The Big Vote

If you’ve even remotely paying to the news, all the chatter among our financial betters is over whether their campaign of shame and blackmail will cow the Greeks into voting for the referendum:

With the polls closed, Greek voters — angry, tired and scared — waited anxiously Sunday to learn the verdict on a high-stakes referendum that many said they did not understand, but that could nonetheless redefine the country’s place in Europe and shake the Continent’s financial stability.

Even preliminary results of the balloting were not expected for several hours.

The poll comes after a week in which voters were barraged with ads that warned that if they did not vote yes, they would soon be without medicine and gasoline.

With Greek banks closed, the nightly news was filled with images of retirees lining up to get only a fraction of their monthly pensions.

Yet it was hard for many Greeks to know exactly what they were voting on. The ballot asks them only to say yes or no to the terms of a deal with Greece’s creditors, which is no longer even on the table.

Prime Minister Alexis Tsipras has told them that rejecting the deal will give him more power to negotiate and urged them to do so. But European and opposition leaders have tried to frame the vote as a yes or no to staying in the eurozone and avoiding economic collapse.

Mr. Tsipras voted late Sunday morning in his working-class neighborhood in Athens. Afterward, he said the vote was a “celebration of democracy.”

“Not only will we remain in Europe,” he said, “but we will live with dignity to prosper, to work as equals among equals.”

Of course, no one is blameless in this mess- the Greeks have a lot to answer for regarding their refusal to collect and pay taxes like a first world democracy, but from my naive perch, it’s hard to not want them to reject the deal and tell the Goldman Sachs jetset to go fuck themselves. Krugman has a lot of great analysis, including noting once again that the austerians are like a monkey with a hammer:

Austerity for a country in Greece’s position appears to be an unworkable solution even if debt is all you care about.

And just to be clear, I’m basically doing textbook macroeconomics here, nothing exotic. It’s the austerians who are inventing new economic doctrines on the fly to justify their policies, which appear to imply not temporary sacrifice but permanent failure.

Personally, this is one of the most informative pieces I have read on the subject (h/t to Chris Hayes):

With respect to Greece, the precise thing that European elites did to set the current chain of events in motion was to replace private debt with public during the 2010 first “bailout of Greece”. Prior to that event, it was obvious that blame was multipolar. Here are the banks, in France, in Germany, that foolishly lent. Not just to Greece, but to Goldman’s synthetic CDOs and every other piece of idiot paper they could carry with low risk-weights. In 2010, the EU, ECB, and IMF laundered a bailout of mostly French and German banks through the Greek fisc. Cash flowed into Greece only so it could flow out to rickety banks. Now, suddenly, the banks were absolved. There were very few bad loans left on the books of European lenders, everyone was clean, no bad actors at all. Except one. There were the institutions, the “troika”, clearly the good guys, so “helpful” with their generous offer of funds. And then there was Greece. What had been a mudwrestling match, everybody dirty, was transformed into mass of powdered wigs accusing a single filthy penitent (or, when the people with their savings in just-rescued banks decide to be generous, a petulant misbehaving child). [antidote]

Among creditors, a big catchphrase now is “moral hazard”. We cannot be too kind to Greece, we cannot forgive their debt with few string attached, because what kind of precedent would that set? If bad borrowers, other sovereigns, got the idea that they can overborrow without consequence, if Spanish and Portuguese populists perceive perhaps a better deal is on offer, they might demand that. They might continue to borrow and expect forgiveness, and where would it end except for the bankruptcy of the good Europeans who actually produce and save?

The nerve. The fucking nerve. Lenders, having been made nearly whole on their ill-conceived, profit-motivated punts, now fear that if anybody is nice to somebody who doesn’t deserve it, where will it end? I’d resort to that cliché about chutspa, the kid who murders his parents then seeks leniency ‘cuz he’s an orphan. But it’s really too cute for the occasion.

For the record, my sophisticated hard-working elite European interlocutors, the term moral hazard traditionally applies to creditors. It describes the hazard to the real economy that might result if investors fail to discriminate between valuable and not-so-valuable projects when they allocate society’s scarce resources as proxied by money claims. Lending to a corrupt, clientelist Greek state that squanders resources on activities unlikely to yield growth from which the debt could be serviced? That is precisely, exactly, what the term “moral hazard” exists to discourage. You did that. Yes, the Greek state was an unworthy and sometimes unscrupulous debtor. Newsflash: The world is full of unworthy and unscrupulous entities willing to take your money and call the transaction a “loan”. It always will be. That is why responsibility for, and the consequences of, extending credit badly must fall upon creditors, not debtors. There is one morality tale that says the debtor must repay, or she has sinned and must be punished. There is another morality tale that says the creditor must invest wisely, or she has stewarded resources poorly and must be punished. We get to choose which morality tale we most use to make sense of the world. We do, and surely should, use both to some degree. But if we emphasize the first story, we end up in a world full of bad loans, wasted resources, and people trapped in debtors’ prison, metaphorical or literal. If we emphasize the second story, we end up in a world where dumb expenditures are never financed in the first place.

But don’t the Greeks want to borrow more? Isn’t that what all the fuss is about right now? No. The Greeks need to borrow money now only because old loans are coming due that they have to pay, and they have been trying to come to an agreement about that, rather than raise a middle finger and walk away. The Greek state itself is not trying to expand its borrowing. Greece’s citizens and businesses would like to expand the country’s borrowing indirectly, by withdrawing Euros from Greek banks that the Greek banks won’t be able to come up with unless they are allowed to expand their borrowing from the ECB. That is, Greece’s citizens are in precisely the place France’s citizens and Germany’s citizens were in 2010, at risk that personal savings maintained as bank deposits will not be repaid. Something was worked out for French and German citizens. Other than resorting to the ethnonational stereotypes that European elites have now revived in polite company, what is the justification for a Greek schoolteacher losing her savings that wouldn’t have applied just as strongly to a French schoolteacher five years ago? Because Greeks are responsible, as individuals, for what the governments they elect do? Well, then I deserve to be killed for what my government has done in Iraq and elsewhere. Is that where we want to go?

You should read the whole thing.

203 replies
  1. 1
    JPL says:

    With fifteen percent of the vote in, No is in front 60-40. Angela Merkel has the most to lose, if they default, so it would appear to be in her best interest to renegotiate the loan. Her f.k…you response last week wasn’t helpful.

  2. 2
    TheMightyTrowel says:

    @JPL: I’m in Germany right now. The cognitive dissonance of my lefty friends between ‘we don’t like Angela’ and ‘those lazy cheating southern Europeans’ is really ugly to observe.

  3. 3
    Corner Stone says:

    It’s simply astounding that the ECB is refusing liquidity to Greece as a “take it or leave it” proposition. Essentially they are saying Greece is a colony of an unelected higher power.

  4. 4
    Corner Stone says:

    @TheMightyTrowel:

    and ‘those lazy cheating southern Europeans’ is really ugly to observe.

    Have they espoused any opinion on Spain, moving forward?

  5. 5
    Corner Stone says:

    If no one has any hard currency in their pockets, how is even the black market working over there? You can only trade so many daughters for food and clean water.

  6. 6
    Chris says:

    @TheMightyTrowel:

    European conservatives are discovering what the American ones figured out fifty years ago: tribalism is one hell of a drug, and a great way to rally people that you might’ve thought were “lefty.”

  7. 7
    Botsplainer says:

    Is there anybody quite so stupid as a German banker?

    Every political overreach, every military adventure gets approved by German bankers. In this instance, their game of chicken in a coup d’état bid is causing greater losses than would happen were they to simply write off Greek loans.

    At the end of today, smug fuckers in immaculately tailored $5000 suits are going to be stammering explanations to Merkel.

  8. 8
    shell says:

    is a colony of an unelected higher power.

    You mean SCOTUS? ;-)

  9. 9
    Botsplainer says:

    BTW – youngest daughter did make her way to Athens. She flies out Tuesday morning.

  10. 10
    feebog says:

    At this point I’m rooting for Greece to default and pull out of the EU. Lots of pain for Greeks, but they will get through it in a few years. The alternative appears to be endless debt and austerity, with no chance of recovery in the foreseeable future.

  11. 11
    Corner Stone says:

    @shell: Thankfully for Greece, the ECB probably is not capable of inflicting as much long term harm as our SCOTUS.

  12. 12
    Tissue Thin Pseudonym says:

    @Botsplainer:

    Is there anybody quite so stupid as a German banker?

    The bankers made out like bandits. They were paid off by the 2010 bailout, pretty much in full. Greece’s creditors now are the IMF, the ECB, and some of the national governments.

  13. 13
    Corner Stone says:

    Little Pro-Tip for Discovery Channel. Slow-mo camera leads do *not* work well with borderline obese leading men.

  14. 14
    Chris says:

    @feebog:

    Endless debt and austerity, and also the precedent that governments obey unelected creditors and not voters, i.e. democracy in name only.

    Rooting for Greece.

  15. 15
    Tissue Thin Pseudonym says:

    @Corner Stone: The ECB is capable of dishing out much, much worse than SCOTUS.

  16. 16
    Elmo says:

    @Botsplainer: one of my dearest friends is landing today, for a ten-day vacation. Him and his wife and daughters. They booked and paid in advance months ago, so by God they’re going.

  17. 17
    srv says:

    Krugman was against it before he was for it. First he said the EU was a mistake and countries like Greece shouldn’t be let in. Now he wants to prop them up.

