today.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Migeru (migeru at eurotrib dot com) on Sun Feb 17th, 2013 at 12:58:48 PM EST
[ Parent ]
It was also the case that the prices were rising while the price of gold was being held down by central banks. So it was in part the purchasing power of gold that they saw as being threatened, as well as the gold standard.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Feb 17th, 2013 at 03:10:26 PM EST
[ Parent ]
The reason people thought the gold standard was a good thing is that it was thought to maintain stable purchasing power. This obviously failed during those financial crises when gold was hoarded and its purchasing power increased, but that was somehow OK. None-the-less that was how Morgan and other bankers obtained lots of southern real estate on the cheap after the Civil War - once they had successfully lobbied to get the country back on a gold standard. They had enough of the gold that, by withdrawing it from circulation, they could create a depression. Prices fell and they bought property on the cheap.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Feb 17th, 2013 at 03:05:53 PM EST
[ Parent ]
Krugman has listed a few:
under the gold standard America had no major financial panics other than in 1873, 1884, 1890, 1893, 1907, 1930, 1931, 1932, and 1933


-----
sapere aude
by Number 6 on Mon Feb 18th, 2013 at 07:18:31 AM EST
[ Parent ]
Also, with respect to the UK, it's now in its third recession since adopting austerity. Why is,it continuing these policies in spite of the fact that the seem not to be working? I assume there is no punnishment factor there.

Hey, Grandma Moses started late!
by LEP on Sun Feb 17th, 2013 at 08:12:18 AM EST
[ Parent ]
LEP:
Why is,it continuing these policies in spite of the fact that the seem not to be working?

  1. they're one-trick ponies

  2. dobbin is going to get run into the ground before they will admit defeat.

it's unthinkable that they act differently than they do, to change would make them look even more idiotic to themselves than they do already!
 

"We can all be prosperous but we can't all be rich." Ian Welsh
by melo (melometa4(at)gmail.com) on Sun Feb 17th, 2013 at 06:05:55 PM EST
[ Parent ]
Migeru:
The UK has gone the Austerity way because of common sense conservative economics.

The Euro crisis has nothing to do with common sense conservative economics? Practically all Europe is run by conservatives.

Migeru:

France is as committed to fixed exchange rates as Germany is.

France is, and has been for forty years, committed to a single currency. Germany is committed to fixed exchange rates. That may only be a nuance, but possibly a considerable one.

Migeru:

France was the last Western European country to abandon the gold standard. France precipitated the end of Bretton Woods by sending a warship to Fort Knox to repatriate their gold.

France was as gold-standard-convinced as many other countries and wasn't all that exceptional. De Gaulle in particular, as an old conservative, held unthinkingly to the standard conservative dogma on sound money and gold, and it was he who decided on the symbolic gesture of sending a naval vessel to New Jersey, because he loved nothing better than pissing off the US. All this doesn't amount to making France Austrian.

Migeru:

For 20 years after Bretton Woods, France

...adopted the single European currency as its policy and supported the different attempts at bringing currencies into line to create it.

Migeru:

Germany had to be dragged into it kicking and screaming

West Germany would rather have kept the Deutschemark. Again, a nuance that may be considerable.

Migeru:

France allegedly introduced the 3% deficit and 60% debt limits in the Maastricht Treaty

It appears French technocrats invented the actual numbers involved, but not that France spearheaded the principle itself. Indeed, it is reported the numbers were just pulled out of the air in a frivolous way, as if the French didn't expect them ever to be applied.

Migeru:

had no objection to introducing the German prohibition of monetary financing as a bargaining concession to the German sensitivities

It seems unlikely that any party would "have no objection" to what is seen as a "bargaining concession".

None of the above is meant as a defence of French policy re the single currency, which has mostly been a tale of foolishness and wishful thinking across the political spectrum. The single currency has been a will o' the wisp leading France into the morass.

by afew (afew(a in a circle)eurotrib_dot_com) on Sun Feb 17th, 2013 at 08:43:46 AM EST
[ Parent ]
Migeru:
The UK has gone the Austerity way because of common sense conservative economics.
The Euro crisis has nothing to do with common sense conservative economics? Practically all Europe is run by conservatives.
The Euro Crisis has to do with having encoded common sense conservative economics into the constitution. At key points, insane people have been able to shut down debate on sensible policies just by pointing to the treaties.

In the UK, you have an insane government, against which are arrayed the Bank of England's monetary policy, the FSA's Adair Turner, the Financial Times economic policy commentators from Martin Wolf all the way down... So the UK is doing much better than its government's stated policy allowed. Because it lacks the Eurozone's lemming-like unity of political purpose.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Migeru (migeru at eurotrib dot com) on Sun Feb 17th, 2013 at 10:41:01 AM EST
[ Parent ]
Agree.

