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Wednesday, July 08, 2015

When politicians are too clever by half

Apparently Greek Prime Minister Tsipras planned to sell Greece out all along, but he failed to anticipate either the rapaciousness of the Euro-creditors or the national pride of the Greek people:
 Like a tragedy from Euripides, the long struggle between Greece and Europe's creditor powers is reaching a cataclysmic end that nobody planned, nobody seems able to escape, and that threatens to shatter the greater European order in the process.

Greek premier Alexis Tsipras never expected to win Sunday's referendum on EMU bail-out terms, let alone to preside over a blazing national revolt against foreign control. He called the snap vote with the expectation - and intention - of losing it. The plan was to put up a good fight, accept honourable defeat, and hand over the keys of the Maximos Mansion, leaving it to others to implement the June 25 "ultimatum" and suffer the opprobrium.

This ultimatum came as a shock to the Greek cabinet. They thought they were on the cusp of a deal, bad though it was. Mr Tsipras had already made the decision to acquiesce to austerity demands, recognizing that Syriza had failed to bring about a debtors' cartel of southern EMU states and had seriously misjudged the mood across the eurozone.

Instead they were confronted with a text from the creditors that upped the ante, demanding a rise in VAT on tourist hotels from 7pc (de facto) to 23pc at a single stroke. Creditors insisted on further pension cuts of 1pc of GDP by next year and a phase out of welfare assistance (EKAS) for poorer pensioners, even though pensions have already been cut by 44pc. They insisted on fiscal tightening equal to 2pc of GDP in an economy reeling from six years of depression and devastating hysteresis. They offered no debt relief. The Europeans intervened behind the scenes to suppress a report by the International Monetary Fund validating Greece's claim that its debt is "unsustainable". The IMF concluded that the country not only needs a 30pc haircut to restore viability, but also €52bn of fresh money to claw its way out of crisis.

They rejected Greek plans to work with the OECD on market reforms, and with the International Labour Organisation on collective bargaining laws. They stuck rigidly to their script, refusing to recognise in any way that their own Dickensian prescriptions have been discredited by economists from across the world.

"They just didn't want us to sign. They had already decided to push us out," said the now-departed finance minister Yanis Varoufakis.

So Syriza called the referendum. To their consternation, they won, igniting the great Greek revolt of 2015, the moment when the people finally issued a primal scream, daubed their war paint, and formed the hoplite phalanx.

Mr Tsipras is now trapped by his success. "The referendum has its own dynamic. People will revolt if he comes back from Brussels with a shoddy compromise," said Costas Lapavitsas, a Syriza MP. "Tsipras doesn't want to take the path of Grexit, but I think he realizes that this is now what lies straight ahead of him," he said.
I was wondering why the Greek government seemed to be so paralyzed; they should already have the drachma ready to go. Instead, they're just doing nothing, as far as anyone can tell.

This is why representative democracy is a complete failure. The elected representatives are less courageous and less decisive and less willing to act in the national interest than the people.

UPDATE: Zerohedge notes that IT HAS BEGUN. Businesses are listing prices in drachma.

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90 Comments:

Anonymous Kreator July 08, 2015 1:16 PM  

Well, there is the problem of what to do if your country and voters voted 'NO' for austerity programs and 'YES' for your country still staying in the Eurozone. Tsipras is between the hammer and the anvil, I think most of Greek people would consider it a victory if a less strict program than the last one was passed.

Anonymous Brother Thomas July 08, 2015 1:16 PM  

He's a socialist. He has only two methods to fund the fallacy called "socialism". He can steal money from people or he can fund it on debt. It currently appears he has neither of these options.

Ultimately the only option the Greeks have to to rebuild their country. And the only way to do that is to embrace free trade, property rights and sound money. In other words, the socialists have to abandon socialism.

Blogger JartStar July 08, 2015 1:18 PM  

I guess that's why The Economist keeps referring to him as an amateur.