    Even when liberals are right, they are wrong.

    The impending collapse of the EU and China cannot bode well for Obama’s dollar mills.

  18. 18
    Corner Stone says:

    @Tissue Thin Pseudonym: Aye, vote No and you may die. Vote Yes, and you’ll live… at least a while. And dying in your beds, many years from now, would you be willin’ to trade ALL the days, from this day to that, for one chance, just one chance, to come back here and tell our ECB that they may take our lives, but they’ll never take… OUR FREEDOM!

  19. 19
    rikyrah says:

    shyt.just.got.real.

  20. 20
    sophronia says:

    I’d resort to that cliché about chutspa, the kid who murders his parents then seeks leniency ‘cuz he’s an orphan.

    “Chutspa”? Oy.

  21. 21
    Corner Stone says:

    @Elmo:

    one of my dearest friends is landing today, for a ten-day vacation. Him and his wife and daughters. They booked and paid in advance months ago, so by God they’re going.

    If he brought enough cash money they will probably have the greatest vacation in their entire lives.

    ETA, Although I do have to say…Greece has been in a slow motion Matrix bullet-video style breakdown for a couple years now. What in the hell motivated him to book a vacay and take daughters?

  22. 22
    Debbie says:

    @Botsplainer:

    You wouldn’t rank American bankers lower?

  23. 23
    divF says:

    @srv:
    Obviously, you did not read any of the long quotes regarding the payoff of the banksters in 2010. But I will stop.

    [grits teeth].
    “DoNotFeedTheTroll, DoNotFeedTheTroll, DoNotFeedTheTroll, DoNotFeedTheTroll”.

  24. 24
    Botsplainer says:

    @Elmo:

    She’s had a blast over this past month – found neat things at her dig.

    That’s her third dig this year.

  25. 25
    Corner Stone says:

    @Debbie:

    You wouldn’t rank American bankers lower?

    Hell, no. German bankers may keep coming to the top but for some reason they always find themselves at the short end of the stick when shit gets real.
    American banksters just keep gettin’ richer.

  26. 26
    Botsplainer says:

    @Debbie:

    Our bankers are officiously incompetent, but not evil. For that special combo of smug incompetence AND evil, Mittel Europa has no equal.

  27. 27
    Corner Stone says:

    @srv:

    Krugman was against it before he was for it. First he said the EU was a mistake and countries like Greece shouldn’t be let in. Now he wants to prop them up.

    The EU was a mistake if your name is not “Germany”, and Greece should never have been let in. It was obvious they were cooking the books to get passed. This was reported in real time for years and while their application was being processed.
    And now they should have their debts written down. That makes everybody better off in the mid to longish term. It’s pure stupidity to try and show Greece who is boss by cutting liquidity and access to reserves. What does Greece have that the ECB and it’s rulers want? No oil, I do not believe. Hard to see how the ECB is going to get whole skimming olive oil and tourism profits for the next 40 years.

  28. 28
    Joel says:

    This is like watching a Lakers-Thunder matchup.

  29. 29
    Chris says:

    @Botsplainer:

    not evil?

  30. 30
    dmsilev says:

    @Corner Stone:

    No oil, I do not believe.

    Olive oil doesn’t count?

  31. 31
    divF says:

    I’m watching the live-blogging at theguardian.com over coffee. 60% no vote, with 30% of the vote reported.

    I’m wondering if the Germans saw this coming the last couple of days, what with the sudden conciliatory noises coming from them on Saturday.

  32. 32
    bk says:

    @sophronia:

    “Chutspa”? Oy.

    Hoot spa.

  33. 33
    Xenos says:

    Among creditors, a big catchphrase now is “moral hazard”.

    Exactly. Greece is being crucified pour encourager les autres.

    This is not even about the Greeks at this point.

  34. 34
    cmorenc says:

    @Chris:

    European conservatives are discovering what the American ones figured out fifty years ago: tribalism is one hell of a drug, and a great way to rally people that you might’ve thought were “lefty.”

    Um…the Eastern Europeans invented “tribalism as a drug” centuries ago, and the potential for successfully stoking it into barbarous ethnic wars has always been there not very far under the surface of relatively calm times (such as Tito was able to maintain for several decades in the conglomeration that was Yugoslavia) – Serbia’s Milosevic was able to successfully stoke lingering Serbian ethnic resentments over a battle fought way back in the 1300s that the Serbians were on the short end of, into a genocidal war in Bosnia.

  35. 35
    Botsplainer says:

    @Chris:

    Way too stupid to be evil.

  36. 36
    JPL says:

    Fox Business will point to Iceland as a country where austerity worked, without realizing that they didn’t protect the investors.

  37. 37
    beltane says:

    @Botsplainer: Our bankers may be just as evil and incompetent, but they are also slithery as eels and quite adaptable to changing circumstances. The German bankers appear to be cursed by a singular lack of imagination. It was their way or the highway without any thought of coming up with a different “their way.”

  38. 38
    JPL says:

    @Botsplainer: Does your daughter still have cash on hand?

  39. 39
    Baud says:

    @Botsplainer:

    Excellent.

  40. 40
    divF says:

    From the Guardian, the quote of the day:

    Eurozone finance ministers are not planning on an emergency meeting tomorrow.

    One official has told Reuters:
    “No way. (The ministers) would not know what to discuss.”

  41. 41
    srv says:

    @divF: Long quotes and mathy theory. tl;dr. I suppose if Krugman did that for Iraq you’d be all in.

    @Corner Stone:

    What does Greece have that the ECB and it’s rulers want?

    They should just sell some of their islands to Google or the Chinese. Not sure why Greece even needs to be a country. Such passé concepts for a country that can’t even manage to collect taxes.

  42. 42
    Botsplainer says:

    @JPL:

    I think she’s got a little ouzo and dolmas money, but that’s about it.

  43. 43
    Corner Stone says:

    @dmsilev: Well, I know I don’t want my olive oil supply interrupted but somehow I find it a less than compelling profit replacement for the ECB and related cartels.

  44. 44
    divF says:

    @beltane:
    I think this was an example of too clever by half. Unlike the US in 2008, who made a direct bailout of the banks and tried to blame it on irresponsible borrowers later, the ECB in 2010 thought could pay off the banks through a “bailout” of Greece, and then leave the latter holding the bag.

    61% no, with 40% of the votes counted.

    ETA: modified to clarify the US strategy.

  45. 45
    JPL says:

    My favorite Guardian comment.. No supporters celebrate.

    @Botsplainer: Well the ouzo should tie her over until Tuesday.

  46. 46
    Davis X. Machina says:

    The German bankers appear to be cursed by a singular lack of imagination. It was their way or the highway without any thought of coming up with a different “their way.”

    There is no different ‘their way’. There is one way. Period.

    Steve Randy Waldman doesn’t post often, but when he does, it’s always worth stopping and reading.

    His 2012 “Depression Is A Choice” remains the skeleton key that unlocks all the macro news you read every day.

    We are in a depression, but not because we don’t know how to remedy the problem. We are in a depression because it is our revealed preference, as a polity, not to remedy the problem. We are choosing continued depression because we prefer it to the alternatives.

    …the preferences of developed, aging polities — first Japan, now the United States and Europe — are obvious to a dispassionate observer. Their overwhelming priority is to protect the purchasing power of incumbent creditors. That’s it. That’s everything. All other considerations are secondary. These preferences are reflected in what the polities do, how they behave.

    (Italics mine…)

  47. 47
    Botsplainer says:

    @divF:

    Eurozone finance ministers are not planning on an emergency meeting tomorrow.

    One official has told Reuters:
    “No way. (The ministers) would not know what to discuss.”

    Somebody is going to need to do one of those Downfall parodies with Hitler as Merkel, yelling at German finance and banking officials. Right now, they’re coordinating on telling her the bad news.

  48. 48

    My two cents on the Greek saga, demonstrated with the help of kittehs.

  49. 49
    Mike in NC says:

    How long before Kansas under Brownback resembles Greece?

  50. 50
    Davis X. Machina says:

    @Botsplainer: Bootleg antiquities should be a decent cash-substitute for a while. “Provenance? That’s the capital of Rhode Island, right?”

  51. 51
    Baud says:

    @Botsplainer:

    Merkel is going to need a shoulder rub. I know someone who gives good ones.

  52. 52

    @Davis X. Machina: Keynes had their number, he called them rentiers. The excessive focus on interest rates and not enough on unemployment by central banks, also benefits them. Another thing we have Reagan and company to thank for. The late seventies was the pivot, from Keynes’ theory being replaced by the neoliberal claptrap.

  53. 53
    Botsplainer says:

    @JPL:

    There’s carbs in Ouzo…

  54. 54
    TheMightyTrowel says:

    @Davis X. Machina: this gives many of my colleagues nightmares. My 2p: most greeks i know are very aware that tourism is their main draw and that antiquities bring in tourists. As long as Greece stays peaceful, i think the monuments are safe. Our at least safe-ish.

  55. 55
    JPL says:

    @Baud: ugh…

  56. 56
    Davis X. Machina says:

    @TheMightyTrowel: I see — hence the nym. It had to be a.) archeologist or b.) mason.

  57. 57
    Botsplainer says:

    @Baud:

    I picture her as Kate Mulgrew in Orange is the New Black, commanding foot rubs and toenail clipping.

  58. 58

    @Chris:
    Europe has its own major racism issues. France has been stomping on Muslim minorities for awhile, but until recently, most of Europe felt safely segregated. It’s really shocking seeing the same ‘fuck those brown people’ dynamics playing out over there, too.

