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Have you read what's happening now, up there in the diary? Do you really think that is just? Are the people who are being forced to take a huge drop in living standards to blame for corruption or unpaid taxes by the more wealthy?

I'll give you one alternative, it is that those people rise up and cut the more wealthy into bite-sized chunks.

Another would be a form of default that does not involve hardship for the same ordinary people through inflation on imported necessary commodities. Perhaps not easy to bring about, but given the alternative to which you say there is no alternative...

Oh, but that would involve our magicians of the financial world taking a hit that would make them look like the sorry assholes they really are. Can't have that kind of alternative, can we?

by afew (afew(a in a circle)eurotrib_dot_com) on Sun Feb 12th, 2012 at 03:02:22 PM EST
[ Parent ]
In Greece it is not only the wealthy who cheat, it s everyone.

They robbed their kids.

by fredouil (fredouil@gmailgmailgmail.com) on Sun Feb 12th, 2012 at 03:07:56 PM EST
[ Parent ]
You're another of these "I was there so I know" people. So you know that ordinary Greeks of the kind who will take a hit on minimum wages or pensions were all taking on debt and "robbing their kids"?
by afew (afew(a in a circle)eurotrib_dot_com) on Sun Feb 12th, 2012 at 03:11:31 PM EST
[ Parent ]
Is this a concerted attempt at hijacking this diary, about where real action is taking place to try and end a horror show?

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin
by Crazy Horse on Sun Feb 12th, 2012 at 03:13:30 PM EST
[ Parent ]
not really, but do you really thing this "action" matter one bit ? LOL
by fredouil (fredouil@gmailgmailgmail.com) on Sun Feb 12th, 2012 at 03:16:40 PM EST
[ Parent ]
and your recommended action is?

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin
by Crazy Horse on Sun Feb 12th, 2012 at 04:29:14 PM EST
[ Parent ]
Yep, it sure will. This sort of colonialism isn't going to work without tanks.

you are the media you consume.

by MillMan (millguy at gmail) on Mon Feb 13th, 2012 at 11:32:35 PM EST
[ Parent ]
The question is, at which point does the public in Core Europe wake up to what's being done in their name and in the name of European unity and solidarity?

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Tue Feb 14th, 2012 at 06:06:40 AM EST
[ Parent ]
Alas, I'm not sanguine about that. Selfishness runs deep, and moral posturing can feel so comfortable.

Plus, the worsening situation is often presented as Greece not upholding its promises -fuelling more anger at those lazy southerners.

So I would say that the public is unlikely to wake up this decade.

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

by Cyrille (cyrillev domain yahoo.fr) on Tue Feb 14th, 2012 at 08:12:00 AM EST
[ Parent ]
The public will wake up when they stand in the breadlines.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 08:26:24 AM EST
[ Parent ]


Friends come and go. Enemies accumulate.
by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 08:39:58 AM EST
[ Parent ]
Breadlines in Greece:



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

by talos (mihalis at gmail dot com) on Tue Feb 14th, 2012 at 09:07:31 AM EST
[ Parent ]


tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Tue Feb 14th, 2012 at 10:40:29 AM EST
[ Parent ]
And other famous last words.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Feb 14th, 2012 at 03:26:05 PM EST
[ Parent ]
Stats show that 86% are full up with taxes. 14% are responsible for 30% tax evasion. If your paycheck is docked art the source, how can you cheat? There are also 23% VAT taxes.

Now, since the argument is that Greece's bureaucracy is bloated, how are you to argue that everyone cheats? A bloated bureaucracy of half of all workers means half of all workers at least are taxed at the source. There's a contradiction there.

by Upstate NY on Sun Feb 12th, 2012 at 03:31:38 PM EST
[ Parent ]
there's got to be an infographic that shows that somewhere

Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Sun Feb 12th, 2012 at 03:58:22 PM EST
[ Parent ]
No. (I'm on the run, back and forth from the flaming and teargas drenched streets - more soon)

The road of excess leads to the palace of wisdom - William Blake
by talos (mihalis at gmail dot com) on Sun Feb 12th, 2012 at 04:07:42 PM EST
[ Parent ]
http://twitpic.com/8j2csm

Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Sun Feb 12th, 2012 at 05:14:47 PM EST
[ Parent ]
Pretty much this: Those that tax evaded are rewarded. Those that didn't are punished now. Luxury taxes are abolished, VAT on food is increased... And this isn't about Greece - it's bankster capitalism starting to swallow the welfare state. You are next.