The recent economic collapses have revealed that quiet clearly a nationalist and populist movement will arise when things get tough. This has turned out to be true in Greece and Spain. Whether they are left or right wing won't matter as much as if the people think the party is looking out for their interest.

The best thing for the EU now is for Germany to lead the way, set up a plan of debt forgiveness for Greece to a level which is believable they can repay the rest, and then help Greece exit the euro in the next few years. That won't happen though as nobody wants to take the haircut.

Anonymous Spooner July 08, 2015 1:18 PM  

Democracy, the Religion that failed.

Anonymous zen0 July 08, 2015 1:20 PM  

I have come to consider everything about Greece as disinformation now, at least until proven otherwise.

I hope Varoufakis says something about it all soon on his blog. He probably has a book about it in the works.

Blogger Nate July 08, 2015 1:29 PM  

Yanis Varoufakis stepping down makes more sense in light of this.

Blogger Dan in Tx July 08, 2015 1:33 PM  

Bring on Golden Dawn.

Anonymous Athor Pel July 08, 2015 1:34 PM  

Show of hands, who wants to live in the Timocratic Republic of Balboa?

And yes, I just finished reading two Kratman books.

Anonymous Alexander, #10 July 08, 2015 1:45 PM  

No, I want to live in the Timocratic Kingdom of Anglia or an independent Oglethorpe. The Balboans have a very explicit anti-immigration policy (barring military specialists) and I consider that both proper and necessary.

Anonymous A Paradigm Is More Than Twenty Cents July 08, 2015 1:46 PM  

As far as I'm concerned, in the 21st century any actions by any political leader must first be considered solely in terms of political theater. Or perhaps political sleight-of-hand would be a better term? While everyone was focused on the possibility of a Grexit, what else was Syriza doing?


Ultimately the only option the Greeks have to to rebuild their country. And the only way to do that is to embrace free trade, property rights and sound money. In other words, the socialists have to abandon socialism.


Ah, but there is another way. Elect a new people who are in theory content to live with lower expectations, lower levels of economic activity, etc. Is it a coincidence that Syriza has been opening the gates on "refugee" camps, making it easier for illegals from the Middle East to disappear into Greek society?

All across the world, the Left is busily electing a new people in country after country. It can't just be for the votes to win future elections. Surely there are other reasons.

Blogger YIH July 08, 2015 1:46 PM  

China plunged, NYSE still down and the SHTF with Greece, what a coincidence...

Anonymous Donn #0114 July 08, 2015 1:48 PM  

I wonder what a nationalist Greek govt will look like? Because I think that's the way they are going. Assuming of course that they don't bow down and tuck tail.

Blogger Alexander July 08, 2015 1:48 PM  

No. Not all across the world. Africa, South America, Asia, the Middle East, are decidedly exempt from the 'new people' strategy.

Anonymous Donn #0114 July 08, 2015 1:50 PM  

You know they used to trade without computers. Of course, that would mean that the rent-takers wouldn't be able to suck the blood without risk and with much less profit.

Anonymous Jourdan July 08, 2015 1:50 PM  

I strongly disagree with this analysis. And for those of you who don't know the British press, they, including the Telegraph, will run stories like this quite often on the word from a friend whose cousin works at the Ministry of Finance.

The story has it completely backwards.

And, Nate, Varoufakis stepped down not because he did anything wrong, but because the Greek's are very skillfully playing Good Cop/Bad Cop and Varoufakis' role was Bad Cop. Just like in an interrogation cell, there is that moment where the Good Cop tells the Bad Cop to leave, to give the prisoner the impression that now, finally, there is someone he can deal with.

The Greek Govt knew it would win this vote and it knew it would win it overwhelmingly. It was a defensive measure to take the Italian coup-d'etat OFF THE TABLE, so as to force the Troika to give up its most powerful weapon, while Greece retains its: migrant avalanche, among them.