    It’s ironic that 20 years ago, a Palestinian Christian and an Indian Hindu were telling me that America was WAY less racist than Europe and they were treated much better here. Things really exploded.

  59. 59
    srv says:

    Michael Lewis explained the Greeks 5 years ago:

    As it turned out, what the Greeks wanted to do, once the lights went out and they were alone in the dark with a pile of borrowed money, was turn their government into a piñata stuffed with fantastic sums and give as many citizens as possible a whack at it. In just the past decade the wage bill of the Greek public sector has doubled, in real terms—and that number doesn’t take into account the bribes collected by public officials. The average government job pays almost three times the average private-sector job. The national railroad has annual revenues of 100 million euros against an annual wage bill of 400 million, plus 300 million euros in other expenses. The average state railroad employee earns 65,000 euros a year…

    The Greek public-school system is the site of breathtaking inefficiency: one of the lowest-ranked systems in Europe, it nonetheless employs four times as many teachers per pupil as the highest-ranked, Finland’s.

    As he finishes his story the finance minister stresses that this isn’t a simple matter of the government lying about its expenditures. “This wasn’t all due to misreporting,” he says. “In 2009, tax collection disintegrated, because it was an election year.”

    “What?”

    He smiles.

    “The first thing a government does in an election year is to pull the tax collectors off the streets.”

    Greece makes Iraq look like the model of efficiency of Switzerland.

  60. 60

    @srv: Nobody held a gun to the bankers’ heads or force them to give loans to Greece or buy their bonds.

  61. 61
    Kropadope says:

    @Corner Stone:

    What does Greece have that the ECB and it’s rulers want?

    They want to set a precedent that private creditors can assume ownership of a major nation-state.

  62. 62
    Davis X. Machina says:

    @TheMightyTrowel:

    I’m in Germany right now. The cognitive dissonance of my lefty friends between ‘we don’t like Angela’ and ‘those lazy cheating southern Europeans’ is really ugly to observe.

    My English footy bulletin board is full of people whom I know voted Labour a month and a half ago — because they proudly announced it — derailing every Greece thread within 5 posts into declarations of general olive-oiliness, garlic-fondness, and shifty Mediterranean layabout-hood.

    The sun may have set on the British Empire but the wogs still start at Calais.

  63. 63
    ArchTeryx says:

    @Mike in NC: It already does. However, we have both political and financial unity (stop laughing, dammit!) so transfer payments to Kansas – as with almost all the other Southern states – don’t depend on a plebiscite. We all finance Kansas’ right wing experiment, because that’s what being a united nation means. Both sides may hate it at times, but Kansas isn’t about to spin off as its own failed nation-state.

    The Europeans gave themselves financial unity but not political unity, and when things get stressful, all the old nation-state tribalism songs suddenly become brand new again.

  64. 64
    Baud says:

    Does anyone know how much money Greece owes to foreign lenders?

  65. 65
    Davis X. Machina says:

    @Baud: Sovereign debt about $60 billion.

    Article covers the gamut — other PIIGS, non-sovereign debt, commercial bank exposure.

  66. 66
    Cervantes says:

    @Davis X. Machina:

    The wogs are inside now, by the millions. One need not venture as far as Calais, or even Dover!

  67. 67
    Cervantes says:

    @Baud:

    Does anyone know how much money Greece owes to foreign lenders?

    And on the other hand, who can say what we owe to Greece?

  68. 68
    catclub says:

    Greece defiantly rejects Europe’s bailout offer, Athens says
    CBS News – ‎46 minutes ago‎

    Greece votes ‘No’ to European Union rescue package in decisive referendum
    Sydney Morning Herald – ‎52 minutes ago‎

    Bailout and rescue. No mention of austerity forever offers that I heard about.

  69. 69
    Baud says:

    @Davis X. Machina:

    That link was from 2011.

  70. 70
    Corner Stone says:

    @Kropadope: Greece is a meh nation-state, and if they follow through on their stupid plans they will lose their ass over teakettle. What good is owning Kansas on the Mediterranean if you can’t squeeze any money out of it?
    I’m surprised the people of Greece have not yet out and out burned the place down. If the ECB and EU think they are going to Caliphate the moops in Spain or Italy they are dumber than I thought.

  71. 71
    TheMightyTrowel says:

    @Cervantes: Birmingham is a no go zone after all….

  72. 72
    Cervantes says:

    @TheMightyTrowel:

    Was that a Romney? Remind me.

  73. 73
    Baud says:

    @Cervantes:

    who can say what we owe to Greece?

    Kirk!

    Dr. McCoy: I wish we hadn’t had to do this.

    Capt. Kirk: So do I. They gave us so much – the Greek civilization, much of our culture and philosophy came from the worship of those beings. In a way, they began the Golden Age. Would it have hurt us, I wonder, just to have gathered a few laurel leaves?

  74. 74
    Kropadope says:

    @Corner Stone:

    What good is owning Kansas on the Mediterranean if you can’t squeeze any money out of it?

    Greece is one of the oldest enduring nations and was vitally important to the development of Western civilization.

    As far as why they would want to own it? Well, if they can own it, they can theoretically own anywhere.

  75. 75
    catclub says:

    @srv: Too bad all the people that loaned money to Greece could not figure all that out (But Michael Lewis could) and decide it would be unwise to loan money to them. The entry at the top of the thread on moral hazard seems highly relevant.

  76. 76
    shell says:

    @Botsplainer: Heard an ad the other day for a brand of vodka, where they stressed it was ‘gluten free.’

  77. 77

    @Baud: More than 300 billion euro, about 60 billion to Germany alone.

  78. 78
    Davis X. Machina says:

    @Baud: Oops. Wrong bookmark

    This is current.

    Of the main euro zone member states, Germany’s exposure for the two bailouts totals 57.23 billion euros,France’s is 42.98 billion, Italy’s is 37.76 billion and Spain’s 25.1 billion. That is in addition to their contributions to the IMF loans, commensurate with their respective quotas in the global lender.

  79. 79

    @Davis X. Machina:

    Their overwhelming priority is to protect the purchasing power of incumbent creditors. That’s it.

    I strongly disagree. The overwhelming priority in America, and probably in Europe, is to punish the Other, crush those unwanted ethnicities until they submit or go away. This dovetails so closely with protecting rich creditors that the creditors find it ridiculously easy to get everything they want.

  80. 80
    catclub says:

    @schrodinger’s cat: Those kitties do not seem to have experienced much austerity.

  81. 81
  82. 82
    Davis X. Machina says:

    @Frankensteinbeck:

    True, the creditor class is not notably diverse. But it behaves the same way in largely homogeneous (Japan) and heterogeneous (US) countries.

    So we have achieved a sort of color-blindness after all.

  83. 83
    The Pale Scot says:

    @srv:

    They should just sell some of their islands to Google or the Chinese

    How does that work?

    Is all the property seized from private owners and put up for sale?

    Or does another political entity (say China) take over and impose their laws over the population, RE and culture, like Hong Kong or Tibet?

    I think NATO would have a problem with that.

    Or seizure/or not followed by the creation of an extra-territorial entity? Which is surrounded on three sides by desperate would be immigrants?

    Ya, I’m sure Google would go for that.

  84. 84

    @catclub: The kitteh troika is imposing austerity, not experiencing it.

  85. 85
    Chris says:

    @Frankensteinbeck:

    Oh, I’ve been hearing nonwhite people tell me for years that it was worse in Europe.

    What’s been picking up steam lately isn’t racism but the Southern Strategy esque marriage of racism with center right, neoliberal elites. To use your French example, there’s always been loooots of Muslim bashing racism, but the attempts by the center right to reach out to far right voters are something newer. Thirteen years ago, when a center right president ended up in a run off against a far right challenger, he reacted by turning the entire election into a referendum against fascism and refused to even debate the fascist. But today? I don’t see that happening.

    Germany and France vs Southern Europe is in a similar vein in terms of rentier elites leveraging popular prejudices.

  86. 86
    ericblair says:

    @Botsplainer:

    One official has told Reuters:
    “No way. (The ministers) would not know what to discuss.”

    Sounds funny, but I don’t see anything weird about the answer. What would they discuss? They’ve got nobody on the other side of the table and no counter-counter-counter-whatever proposal, so they’d be sitting in Brussels or Frankfurt or wherever fiddling with their water glasses.

    So besides reviewing the cavalcade of dumbassery and money fever that got everyone to this point, like, now what. The Syriza government seems to be relying very heavily on a belief that a Grexit is an unthinkable catastrophe for the ECU, and doesn’t seem to have lifted a finger to plan for the contingency. My read is that the rest of the currency union is less convinced about its unthinkability, plus the fact that Germany never wanted them in in the first place. So no shiny new deal, especially by Tuesday, and the whole economy could just stop. Then it’s time for the dudes with the tanks again.

  87. 87
  88. 88
    Baud says:

    @The Pale Scot:

    Unless Greece has assets in foreign banks, no one can do anything if they don’t pay except refuse to lend them more money.

  89. 89
    Chris says:

    @Kropadope:

    This.

  90. 90
    divF says:

    @ericblair:

    They’ve got nobody on the other side of the table

    From the Guardian:

    Greek television are reporting that Alexis Tsipras has spoken with several European leaders, starting with the French president Francois Hollande.

    There are also suggestions that ECB president Mario Draghi has also been contacted.

