The Greeks are revolting

It looks like Greece is about to foul up:

Government in Greece Teeters After Move on Referendum

By and NIKI KITSANTONIS
Published: November 1, 2011

ATHENS — The government of Prime Minister George Papandreou teetered on the verge of collapse on Tuesday, threatening Greece’s adherence to the terms of a new deal with its foreign lenders and plunging Europe into a fresh bout of financial turmoil.

Several lawmakers in the governing Socialist Party rejected Mr. Papandreou’s surprise plan for a popular referendum on the Greek bailout, raising the possibility that he will not survive a no-confidence vote scheduled for Friday that depends on his holding together a razor-thin parliamentary majority. Mr. Papandreou was holding an emergency cabinet meeting Tuesday evening to save his government, but the opposition and some members of his own party were calling for new elections immediately.

The impasse in Athens seemed likely to delay — and perhaps scuttle — the debt deal that European leaders reached after marathon negotiations in Brussels last week. Financial markets cratered on Tuesday for the second straight day, wiping out the gains since the Brussels deal was announced last week. Some analysts said that Greece was now coming closer to a messy default on its debt, and perhaps a departure from the zone of 17 countries that use the euro as their common currency.

Greece has two, and only two, choices: severe austerity measures, to enable them to get the money they need from the “eurozone” currency countries to avoid a default on its external loans, or to default. The people are up in arms about the austerity measures, and absolutely hate them, but if this referendum goes forward and the voters reject it, then Greece defaults. Once that happens, a lot of other people in Europe will suffer for having lent Greece money so the Greeks could live well beyond their means, but it also means that Greece won’t be able to borrow more money — except from absolute idiots — to finance the Greeks living beyond their means.

Either way, the Greeks are going to have to live only at the level that their productivity justifies. They can have austerity on a regularized, organized basis, or they can have austerity forced upon them chaotically. Greece is a democratic country, and it looks like the voters will get to choose between those two options, but a third option, continuing to live beyond what their productivity justifies, is not available.

(The governing) party, known as Pasok, is deeply divided. A more reform-minded wing is upset that Mr. Papandreou has not acted decisively enough to carry out the structural changes needed to revive the economy, while a more traditional wing is opposed to some of the changes that inevitably cut into the heart of the social welfare state the party was elected to promote.

Sorry, but “the social welfare state the party was elected to promote” simply isn’t sustainable. Eventually, a society must live within its means, and Greece does not produce enough for export — Greece has a sustained balance of trade deficit — which means that Greece’s standard of living, over the long haul, has been greater than its productivity justified. If Greece stays in the eurozone currency alliance, maybe they can restructure some of their loans, and maybe they can take advantages of the free trade within Europe to reduce their trade deficit. If Greece returns to its own currency, the drachma, as some are pushing, they can look forward to rapid inflation, and see even more of their productivity exported to buy the essentials that Greece imports: industrial and capital goods, food and petroleum.

Akis Tsirogiannis, a 42-year-old father who recently lost his job at a furniture workshop in Athens, said:

This deal, like all the others, is a life sentence of austerity for Greeks. The country is being run from the outside — by bankers and the European Union government. We need to reclaim our country, whatever that entails.

Actually, a life sentence of austerity is inevitable: it’s simply a matter of how living within their means is going to be achieved. But if the country is being run from the outside, that’s because for too long it was run from the inside, and bad, bad, bad decisions were taken. Now Greece paying the penalty. They may well get out of paying back their loans, through simply defaulting, but that doesn’t mean they won’t have to pay for their former lifestyle in other ways. If they return to the drachma, they’ll experience rapid inflation, and foreign sellers aren’t going to give them any breaks: it will take more and more drachmas to buy oil, because oil is sold in dollars, not drachmas. If they stay with the euro, they’ll see rapid deflation of wages and prices, which might help their exports some, but which would leave them with far fewer euros with which to buy imported goods.

There is a lesson in this for the United States. Greece’s economy is small, and Greece lacks a national currency that they both control and is in demand. The United States is fortunate to have the world’s reserve currency in the dollar, but eventually we, too, will have to start living within our means, have to start living only as well as our productivity justifies.

30 Comments

  1. let the record reflect that I actually agree with most of what you say here, though it’s a little mystifying that you vote Republican if you believe the things you say here

  2. One of the problems that Greece has experienced is that its tourism industry has suffered due in part to the fact that being on the euro has made them price-noncompetitive to Turkey. It’s possible that disconnecting from the euro and then dropping in value against the euro and dollar could make it a more promising tourist destination, and that the added inflow of harder currency caused by this (plus the jobs recreated in the industry) would offset higher petroleum costs.