But it's "common sense conservative economics" that's the bugbear.

by afew (afew(a in a circle)eurotrib_dot_com) on Sun Feb 17th, 2013 at 10:45:07 AM EST
[ Parent ]
It's been the lay of the land for 20 years, and we would not or could not listen to those who warned us against it:
Let me express a different view. I think that the central government of any sovereign state ought to be striving all the time to determine the optimum overall level of public provision, the correct overall burden of taxation, the correct allocation of total expenditures between competing requirements and the just distribution of the tax burden. It must also determine the extent to which any gap between expenditure and taxation is financed by making a draft on the central bank and how much it is financed by borrowing and on what terms. The way in which governments decide all these (and some other) issues, and the quality of leadership which they can deploy, will, in interaction with the decisions of individuals, corporations and foreigners, determine such things as interest rates, the exchange rate, the inflation rate, the growth rate and the unemployment rate. It will also profoundly influence the distribution of income and wealth not only between individuals but between whole regions, assisting, one hopes, those adversely affected by structural change.

...

I recite all this to suggest, not that sovereignty should not be given up in the noble cause of European integration, but that if all these functions are renounced by individual governments they simply have to be taken on by some other authority. The incredible lacuna in the Maastricht programme is that, while it contains a blueprint for the establishment and modus operandi of an independent central bank, there is no blueprint whatever of the analogue, in Community terms, of a central government. Yet there would simply have to be a system of institutions which fulfils all those functions at a Community level which are at present exercised by the central governments of individual member countries.

...

What happens if a whole country - a potential `region' in a fully integrated community - suffers a structural setback? So long as it is a sovereign state, it can devalue its currency. It can then trade successfully at full employment provided its people accept the necessary cut in their real incomes. With an economic and monetary union, this recourse is obviously barred, and its prospect is grave indeed unless federal budgeting arrangements are made which fulfil a redistributive role. As was clearly recognised in the MacDougall Report which was published in 1977, there has to be a quid pro quo for giving up the devaluation option in the form of fiscal redistribution. Some writers (such as Samuel Brittan and Sir Douglas Hague) have seriously suggested that EMU, by abolishing the balance of payments problem in its present form, would indeed abolish the problem, where it exists, of persistent failure to compete successfully in world markets. But as Professor Martin Feldstein pointed out in a major article in the Economist (13 June), this argument is very dangerously mistaken. If a country or region has no power to devalue, and if it is not the beneficiary of a system of fiscal equalisation, then there is nothing to stop it suffering a process of cumulative and terminal decline leading, in the end, to emigration as the only alternative to poverty or starvation. I sympathise with the position of those (like Margaret Thatcher) who, faced with the loss of sovereignty, wish to get off the EMU train altogether. I also sympathise with those who seek integration under the jurisdiction of some kind of federal constitution with a federal budget very much larger than that of the Community budget. What I find totally baffling is the position of those who are aiming for economic and monetary union without the creation of new political institutions (apart from a new central bank), and who raise their hands in horror at the words `federal' or `federalism'. This is the position currently adopted by the Government and by most of those who take part in the public discussion.



I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Feb 17th, 2013 at 10:56:42 AM EST
[ Parent ]
When you have yourself tied to the mask so as to hear the sirens sweetly singing you are pretty much doomed when they reach in via the aural orifice to pull out your brains.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Feb 17th, 2013 at 12:06:03 PM EST
[ Parent ]
Ouch! Keep taking your meds!
by afew (afew(a in a circle)eurotrib_dot_com) on Sun Feb 17th, 2013 at 12:58:03 PM EST
[ Parent ]
Red pill or blue pill?

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Feb 17th, 2013 at 12:59:55 PM EST
[ Parent ]
Amoxicillin.
by afew (afew(a in a circle)eurotrib_dot_com) on Sun Feb 17th, 2013 at 01:02:56 PM EST
[ Parent ]
Going to have to read that carefully.

Didn't Krugman say basically that "if you have a national currency you should also have a nation"?


-----
sapere aude

by Number 6 on Mon Feb 18th, 2013 at 07:40:56 AM EST
[ Parent ]


Austerity can only be implemented in the shadow of a concentration camp.
by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Feb 18th, 2013 at 05:36:30 PM EST
[ Parent ]
It is quite possible. Language greatly shapes the way we think -which should be a major reason why we should learn other languages even if we don't clearly need to (aka: if one is a native English speaker).