The road of excess leads to the palace of wisdom - William Blake
by talos (mihalis at gmail dot com) on Sun Feb 12th, 2012 at 04:10:50 PM EST
[ Parent ]
Indeed.

My concern isn't that the economics of the bailout make no sense - obviously, they don't - but that Greece is being used as a testbed for a return to 19th century capitalist values across Europe.

Not so popularly known as 'reform.'

So yes - I think it's likely we'll see similar measures in other countries, using whatever melodramatic excuses can be waved in front of the financial press.

This is basically a class-led land-grab similar to the Enclosures in the UK and the Clearances in Scotland, but making a claim on the productive economy instead of physical territory.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon Feb 13th, 2012 at 05:55:33 AM EST
[ Parent ]
ThatBritGuy:
This is basically a class-led land-grab similar to the Enclosures in the UK and the Clearances in Scotland, but making a claim on the productive economy instead of physical territory.

bingo. the consumer economy is tapped out, and there's nothing to take its place.

planet couldn't take it this way for long anyway.

i heard an italian economist say today that all greece's profitable industries are registered and pay taxes in the netherlands, wtf?

nothing else but yoghurt and tourism, according to him...

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Mon Feb 13th, 2012 at 09:29:42 AM EST
[ Parent ]
This is also very similar to the situation in the US in the 1890s with the Robber Barons, the labour conflicts of 1893 (Eugene Debs) etc.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Mon Feb 13th, 2012 at 07:02:17 PM EST
[ Parent ]
Luckily, there is a strong intellectual argument, supported by solid technical analysis and factual understanding, that is being used to drive a popular social movement to reverse the trend, which will lead to a changed political environment and suitable adjustments to the overall system.

Not.

by asdf on Wed Feb 15th, 2012 at 12:38:30 PM EST
[ Parent ]
The Occupy movement?

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Wed Feb 15th, 2012 at 03:56:27 PM EST
[ Parent ]
Well, they have a good organizational name. Now all they need is...all the other stuff.
by asdf on Wed Feb 15th, 2012 at 10:29:24 PM EST
[ Parent ]
See this Reuters blog: Occupy's amazing Volcker Rule letter by Felix Salmon (FEBRUARY 14, 2012)

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Thu Feb 16th, 2012 at 09:05:56 AM EST
[ Parent ]
That's great wonkery. But you don't accomplish social change by wonkery, you do it by having a populist story and a lot of political power.
by asdf on Thu Feb 16th, 2012 at 10:00:10 AM EST
[ Parent ]
asdf:
you do it by having a populist story

The 1% stole everything. We are the 99%.

asdf:

and a lot of political power

Yes, it is unclear how the Occupy movement can translate their street presence into political change, without loosing their strengths. But the meetings are a start.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Thu Feb 16th, 2012 at 11:14:26 AM EST
[ Parent ]
Do you really think that is just? Are the people who are being forced to take a huge drop in living standards to blame for corruption or unpaid taxes by the more wealthy?

Yes.

Elections have consequences. The greek mess is collectively and very firmly the product of the Greek citizens.

by cris0 on Tue Feb 14th, 2012 at 04:15:26 PM EST
[ Parent ]
Lenders have a duty to due diligence.

Sovereign states have no duty to repay their creditors.

Don't like that? Don't lend money to sovereign states.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 04:19:53 PM EST
[ Parent ]
well.

Nobody will lend you money if you stop paying it back.

Don't like that? Pay your debts...

It goes both ways.

by cris0 on Tue Feb 14th, 2012 at 04:30:06 PM EST
[ Parent ]
Sovereign states have no need to borrow money. They have a perfectly good printing press.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 04:33:09 PM EST
[ Parent ]
That basically characterizes your whole argument.

Only in wishful thinking land money printing produces actual value.

But if you don't accept this reality, you can not be helped.

by cris0 on Tue Feb 14th, 2012 at 07:05:04 PM EST
[ Parent ]
Printing money does not produce real value.

Refusing to print money can destroy real value.