    They (the Troika) have someone on the other side of the table, and they’ve got the starting point for negotiations (the IMF analysis). They were just betting that the referendum today would rid them of both.

  91. 91

    @Kropadope: Like the East India Company!

  92. 92
    Ruckus says:

    @Davis X. Machina:
    They aren’t color blind, they do see one color. US currency green. It is the shade of everything in their world.

  93. 93
    Davis X. Machina says:

    @Ruckus:

    Les rentiers n’ont pas de patrie.

  94. 94
    TheMightyTrowel says:

    @schrodinger’s cat: exactly! The age of european imperialism may be on the wane but it still dresses itself in a somber black banker’s suit and wears the guise of a serious, hard working old white guy.

  95. 95
    srv says:

    @The Pale Scot:

    Or does another political entity (say China) take over and impose their laws over the population, RE and culture, like Hong Kong or Tibet?

    One country, many systems.

    Peter Thiel and crew have always wanted their own island. Am sure a few pillboxes would not be a problem. Israel manages.

  96. 96
    jl says:

    Thanks for link to Waldman piece. Interesting analysis and graphs.

    I would be amazed if any serious negotiations happen before result of the Greek referendum is known. Unless the troika decide that the chances of a ‘no’ vote are too high, and the consequences too unappetizing, and they decide to back off.

    Only thing clear to me is that the macroeconomic analysis and predictions of Eurozone poobahs, and in this case IMF, have failed. No reason to believe anything they say about what will happen if their policy preferences are followed.

    Edit: one minor quibble perhaps with Waldman is that one concern of troika should be effect of Greek exit on incentives for other Eurozone countries, up to half a dozen, whose growth and fiscal policy have been harmed by Eurozone membership.

  97. 97
    The Pale Scot says:

    @Davis X. Machina:

    Sovereign debt about $60 billion.

    To put that in perspective it’s about 6% of the current estimated cost of the F-35, the Brewster Buffalo of the 21st century.

    Edit; Re: Oops. Wrong bookmark

    So 16% of useless defense pork barrel

  98. 98

    @Davis X. Machina:
    There was a big racist element in setting up Japan’s position, too. For decades big companies got everything they wanted, period, because it was a point of pride that Japan had to outcompete the rest of the world.

    @Ruckus:
    I kind of think they see money as a race. Romney’s famous leaked 47% speech wasn’t about manipulating the plebes. He was sharing with his fellow rich people how much they really hate the poor.

  99. 99
    Corner Stone says:

    @Chris: “This”, what? Having Greece in default does not seem to be a winning strategy for the EU. Once they bar the doors on the Greece banks, then what?

  100. 100
    Xenos says:

    @ArchTeryx: I work in a very pan-European branch of financial services in Luxembourg.

    When I explain to German colleagues that holding the the US together means that states like New Jersey pay 1/3 of their share of federal taxes to states like Arkansas, West Virginia, and Louisiana in perpetuity they are absolutely gobsmacked. The resent it enough that they have to do this for parts of the former East Germany. The idea that the EU means they are going to have to do the same for the peripheral nations in a non-starter.

    And sure enough, like the days of the ‘cross of gold’, tight monetary policy and efficient labor in the industrialized and developed countries leads to the systematic immisseration of the agricultural, peripheral states.

    People ask why German bankers and German planners don’t get it. This is because the ones who rise to leadership and control are experts in power – its accumulation and employment, and not really that knowledgeable about economics or finance outside their own little cushy realm.

    ETA – final point: the political struggles over the integration of the US economy based on a centralised banking and monetary system are very much the model of what the EU will have to go through in order to survive.

  101. 101
    Haroldo says:

    @Frankensteinbeck: (and DavisX. Machina): As the kidz say, reject the tyranny of “or.”

  102. 102
    raven says:

    @Ruckus: Hey, I wasn’t dissin your service (but you knew that), I just wondered when hot swaping was ended.

  103. 103
    divF says:

    @jl:

    before result of the Greek referendum is known

    Latest update: with 57% of the votes counted, 61% voting no.

  104. 104
    Heliopause says:

    a high-stakes referendum that many said they did not understand

    I wish I didn’t have to keep reading this, including from some left commentators, because it’s completely vacuous. In approximately 100% of democratic votes taken anywhere, anytime, for any purpose, a vast number of voters only have a cursory notion of the issues involved. The inference that this referendum is somehow less legitimate than any other democratic vote is not supportable.

  105. 105
    Corner Stone says:

    @jl:

    and in this case IMF, have failed. No reason to believe anything they say about what will happen if their policy preferences are followed.

    It’s been reported that the EU tried to suppress a report from the IMF that laid out a case the leftish Greek govt has been stating all along.
    They said it was beyond foolish to push Greece into default. The EU Banksters did not want that info to see the light of day.
    Don’t get me wrong, the IMF is a bunch of shady no-goodniks who go in and set nations up to fail with their loan terms. *Cough* Argentina *cough*. But in this case at least they stated they were pulling down Greece’s petticoats and looking for Her modesty.

  106. 106
    mike with a mic says:

    The point of austerity isn’t to improve the economy, it’s to get rid of the historical fluke that was a middle class in a post WW2 society. A middle class is an abnormality, a very odd abnormality that the professional and elite classes have to pay for. It could be argued that it was needed to put a pretty face on challenging the USSR and rebuilding post WW2, but it sure as fuck isn’t needed now so the powers that be have decided to do away with it.

    Austerity right now is a corrective measure, to bring everything back to the way it was originally ordered and run.

    And much as I hate to say it, short of violence in the streets and throwing socially liberal well off urban types in tumbrels and lopping their heads off, this fight already over and lost. Of course doing that would mean getting rid of our allies that let us win social battles. So it’s sort of a choice, give up on social issues and engage in a good bit of ultra violence against the economic elite… or get ready to go back to the economic order that existed prior to WW1 and WW2. There is no other option now.

  107. 107
    Sly says:

    @TheMightyTrowel:

    The cognitive dissonance of my lefty friends between ‘we don’t like Angela’ and ‘those lazy cheating southern Europeans’ is really ugly to observe.

    Ethno-nationalism in Europe has an elective affinity with racism in America, especially to the extent that they form an intractable basis for reactionary politics.

    Just as the New Deal could only be passed by placating the interests of white supremacists, and began to unravel once the victims of white supremacy began to be incorporated into the system, much of Europe’s social democracy took shape in an environment of ethnic exclusion, and support for those systems break down on issues like immigration. Considering this, it’s not surprising that the most popular euroskeptic/populist parties across Europe – UKIP in the UK, Dansk Folkeparti in Denmark, National Front in France, Golden Dawn in Greece, etc. – are also xenophobic as fuck.

  108. 108
    Botsplainer says:

    @ericblair:

    Sounds funny, but I don’t see anything weird about the answer. What would they discuss? They’ve got nobody on the other side of the table and no counter-counter-counter-whatever proposal, so they’d be sitting in Brussels or Frankfurt or wherever fiddling with their water glasses.

    Owe the bank $20,000 and its your problem. Owe the bank $300,000,000,000 and it is the bank’s problem.

    We’re about 5 years into bank imposed austerity which has proven to be such a manifest failure that the Greeks elected a leftist government that flatly stated “no more”, and held a plebiscite to back that up. The Greek people have spoken and the bankers now have a decision to make, that decision whether to benefit the Greek people or not. If not, the Euro and stock markets will lose value.

  109. 109
    Davis X. Machina says:

    @Xenos:

    This is because the ones who rise to leadership and control are experts in power – its accumulation and employment, and not really that knowledgeable about economics or finance outside their own little cushy realm.

    From Essayist-Lawyer, a commenter on Simon Wren-Lewis’ blog MainlyMacro:

    Somehow I can imagine that if the same VSP’s had been commenting on the US election in the fall of 1932, they would be saluting Herbert Hoover for his highly successful economic stewardship. After all, they would say, despite intense pressure he managed to maintain the dollar peg to the gold and had made impressive (though not ultimately successful) strides toward balancing the budget. And, indeed, the economy had bottomed out and was showing early stirrings of recovery. And now that irresponsible populist Roosevelt was threatening to undermine the whole thing.

  110. 110
    ericblair says:

    @divF:

    They (the Troika) have someone on the other side of the table

    They’re on the other side of the table, tomorrow morning, with a written coordinated proposal? Because that’s what we’re talking about. The IMF analysis is an analysis. At this point, there’s nothing that could be agreed to besides how and when to actually meet and who brings what.

    The ministers are politicians and will need to have their staffs crunch the language on anything they get. Then they’ll have to agree internally. Then they’ll have to coordinate. Doesn’t matter if they’re Satan’s spawn incarnate or the International Do-Gooder Kitten Saving Society. It’s not going to happen quickly, but Greece is assuming it will, and a lot of other shit could happen in the meantime.

  111. 111
    Corner Stone says:

    @Xenos:

    the political struggles over the integration of the US economy based on a centralised banking and monetary system are very much the model of what the EU will have to go through in order to survive.

    But how then, can it survive? Wasn’t it doomed to fail from the beginning? Just another way to backdoor hegemony financially, instead of militarily?

  112. 112
    The Pale Scot says:

    @Baud:
    I’m commenting on the idea, which I’ve been hearing personally, that Greece should “sell” some islands, I can’t get a coherent answer on how that works.