It is entirely possible that if, say, you and I had a discussion in French about the world situation, we would come up to different conclusions than if we had it in English. But of course the effect is markedly greater for the mother tongue. If a language makes a concept impossible to express, native speakers may believe that it is the concept that is impossible, not the expression of it.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Sun Feb 17th, 2013 at 07:18:56 AM EST
[ Parent ]
It also feels like these tax policies mean to shift as much as the Greek public debt as possible onto Greek citizens, and recapture some of it through confiscation of property (80% of Greeks live in their own homes, well theirs and some bankers for some of them) and draining of as much of that >100 billion euros of citizens' savings as possible, to pay up the "public debt". This of course excludes the local elites above a certain level of power who are already scrambling for a share of the loot


The road of excess leads to the palace of wisdom - William Blake
by talos (mihalis at gmail dot com) on Sat Feb 16th, 2013 at 07:02:55 PM EST
[ Parent ]
Is it time for a leader of one of the large countries to declare that the euro is a failed experiment and call for an orderly breakup.

The Euro is the culmination of many decades of European attempts to create a fixed exchange rate system. It has been a resounding success, just ask the European policy elite.

What is that welfare of the people that you speak of? Funny concept.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Migeru (migeru at eurotrib dot com) on Sat Feb 16th, 2013 at 05:00:03 PM EST
[ Parent ]
So the only solution is revolution unless the misery spreads to the wealthy countries  like a cancer. Then policies might be changed

Hey, Grandma Moses started late!
by LEP on Sat Feb 16th, 2013 at 05:17:01 PM EST
[ Parent ]
It is spreading to wealthy countries.  It's here in the US.  28% of working Americans have a gross income of $25,000 or less.  WalMart is freaking because their customer base isn't buying their cheap shoddy products anymore, they don't have the money.

Skepticism is the first step on the road to truth. -- Denis Diderot
by ATinNM on Sat Feb 16th, 2013 at 05:48:02 PM EST
[ Parent ]
I suppose I meant Germany instead of "wealthy countries. It's not a great idea to destroy your own markets.

Is it the same thing Walmart is doing by grossly underpaying its own workers? See Henry ford.

Hey, Grandma Moses started late!

by LEP on Sun Feb 17th, 2013 at 04:46:20 AM EST
[ Parent ]
The German chattering classes flatter themselves that they'll be able to export to China what the rest of the EU doesn't import.

Also, they tell Spain that it should export more to Latin America.

So, Germany wants the largest economy in the world to apply deflationary policies at home and export unemployment to the rest of the world. We could call this the 'small open economy syndrome', for Germany (let alone Europe) may be an open economy, but it surely isn't small.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Migeru (migeru at eurotrib dot com) on Sun Feb 17th, 2013 at 04:52:03 AM EST
[ Parent ]
italy is teetering on the edge...

people are struggling to keep up appearances of normality, while watching the waters recede before the economic tsunami to hit here like spain, greece and portugal.
 i have a hunch italy will be the straw that breaks the euro's back, or provokes a u-turn from the ECB.

probably a few months from now, once the election results have sunk in.


"We can all be prosperous but we can't all be rich." Ian Welsh

by melo (melometa4(at)gmail.com) on Sun Feb 17th, 2013 at 06:15:50 PM EST
[ Parent ]
[ET Moderation Technology™]

LEP's subthread should be made a diary, the successive replies are nesting too deep and being squeezed into the right margin of the page.

Any volunteers for refactoring this particular discussion?

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Migeru (migeru at eurotrib dot com) on Sun Feb 17th, 2013 at 12:33:09 PM EST
[ Parent ]
I volunteer afew when he has time.

Hey, Grandma Moses started late!
by LEP on Sun Feb 17th, 2013 at 12:49:59 PM EST
[ Parent ]
I would but the Newsroom calls.
by afew (afew(a in a circle)eurotrib_dot_com) on Sun Feb 17th, 2013 at 01:06:14 PM EST
[ Parent ]
Question: How far can you push an entire society until they break out the guns and kill off the politicians/bankers/wealthy? What are the warning signs that this is about to happen?

Useful information for the wealthy when this crap finally arrives at our doorstep. What's that again? In the end we're all Palestinians.

The good news ... it's only a life sentence. You eventually leave this planet of idiots.

by THE Twank (yatta blah blah @ blah.com) on Sat Feb 16th, 2013 at 06:26:43 PM EST

The next step for Greece.