So when in doubt, print more money. If that doesn't solve the problem, print even more money while looking for other ways to solve the problem. The only harm that can do is inflation, which isn't actually harmful at all.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 07:24:53 PM EST
[ Parent ]
Historically that isn't true,

States have always been able to default on their debts, and other states have always been willing to lend to them again afterwards, as other states are the only game in town.

Any idiot can face a crisis - it's day to day living that wears you out.

by ceebs (ceebs (at) eurotrib (dot) com) on Tue Feb 14th, 2012 at 07:09:03 PM EST
[ Parent ]
Historically, states who default on their debts have faced the Gunboat Collection Agency.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Feb 16th, 2012 at 08:29:38 PM EST
[ Parent ]
Historically, the Gunboat Collection Agency has considered it unsporting for its victims to field NATO weapons.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Feb 17th, 2012 at 03:02:38 AM EST
[ Parent ]
Which is why I don't really mind the Greek overspending on defence...

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Feb 17th, 2012 at 03:46:23 AM EST
[ Parent ]
An astounding version of democratic responsibility. The ordinary, lower-income, least powerful citizens are entirely to blame for the corrupt wealthier classes and for the successive governments of different parties - and their guilt is such that they should be punished.

But if it makes it easier for you to feel self-righteous, I guess it must be worth it.

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Feb 14th, 2012 at 04:27:21 PM EST
[ Parent ]
this isn't about punishment.

Nobody is 'punished' here, any more than you are 'punished' when you get wet after walking in the rain.
Dont want to gert wet? Don't walk in the rain...

Actions have consequences.

by cris0 on Tue Feb 14th, 2012 at 04:32:33 PM EST
[ Parent ]
cris0:
Actions have consequences.

This, Germany will certainly learn in the next few years.

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Feb 14th, 2012 at 04:36:05 PM EST
[ Parent ]
Yes, lending to an insolvent means you lose your money.

Except apparently not in this case.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 04:36:19 PM EST
[ Parent ]
Weather is not politics.

Politics is a human construction. The rules can be changed at any moment. (And often are, to suit someone or other.)

by ThatBritGuy (thatbritguy (at) googlemail.com) on Tue Feb 14th, 2012 at 05:01:39 PM EST
[ Parent ]
afew:
The ordinary, lower-income, least powerful citizens are entirely to blame for the corrupt wealthier classes and for the successive governments of different parties - and their guilt is such that they should be punished.

It is at least close to half the case that they so easily bought into the lies that brought them to their present condition, though credit must be given to the sociopathic 'social scientists' who helped them figure out how to appropriately frame these issues.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Feb 15th, 2012 at 12:57:15 PM EST
[ Parent ]
An astounding version of democratic responsibility. The ordinary, lower-income, least powerful citizens are entirely to blame for the corrupt wealthier classes and for the successive governments of different parties - and their guilt is such that they should be punished.

Nonsense, of course, but so's the opposite position: that voters who vote for those who court their dark sides have no responsibility for what they do.
by Colman (colman at eurotrib.com) on Wed Feb 15th, 2012 at 01:04:16 PM EST
[ Parent ]
This would be true if there wasn't an astounding unanimity of fuckwittery among pols, and if they didn't lie like pigs just to get into power - before conveniently throwing all their very important publicly-held principles into the bottom of the nearest cess pit.

If you can think of anyone in mainstream politics in the UK who actually represents the interests of the voting majority, instead of pretending to in a rather half-hearted way but very serious way, let me know who they are.

I promise to vote them for them next time around, if you can convince me it will make a useful difference.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Feb 15th, 2012 at 01:11:13 PM EST
[ Parent ]
But that's largely a closed loop: politicians run on the basis of what people will fall for and act on the basis of what they'll get away with.

Satisfy enough of enough people's dark side and you'll get away with a lot.

Run on the basis of people's good side and you tend to not get elected - so even originally well-meaning politicians don't and that's an awful slippery slope. Once you're inside the machine you end up being swallowed by it.