  113. 113
    Baud says:

    @mike with a mic:

    So it’s sort of a choice, give up on social issues and engage in a good bit of ultra violence against the economic elite… or get ready to go back to the economic order that existed prior to WW1 and WW2.

    Old economic order it is then.

  114. 114
    jl says:

    @Xenos: Probably true, and I think that explains much of Obama administrations enthusiasm for sketchy trade deals. Vague boilerplate and nonsense about geopolitical power politics credibility chips and influence magic power pills dominate, actual economics takes a back seat. That may explain why WH talking points and analysis of TPP consist of vague boilerplate about the benefits and actual ‘free trade deals’ from decades ago, with no analysis of the actual TPP provisions (though I guess if everything has to be all secret secret until 90 days before an up or down vote, that is another obstacle to publishing an actual analysis)

    But, it is true that German, and to lesser extent, French, macroeconomists who Eurozone officials will listen too do not accept DeLong/Summers/Galbraith/Krugman/Stiglitz/Solow macroeconomics. They still believe austerity and slashing pensions and pay and rights of ordinary people, which is what their vague structural reform talk boils down to, will do something good, despite the miserable failure of their past predictions and forecasts.

  115. 115
    Baud says:

    @The Pale Scot:

    A country can always raise funds by selling its assets. No chance Greece does that.

  116. 116
    Botsplainer says:

    @Corner Stone:

    “This”, what? Having Greece in default does not seem to be a winning strategy for the EU. Once they bar the doors on the Greece banks, then what?

    Profit!

  117. 117
    MattF says:

    Note that some US speculators are heavily into Greek debt. It’ll be interesting to see if they take big losses. Anyone wanna bet?

  118. 118
    jl says:

    @Corner Stone: It is true, as Waldman says, that the private creditors have been made whole enough that they don’t have much incentive to work with Greece, they are interested in going in direction of high probability of squeezing more cash out in short run, since more money is better than less.

    Edit: IMF has done a much better job of late in macroeconomic analysis. I don’t have enough time, and reports too conflicting for me to follow it all. But it is true, we are seeing some of the dogmatic old IMF worldview in Greek crisis. I don’t know why. Maybe political pressure by Eurozone bigshots?

  119. 119
    jl says:

    @divF: Thanks for update.

  120. 120
    Elizabelle says:

    @Botsplainer: She’s been there for history.

    Unplanned lesson, but a fascinating one.

  121. 121
    Corner Stone says:

    @jl:

    They still believe austerity and slashing pensions and pay and rights of ordinary people, which is what their vague structural reform talk boils down to, will do something good, despite the miserable failure of their past predictions and forecasts.

    Pushing austerity is not, and has never been, about doing something good. It’s quite simply not a viable business model. No one else is going to come in and give the banksters their money. They will have to get it from Greece over a longer period of time or if they push them into default they will not get it at all. There will be nothing left to own beyond tourism. The pension system is fucked. They do not have any natural resources worth arguing over. How many franchisee licenses can you sell to put Subways and McD’s next to ancient landmarks? Or rent out the amphitheater for a Bieber one night only concert for some birthday of a 16 yr old daughter of a German oligarch?

  122. 122
    divF says:

    @ericblair:

    The Eurozone finance ministers are not ready to talk because they were assuming they would scare Greece into voting yes. Since (as pointed out by Botsplainer) they have 300B Euro on the table to lose, you would think they would have a backup plan.

    As I said above, I think the conciliatory noises from Germany on Saturday indicates exactly when they realized that there was a possibility they might be on the short end of the vote.

  123. 123
    Xenos says:

    @Corner Stone: My not-very-well-informed take on this is that both the left and the right, in central EU and in Greece knew it would blow up. And knowing that they built the EU into a system that could not disengage Greece without wrecking the whole financial system.

    This crisis was planned for and expected, sooner or later. It is just that both right and left, in Frankfurt and in Athens, thought they could manuever through the crisis to get greater power and financial consolidation on their preferred terms.

    When the bomb went off, however, the damage has been much, much worse than expected, and is throwing the survival of the entire project into question.

    Nobody comes out of this looking good.

  124. 124
    The Pale Scot says:

    @Baud:

    A country can always raise funds by selling its assets. No chance Greece does that.

    How does a country sell an (a populated, highly developed) island? Does the population become Chinese and keep the title their properties? What becomes of the mortgage agreements. The Louisiana Purchase was a long time ago.

    On the other hand, from what I’ve read China could use some good diners

  125. 125
    MobiusKlein says:

    @divF: Fixed link: here

    39y, 61 n

  126. 126
    Corner Stone says:

    @divF:

    As I said above, I think the conciliatory noises from Germany on Saturday indicates exactly when they realized that there was a possibility they might be on the short end of the vote.

    According to reports, they went full court press on trying to persuade Greek citizens that Yes was winning the day ahead of the polls.

  127. 127
    divF says:

    @MobiusKlein:
    Thanks.

  128. 128
    catclub says:

    @MattF: It all depends on where they bought in. There is evidence that they bought very low:

    Third Point invested in Greek government debt when it traded at depressed levels and the market has gradually recovered. Greek government bond yields have settled below 10 percent after shooting above 30 percent at the height of the country’s debt crisis.

  129. 129
    jl says:

    @Corner Stone: Greece is a major agricultural exporter, and its agricultural sector could be larger. If Greece left Euro it could lower its exchange rate dramatically while lessening disruption of debt deflation and large changes in relative prices and incomes internally.

    So, I don’t share view that Greece has to be an eternal economic basket case. Doubters will look at precedents like Iceland and Argentina and some Asian economies from the 1990s crises and claim their recoveries were due to some special situations that do not apply to Greece. But that is just 20 20 hindsight excuse making.

    That route would be immensely painful, but what Greece is facing with current Eurozone policies is immensely painful, and using actual data to guide forecasts, will results in decades of what amounts to national debt slavery. So, no good short run options at this point.

  130. 130
    The Pale Scot says:

     Edit: I guess the idea is that the Greek government owns islands outright and would sell them but remain Greek.

  131. 131
    Roger Moore says:

    @Davis X. Machina:

    So we have achieved a sort of color-blindness after all.

    They aren’t color blind; it’s just that the color they care about is green.

  132. 132

    Folks, the European Union is a political federation, the Eurozone is the part of the EU that uses a single currency, the Euro.

    Xenos@100: “I never discuss economic policy with Germans,” jokes a senior eurozone official in Brussels, “because for them it’s not about economics, it’s religion.”—The Guardian. Angela Merkel is herself the daughter of a Lutheran convert pastor, a man so devout he moved his family to East Berlin to evangelize the Communists. The idea of the deserving poor comes from Martin Luther himself.

    Such views, widespread in northern Europe, combined with the household metaphor of a national economy, fly directly in the face of macroeconomic reality. The Eurozone is failing because of them. Here in the USA we are more used to the situation and we grudgingly accept the conflicts and dislocations of a single currency. Not so in the European Union.

    With over 70% of the ballots counted, the Greek vote is going 62% no. I suspect, had the troika not decided to force the Greek banks to close, it would have been a much closer vote. We are (at least over in the Guardian) seeing typically clueless remarks from the German leadership. It appears that, if the German leadership has its way, Greece will be forced out of the Euro. I don’t see is why the German leadership thinks this is a threat with any weight. The troika has already forced bank closures in Greece. It has already demanded that Greece impoverish itself for at least a generation and only be allowed to recover at the convenience of its creditors. What else can they do? Invade Greece?

  133. 133
    Botsplainer says:

    @divF:

    The Eurozone finance ministers are not ready to talk because they were assuming they would scare Greece into voting yes. Since (as pointed out by Botsplainer) they have 300B Euro on the table to lose, you would think they would have a backup plan.

    Like Mitt Romney, they were so self-assured of their position that they didn’t have a concession speech prepared.

    As I said above, I think the conciliatory noises from Germany on Saturday indicates exactly when they realized that there was a possibility they might be on the short end of the vote.

    I’m thinking that it was way too little, way too late. They come out of this looking like overbearing assholes, particularly after taking direct cheap shots at the Syriza government and Tsipras personally.

  134. 134
    ericblair says:

    @divF:

    The Eurozone finance ministers are not ready to talk because they were assuming they would scare Greece into voting yes. Since (as pointed out by Botsplainer) they have 300B Euro on the table to lose, you would think they would have a backup plan.

    The way I read the tweet is that there is no proposal on the table to discuss tomorrow, much less analyzed and internally coordinated. What we found out tonight is what Greece won’t agree to, which is useful, but doesn’t say exactly what they would agree to. All the ministers could do would be to tell the other dudes in expensive suits at the table that they’ll send it to their capital for analysis and be ready with a response by X date. No point.This is simply happening too fast and too chaotically for a consensus-based organization to handle, regardless of how good or evil they are.

  135. 135
    jl says:

    @The Raven on the Hill: I think German economists are more willing to make the reasoning behind their non-Keynesian, and effectively neoclassical macroeconomics more accessible. Which I think gives them more influence and more consistent ideological buy-in. In the US the same types tend to just say ‘well, you can’t follow my fancy math and I am smarter than you’. The fancy math is of course, not essential at all.

  136. 136
    Roger Moore says:

    @Ruckus:

    They aren’t color blind, they do see one color. US currency green. It is the shade of everything in their world.

    I’m pretty sure they see Reds everywhere, also, too.