  3. From MSNBC:

    Rejection of the package, which includes yet more austerity measures for the long suffering Greek electorate, would unravel the euro zone’s plan for tackling its wider debt crisis, and cut off Greece’s international financial lifeline.

    Finance Minister Evangelos Venizelos broke ranks with Papandreou, coming out against holding the referendum after a bruising meeting with the German and French leaders, who made clear that Greece would not receive a cent more in aid until it votes to meet its commitments to the euro zone.

    The Greeks are like long-term welfare recipients, simply aghast at the idea that, to keep getting welfare, they’ll have to make some compromises, and might actually [horrors!] have to work. And Nicolas Sarkozy and Angela Merkel are like the long-suffering taxpayers, who are certainly sympathetic to the poor but fed up with the malingerers taking advantage of them, saying that Greece has to get it’s act together or that’s in, no more welfare; I’d guess that a majority of the French and German taxpayers would agree with their leaders on this.

  4. From the Front in Athens a friend has written:

    Thank you for your concern. We are both fine and we are watching all that is happening around us… hoping that we will finally not fall into an abyss… into which some forces are trying hard to push us, as a country….

    Unfortunately there is nothing we can do… but just wait and see…

    Everyone here in Greece has lost their sleep not knowing what each day will bring… as everything changes all the time and nothing can be taken for granted.

  5. And Also:

    I know many people who have lived organized, low profile lives… (always within the law and following the theory that you should always save something for the years to come, as well as care for the people around you)… … who now feel helpless as they see that they might loose everything through no fault of their own… their children can’t find a job… the elderly see their pension cut down (they might not be paid at all in the future)…
    etc…

  6. Yorkshire, there are too many of our fellow Americans in exactly the same predicament as these Greeks. I attribute it to corporate greed, government corruption, and lack of prioritizing education, the bulk of these problems being perpetrated by the American political Right.

    ” After substantial progress against concentrated poverty during the booming economy of the
    late 1990s, the economically turbulent 2000s saw much of those gains erased.”

  7. I attribute it to corporate greed, government corruption, and lack of prioritizing education, the bulk of these problems being perpetrated by the American political Right.

    Citation please.

    Why do corporations give as much to Dems as to the GOP?

    Gov. corruption the domain of the Right? Only in your alternative universe, I’m afraid.

    Lack of priorities for education? That’s why George W. Bush pushed No Child Left Behind, I guess.

    Three strikes. You’re out. Now have a seat.

  8. Oops. Majority of Americans now disapprove of OWS.

    As usual with Hube, this is a l1e.

    From the poll he cites:

    “38. Is your opinion of the Occupy Wall Street Movement favorable, unfavorable or haven’t you heard enough about it? ”

    Favourable 30%
    Unfavourable 39%
    Haven’t heard enough 30%
    REFUSED 1%

    Hube claims to have a degree in economics. I’m not sure what university taught him 39% was “a majority”, but I suspect they advertise on the back of matchbooks.

    What a loser.

    From the same poll:

    “37. Is your opinion of the Tea Party Movement favorable, unfavorable or haven’t you heard enough about it?

    Favourable 31%
    Unfavourable 45%
    Haven’t heard enough 24%
    REFUSED 1%

    65. Who do you think would be mostly to blame if the Committee and the President are not able to agree on a plan to reduce the deficit – President Obama and the Democrats in Congress, or the Republicans in Congress?

    Obama/Democrats 36%
    Republicans 46
    DK/NA 17

    Which seems to agree with another recent poll from Florida:

    With 51 percent of voters saying that jobs and the economy are the most pressing issues in the nation today, 49 percent said they believe that the Republicans are intentionally hindering efforts to boost the economy so that President Barack Obama will not be reelected. Thirty-nine percent disagreed. As expected, most registered Democrats (70 percent) agreed that Republicans are intentionally hindering the economy and hurting Obama, but independents (52 percent) and even some Republicans (24 percent) also agreed.

  9. Hube claims to have a degree in economics. I’m not sure what university taught him 39% was “a majority”, but I suspect they advertise on the back of matchbooks.

    I never made such a claim. You must have gotten your degree from The Perry Alzheimers College. Y’know, where they teach about Jefferson’s Constitution.

    Nevertheless, I retract the term “majority” and say “more” people disapprove of the OWSers than support them. Regardless of the terminology error, this is a dramatic reversal, has nothing to do with the current opinion of the Tea Party (essentially moribund since the last election anyway), and proves that, despite a compliant national media, the truth about these moonbats will eventually get out somehow. (A compliant national media which, BTW, was completely adversarial during the Tea Party protests.)