Labour tacked to the right partly because they decided it was the only way to get elected.

by Colman (colman at eurotrib.com) on Wed Feb 15th, 2012 at 01:15:39 PM EST
[ Parent ]
You're not getting away from the fact that the politicians who fucked Greece up before the crisis were elected by the Greek people.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Feb 16th, 2012 at 08:31:55 PM EST
[ Parent ]
Yes, but this is systemic and it cuts both ways, not only Greek politicians fucked up public finances, but politicians in the rest of the EU accepted Greece in the EZ knowing full well it didn't meet the standards, and the German and French governments had no problem exacerbating the situation via arms sales. And more importantly lenders lent at rates they shouldn't have lent at...

But this is neither here nor there: this type of democracy we supposedly have is in fact a mediated system in which the "viable" choices are selected for the people by a series of checks and mechanisms, in which cultural hegemony plays a big role. Not only Greece though. What you say is the same type of fallacy that Al Qaida has employed in the not so distant past: Americans elected Bush, Bush kills Arabs, Arabs have a right to kill all Americans as complicit in Bush's election in a free and fair (well...) way. It doesn't work that way.

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

by talos (mihalis at gmail dot com) on Thu Feb 16th, 2012 at 09:26:28 PM EST
[ Parent ]
And the politicians who now create these bank bailouts for european tax payers (and turn national budjets into junk funds) are also elected by these countries.

What we after all should not forget is that neoliberalism is a religious movement. The poor are "sinners." They must be punished, when the elites f** up.

by kjr63 on Fri Feb 17th, 2012 at 09:05:17 AM EST
[ Parent ]
I don't think that's neoliberalism, rather it's Calvinism/protestant work ethic kinda thingie.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Feb 17th, 2012 at 12:42:56 PM EST
[ Parent ]
I don't think so. Neoliberals could care less about work. These are more like pagan rituals.
by kjr63 on Fri Feb 17th, 2012 at 01:07:53 PM EST
[ Parent ]
Do you really think that is just? Are the people who are being forced to take a huge drop in living standards to blame for corruption or unpaid taxes by the more wealthy?

Yes.

Elections have consequences. The greek mess is collectively and very firmly the product of the Greek citizens.

Being such a fan of collective punishment, I assume you will be prepared to argue that every surviving Wehrmacht soldier should have been shot at the end of the last world war?

For that matter, you should be a big fan of the Versailles treaty.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 04:35:23 PM EST
[ Parent ]
Oh no, Jake S, I carefully avoided suggesting that if every citizen was collectively and firmly responsible for the acts of their government, Germany would have been obliterated from the map in 1945 instead of being given a massive wealth transfer to a thriving industrial economy.
by afew (afew(a in a circle)eurotrib_dot_com) on Tue Feb 14th, 2012 at 04:38:43 PM EST
[ Parent ]
You did. I was feeling less charitable. And the analogy is becoming increasingly apropos.

Papademos and his merry band of collaborators should take very careful note of what happened to Vidkun Quisling.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 04:46:20 PM EST
[ Parent ]
you might want to read a little about that before making wild claims.

Germany received some 1.4 billion US$ over the whole Marshal plan duration; which amounts to slightly more than 10% of its overall size. Germany repaid about 2/3 of that.

On the other hand, the allies took values from Germany, in the form of dismantled industries, patents, trademarks, trade secrets and abducted scientists that exceeded that sum by orders of magnitutde.

And that doesn't even account for all the other willful damage that the allied occupation forces inflicted, especially in the early years of the occupation (when they did not fear a surging Soviet Union).

Go, read some Wikipedia

by cris0 on Tue Feb 14th, 2012 at 06:03:10 PM EST
[ Parent ]
you might want to read a little about that before making wild claims.

Germany received some 1.4 billion US$ over the whole Marshal plan duration; which amounts to slightly more than 10% of its overall size. Germany repaid about 2/3 of that.

Forgetting the Versailles war reparations, are we?

Forgetting the reparations to the victims of war crimes, are we?

Forgetting the reparations to occupied states for the goods and services looted from them during the war, are we?

On the other hand, the allies took values from Germany, in the form of dismantled industries, patents, trademarks, trade secrets and abducted scientists that exceeded that sum by orders of magnitutde.

Oh, you mean they took away war criminals like von Braun and put them to use in their own industries instead of shooting them? How was that burden not self-inflicted, again?

Patents, trademarks and trade secrets were not internationally protected at the time, so no dice there.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 06:12:54 PM EST
[ Parent ]
now you crossed from economical delusions and hate mongering to open historical revisionism.