  137. 137
    Corner Stone says:

    @jl:

    Top 5 Products exported by Greece Refined Petroleum (35%), Packaged Medicaments (3.1%), Aluminium Plating (1.9%), Non-fillet Fresh Fish (1.7%), and Raw Cotton (1.7%)

    That doesn’t format well but here’s the source:
    OEC
    And from something a few years ago:

    Greece trade imbalance has been managed with loans from the EU, remittances from expatriates, shipping and tourism. Tourism has, in fact, helped the nation collect foreign exchange and contributes to the GDP on an increasing trend.

    Greece Trade, Exports and Imports

  138. 138
    Bobby B. says:

    “Troika is Russian dance”
    -Miklos Molnar 1961

  139. 139
    Tom Q says:

    Just for the record: CNN’s coverage (what they squeezed in between wall-to-wall talk about the royal christening) amounted to an interview with Nicholas Burns — mostly-Republican though he served under Clinton as well — who called the Greek government “radical” and scolded the voters for not listening to their betters. He also suggested the troika’s just going to sit there making the same proposal till Greece rolls over and plays dead.

  140. 140
    Corner Stone says:

    @ericblair:

    This is simply happening too fast and too chaotically for a consensus-based organization to handle, regardless of how good or evil they are.

    Given our calendar date I will, dare I say, compare it to an Articles of Confederation type event?

  141. 141
    Botsplainer says:

    @ericblair:

    They’re going to have to actually move on this one, after overplaying their hand. There isn’t the luxury of lots of time.

  142. 142
    Corner Stone says:

    @Tom Q:

    He also suggested the troika’s just going to sit there making the same proposal till Greece rolls over and plays dead.

    IMO they aren’t going to be able to try that approach for very long, if at all. If the Greferendum keeps at something over 60% that will be like a taser to the boxer briefs of the ECB. Not a knockout blow, but highly unpleasant and possibly attitude changing, in the short term.

  143. 143
    ericblair says:

    @Corner Stone:

    Given our calendar date I will, dare I say, compare it to an Articles of Confederation type event?

    Drafted 1776, approved draft for ratification 1777, ratified 1781. Probably.

  144. 144
    The Pale Scot says:

    I reading the Vanity Fair article, does anyone know what is meant by legal, under whose legal system?

    Here, in 2001, entered Goldman Sachs, which engaged in a series of apparently legal but nonetheless repellent deals designed to hide the Greek government’s true level of indebtedness. For these trades Goldman Sachs—which, in effect, handed Greece a $1 billion loan—

  145. 145
    divF says:

    @ericblair:
    I’ll grant that part of this is the sluggishness of consensus-driven processes. But there is also bureaucratic tunnel vision. Tsipras and Varoufakis are not playing by the “quiet rooms” (h/t to Mitt Romney) rules that the EZ finance ministers are used to, and consequently have caught them flat-footed. Whether you agree with them or not, you have to admire the way the current Greek government is fighting rather than rolling over.

    What I don’t understand is the IMF’s play in this. The release of their analysis just days before the election was a massive break politically with the rest of the Troika.

  146. 146
    Ruckus says:

    @Davis X. Machina:
    I thought you were being more specific to the US.
    OK here is the corrected line.
    The color of currency. It is the shade of everything in their world.

  147. 147
    Botsplainer says:

    @Bobby B.:

    Troika is Russian dance”

    And the best of the Russian folk dances at that. Done it many times over the years.

  148. 148
    Aleta says:

    The hard thing to watch and admit is that Greece is not an independent country. Despite all the differences Krugman pointed out between Greece and Puerto Rico, neither can print currency and both are subject to decisions not made by their own government.

    How hard would it be for Greece to raise the tax on foreign-owned vacation properties and other foreign-owned assets? And to reclaim those properties if taxes are overdue? For example, there are lots of German-owned properties worth in the million $s located there. I have the impression that they also serve as tax dodges for the Germans, among others of course.

    Anyway, the Greek PM is now off the hook for not achieving his campaign promise to get a deal from Germany. I’m glad about the vote.

  149. 149
    divF says:

    It’s official: 61.5% of the vote is no with 81.5% counted = more than 50% of the total vote goes no.

    Time to go run errands – will check in later.

  150. 150
    Ruckus says:

    @raven:
    No offense taken! If you can’t jab a bit at another branch of the service…….
    I think hot swapping stopped well before I was in with possibly a few diesel subs that might have been left over from the fifties/early sixties. Never heard of another boat or ship that did, from minesweeps to carriers. Now I’m pretty sure that the Constitution used hot swapping, given the number of hammocks I saw on it and the number of crew they had.

  151. 151
    catclub says:

    @divF:

    What I don’t understand is the IMF’s play in this. The release of their analysis just days before the election was a massive break politically with the rest of the Troika.

    The analysis branch that released the study is not the decision making branch, unfortunately.
    The analysis branch is trying to wash their hands of the past (and future) failures of austerity.

  152. 152
    Xenos says:

    @The Pale Scot: I think it means the deal was not fraudulent because while the deal was structured explicitly to hide what was going on, both sides of the deal knew what was happening. Thus, no fraud because even though the whole thing was rife with misstatements, the parties were not relying on the misstatements.

    The financial gymnastics were intended to fool the public, not the parties to the deal.

  153. 153
    Robert Sneddon says:

    @Xenos:

    ETA – final point: the political struggles over the integration of the US economy based on a centralised banking and monetary system are very much the model of what the EU will have to go through in order to survive.

    Ah yes, the War of States Rights that solidified the Federal government’s supremacy in the United States a hundred and fifty years ago. How did that work out for you guys, just a bunch of folks sitting around a table arm-wrestling over debts and further loans or something a lot bloodier? I really REALLY hope we don’t go down your route of integrating our economy. Burning Athens to the ground the way you burned Atlanta wouldn’t go down particularly well over here, never mind the piles of corpses.

  154. 154
    BGK says:

    @TheMightyTrowel:

    The cognitive dissonance of my lefty friends between ‘we don’t like Angela’ and ‘those lazy cheating southern Europeans’ is really ugly to observe.

    The Shorter™ for that in this country is “I’m socially liberal and fiscally conservative.”

  155. 155
    wasabi gasp says:

    One Greece export that the world will never have again. Financiers clearly don’t do dishes.

    http://i.imgur.com/qZwBCHn.jpg

  156. 156
    The Pale Scot says:

    @Xenos: That makes sense I guess, it’s pretty much what happened in Jefferson County.

    But my brain keeps twitching that there is vulnerability somewhere that could be used, I know I’ve seen this sort of thing prosecuted on a smaller stage. It would be a beautiful thing to see GS excluded from the EU.

  157. 157
    Baud says:

    @Robert Sneddon:

    I really REALLY hope we don’t go down your route of integrating our economy.

    I hope you don’t either, but that doesn’t detract from the economic benefits of political integration.

  158. 158

    @jl: I think that’s right. Ordoliberalism (the German name for the German variant of neo-liberalism) is also culturally congenial to Germany. It’s hard for Germans to feel that Keynesian macroeconomics, which they see as deeply in conflict with the ideals of their culture, is nonetheless true.

  159. 159
    sharl says:

    @Ruckus:

    I think hot swapping stopped well before I was in with possibly a few diesel subs…

    There was a recent interview of a submarine guy at FoxtrotAlphaConfessions Of A U.S. Navy Submarine Officer – and according to a lot of the commenters who identify as former and current bubbleheads, it is very accurate. And you are correct, according to #5 on his list of “10 weird things” that non-submariners wouldn’t know about life on a sub:

    There are not enough racks for everyone onboard so some people have to share. Usually three people (junior personnel) will share two racks. There goes your personal space. They call it hot racking because the rack might still be warm from the last guy. They’re supposed to swap in their own sheets, but some guys are scum bags and don’t. Nasty.

    I think that is probably specific to the older diesel subs, as you said. The author said the bigger SSBNs and SSGNs are more comfortable.

  160. 160
    ericblair says:

    @divF:

    Tsipras and Varoufakis are not playing by the “quiet rooms” (h/t to Mitt Romney) rules that the EZ finance ministers are used to, and consequently have caught them flat-footed. Whether you agree with them or not, you have to admire the way the current Greek government is fighting rather than rolling over.

    If the Greek government a) needs the troika to do something, then b) maneuvers so that they can’t to anything, I don’t know how clever this is. Nobody’s covered themselves in glory in this particular shitshow, but it’s going to hit the Greek people a lot harder and sooner than anybody else involved.

  161. 161
    The Pale Scot says:

    I finished the VF article
    But the place does not behave as a collective; it lacks the monks’ instincts. It behaves as a collection of atomized particles, each of which has grown accustomed to pursuing its own interest at the expense of the common good.

    So Greece is the perfect libertarian paradise.

  162. 162

    @Robert Sneddon:

    Despite what American conservatives have been pretending for the past 100 years, that war had a whole heck of a lot more to do with slave owners wanting to forcibly expand chattel slavery than any non-slavery related economic discontents. In fact, when you examine them, all of the economic discontents of the South were about their inability to force slavery on the rest of the country.

    As long as none of your stakeholders have a “peculiar institution” that they’re trying to force the rest of the region to adopt, you’re probably safe from a Civil War-type scenario.

  163. 163
    Belafon says:

    @Robert Sneddon: Except our system integrated much earlier than that, the 1780s. The Civil War came later.

  164. 164
    Applejinx says:

    Wow, if they can do this in Greece maybe we can try this popular democracy thing here. It’s crazy but it just might work!