There comes a point where kicking the can down the road and awaiting events becomes just making excuses for indulging in bad analysis. I won my bet with Shimshon yesterday on this matter, but I'd much rather people instead consider that perhaps, maybe, given the events continuing to unfold in ways that are NOT being predicted either here or in the press that maybe the matter is not properly understood?

Greece will not leave the Euro.

Greece will not leave the EU.

This is not an economic crisis, but a political one in which economics are being deployed as a weapon, and it will be resolved politically.

Which is why, yet again, after declaring the 114th "last chance for a deal" yet another extension was given and the parties continue to talk.

And, JartStar, the Economist referring to someone in negative terms is like being insulted by Bank of America or Goldman Sachs. It's a good thing for the person involved.

Blogger luagha July 08, 2015 1:56 PM  

Heh heh heh. I'm just laughing at the EU demanding a raise in the hotel VAT tax from 7% to 23%.

"You can't come up with the money, eh? Well, WE'LL TAX YOUR HOTELS FOR YOU!"

Totally failing to get that people aren't paying their taxes anyway.

Blogger Jim July 08, 2015 1:56 PM  

So Tsipras is actually Max Bialystock.

Anonymous You, Me, and Bud Dupress July 08, 2015 1:58 PM  

Note: I usually comment as OASF.

Tsipras realized, after it was too late, that they were too broke to afford Diebold voting machines and the tightwads at the IMF wouldn't spring for them either.

Yes, quite the impasse.

Anonymous A Paradigm Is More Than Twenty Cents July 08, 2015 2:04 PM  

Africa, South America, Asia, the Middle East, are decidedly exempt from the 'new people' strategy.

Well, yes and no. The South Koreans have embraced die-versity to an amazing degree, ostensibly to compensate for a below replacement birth rate. Japan refuses, of course. And in Africa there's Zim and South Africa. But for the most part, you're correct, replacement is an ongoing project only in the industrialized world, apparently including Australia.

Anonymous zen0 July 08, 2015 2:09 PM  

15. Jourdan:

Greece will not leave the Euro.

Greece will not leave the EU.


I don't know how many time Yanis Varoufakis has written, and said, that Greece does not want to leave the EU. Maybe everybody thinks it is just a bluff.

Anyway, here is Varoufakis from his blog July 6th.

Our NO is a majestic, big YES to a democratic Europe.

It is a NO to the dystopic vision of a Eurozone that functions like an iron cage for its peoples.

It is a loud YES to the vision of a Eurozone offering the prospect of social justice with shared prosperity for all Europeans.


Of course, sometimes things take on a life of their own. We shall see.

Anonymous zen0 July 08, 2015 2:12 PM  

> Heh heh heh. I'm just laughing at the EU demanding a raise in the hotel VAT tax from 7% to 23%.

The other funny thing about that is the fact that it will be mostly German tourists paying the tax.

Now THAT'S funny.

Anonymous Kreator July 08, 2015 2:16 PM  

Well, zen0, no one from Greece wants to leave Euro (I know, I am from Greece), and the thing that really sticks to me is how the heck are they are going to cause a Grexit? I mean, AFAIK there is NO lawful article (emphasis on 'lawful') in the EU constitution that has that clause, so they will have to really cook up some new law ex-nihilo or just unilaterally kick us out.

Anonymous zen0 July 08, 2015 2:16 PM  

O.T.

ZH says US under cyber attack from China. Thats why stock exchange is out.

Blogger Corvinus July 08, 2015 2:20 PM  

I was wondering why all the pics of Tsipras since the vote show him scowling in frustration. One would expect him to look pleased, or at least confident.

I suppose the referendum was a fig leaf to make it appear the austerity had the support of the people and to shut up critics, and they were assuming that the YES vote from Greek Baby Boomers would overwhelm the NO votes from younger Greeks.