Which is the signal for me to call it a day. It probably was time for that hours ago.

Arguing with fanatics is a waste of time.

by cris0 on Tue Feb 14th, 2012 at 07:15:33 PM EST
[ Parent ]
The only revisionism here is your insistence that Germany was not granted massive aid and debt relief after the last world war (starting, actually, in the interbellum).

It really is bizarre. These facts are a matter of public record. Anybody can look up how great a fraction of the Versaille payments Germany actually made, and how many reparations Germany paid to the victims of its various occupations. The numbers are not secret. Just embarrassing to any German who gets on a high moral horse about international debts.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 07:34:52 PM EST
[ Parent ]
Well, I think you are both right.

First the allies pillaged Germany:
Industrial plans for Germany - Wikipedia, the free encyclopedia

The first "level of industry" plan, signed by the Allies on March 29, 1946, stated that German heavy industry was to be lowered to 50% of its 1938 levels by the destruction of 1,500 listed manufacturing plants.[2] In January 1946 the Allied Control Council set the foundation of the future German economy by putting a cap on German steel production capacity: the maximum allowed was set at about 5,800,000 tons of steel a year, equivalent to 25% of the prewar production level.[3] The UK, in whose occupation zone most of the steel production was located, had argued for a higher limited reduction by placing the production ceiling at 12 million tons of steel per year, but had to submit to the will of the US, France and the Soviet Union (which had argued for a 3 million ton limit). Steel plants thus made redundant were to be dismantled. Germany was to be reduced to the standard of life it had known at the height of the Great Depression (1932).[4] Car production was set to 10% of prewar levels, etc.[5]

Destroyed forests:
Industrial plans for Germany - Wikipedia, the free encyclopedia

Timber exports from the US occupation zone were particularly heavy. Sources in the US government admitted that the purpose of this was the "ultimate destruction of the war potential of German forests." Extensive deforestation due to clear-felling resulted in a situation which could "be replaced only by long forestry development over perhaps a century.".[7]

And took over patents, copyrights, trademarks and trade secrets:
Industrial plans for Germany - Wikipedia, the free encyclopedia

The Allies also confiscated large amounts of German intellectual property (patents and copyrights, but also trademarks).[28] Beginning immediately after the German surrender and continuing for the next two years the US pursued a vigorous program to harvest all technological and scientific know-how as well as all patents in Germany. John Gimbel comes to the conclusion, in his book "Science Technology and Reparations: Exploitation and Plunder in Postwar Germany", that the "intellectual reparations" taken by the US (and the UK) amounted to close to $10 billion.[29][30][31] The US competitors of German firms were encouraged by the occupation authorities to access all records and facilities.[32] In 1947 the director of the US Commerce Department's Office of Technical Services stated before congress: "The fundamental justification of this activity is that we won the war and the Germans did not. If the Germans had won the war, they would be over here in Schenectady and Chicago and Detroit and Pittsburgh, doing the same things."[32] A German report from May 1, 1949 stated that many entrepreneurs preferred not to do research under the current regulations (Allied Control Council Law No. 25) for fear of the research directly profiting their competitors. The law required detailed reporting to the Allies of all research results.[32]

The patents, drawings and physical equipment taken in Germany included such items (or drawings for) as electron microscopes, cosmetics, textile machinery, tape recorders, insecticides, a unique chocolate-wrapping machine, a continuous butter-making machine, a manure spreader, ice skate grinders, paper napkin machines, "and other technologies - almost all of which were either new to American industry or 'far superior' to anything in use in the United States."[33]

The British took commercial secrets too, by abducting German scientists and technicians, or simply by interning German businessmen if they refused to reveal trade secrets.[34]

Though I must say that I do not know exactly how that worked. I would imagine that at least they transfered the rights companies held in the western allied countries to allied companies and the rights companies held in Germany to allied companies. If enforced in Germany that should have been quite devastating. I know that the neutral Swedish government did not quite accept these seizures leading to an interesting period. Still does not accept some of them as the copyright of Mein Kampf in Sweden was in the 90ies found by a Swedish court not to belong to the state of Bavaria. Probably would belong to hitlers relatives but they do not enforce their rights.