  10. I never made such a claim.

    Everyone can see you lie, you know.

    “Hube says:
    3 November 2011 at 12:11

    Oops. Majority of Americans now disapprove of OWS.”

    That cite again:

    “38. Is your opinion of the Occupy Wall Street Movement favorable, unfavorable or haven’t you heard enough about it? ”

    Favourable 30%
    Unfavourable 39%
    Haven’t heard enough 30%
    REFUSED 1%

    That isn’t college level statistics, Hube. It isn’t even high school statistics – way back in what would be for Americans grade2 or 3, when we were taught statistics, we learned that 39% isn’t a majority.

    Is it any wonder Europe and Asia are wiping you guys out if this is an example of the American education system?

  11. Perry wrote:

    Yorkshire, there are too many of our fellow Americans in exactly the same predicament as these Greeks. I attribute it to corporate greed, government corruption, and lack of prioritizing education, the bulk of these problems being perpetrated by the American political Right.

    What? Perry, I have no idea how you can write that with a straight face! The United States spends 6.12% of GDP on education, more than any other government function except health care (7.09%) and pensions (6.47%), and that percentage has been slowly rising since 1945.

    The problem with prioritizing education isn’t among government or corporations, but among the subcultures of specific groups, where education simply is not valued, and nearly half of the students simply drop out. We spend a clear pile of money on education, yet half of the students in Philadelphia don’t care enough about it to stay in school.

    Of course, the wicked American political right has been looking for solutions, and many of them concentrate on expanding access to private schools, because we look at the public schools and see nothing but failure. Maybe that’s the wrong approach, but the approach of the Democrats — steadily increasing public education spending — has not demonstrated positive results. We seemed to get better results in 1949 when, according to the linked CBO chart, we spent less than half as much on public education.

    You want to blame corporate greed? Is it the fault of the corporations that Americans have chosen to spend ever-larger shares of their dollars on imported goods, a practice which has dramatically hurt American manufacturing, taking away not only good jobs in general, but the kinds of jobs that men used to be able to get even if they dropped out of high school? (I noticed that you drive a Japanese car.)

    And now we have the silly fleabaggers, complaining that they can’t get jobs. Well, jobs are scarce these days, no doubt about that, but when I see this mass of unwashed, tattooed, and pierced people, I can tell you that, were I a personnel manager for any sort of professional corporation, not a single one of them would ever get hired. If you have visible tattoos in normal business attire, or piercings on your face, or any piercings other than a woman with one piercing on each ear, you have seriously limited your employability.

    Government corruption? Yeah, right. It’s not the “American political right” which cultivates the welfare culture; it’s Republicans who want to see people employed and off the public dole, while the Democrats count the welfare recipients as part of their base.

  12. What? Perry, I have no idea how you can write that with a straight face! The United States spends 6.12% of GDP on education, more than any other government function except health care (7.09%) and pensions (6.47%), and that percentage has been slowly rising since 1945.

    Gee, how are you paying for those guys killing civilians in Iraq and Afghanistan? Bake sales?

  13. Government corruption? Yeah, right. It’s not the “American political right” which cultivates the welfare culture; it’s Republicans who want to see people employed and off the public dole, while the Democrats count the welfare recipients as part of their base.

    Except, of course, that the Republicans are blocking meaningful attempts to help the economy while Obama is in office to try and make him a one-term President. Like you, they put their political interests in front of the good of the country. Like you, they’re not American patriots.


  14. Hube claims to have a degree in economics. I’m not sure what university taught him 39% was “a majority”, but I suspect they advertise on the back of matchbooks.

    I never made such a claim. You must have gotten your degree from The Perry Alzheimers College. Y’know, where they teach about Jefferson’s Constitution.

    Nevertheless, I retract the term “majority” and say “more” people disapprove of the OWSers than support them. Regardless of the terminology error, this is a dramatic reversal, has nothing to do with the current opinion of the Tea Party (essentially moribund since the last election anyway), and proves that, despite a compliant national media, the truth about these moonbats will eventually get out somehow. (A compliant national media which, BTW, was completely adversarial during the Tea Party protests.)”

    The OWS has not been around very long, yet in the last month the favorables went from 27% to 36%, according to a recent poll, in spite of Fox News and Rush Limbaugh and his right wing radio ilk vilifying the movement on a daily basis. Let us see where it is in another few months.

    I also note that you did not report a figure on the “moribund” TEA Party followers in your original post. Leave it to PiaToR to call you out on your purposeful distortion.

    PS: Hube, beware that I am not kidding [redacted]. So stifle yourself!