Anonymous Feh July 08, 2015 2:21 PM  

a blazing national revolt against foreign control

Translation: "You must keep loaning us cash even if we won't ever pay you back, and you must not put any conditions on what we spend it on, or we'll have a big screaming tantrum. Also, give us mo' money, beyotch!"

austerity demands

Which were so unreasonable -- "Um, say, could you guys please not piss away a THIRD infusion of someone else’s money on your unsustainable socialist paradise?"

Anonymous Statists are so dull July 08, 2015 2:25 PM  

Democracy, the Religion that failed.

Statism is the actual religion. Democracy is just one of the more popular forms of worship.

Anonymous John B. Wrong July 08, 2015 2:31 PM  

"Democracy, the Religion that failed."

Speaking of failed religions...

http://www.foxnews.com/world/2015/07/08/pope-wraps-ecuador-leg-south-america-trip-after-calling-for-new-ecological/

QUITO, Ecuador – Pope Francis wraps up the first leg of a three-nation South American pilgrimage Wednesday after issuing an impassioned call for a new economic and ecological world order where the goods of the Earth are shared by everyone, not just exploited by the rich.

http://www.nytimes.com/2015/06/17/us/politics/popes-views-press-gop-on-climate-change.html?_r=0

WASHINGTON — As the steamy hurricane season descends on Miami, the city’s Roman Catholic archbishop, Thomas G. Wenski, is planning a summer of sermons, homilies and press events designed to highlight the threat that a warming planet, rising sea levels and more extreme storms pose to his community’s poorest and most vulnerable.

His sermons and speeches are meant to amplify the message of Pope Francis’ highly anticipated, highly controversial encyclical on the environment, which the Vatican is expected to unveil on Thursday. A papal encyclical, or teaching document, is among the strongest and most authoritative statements made by the Catholic Church.

http://www.businessinsider.com/iowa-catholic-leaders-urge-pope-francis-message-2015-7

DES MOINES, Iowa (AP) — Roman Catholic leaders in the early voting state of Iowa will call Thursday on candidates for president to follow the teachings of Pope Francis and focus as much on the environment and income inequality in 2016 as they have in past elections on opposing gay marriage and abortion.

Anonymous Roundtine July 08, 2015 2:31 PM  

Is that really drachmas or the the euro price? Is grilled mushrooms 4,50 euros or 450 drachmas?

Anonymous BGS July 08, 2015 2:33 PM  

OT: UK daily mail says the sig sauer wrapped in a shirt that the illegal used to kill a white woman in San Fran was a rifle.
Only 2 people wear shirts big enough to wrap rifles in Chris Christy and GRRM. Perhaps that explains why GRRM was silent for a few days. http://www.dailymail.co.uk/news/article-3152998/The-city-mistake-Illegal-immigrant-shot-San-Francisco-woman-appears-court-amid-media-circus-Hillary-Clinton-joins-Republicans-condemning-city-releasing-kill.html

Anonymous A Visitor July 08, 2015 2:37 PM  

"He called the snap vote with the expectation - and intention - of losing it. "

Well, he won! Yay (?) ! He could resign. That'd be too honorable.

Also, Limbaugh is talking about the NorseCorp map provided on a pervious thread, ZeroHedge, and the NYSE being down. Limbaugh saying for some reason a Chinese DDOS attack was focused on St. Louis. I saw that in real time. Hmm...what's in St. Louis Rush? THE NRO!!!!!!!

Also, it was funny watching us attack Paris and Madrid in real time. Good stuff.

Blogger Positive Dennis July 08, 2015 2:38 PM  

I think it will depend on how big a puppet of America Germany is. I think it likely that Germany will fold and Greece will remain in the euro.

Blogger Student in Blue July 08, 2015 2:50 PM  

OT: Re: That whole thing about NYSE being down due to China cyber-attack.

I read a rumor on ZH comment section that China was holding US responsible for their falling stock markets, due to "financial meddling" by US/foreign companies (more specifically Morgan Stanley). Considering all the HFT shenanigans that go on, I wouldn't be surprised if this were true, and with how China's market tumbled again that this attack was in response to it.