    @mike with a mic: Nope nope nope. You only think the fight is over and lost because you have some kind of faith in the inherent unbreakable value of ‘capital’ as a concept. That, too, was invented by humans, and right now the amount of capital in the world is (a) silly, and (b) completely imaginary.

    It’s all imaginary numbers juggled by computers and hoarded by a very few organizations (not even individuals so much). The numbers represent a system that is in theory meant to run the damn world. In the event that the numbers go crazy and the world can’t be run by them, the numbers will just have to lose.

    For people who have basically no capital resources other than tools to do their work and some food or whatever, perhaps a shelter to live in (be it humble or kinda middleclass), the wrecking of capital doesn’t mean as much as you think. I saw my house lose 15 grand in valuation and I went ‘woo!’. Hello, somewhat lower real estate tax, something I pay regardless. It’s the hyper-wealthy who have skin in this game, not humanity as a whole.

    Anybody who’s been paying attention knows things have ALREADY gone over the cliff. There is no longer any compromise with the austerians and hyper-rich. There’s noplace on Earth for them to hide. I’m going to guess that taking about half their outrageous wealth will suffice, and they will still be the richest people on Earth because it’s all unmeasurable and keeping score to them… that and ‘moral hazard’.

    Which means ‘fuck the poor, they should get rich if they’re any good’. And that is so childish…

  165. 165
    Ruckus says:

    @sharl:
    As best as I can tell, and it has been a long time since I was in, the old style racks, an aluminum frame with a grommeted flat piece of canvas tied on by rope and a skimpy mattress that felt like it was filled with straw and a very small separate locker has been replaced with a bunk sized locker with a mattress, that feels like it’s filled with straw, on top of that. The locker bunk is much, much better. You sleep on a solid surface, not a 30 yr old piece of stretched canvas. The kicker is that with the locker bunk there has to be one for each person. But over all they take less room and with a curtain you actually have a semblance of privacy.
    Old style
    Locker bunk

  166. 166
    catclub says:

    @ericblair:

    but it’s going to hit the Greek people a lot harder and sooner than anybody else involved.

    The Greek economy has had great depression levels of gdp contraction and unemployment for the last five years already. I think they also know it will get worse.

  167. 167
    Jay C says:

    Results (via Guardian and BBC) as of about 5:00p ET

    Yes 38.56 %
    No. 61.44%

    With 89% of precincts reporting.

    Pretty clear result, I’d say.

  168. 168
    raven says:

    @Ruckus: One story about my old man that is hard to recon with is that he grabbed a porthole when they converted from DD to APD and carried it in his locker the whole war. I had a couple of ling conversations with one of his good buddies from the Crosby after my dad died and he said he didn’t know how he could have done it given the small size of the lockers. I know he left a porthole to me and my stepmom still hasn’t forked it over.

  169. 169
    Roger Moore says:

    @Belafon:

    Except our system integrated much earlier than that, the 1780s.

    Not really. We had a common currency, but there wasn’t anything like our current system of transfer payments to balance the interests of different geographical regions. There also wasn’t any effective monetary policy because there wasn’t anything like a central banking system. And while the Civil War may have been predominantly about slavery, that part of the conflict wound up popping up in all kinds of other places, like disputes about tariffs. We didn’t get anything even like our current system until after a whole series of vicious boom and bust economic cycles in the post-Civil War era finally convinced everyone to accept central banking in the form of the Fed.

  170. 170
    Ruckus says:

    @catclub:
    And it will have a chance to get better. If they had voted to accept the continued austerity and fucking of their economy there was no chance, zero, nada, none. A slim chance is far better than none in the case of an economy. Greece has been used as a chew toy by the EU and it shows and I’d bet good money that the citizens are ready to try almost anything else. They had their own currency for a long time, the EU was supposed to make things better, but instead it made them a lot worse. And for the same reason that Kansas is worse. Idiots with an agenda.

  171. 171
    Robert Sneddon says:

    @Belafon: The early USA was a Union of States rather than being a united nation and the various states had their own economic problems. I believe many states had their own currencies at various times during the assorted depressions and fiscal crises that occurred after independence.

    Slavery was very much the reason for the Second Treasonous Slaveholders Rebellion of 1861 but slavery was a major economic driver of nearly all the states that seceded hence their desperate desire to preserve the Peculiar Institution and indeed to expand slavery into the new territories being opened up to the West and South as the various Native American tribes living there were eliminated or marginalised. After political integration of the United States was completed at bayonet point in 1865 the Federal Bank reigned supreme economically and the slavery-backed Confederate dollar was consigned to the dustbin of history.

  172. 172
    Botsplainer says:

    @ericblair:

    If the Greek government a) needs the troika to do something, then b) maneuvers so that they can’t to anything, I don’t know how clever this is. Nobody’s covered themselves in glory in this particular shitshow, but it’s going to hit the Greek people a lot harder and sooner than anybody else involved.

    So why is it up to a brand new Greek government to fellate their Northern European betters immediately after the Northern European betters have just been pounding them in the ass for several straight years?

    Perhaps der untermensch have recognized that the calculus has changed and they no longer have an obligation to grovel.

  173. 173
    Ruckus says:

    @raven:
    We had no portholes. I know what they are, have seen them on older ships and cruse lines, but never on a warship newer than what I was on, build about 1960.
    Keeping one in his locker. Harder due to inspections rather than room. When I first went in we were not allowed to keep anything other than uniforms, toothbrush, shaving stuff. So the size of the locker was not insurmountable. In, I think 71, that changed and we could keep civies and leave the ship wearing them.

  174. 174
    Ruckus says:

    @Robert Sneddon:
    It may have been relegated legally but it for sure has not disappeared culturally. That’s what is trying to happen now but because it has been allowed to be a cultural thing for so long it will take a generation or eight to be effectively gone, which it isn’t now.

  175. 175

    @Robert Sneddon:

    I’m not sure what you’re referring to when you say “Federal Bank.” There was a single currency after the Civil War, but the Federal Reserve Bank system was not created until at least 40 years after the end of the war:

    https://en.m.wikipedia.org/wiki/Federal_Reserve_Bank

    I also think you’re conflating the various state-issued currencies common before the Civil War with the currency issued by the Confederate States of America when they declared themselves to be a sovereign country. Not the same thing in intent or practice.

  176. 176
    Chris Andersen says:

    This whole thing makes me think of two guys falling off a cliff and then arguing with each other about who gets to hit the ground first.

  177. 177
    Corner Stone says:

    @Robert Sneddon:

    but slavery was a major economic driver of nearly all the states that seceded hence their desperate desire to preserve the Peculiar Institution and indeed to expand slavery into the new territories being opened up to the West and South

    Make no mistake, slavery was an economic driver for the whole of the US at the time, including the “industrialized” North.
    We built this country and it’s wealth on slave labor.

  178. 178
    raven says:

    @Ruckus: Yea, this is what it looks like. There were three sets of them on Four Pipers but when they were converted they were taken out.

  179. 179
    sharl says:

    @Ruckus: Thanks; neither option looks like a king size bed at the Ritz, but the newer locker style bunk system does look like it would be more comfortable.

  180. 180
  181. 181
  182. 182
    sharl says:

    @raven: Fresh water within reach; luxury!

  183. 183

    @sharl:

    My dad always told his children and grandchildren who expressed an interest in the military that they should go into the Air Force, because they never have to sleep on the ground.

    (He was in the Army during mandatory draft years and HATED it. He was out by 1962 and so was never in danger of getting sent to Vietnam.)

  184. 184
    Heliopause says:

    @Tom Q:

    He also suggested the troika’s just going to sit there making the same proposal till Greece rolls over and plays dead.

    They might. On the other hand, the fact that Greece voted overwhelmingly against them might help get a few related messages through to them.
    1. Greece hates you.
    2. Outside observers are increasingly put off by your intransigence. It would be interesting to know what went on behind the scenes of the IMF “leaked” report a few days ago. Also, Obama and other non-European leaders aren’t getting anything out of this continuing farce and I wouldn’t be surprised if they increase the pressure.
    3. Maybe the European left will wake just a bit from its torpor and become a bit more bold as a result of this. If you want to tamp that down you might want to consider a meaningful debt restructuring. The alternative could be genuine gains in the popularity of extreme right and left parties.

  185. 185
    Timurid says:

    @Botsplainer:

    At the end of today, smug fuckers in immaculately tailored $5000 suits are going to be stammering explanations to Merkel…

    …and then dying in agony after getting punted with poisoned shoe spikes.
    But Angela’s white Persian kitty may still have to downgrade from Hill’s to Fancy Feast…

  186. 186
    Ruckus says:

    @Mnemosyne (tablet):
    When I tried to join the AF in 1969 I was told that I had to have a 4 yr college degree to be accepted. I asked why it took a 4yr degree to scrub toilets but all I got was a shoulder shrug and a get the fuck out of my face. The navy didn’t seem to care if I was a member of the Manson cult. Or not. I soon found out why, they were trying to have a 600 ship navy with a 400 ship amount of crew. They kept crap afloat that should have be turned into cars or dive reefs ten yrs earlier.

  187. 187
    sharl says:

    @Mnemosyne (tablet): Our dad never offered strong opinions about us going into the military (and none of us did), but did gently warn us away from the Marines: ‘they…they kind of mess with your head…I’d think hard before choosing them.’ Might have been a combination of what he knew of our personalities, and stories from his brothers that helped form that opinion (though things I’ve heard on my own don’t really conflict with his advice).