The good news ... it's only a life sentence. You eventually leave this planet of idiots.

by THE Twank (yatta blah blah @ blah.com) on Sun Feb 17th, 2013 at 10:37:30 AM EST
I still can't get it out of my head. Greece's predicament would seem to give incentive for any other euro country to immediately default on all its loans (written under that country's laws) rather than go through this. Granted, the chances of falling to 110% debt to GDP as Greece did prior to the meltdown are likely minimal for smaller countries. Italy obviously would take the whole edifice down with it so it can't be threatened.

Many Greek journalists and analysts even on the left still don't get it. The immediate prescription now seems like the best one, as others predicted. Default.

by Upstate NY on Sun Feb 17th, 2013 at 11:57:07 AM EST
If nothing else, default to save your homes. Most are not going to have any of the imported things at any affordable price anyway.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Feb 17th, 2013 at 12:31:39 PM EST
[ Parent ]
Assuming the loans you default on are non-recourse loans.

In Spain, full-recourse home mortgages are leaving people homeless, destitute, and indebted.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Migeru (migeru at eurotrib dot com) on Sun Feb 17th, 2013 at 12:34:31 PM EST
[ Parent ]
There was a diary today on Daily Kos on this subject.

http://www.dailykos.com/story/2013/02/16/1187676/-It-s-Not-Eviction-It-s-Murder

Hey, Grandma Moses started late!

by LEP on Sun Feb 17th, 2013 at 12:47:48 PM EST
[ Parent ]
Yeah, but the Troika is using the Greek Government to make things worse by creating additional burdens from unpayable taxation that might be used for tax liens on homes that have no mortgage. The government should be protecting its citizens from foreign predictors, not vise versa.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Feb 17th, 2013 at 02:45:06 PM EST
[ Parent ]
Actually one of the few sane things that the past governments have done is pass a law protecting "primary abode", meaning that the banks could not take away peoples' homes. This has been renewed and currently will hold until December 2013. However, statements from some high-ranking conservative MPs and others attributed to the troika, suggest that this will be the final deadline and that afterwards, all hell might break loose...

The road of excess leads to the palace of wisdom - William Blake
by talos (mihalis at gmail dot com) on Sun Feb 17th, 2013 at 03:15:25 PM EST
[ Parent ]
Even in the USA, your home (if owned) cannot be taken if you owe debts. Bankruptcy allows you took your home, car and a little money.
by Upstate NY on Sun Feb 17th, 2013 at 04:02:50 PM EST
[ Parent ]
Not in all states.

Hey, Grandma Moses started late!
by LEP on Sun Feb 17th, 2013 at 04:19:47 PM EST
[ Parent ]
Really? I'm surprised, I thought bankruptcy was federal law. The Chapters are all federal and all bankruptcies are adjudicated in federal court since creditors are from far flung states.
by Upstate NY on Sun Feb 17th, 2013 at 05:50:28 PM EST
[ Parent ]
Property and forclosure law are state law.

Hey, Grandma Moses started late!
by LEP on Sun Feb 17th, 2013 at 05:54:55 PM EST
[ Parent ]
Right, but when it comes to bankruptcy, federal laws prevent seizure of home by creditors (if you own it, that is).
by Upstate NY on Mon Feb 18th, 2013 at 08:51:55 AM EST
[ Parent ]
Bankruptcy won't prevent seizure of a property if tne creditor has a valid lien. If it were otherwise, who would make a mortgage loan.

Hey, Grandma Moses started late!
by LEP on Mon Feb 18th, 2013 at 10:13:04 AM EST
[ Parent ]
It depends on the lien.

If it's a creditor and not the mortgage holder, the creditor's lien is wiped out. The asset won't be seized. It's protected. The holder of the title deed however is the true owner of the home, so a foreclosure would be in the works if the mortgage isn't being paid.

by Upstate NY on Mon Feb 18th, 2013 at 11:23:47 AM EST
[ Parent ]
No, I mean defaulting on mortgage payments on that home. No foreclosures on first homes

The road of excess leads to the palace of wisdom - William Blake
by talos (mihalis at gmail dot com) on Sun Feb 17th, 2013 at 05:07:12 PM EST
[ Parent ]
I see. So what if you can't pay?
by Upstate NY on Sun Feb 17th, 2013 at 05:49:40 PM EST
[ Parent ]
I think they might be able to seize a borrower's other property if it's worth it to go through a lengthy trial. If the borrower has no other property, they can't really do much but wait...

The road of excess leads to the palace of wisdom - William Blake
by talos (mihalis at gmail dot com) on Sun Feb 17th, 2013 at 06:16:22 PM EST
[ Parent ]
What is the earliest conceivable date for another election?