That said, I could not find confirmation that China was placing blame on US institutions so at best it remains a rumor.

Blogger luagha July 08, 2015 2:50 PM  

OT: Cyber attack from China: Well, guess they need to take down all the other markets sending in SELL requests on their market, huh?

Sort of like the Batman-Dark Knight-Bane plan: "I'll take over the stock building with guns, issue falsified trades to wipe out my rivals by holding a gun to the admin's head! It'll be great, they won't ever be able to backtrack the obviously illegal fraud!"

Anonymous Shut up rabbit July 08, 2015 2:52 PM  

@BGS
Remember when killing a white woman used to provoke cries of indignation and calls to action from across the whole of society? Now its gotta be a mixed-race tranny or nobody cares.

Anonymous Porky July 08, 2015 2:52 PM  

Burn. Burn. Burn.

Anonymous p-dawg July 08, 2015 2:54 PM  

I think the Greeks are just looking for a back door to sneak through.

Blogger Kevin Blackwell July 08, 2015 3:08 PM  

Every democracy fails, because democracy is anarchy.

Blogger Joshua Dyal July 08, 2015 3:08 PM  

@BGS UK daily mail says the sig sauer wrapped in a shirt that the illegal used to kill a white woman in San Fran was a rifle.

Even better; reports are coming out that it belonged to a federal agent.

Blogger JartStar July 08, 2015 3:34 PM  

He wrote "representative democracy", not "democracy".

Anonymous Goat July 08, 2015 3:35 PM  

>>Zerohedge notes that IT HAS BEGUN. Businesses are listing prices in drachma.

No, they're not. They're listing in Euro cents How could they be listing in drachma when the currency does not exist and there is no exchange rate, formal or informal? And how would you even settle the transaction? This is a restaurant menu.

Blogger Jim July 08, 2015 3:35 PM  

Even better; reports are coming out that it belonged to a federal agent.

Obviously we need to ban high-powered small caliber semi-automatic assault ghost guns with 30 shot clip magazines.

Blogger Peter P. July 08, 2015 3:38 PM  

Greek here, can confirm that we still list prices with Euros.

Blogger FALPhil July 08, 2015 3:40 PM  

p-dawg wrote:
I think the Greeks are just looking for a back door to sneak through.


Funny. Nothing like a little ethnic humor to lighten things up.

Q: Why do Greeks make lousy sailors?
A: They can't leave their best buddy's behind.

Blogger FALPhil July 08, 2015 3:40 PM  

p-dawg wrote:
I think the Greeks are just looking for a back door to sneak through.


Funny. Nothing like a little ethnic humor to lighten things up.

Q: Why do Greeks make lousy sailors?
A: They can't leave their best buddy's behind.

Anonymous Kreator July 08, 2015 3:49 PM  

Greek here, as Peter P. I co-sign his confirmation.

Anonymous zen0 July 08, 2015 4:00 PM  

40. Goat

They're listing in Euro cents How could they be listing in drachma when the currency does not exist and there is no exchange rate, formal or informal?

1 Euro = 340.75 drachma
Conversion base : 1 GRD = 0.0029347028613353 €

Anonymous Kreator July 08, 2015 4:04 PM  

zen0 This is the old conversation that was used up until 2002. Or you were being sarcastic?

Blogger Tom Kratman July 08, 2015 4:08 PM  

#10

It's not actually barring military specialists; it's only admitting military volunteers, sans dependents. Once they've complete training and been accessed into one of the echelons of the Tercio System, they're in and they can bring in some dependents, but they usually start with no military background. (Yes, some do have prior service in a different armed force.)

Anonymous John Regan July 08, 2015 4:11 PM  

Yeah, I prefer constitutional monarchy as well.

In any case, it's not difficult to make a transition to a new currency. The problem is the will - the resolve - to do it. Basically, you tally up the gold and/or silver you have available for redemption purposes and set the value of the drachma at whatever fraction of an ounce you need to cover bank deposits plus any outstanding currency you also wish to redeem.