Anyway, then the Allies changed their policy and instituted the much more well known policies to let West Germany rebuild.

So what Jake should say that in keeping with Cris view on the consequences of going out in the rain, the policy of grabbing everything should have continued.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Wed Feb 15th, 2012 at 05:57:00 AM EST
[ Parent ]
The plunder described here is still assessed as less than a third of the aid and debt forgiveness granted to Germany, nevermind the order of magnitude that Chris was confabulating about.

You can quibble with the valuation, of course, but one and a half orders of magnitude is a pretty big quibble.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Feb 15th, 2012 at 06:53:34 AM EST
[ Parent ]
The whole idea is obscene given the human toll.
by Upstate NY on Wed Feb 15th, 2012 at 09:39:54 AM EST
[ Parent ]
cris0 is talking about the post WW II era while Jake is including the entire period from the end of WW I through the Marshall Plan. The US did change its plan part way through the post WW II era when it became concerned about the perceived thread from the Soviet Union. Before it was planning on turning Germany into a poor agricultural and resource extracting country. After, it was concerned to turn Germany into a pillar of opposition to the Soviets and supported the re-industrialization of Germany and encouraged the beginnings of the common market.

I recall being shown equipment in the Mechanical Engineering Lab at Oklahoma State University that had come from Germany in the early years after WW II. But given Germany's performance during and before WW II, a case could be made for the first policy: "Never Again!" Now, an argument can be made that they are accomplishing through economic means what they could not accomplish through military might.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Feb 15th, 2012 at 01:08:46 PM EST
[ Parent ]
That is one take on what happened. Varoufakis' book, Modern Political Economics, has a lot of research that shows that in the immediate postwar period, the USA also had plans to recycle its surplus through Germany and extend its economic dominance. So it wasn't only a military strategic goal, but also an economic one. Varoufakis sees the Marshall Plan as the upshot of the US's rejection of a global surplus recycling mechanism as proposed at Bretton Woods. So, some form of Marshall Plan was already in the offing as soon as 1944.
by Upstate NY on Wed Feb 15th, 2012 at 02:01:15 PM EST
[ Parent ]
Great book. I wish he had referenced his sources for the discussion of post war US planing. I strongly suspect his conclusions are based on biographies, memoirs and secondary works. It would be unreasonable to expect an economist to do the sort of primary source research to document such a claim. And this is not an area I ever studied in any significant way, but his conclusion seems so right.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Feb 16th, 2012 at 12:38:44 AM EST
[ Parent ]
You are not seriously arguing the postwar?

I mean, massive amounts of German debt were expunged. In Greece alone, Germany not only had its pre-war debts expunged, but its forced loan for the German occupation was never repaid, it took many billions of gold from the National bank treasury, not to mention all the damage, death and destruction.

Read all about it: http://www.spiegel.de/international/germany/0,1518,769703,00.html

by Upstate NY on Tue Feb 14th, 2012 at 06:15:14 PM EST
[ Parent ]
Prior to the Marshall Plan, the USA had given an equivalent amount to Germany. The total of the Marshall Plan was $26 billion or more than 15% of US GDP at the time.

In an American context, this is equivalent to $225 billion today.

In a German context relative to GDP, this would be $50 billion.

The total amount Greece has received from Germany so far is $15 billion, but it will all be paid back, and it is being paid back at 5.25% over the last 18 months. Germany actually received the Marshall Plan money. The Greek money however has mainly gone to the creditors.

by Upstate NY on Tue Feb 14th, 2012 at 06:43:21 PM EST
[ Parent ]
Hmm

Wikpedia seems to differ (it gives the total amount as 12.731 bn), but in any case, as mentioned before, the actual subsidy to Germany was about 400m US$, plus another 1bn in repaid loans. The vast majority of Marshal Plan funds went to US allies; and the British received another 40bn on top outside of it.