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Feb 18th, 2013 at 02:01:28 AM EST
[ Parent ]
Another interesting aspect of this is that austerity is not only reinforcing the worst behaviors that harm the country (such as tax evasion, destruction of community and commonality) but it is seen as simply yet another event that prevents Greece from ever escaping the trap of history.

We're 5 or 6 years into this debacle, and the signs point downward still. When you realize that Greece has these crises every 20 years, you then can't ever hope to build a functioning system that lasts. Balkan Wars, Asia Minor catastrophe, huge influx of refugees, Smyrna, the National Schism, Dictatorship in the 30s, Italian invasion and German occupation, Civil War, proxy gov't by CIA, the junta and the Colonels, now this, an economic meltdown that will take another 20 years to recover from IF they are lucky, but by then, concepts of government for the people will be so run down and tattered that they will simply anticipate the next historical crisis.

by Upstate NY on Sun Feb 17th, 2013 at 12:08:31 PM EST
Unless of course the phoenix rises from the ashes, and Greeks are quite taken by their newfound sustainable economy. while the chances for such a restructuring may be small, no one an predict what comes from the current horror.

Solar/wind marshall plan, for starters. (i know that's a stretch, but...)

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Sun Feb 17th, 2013 at 03:28:16 PM EST
[ Parent ]
We need dreams to stay sane, and some might even come true.
by Katrin on Sun Feb 17th, 2013 at 03:36:02 PM EST
[ Parent ]
It's a fantasy. People in Germany seem to ascribe cultural or moral attributes to the people that cause this problem without once understanding the circumstances. Crises reinforce bad behaviors. The answer to the national schism was repression. The answer to German occupation was a political war. The answer to starvation was food imports in exchange for a military build-up and vassal-dom which evolved into the curtailment of civil rights and totalitarianism. The answer to fascism was then a ban on political prisoners which fostered corruption. Round and round it goes, where it stops, nobody knows.

In the interwar period, Germans behaved much the same as Greeks, proving once again that circumstances drive behavior.

Despite what people think, the current crisis makes Greek tax-dodging not only logical, but an absolute requirement.

by Upstate NY on Sun Feb 17th, 2013 at 04:07:58 PM EST
[ Parent ]
You're supposed to label snark

Hey, Grandma Moses started late!
by LEP on Sun Feb 17th, 2013 at 04:22:00 PM EST
[ Parent ]
I don't underestimate the power of modern people uprising, especially where least expected. The desire for a sustainable world is strong in many.

Just because the surface is clouded with Schock Doctrine and renewed fascism, doesn't mean there isn't a strong minority of those with vision.

I didn't write that as snark. In fact, i began the post because I wondered  how many starved or went bankrupt or homeless in the hours we got sidetracked on Gold Bugs and Bretton Woods, and I wanted to recall that this is truly an uncivilized horror.

Then it occurred to me that the game isn't over, we haven't lost yet.

who knows what those billion women who danced against rape and gender violence three days ago might attempt next time?

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Sun Feb 17th, 2013 at 04:34:43 PM EST
[ Parent ]
And in Greece, circumstances might just force a return the resources already present there.

Young people aren't going to stand this shit much longer. Sure, some will be seduced by Golden Dawn, but more have already tasted a more satisfying siren call.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Sun Feb 17th, 2013 at 04:37:34 PM EST
[ Parent ]
The misery and death that has already occurred can never be balanced out, especially when we ask "why" and there is no rational answer to be had.

Hey, Grandma Moses started late!
by LEP on Sun Feb 17th, 2013 at 05:18:54 PM EST
[ Parent ]
very true, though i think there is a rational answer:  Shock Doctrine.

But that doesn't mean we should stop trying to ground vision into reality.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Sun Feb 17th, 2013 at 05:29:51 PM EST
[ Parent ]
"Shock doctrine" doesn't do it for me. Germany and Greece are supposed to be on the same team. And Greece is a tiny little country; too small to be raided.

Hey, Grandma Moses started late!
by LEP on Sun Feb 17th, 2013 at 05:38:41 PM EST
[ Parent ]
supposed to being the operative word.

The European Dream was fine while it lasted.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Migeru (migeru at eurotrib dot com) on Sun Feb 17th, 2013 at 05:44:30 PM EST
[ Parent ]
But it is part of a larger process.

Profits were increased in Germany durng the 90ies and 00ies by decreasing relative salaries through worse conditions for unemployed, this set both the stage for the persistent current account surplus and the moral play where the Germans (but not the owners) has already tightened their belts and it is time for the Greeks to do the same.