Anyone who's still interested can read this:

https://strikelawyer.wordpress.com/2011/12/27/saving-the-world-revised-edition-part-ii/

It's the same idea.

Of course I also think it would be a good idea to cancel all other debts at the same time. In fact I think it's necessary.

Certainly sounds like it will be a wasted opportunity, doesn't it?

Anonymous 11B July 08, 2015 4:13 PM  

I wonder what a nationalist Greek govt will look like? Because I think that's the way they are going. Assuming of course that they don't bow down and tuck tail.

I would like to see this type of government come back.

Anonymous Jourdan July 08, 2015 4:14 PM  

@ Shut Up Rabbit

Remember when killing a white woman used to provoke cries of indignation and calls to action from across the whole of society?

I can't think of another racial/sexual/ethnic group in modern America more deserving of a complete loss of concern for their well-being than European-American women.

They asked for this level of unconcern. In fact, they demanded it. Let them enjoy it.

Anonymous You, Me, and Bud Dupree July 08, 2015 4:15 PM  

OASF.

A China "cyber attack" is nonsense.

China does not need to resort to cyber attacks to cause chaos in the US/EU markets - all they have to do is dump their holdings. If anything this "glitch" was the "kill switch" being thrown because market indications hint that the looming Grexit may finally trigger the currency crisis of our dreams to the dismay of many a Gold-Sacks-Lacks.

Anonymous 11B July 08, 2015 4:20 PM  

DES MOINES, Iowa (AP) — Roman Catholic leaders in the early voting state of Iowa will call Thursday on candidates for president to follow the teachings of Pope Francis and focus as much on the environment and income inequality in 2016 as they have in past elections on opposing gay marriage and abortion.

@John B Wrong. That is too easy. To focus on the environment and income inequality all one needs to do is focus on immigration. Namely, ending it. Immigration is driving population growth which is causing more carbon output and turning more Iowa farmland into housing tracts. Income inequality spreads whenever a population becomes increasingly diverse since certain groups have a natural advantage in a first world modern society over others. So importing less third worlders into Iowa, and returning Iowa to its historical Northern European stock would decrease inequality.

Anonymous 11B July 08, 2015 4:28 PM  

As has been pointed out before, US conservatives seem to like jumping all over Greece to highlight the failures of socialism and to convince their minions on why we need to oppose Obamacare and all the rest of what the democrats have in store. They even take to calling the Greeks names that they would never attempt with equally bankrupt Puerto Rico or even Argentina, to name but a few.

But if the US conservatives really wanted to find a lesson in Greece, why wouldn't they focus on the demographic replacement of its historical population? Given the biggest crisis facing the US is demographic, shouldn't we learn a lesson that replacing the population with aliens, even if those aliens adopt our language, is not a good idea? And without trying to demean said aliens, do they really have a chance to compete with the legacy of the Founding Americans? After all, the European Americans put a man on the moon. There is really no where to go but down.

But I hear no one discussing this. Just as America is becoming increasingly unrecognizable to its Founders, the great majority of Greeks today must surely bear little resemblance to the Ancients. The lesson of Greece is not socialism, but demography.

Anonymous Grinder July 08, 2015 4:38 PM  

I don't believe Tsipras hoped that the Yes side would win. I do believe that he thought that getting a No result would be sufficient leverage to get creditors to offer better terms than their recent ones. I suspect that Tsipras' failure to prepare much for a worst case scenario of complete creditor intransigence may signal that Syriza's usefulness to the Greek nation is about to end if Tsipras is unable or unwilling to do whatever is necessary to save the Greek Nation. Unfortunately, this likely means that Greeks will face another General election and another tempting chance to agree to austerity for resumed access to the euro teat.
If possible, Golden Dawn could benefit by a coalition government with another party and then force out those coalition partners with bold and skilful maneuvers.

