The author is a socialist. That much is clear. And like many of that ilk, he fails to understand economics. The fact of the matter is Greece has spent itself dry. It has no way to support it's public service employees (something like 50% of the population?), and it took money for others to keep living in denial for a while longer. Now, they've flat out said, "we refuse to stop deficit spending, and we're not paying you back." No... scratch that, they're not even saying "we're not paying you back." Because the banks who gave them that money never expected to see it again. They're saying "we're not going to cut spending as you said was a condition of continuing to get financial support, so keep that money flowing or else!"
This is insanity. They were gifted money on the condition that they spend it wisely. They decided that restraint and responsibility was "too hard" so they now are saying "screw responsibility, we'll do what we want." Now, I do think it's possible the Eurozone will throw money at them to keep the whole thing from collapsing, but if they do so, I'm sure the rest of Southern Europe will follow that ancient precept "if you subsidize a thing, you get more of that thing." In this case, it would be profligate spending. But, again, most European countries are Socialist in nature, so I don't expect economic reality is their strong suit.
The other possibility (and what I would certainly do in their case) is tell Greece to take a hike. I doubt I'd ever see the money I gave them already to ever be repaid by such a basket case, so write it off. And then let them implode under the weight of their own bullcrap. You are entitled to run your country the way you want. I concur. But no one else should have to subsidize it.
The article is an interesting mishmash. He flirts with the idea that money is about a promise--value later for value now--and he almost understands that if the promise can't be trusted, the money will have no value. That's all sane stuff.
Then he turns right around and says "so keep giving us money for nothing, which we'll never repay!" And what this business is about how wrong it is to be beholden to banks, I'll never understand. What do people like this think is supposed to happen when they borrow money and don't pay it back? Do they think the lenders are an inexhaustible well of generosity, and it doesn't matter what they do or how they act? Well, I guess they do. As Mike says, it would be one thing if they honestly defaulted and threatened to shoot anyone who came to collect the collateral. But they actually think people will keep sending more money?
The suggestion of a shadow currency is actually one I quite like, but if they created such a thing and then made all the same mistakes, it wouldn't last long. One of the virtues of a black-market currency is that it's a not a lie. That's why they spring up when the official currency becomes a lie. If Greece did this, the currency would have to be used for local goods and services, i.e., things they genuinely produce and are prepared to part with at a price.
3 comments:
Inflation not bad enough? Pswah! You will live hand to mouth. And the government will tax every forced transaction.
-Michael
The author is a socialist. That much is clear. And like many of that ilk, he fails to understand economics. The fact of the matter is Greece has spent itself dry. It has no way to support it's public service employees (something like 50% of the population?), and it took money for others to keep living in denial for a while longer. Now, they've flat out said, "we refuse to stop deficit spending, and we're not paying you back." No... scratch that, they're not even saying "we're not paying you back." Because the banks who gave them that money never expected to see it again. They're saying "we're not going to cut spending as you said was a condition of continuing to get financial support, so keep that money flowing or else!"
This is insanity. They were gifted money on the condition that they spend it wisely. They decided that restraint and responsibility was "too hard" so they now are saying "screw responsibility, we'll do what we want." Now, I do think it's possible the Eurozone will throw money at them to keep the whole thing from collapsing, but if they do so, I'm sure the rest of Southern Europe will follow that ancient precept "if you subsidize a thing, you get more of that thing." In this case, it would be profligate spending. But, again, most European countries are Socialist in nature, so I don't expect economic reality is their strong suit.
The other possibility (and what I would certainly do in their case) is tell Greece to take a hike. I doubt I'd ever see the money I gave them already to ever be repaid by such a basket case, so write it off. And then let them implode under the weight of their own bullcrap. You are entitled to run your country the way you want. I concur. But no one else should have to subsidize it.
The article is an interesting mishmash. He flirts with the idea that money is about a promise--value later for value now--and he almost understands that if the promise can't be trusted, the money will have no value. That's all sane stuff.
Then he turns right around and says "so keep giving us money for nothing, which we'll never repay!" And what this business is about how wrong it is to be beholden to banks, I'll never understand. What do people like this think is supposed to happen when they borrow money and don't pay it back? Do they think the lenders are an inexhaustible well of generosity, and it doesn't matter what they do or how they act? Well, I guess they do. As Mike says, it would be one thing if they honestly defaulted and threatened to shoot anyone who came to collect the collateral. But they actually think people will keep sending more money?
The suggestion of a shadow currency is actually one I quite like, but if they created such a thing and then made all the same mistakes, it wouldn't last long. One of the virtues of a black-market currency is that it's a not a lie. That's why they spring up when the official currency becomes a lie. If Greece did this, the currency would have to be used for local goods and services, i.e., things they genuinely produce and are prepared to part with at a price.
Honestly. It's like bank robbers without guns.
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