Pillaging Greece and crushing their wages will then create a pool of really cheap workers for the core (see the Amazon stories), which in turn will drive down wages there. Though not having passed yet, it is also obvious that conservative forces wants the EU to allow companies to set contracts according to the law of the land of their HQ, rather then the law of the land where the work is done. So once Greece is sufficiently crushed, companies can place a HQ there and employ cleaners in the core for Greek wages and with Greek laws (dictated by Troika). Then comes another round of cuts in the core to increase competetivness. And anger is diverted at the feckless southerners that are taking the jobs.

Run and run it goes, when it ends nobody knows.

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!

by A swedish kind of death on Mon Feb 18th, 2013 at 03:45:27 AM EST
[ Parent ]
Your take on this is frightening.

Hey, Grandma Moses started late!
by LEP on Mon Feb 18th, 2013 at 03:58:47 AM EST
[ Parent ]
And if the euro soon breaks up, what's the good to Germany?

Hey, Grandma Moses started late!
by LEP on Mon Feb 18th, 2013 at 04:00:12 AM EST
[ Parent ]
If the euro breaks up, the efforts to keep wages down would need to return to Germany. To Germany at large it might be good as the chance for political resistance increases with visible costs, but to the political and economical elite it would be bad in particular as they loose the newly acquired powers of the ECB. So the rational thing for said elite would be to try to avoid a break-up while promoting their policies. Practically this would consist of carrots and sticks being applied in relation to election that could end with a state breaking away. Threathen a world of hurt if the wrong party wins and give support to the right parties in the form of promises, bit of better terms before the elections and if necessary direct funds to the party coffers of the right parties.

There is of course the hope that they are sufficiently blinded by their ideology to act irrational. But when your best hope is that the powers that be are nuts, it is not good.

The world is a frightening place, I just try to make sense of it. Though it grants no control, the effort gives a sense of comfort.

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!

by A swedish kind of death on Mon Feb 18th, 2013 at 04:46:33 AM EST
[ Parent ]
seems naive at this point to believe elite german banksters-behaving-badly care a fig for a. the euro (offshore stashes)
b. the people of europe
c. the people of germany

any evidence to support an antithesis?


"We can all be prosperous but we can't all be rich." Ian Welsh

by melo (melometa4(at)gmail.com) on Mon Feb 18th, 2013 at 05:19:42 AM EST
[ Parent ]
A breakup of the euro has to hurt Germany since the currencies of the countries in its major market will be devalued against the Deutschmark hurting Germany's exports and increasing its imports; something that Germany has been avoiding.

Hey, Grandma Moses started late!
by LEP on Mon Feb 18th, 2013 at 05:44:20 AM EST
[ Parent ]
yes it will hurt germany's people, but by then their work will be done, and she will be the most pwerful pauper.

see why they aren't allowed nukes?

/snark

"We can all be prosperous but we can't all be rich." Ian Welsh

by melo (melometa4(at)gmail.com) on Mon Feb 18th, 2013 at 01:52:48 PM EST
[ Parent ]
After two days of having discussed the "why" of what's happening I can't find any answer that satisfies me. My mind is boggling.
Frankly it sounds as if we're in an insane assylum.

Hey, Grandma Moses started late!
by LEP on Mon Feb 18th, 2013 at 02:18:35 PM EST
[ Parent ]
Maybe this will help:

Psychosis:

Psychosis is a loss of contact with reality that usually includes:

    *  False beliefs about what is taking place or who one is (delusions)

    *  Seeing or hearing things that aren't there (hallucinations)

For me a whole bunch of stuff became clear when I stopped assuming rationality and demanded proof.

Skepticism is the first step on the road to truth. -- Denis Diderot

by ATinNM on Mon Feb 18th, 2013 at 03:06:33 PM EST
[ Parent ]
There is no such thing as a country too small to be raided.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Feb 18th, 2013 at 05:36:57 PM EST
[ Parent ]
Solar/wind marshall plan, for starters. (i know that's a stretch, but...)

I've argued before that that will likely just mean rent extraction by Siemens, which will install the solar and wind, use Greek sun and wind for free, and charge the Greeks for the use of the resulting electricity. Or, even better, just export the power and send the profit back home.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Migeru (migeru at eurotrib dot com) on Sun Feb 17th, 2013 at 05:46:52 PM EST
[ Parent ]
Migeru:
I've argued before that that will likely just mean rent extraction by Siemens

heh, you really are on to them...

probably already working out the spin to sell it as logical.

syriza must just be waiting for the votes to roll in next election...