But this exists in a context of allied powers extracting/looting several 10bns of values from Germany during the same period; and further damage through malicious and/or stupid occupation rules and actions. (like, intentionally starving the population, forbidding food imports etc).  Just read the Wikipedia article.

by cris0 on Tue Feb 14th, 2012 at 07:29:33 PM EST
[ Parent ]
I should have written the total aid. In the year prior to the Marshall plan they gave $13 billion and then another 12.7 in the Marshall Plan. Germany was one of the biggest beneficiaries, but unlike countries in the Eastern Bloc and Greece where all the money was spent on the military in fighting still running wars, 60% of the 3 billion given to Germany was used giving loans to industry to rebuild Germany's industrial capacity.
by Upstate NY on Tue Feb 14th, 2012 at 10:23:10 PM EST
[ Parent ]
I trust you're familiar with the following story, too.

From Deutsche Welle: Als Griechenland deutsche Schulden halbierte. That's what "European solidarity" means.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Tue Feb 14th, 2012 at 04:45:22 PM EST
[ Parent ]
I really doubt we'd be having this debate if this was about debt. If Greece campaigned to get its debt cut in half, and could show how it would get its budget back on track by that, practically every German politician would jump at the occasion.

You would see Schäuble walking around as Greece's biggest supporter.

But, alas, they can't.  

by cris0 on Tue Feb 14th, 2012 at 06:10:39 PM EST
[ Parent ]
Of course it's not about debt, it's about guilt.

Oh, wait...

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Tue Feb 14th, 2012 at 06:15:45 PM EST
[ Parent ]
Oh, suddenly this debate is no longer about debt? Interesting.
by Katrin on Tue Feb 14th, 2012 at 06:17:42 PM EST
[ Parent ]
David Graeber would love this exchange.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Tue Feb 14th, 2012 at 06:18:14 PM EST
[ Parent ]
debt and deficit are 2 different things.

Very early on quite a few European politicians noted that Greek debt in and by itself was not the major problem.  

Greece's complete inability to balance its budget even with much reduced debt, though, certainly was. (and is)

by cris0 on Tue Feb 14th, 2012 at 07:33:05 PM EST
[ Parent ]
Balancing the government budget is stupid.

The government is the employer of last resort. This implies that the government has to be able to print and spend money at will.

Why is this difficult to understand?

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 07:36:28 PM EST
[ Parent ]
sigh

since everybody is going to jump on that:

s/balance/curb to a level appropriate for its growth/

by cris0 on Tue Feb 14th, 2012 at 07:37:30 PM EST
[ Parent ]
Greece's deficit was perfectly appropriate for its growth path. Probably a bit too small, actually, considering the mercantilist attack Germany and the Netherlands were subjecting it to.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 08:14:25 PM EST
[ Parent ]
Much reduced debt? What? Debt is up.
by Upstate NY on Tue Feb 14th, 2012 at 10:20:07 PM EST
[ Parent ]
Greece should not get its budget "back on track" to a 1930s style depression.

Balanced budgets are bad. Why is this so hard to grasp? Governments need to run deficits - usually quite substantial ones - to ensure full employment and macroeconomic stability. Any deal that does not allow European states to run any deficit required to defend full employment is a totally unacceptable deal and should be rejected and repudiated.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 06:17:53 PM EST
[ Parent ]
I'm at pains not to flip my wig here.

Greece has cut its budget by 19%.
It is being asked to cut it another 6%.

No country in history has ever cut its budget that much without an accompanying economic stabilizer (such as currency devaluation).

In other words, Greece has slashed a ton already.

And it did so in a recession. Any further so-called reforms would have only killed the economy even more.

Not single serious economist has ever said this plan would ever work. And now that it hasn't worked, the dunderheads are looking for scapegoats, as though the deregulation of the taxi and pharmacy sector will save Greece.

Even the IMF in its own handbook warns against cutting the budget like this in so short of time without any economic stabilizer whatsoever.

by Upstate NY on Tue Feb 14th, 2012 at 06:19:22 PM EST
[ Parent ]
When the IMF says you're cutting government budgets too fast, you know you're in really deep shit.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 06:25:08 PM EST
[ Parent ]
And yet, Greek politicians prefer this to default and control over their currency...
by asdf on Wed Feb 15th, 2012 at 01:17:27 PM EST
[ Parent ]
They yearn to be "good Europeans"...

... and to retire to a sinecure at a global corporation.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Wed Feb 15th, 2012 at 03:54:15 PM EST
[ Parent ]
Greece needs some crazy Mahathir Mohammad-style guy.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Feb 16th, 2012 at 08:38:18 PM EST
[ Parent ]

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