  15. Everyone can see you lie, you know.

    No, you made the statement that in I claimed to have a degree economics, you cretin. You are confusing me with Hoagie. Or, is two people with monikers that begin with “H” too much for your pea brain to handle, hmm …?

    The rest of your follow-up is totally moot as I admitted my mistake and changed the wording.

  16. The OWS has not been around very long, yet in the last month the favorables went from 27% to 36%, according to a recent poll,

    Or, it unfavorables went up in the poll I cited.

    in spite of Fox News and Rush Limbaugh and his right wing radio ilk vilifying the movement on a daily basis.

    As opposed to the REST of the media vilifying the Tea Party on a daily basis …

    Let us see where it is in another few months.

    Given what it’s led to in recent days, good luck with that.

    I also note that you did not report a figure on the “moribund” TEA Party followers in your original post. Leave it to PiaToR to call you out on your purposeful distortion.

    It’s irrelevant to the point of public opinion reversing on the OWSers. It’s THEM in the news right now, not the [moribund] Tea Party. There’s no distortion — only in your brain.

    PS: Hube, beware that I am not kidding [redacted]. So stifle yourself!

    [redacted]? I have no idea what you’re talking about here.

  17. OWS pulled off a real “smart” thing for the people they alegedly represent in Oakland. They shut down the port for 17 hours. So, were the 1% hurt by this? I doubt it. Were the 99% such as truck drivers, longshoreman, clerks, crane operators, guards, and others who rely on the port for business like restaurants hurt by this? YES. The Whole Foods store was ransacked, seems like the 99% were hurt by that who worked there. This didn’t sound like a protest for the “little” guy, it was “ANARCHY“!

  18. Perry Issues A Threat:
    PS: Hube, beware that I am not kidding re [redacted] SMS et al. So stifle yourself!

    So what the heck is [redacted]SMS? Some secret society only you know about? Did you mean MSM, or LSM? But this is sure appears to be a threat against Hube. Or is this the Gap in the Bridge Hube is supposed to walk over then drop. Actually, I take great offense to “THREATS” of any kind.

    [redacted by the original poster][PERRY, DO NOT CHANGE MY POSTS. YOU HAVE NO RIGHT TO DO THAT]

  19. any piercings other than a woman with one piercing on each ear,

    I don’t think this is actually true any more; in urban and suburban environments, at least, men with discreet piercings in their ears are also fine.

  20. I went to Google and typed:

    “Cain sexual harassment”

    Google said there were:

    About 151,000,000 results (0.17 seconds)

    And I thought how many hits would Bubba have gotten for the same 4 days?

    I know, when a Dim does it, it’s not news, but………

  21. As regards Greece defaulting – let’s take a look at the real world for a moment. What happened when Argentina and Iceland defaulted?

    What research has been done on the question of costs of default? In October 2008, the IMF released a working paper – The Costs of Sovereign Default – which identifies four different types of cost that accompany sovereign debt default. I could easily criticise the methodology and the way in which they have assembled their data but in the scheme of work that is out there the paper is relatively standard and so it is better to concentrate on its conclusions.
    [...]
    So what about the costs of default? After investigating a “number of default episodes by geographical area” from 1824 to 2004 the IMF paper concludes:

    … that default costs are significant, but short lived. Reputation of sovereign borrowers that fall in default, as measured by credit ratings and spreads, is tainted but only for a short time. While there is some evidence that international trade and trade credit are negatively affected by episodes of default, we could not trace it to the volume of trade credit, as the default literature suggests. Debt defaults seem to cause banking crises, and not vice versa, but we found weak evidence to suggest the presence of default-driven credit crunches in domestic markets. Finally, defaults seem to shorten the life expectancy of governments and officials in charge of the economy in a significant way.

    [...]
    We are also told by conservatives that a nation that defaults will face onerous borrowing costs in the future as a penalty for their untrustworthy behaviour. There is no consensus in the research literature on this question. The IMF paper find that:

    … ratings have a large and statistically significant effect on spreads … [but] … that default episodes have a short-lived impact on spreads …

    The point is that there is no substantive and authoritative research that shows borrowing costs to a defaulting nation are higher for lengthy periods after a default. The evidence points to the opposite being the case.

    Conservatives also argue that a nation that defaults will suffer trade retaliation – that is, no-one will export to them. Remember that these characters also push export-led growth models as a the primary way in which a nation should develop – which reflects their bias against public sector-led domestic oriented growth.

    The IMF paper finds that:

    … there is little historical record of countries imposing quotas or embargos on a country that falls in default. The current structure of international capital markets, where investors are increasingly anonymous bondholders who may switch from long to short positions in minutes, makes this traditional assumption more implausible nowadays.