    My dad joined the newly created Air Force in 1950, mostly because he hoped to be a pilot. He failed the vision test, and became a radioman. In any event, he would have probably joined any service available, just to be one less mouth to feed at home in rural Michigan poverty, and so he could send money back home to grandma to help with the younger siblings.

  188. 188
    rikyrah says:

    @Corner Stone:

    Make no mistake, slavery was an economic driver for the whole of the US at the time, including the “industrialized” North.
    We built this country and it’s wealth on slave labor

    there is no economic foundation of this country that does not include slavery – North or South.

  189. 189
    jl says:

    @Corner Stone: Thanks, but the second link names ‘food and beverages’ as the top export category. Doesn’t that cover agriculture. Maybe one specific product is not a top 5 export, but I think the overall category is important.

  190. 190
    chopper says:

    @Botsplainer:

    if you owe the bank 100,000 it’s your problem.
    if you owe the bank 100 million it’s the banks problem.
    if you owe the bank 100 billion it’s the taxpayers’ problem.

  191. 191
    PaulW says:

    The standard operating procedure for the IMF has been austerity piled on top of more austerity (SEE: Argentina) and very few countries that rely on that organization really work out (most of them being Third-World nations that remain mired in debt and stripped resources).

    At some point nations are going to fight back against austerity measures. Won’t be at all surprised if Spain does real soon.

  192. 192
    mclaren says:

    @Corner Stone:

    Greece might have to try something radical, like getting rid of money.

    Whuffie economy, anyone? Or how about full-on communism?

  193. 193
    mclaren says:

    @chopper:

    If you owe the bank 100 trillion, it’s capitalism’s problem.

  194. 194
    mclaren says:

    @PaulW:

    The standard operating procedure for the IMF has been austerity piled on top of more austerity (SEE: Argentina)….

    No, it’s not ‘austerity,’ it’s Naomi Wolf’s disaster capitalism, AKA economic shock doctrine.

    STEP 1: Create an artificial phoney financial crisis (sometimes requires a military invasion; but can also be accomplished by loaning unrepayable money, or changing bankruptcy laws to make getting out of debt impossible, etc.)

    STEP 2: Use the financial crisis as an excuse to ram through economic “emergency measures” which systematically dismantle the social safety net and set up savagely regressive crony capitalism looting to strip-and-rip the entire society of its saleable assets via control fraud.

    STEP 3: When the emergency measures worsen the economy, use that as an excuse to ram through even more viciously regressive neo-feudalism.

    STEP 4: When the neofeudalism gets so extreme that riots break out, use them as an excuse to impose authoritarian Pinochet-style dictatorship in a police state where labor leaders get assassinated, protesters rounded up and “disappeared,” and so on.

  195. 195
  196. 196
    mclaren says:

    Professor Simon Wren-Lewis of Oxford University on the Greek debt ‘crisis’:

    It was all going so well. True, Greek GDP did shrink by 25% over 4 years, unemployment rose to 25% and youth unemployment to 50%, but before Syriza’s election Greek GDP had actually stopped falling. Further austerity was planned so that Greece could start to pay interest on its enormous debts, together with various ‘reforms’ that were so obviously in the interests of the Greek economy, and the consensus forecast was that the Greek economy might start to grow at a pace that would also stop unemployment rising. Who knows, in a decade or so it might even fall below 20%.

    But then disaster struck. The Greek people went and spoilt everything by electing a government that suggested that there might be an alternative to all this. Of course the Greek people are not really to blame: how can they be expected to understand there was no alternative to their suffering. The real blame must lie with the ‘populist’ politicians who pretended there could be an alternative. The ever patient and understanding Troika negotiators then had to deal with ‘adolescent ideologues’ who were prepared to use the suffering of the Greek people as a means to achieve their own political ends. They were cheered on by pundits and economists on the left in the UK and US who wanted nothing more than to use Greece as part of a ‘proxy war’ to get more Keynesian policies in their own countries.

    Source: “The Ideologues of the Eurozone,” Simon Wren-Lewis, Mainly Macro blog, 3 July 2015.

  197. 197
    J R in WV says:

    @shell:

    I bet it’s also fat free Vodka!

  198. 198
    mclaren says:

    The escalation of the conflict over Greece is more than a dispute between the government of Prime Minister Alexis Tsipras and Greece’s international creditors. The conflict is a proxy for two wars—one intellectual and one political—in which the Greek people, especially the poor, have been taken hostage. The intellectual war is over the sustainability of the euro project and the economic effects of austerity policies. The political war is over populist and nationalistic policies aimed at addressing the economic cost of the long and severe recession. As with all wars, propaganda has taken over, and facts are being used selectively. For all the talk of Greece’s failed policies, it is often forgotten that the Greek economy last year was growing and Greek bonds had recovered some market access. Last summer Greek GDP growth was approaching 2 percent. The consensus forecast was for an acceleration toward 3 percent this year. Interest rates on 10-year government bonds had declined to 5.5 percent.

    Source: “A Political and Intellectual Proxy War over Greece,” Real Time Economic Issues Watch, 2 July 2015.

    This gets at part of the truth, but not all of it.

    The real proxy war going on over Greece is not about the Eurozone project — it’s about whether multinational corporations and foreign banks will replace governments as the central organs of power in the 21st century, and whether asset stripping and looting by financial entities will replace industrial democracy as the primary mode of wealth generation in the 21st century.

    The proxy war over Greece is one facet of the current clash twixt belligerently regressive authoritarians controlled by the global 1% who seek to strip away the trappings of modern society (democracy, the welfare state, social safety networks, the New Deal, job security, the minimum wage, the 8-hour workday, the 40-hour work week, paid overtime, sick leave, health and safety job regulations, financial regulations, etc.) and susbtitute neofeudalism based on a raubwirtschaft model, AKA “an economy run by anything the strong can steal for themselves as long as they can crush the weak who try to prevent it.”

    In America the proxy war over neofeudalism is being fought by Bernie Sanders vs. Jeb Bush. A perfect illustration of socialist democracy (Sanders) vs the raubwirtschaft economic model (Bush crime family).

    In Britain the proxy war over neofeudalism is being fought by Cameron’s insane austerity + police state surveillance policies vs. mass public demonstrations. And so on.

    This stage of the global economic conflict represents the final push by the 1% to completely destroy democracy and modern industrial economies and replace them with authoritarian multinational corporate/bank diktats and asset looting via legalized control fraud.

    It’s worth noting that the Trans Pacific Partnership is the very definition of “asset looting via legalized control fraud.” The TPP explicitly enacts authoritarian multinational corporate/bank diktats as the central method of governance in signatory nations.

  199. 199
    Corner Stone says:

    @mclaren:

    It’s worth noting that the Trans Pacific Partnership is the very definition of “asset looting via legalized control fraud.” The TPP explicitly enacts authoritarian multinational corporate/bank diktats as the central method of governance in signatory nations.

    It’s nothing more than a way to export wages and codify future cash flow for MNC’s. The TPP is a bulwark against the good of the commons in developing countries.

  200. 200
    Original Lee says:

    I haven’t seen this discussed anywhere, so maybe it’s just a conspiracy theory, but quite a few of the older Greek citizens allegedly suspect Germany of trying to get their cheap workers back. Greek Gastarbeiter (guest workers) were an important part of the German post-war economic miracle. They got paid reasonably well, but still cheaper than German workers; they sent money home, which helped the Greek economy; and they only stayed 10-15 years before going back to Greece. Just about perfect, really, for the Germans, and not so bad for the Greeks.

    Then the fall of the Iron Curtain opened up not just sources of cheap labor but also cheap land for factories in places where occupational safety was perhaps not as enthusiastically enforced as in Germany, and the workers weren’t as swarthy as the Greeks and Turks and Italians. The Greeks could stay home! Yay!

    But now Poland and some of the other formerly Communist countries are starting to do pretty well for themselves, the labor there isn’t as cheap as it used to be, and golly, we don’t want to invite anybody from the African continent to be a guest worker, do we? Greece just needs a little push to go back to being dependent on exporting workers.

    At least, that’s what I’ve heard is part of the reason for the No vote. If almost any other country than Germany was pushing the austerity plan, I think the Greeks would have approached the whole mess differently. But because it’s Germany, the Greeks are very very suspicious and distrustful and are refusing to be screwed again.

  201. 201
    Xenos says:

    @Original Lee: Greeks have long memories, and a lot of elderly greeks faced starvation as children under German occupation in the 40s. This is pretty personal in many cases.

  202. 202
    Applejinx says:

    @mclaren: Hate to blithely agree with mclaren, I know how it looks, but this is correct.

    It is exactly out of the Shock Doctrine playbook, and in fact the rebellion (and laying claim to institutional memory) is also what’s in the back of that book as the antidote. This is why I rail against ‘received wisdom’ about how anything other than rolling over and surrendering to Capital is certain doom: part of this strategy is claiming its inevitability.

    The story here is that Greece of course surrendered because they had NO choice and no options on the table. The shock of Merkel and German bankers is of seeing new moves on the board that aren’t following Shock Doctrine rules.

    Greece didn’t surrender, so the game is up… capital doesn’t always win, and it’s wise to remember that. Remembering is part of the recipe for resistance: that and seeing the resistance of others. Greece may not have a terrific plan, but it’s good to see their defiance. We’ll be seeing more defiance elsewhere, now.

  203. 203
    Karen says:

    Doesn’t Greece have a money black hole?

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