"We can all be prosperous but we can't all be rich." Ian Welsh

by melo (melometa4(at)gmail.com) on Sun Feb 17th, 2013 at 06:31:27 PM EST
[ Parent ]
syriza must just be waiting for the votes to roll in next election...
That's assuming there is a next election.
The dislike of government spending policy as such is overcome under fascism by the fact that the state machinery is under the direct control of a partnership of big business with fascism.  The necessity for the myth of 'sound finance', which served to prevent the government from offsetting a confidence crisis by spending, is removed.  In a democracy, one does not know what the next government will be like.  Under fascism there is no next government.
(Political Aspects of Full Employment by Michal Kalecki)

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Feb 17th, 2013 at 09:09:07 PM EST
[ Parent ]
Right now they're using the Media and TV against SYRIZA accusing it of caving in and becoming more systemic, less radical and of flirting with terrorists, being irresponsible, violent and for lawlessness at the same time. It works, sort of, SYRIZA is stuck around its last electoral result and ND has fallen by "only" ~3-4% while the socialists are at around half of what they had last June and DIMAR a bit down. The nazis are at >10%, it seems that they have a hard percentage roof of at most 15%, but for the time being SYRIZA seems to have a similar roof at 30-32%. Making sure that popular dissatisfaction leads people to vote Nazi rather than turn left is a major subtheme of media manipulation - thus the toleration of Nazis and lack of horror stories about them despite the daily incidents that they're involved in...

Mind you things are going to hell really fast as social tensions are mounting again - SYRIZA is trying to make inroads where it has been weakest: rural populations and senior citizens. But these guys are perfectly capable of starting a civil war rather than allow outsiders to gain power: its not only their increasingly quasi-criminal ship-owning backers and bankers... there are skeletons in the former two-party closet enough to keep courts busy for a decade...

The road of excess leads to the palace of wisdom - William Blake

by talos (mihalis at gmail dot com) on Sun Feb 17th, 2013 at 09:36:00 PM EST
[ Parent ]
Siemens, bankers and shipowners paying some euros a day on the top of unemployment benefit paid by Greece to the people who build the plants. EU seems to be very good at solving the most pressing problem at the time but much worse at doing it in a fair way. Because unemployment is replacing bank and sovereing solvency as the main problem I would bet that something will done to "solve" it as previous problems have been "solved".
by Jute on Tue Feb 19th, 2013 at 08:21:10 AM EST
[ Parent ]
Crazy Horse:
Solar/wind marshall plan, for starters. (i know that's a stretch, but...)

ding fucking ding!!! hello?

it's not a stretch physically, it's the vested interests against it that are holding it back.... and the fact the greeks aren't articulate enough to demand it.

that it's a stretch is entirely their frame, i totally reject it as the BS it is
.

"We can all be prosperous but we can't all be rich." Ian Welsh

by melo (melometa4(at)gmail.com) on Sun Feb 17th, 2013 at 06:21:26 PM EST
[ Parent ]
This has to be read in its entirety to be believed, but here is a quote

Greek adjustment program is working, insists ESM's Regling:

Leaving aside the academic debate of multipliers, there has been much criticism regarding the general direction of the fiscal policy in the eurozone. Some are saying that the continuation of deflationary and contractionary policies in the eurozone is self-defeating. I mean that the eurozone cannot really achieve its fiscal targets because of the recession and that the mixture of measures adopted throughout the crisis, and especially in the South, is wrong. I was wondering what your reaction is to this criticism

You are right, there is a debate on that. It is partly coming from the academic world. The Eurogroup has a very clear view on that. The strategy is the right one, and the strategy is working, because there is progress. The population doesn't see that, because they look at their income, they look at the employment situation, and it's very difficult, and we know that, it is painful. But when we, as economists, look at the overall developments, one can see real progress, in Greece, but also in the other Southern European countries, in Portugal and Spain, and of course in Ireland. Competitiveness is improving, also in Greece, because of the drop in income and cuts in nominal wages and salaries. As competitiveness is improving, exports are growing again, despite the fact that the overall economy is shrinking, and the trade deficit is falling. The fiscal deficits are coming down too.

He says more, this is someone who either has absolutely no clue as to the record of real world implications of the policy he supports (and he's the managing director of the European Stability Mechanism) - thus falling victim to his own propaganda; or is cynically propagating this argument to help extend plunder and disaster as much as possible, with no regard to the economic desert he is helping create...
In an ideal world he's be sitting in the docks at a new fiscal Nuremberg along with his superiors and buddies from the policy and banking elites...