    Having dismissed that part of the conservative argument, they recognise that it is still possible for exporting firms to suffer a “deterioration in … credit quality” which would “have consequences similar to those of retaliatory measures”.

    What did they find?

    … the effect is negative and large only in the first and second year of the default. This result suggests that default does have a negative effect on trade credit but that this effect is short lived.

    Oh dear – yet another w1ngnut mantra slain by cold hard reality. Curee that reality and its well known liberal bias…

  22. FWIW, Perry finally replied to an e-mail of mine which asked what he meant in his since-redacted line. He threatened to out me, because I “pressed his button” again, saying “It is not worth your while to continue to do so, as I will not hesitate to out you like you did to me!”

    Can someone please point to where I “outed” Perry — other than in that silly fracas from about a week or so where he insisted upon mentioning a relative of mine, despite my cordial e-mail requests NOT to? (And, despite the fact that Perry has used his own full name HIMSELF numerous times around the blogs?)

    Is this the new devolved Perry standard — if someone “pushes someone else’s button” that they’ll be outed?

  23. Hube, now you go public with a private email! That is a breach right there.

    If you don’t know what you did to out me, that’s on you, Hube. I choose to use my first name on this blog, which both you and Hitchcock arbitrarily revoked. Is this what you call behaving with honor in public.

    All I ask of you, and Hitchcock, is that we keep our discourses civil, free from the personal attacks. Apparently that is too much to ask of you, Hube.

    So yes, Hube, if the personal attacks continue, in retaliation your identity will then be revealed by me, as you have already done to me. Disagree with me all you want, that is fine, but cease the personal attacks. Do I have to spell out to you what a personal attack is? Perhaps, as a warning, I should point out to you first if you use one. Or just take a look at every Hitchcock post addressed to me – there you will find a million examples. Since Dana has refused to follow through on his requests for civility, ignored by you and Hitchcock, I will act when I am victimized and bullied by you too.

    And don’t forget, Dana, your blog is in the public domain. You can certainly maintain your devotion to free speech and simultaneously exert your influence in order to minimize the personal attacks, which certainly contaminate your blog. What has happened to your standards, Dana?

  24. If you don’t know what you did to out me, that’s on you, Hube. I choose to use my first name on this blog, which both you and Hitchcock arbitrarily revoked. Is this what you call behaving with honor in public.

    Is this like you continually using my relative’s name despite the fact I e-mailed you twice — cordially — requesting you not? And did this happen before I mentioned your full name — your full name which you arbitrarily pick and choose when and where to use it? Why yes, it did.

    All I ask of you, and Hitchcock, is that we keep our discourses civil, free from the personal attacks. Apparently that is too much to ask of you, Hube.

    *Sigh* It’s a shame you don’t live up to your own personal standards. Typical “progressive.”

    So yes, Hube, if the personal attacks continue, in retaliation your identity will then be revealed by me, as you have already done to me. Disagree with me all you want, that is fine, but cease the personal attacks.

    You’re a liar. You revealed it yourself long ago.

    Again, I see no mention whatsoever of your own personal attacks. Considering that you routinely claim they are not such attacks, this is no surprise. You’re a scummy hypocrite, Perry.

    Nevertheless, you win. I’m out of here, and will be excising any and all reference to CSPT and its associated blogs. You just breached the single greatest (and coveted) protocol in all of blogging. In all the years I’ve gotten grief from the DE Liberal crowd, I never, ever considered outing them … especially over mere silly name-calling.

    Enjoy yourself, everyone, dealing with this pathetic specimen of humanity.

  25. Wow. Seems you guys have gotten to the point where you should not even address each other. I mean really, it has degenerated from disagreement to out and out hostility. Perry, don’t drag Dana’s standards into the fray. It’s between you guys and you all need to sort it out in private.

  26. “Wow. Seems you guys have gotten to the point where you should not even address each other. I mean really, it has degenerated from disagreement to out and out hostility. Perry, don’t drag Dana’s standards into the fray. It’s between you guys and you all need to sort it out in private.”

    That was attempted, Hoagie, and it failed! Then Hube decided to take it public on here, as you can see.

  27. “Is this like you continually using my relative’s name ….”

    Not true, Hube. In fact I never did that. Do a search and prove it to yourself, as I just did.

    “You’re a liar. You revealed it yourself long ago.”

    Not on this blog!

    “Again, I see no mention whatsoever of your own personal attacks.”

    True, occasionally. But I’ll let the readers be the judge of that, compared to you and Hitchcock.

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