Blogger Danby July 08, 2015 4:44 PM  

If possible, Golden Dawn could benefit by a coalition government with another party and then force out those coalition partners with bold and skilful maneuvers.

Well, they've got the bold part down pat. The skillful part, maybe not so much.

Blogger Alexander July 08, 2015 4:49 PM  

Not a chance. The enemy is well versed in the old "popular front" bait-and-switch tactic.

Anonymous zen0 July 08, 2015 4:51 PM  

> zen0 This is the old conversation that was used up until 2002. Or you were being sarcastic?

I was puzzled why if there was no conversion rate one could find it on the internet.
the site said nothing about statute of limitations or no longer available.

So good. Now we know better.

Anonymous A.B. Prosper July 08, 2015 5:03 PM  

Brother Thomas, the last thing Greece or anyone else needs is free trade.

the TL:DR version, under free trade your offspring have to compete with the 3rd world for wages and since they can't, they get poorer and deeper in debt.

All free trade does is enrich oligarchs and net exporters and pushes wages down for workers with skill sets that can be had cheaper. Basically prices never decline faster than wages in free trade, instead savings are kept as profit and debt or more hours worked (c.f women in the work place) used to prop up demand.

What nations need is economic nationalism, where the government works to increase the standard of living of its own citizens even at the expense of others, This type of thing means the "rules of the game" are equal . In free trade, the rules benefit cheaters which is bad for everybody.

Now free trade among peer nations is tolerable if they don't cheat and are all on the same or very similar economic systems

Otherwise economically you are better off with somewhat shoddy locally made goods rather than imports.

As for property rights, also not necessarily, A basic respect for personal property rights is 100% needed but its perfectly sound policy to say limit foreign or bank ownership or corporate or even personal ownership to increase the breadth of ownership of property. More property owners among the working class and up is a good thing and is more important than some rich rentier.

I do agree with you on sound money with a caveat, bi-metal standards or gold standards don't scale too well with population growth or debt. If sound money is used its deflationary. Deflation isn't a bad thing is debt is avoided but that means developing a sound economy with slow growth and little to no debt. For example, 5 year house notes not 30 .

and it also means that if economic efficiency puts too much money in one person or groups hands and they don't spend it , its quite possible for the economy to falter. This can also happen faster than expected if demand is low

Also making such a system work nearly certainly requires a policy of non intervention or strict neutrality simply because there isn't enough money to spend and debt is always inherently bad. Unfortunately the US is mostly run by meddlers and it would be a Herculean effort to get us away from such a policy and to maintain our safety while living within our means. Now that we've been invaded by Mexico and Leftist allies it might be impossible

However if that could be resolved it could happen.

Blogger Nate July 08, 2015 5:10 PM  

"the TL:DR version, under free trade your offspring have to compete with the 3rd world for wages and since they can't, they get poorer and deeper in debt."

The problem with this... is the assumption that its wages that cause the companies to move manufacturing.

It isn't the wages.

That's the lie.

The problem is a legal one... the legal burdern on corporations in america is astounding. That's why they leave. They'd be fine with the wages.

Anonymous Grinder July 08, 2015 5:30 PM  

High wages cause companies to manufacture goods. For free markets look to your favourite features found in countries like former Rhodesia aka Zimbabwe. No worry about min.wage laws or labour unions there and yet manufacturers are not clamouring to get into sub-Saharan Africa because there is no market for their goods there. Companies leave high wage jurisdictions because there are trade agreements allow them to get the milk (reach affluent markets) without paying for the cow (offering good wages). Maybe once upon a time the legal obstacles were about protecting living standards of American workers, but now I think they are about gov't bureaucracies grabbing a bigger piece of the profits that employers make off their workers backs. It is a warped system and I would gladly see it eliminated.

Blogger Rantor July 08, 2015 5:34 PM  

I felt this was a weak move all along. A real believer would have proceeded to leave Eurozone based on his electoral mandate. This makes him look like an empty suit populist. Lots of promises, no delivery. He must know that Grexit will result in a few years of austerity, if done right. Many years of suffering if done in the socialist style.