[BTW competitiveness (what ever it means) is actually falling ever since the ordeal started]

The road of excess leads to the palace of wisdom - William Blake

by talos (mihalis at gmail dot com) on Sun Feb 17th, 2013 at 04:48:06 PM EST
Regling is such a moron.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Feb 17th, 2013 at 05:50:01 PM EST
[ Parent ]
Oh my

You can find the same when you look at the Latin American debt crisis in the 80s and early 90s. Brazil looked hopeless at that time. But for the last 10 years, it has been another star performer in the world economy.

Wow -and no mention of the fact that Latin America recovered by throwing to the dustbin the very policies that this guy is telling us must be applied come what may ("we did not agree with IMF and anyway what difference would it make?").
Well, there might be some logic to it: if you do it long enough, the population will be so fed up that it will go full Venezuelan, with added beheading of the banksters. Therefore bringing a nice period of growth. QED.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Mon Feb 18th, 2013 at 02:39:08 AM EST
[ Parent ]
Brazil actually did pay enough debt (to the tone of federal superavits of 4.5%/year) to get rid of IMF. The part of the federal budget dedicated to pay debt is still monstrous.

Indeed, they might be following different policies, but first they had to get the creditors boot out of their neck. And they decided to do it the "creditor-friendly" way.

In any case, in Southern Europe, I think both avenues are closed: "creditor-friendly" = mathematically impossible. "creditor-unfriendly" = disaster consequences (as I bet there will be political will to make any country that follows that path an "example").

by cagatacos on Mon Feb 18th, 2013 at 05:44:21 AM EST
[ Parent ]
OK -but that's why I said "Latin America". The continent as a whole has been showing progress, and of course it's an economic zone.
I must admit that I have not run through the data to make a completely qualified statement, but I would guess that good performances between Latin America countries are somewhat correlated. So the general good performance of the continent explained some of the good performances of individual countries.

Also, while they did have to get the creditors off their necks, the whole of the last 10 years (and a bit) have been spent under a Lula presidency or that of her formet chief of cabinet. Whose inclinations are totally at odds with the EU elites.

So, it feels a bit rich to give the fiscal consolidation in the first year of his presidency credit for the entirety of the performance, and none to a move towards more left-wing policies and lower inequalities (not saying that there are no other factors). Especially since Argentina and Venezuela did quite decently over the period as well.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Mon Feb 18th, 2013 at 08:59:09 AM EST
[ Parent ]
Actually it is worth mentioning that Lula himself has never missed an opportunity to slam the IMF and IMF type policies whenever he has had the chance. I.e.:
Lula... urged Portuguese policymakers to reject any austerity measures.  "The IMF won't resolve Portugal's problems, like it didn't solve Brazil's" he told Portuguese reporters on Monday, making the point that accepting an EU-IMF bailout would results in stricter austerity measures which would hamper growth, according to The Washington Post.


The road of excess leads to the palace of wisdom - William Blake
by talos (mihalis at gmail dot com) on Mon Feb 18th, 2013 at 10:52:45 AM EST
[ Parent ]
They were anti-IMF that is for sure.

But that is not the issue. The issue is how did they get rid of it? They opted for paying. Super-avits of 4.5% year over year.

Brazil's model is not one of "sticking the finger to creditors", au contraire.

I am not saying that it is a good model to follow (I actually think it is an IMPOSSIBLE model to follow).

But in name of getting the history correct (my only point here, nothing more), the Brazilian case is not one of defaulting or anything like that.

by cagatacos on Mon Feb 18th, 2013 at 11:31:01 AM EST
[ Parent ]
Yes, but my point is that the claim that "the foundation was laid for very good economic developments in subsequent years" through the IMF programmes is denied by Lula himself. Brazil pushed through despite the IMF programme, not because of it, according to those in charge at the time. Plus of course, as you say, the numbers are very different...

The road of excess leads to the palace of wisdom - William Blake
by talos (mihalis at gmail dot com) on Mon Feb 18th, 2013 at 12:58:02 PM EST
[ Parent ]
children fainting at school due to low calorie intake.

... no, I have no words.

While 2.3 million tax-payers owing each under 3000 Euros have a total debt that adds up to 1.1 billion Euros, the top 6.270 debtors owe the Greek tax office over 35 billion Euros!

Simple math it would seem.

-----
sapere aude

by Number 6 on Mon Feb 18th, 2013 at 09:11:14 AM EST
And Greece is just the guinea-pig for the rest of the EU South and beyond...
-------------
The rest of the Europe , just wait...it will all come to you too.Learn and get prepared...And not just Europe...
But the market is picking up, all is good...why should we worry ?

Science without religion is lame, religion without science is blind...Albert Einstein
by vbo on Wed Feb 20th, 2013 at 05:11:57 AM EST


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