Blogger Eraser July 08, 2015 5:38 PM  

My hypothesis is still the same, that the Greek government knows that the debt is unpayable and a default is likely sometime in the future. They are taking advantage of the European reluctance to kick them out, for whatever reason (banker profits, illegal migrants, strategic position, fear of a "domino effect" in the EU) and basically dragging it out and taking as much help money as they can. The drachma not being ready is just plain incompetence.

Of course I could be wrong and the far-left Syriza be simply out of touch with reality.

Anonymous Grinder July 08, 2015 5:39 PM  

56&57. I agree. What I don't see is an alternative that will save the Greek Nation without nationalists in charge. A bailout package that implements technocrat rule and shackles generations of Greeks into cradle-to-grave indentured servitude for debts that they can never pay off is not saving Greece or the Greek economy. It's consolidating the grip of the bankster overlords and destroying the nation in the process. Boatloads of migrants are just icing on the cake.

Anonymous haha July 08, 2015 5:47 PM  

I can't think of another racial/sexual/ethnic group in modern America more deserving of a complete loss of concern for their well-being than European-American women.
They asked for this level of unconcern. In fact, they demanded it. Let them enjoy it.


Right now they are all spun up about the QB who hit the girl who hit him. HOW DARE YOU HIT A WOMAN!!!!!!

Blogger Nate July 08, 2015 5:56 PM  

"Companies leave high wage jurisdictions because there are trade agreements allow them to get the milk (reach affluent markets) without paying for the cow (offering good wages). "

Bullshit.

Try to do business in Zimbabwe.

The reason they leave is because they can't afford not to leave... because of lawsuits and insane legislation.

Anonymous A.B. Prosper July 08, 2015 6:11 PM  

Nate, I agree that there is way too much useless regulatory overhead in the US however its only part of the cause,

In the end its always been the American way to avoid paying for things, natural in a nation founded by traitors tax cheats and slavers but we are past the point where that is working for us. Hell it stopped working for us at the end of the Westward expansion and lead to constant often violent labor upheaval we've only recently been able to avoid, And that upheaval was in times when there was no civil rights burden and very few regulatory issues. Simply, "capital" if you'll forgive Marxist rhetoric here doesn't want to pay the cost of civilization

Why?

In the end civilization is expensive and while there are ways to reduce costs, not bringing in many immigrants and trimming to the bare bones regulation for example he real costs of paying for all the complexity always create an impetus to cut corners, arbitrage wages down and seek cheaper places to do business.

That's why you can't have nice things because even if we cut all the regulatory B.S and we should it won't help. what does help is trade control.

Blogger Groot July 08, 2015 6:12 PM  

@15. Jourdan:

You are entirely correct that Greece will not leave the Euro, but it's not because Tsipras, a socialist, is a super-genius, except in the Wile E. Coyote sense. It's because nobody will let them leave. Nobody wants to be paid in drachmas, which the Greeks would then be able to print by the truckload. That is a privilege that the ECB reserves for itself.

Anonymous Steve Brown VFM#0273 July 08, 2015 7:08 PM  

Nobody here knows what the hell they are blogging about. 60 comments, 60 opinions. I would hope the evening comments are better.

Blogger Nate July 08, 2015 7:18 PM  

"Nate, I agree that there is way too much useless regulatory overhead in the US however its only part of the cause, "

1 multimillion dollar lawsuit and 20 years of cheap wages is lost.

Its not just the regulations... its the combination of the litigation and regulation.

The house is on fire and and everyone is rushing out the doors.

You protectionists are busy shouting that we should lock them inside.

In reality... you better put out the damn fire.

Anonymous Not-So-Merry zen0 July 08, 2015 7:28 PM  

>Nobody here knows what the hell they are blogging about.

We don't care.

Anonymous Krul July 08, 2015 7:30 PM  

"UPDATE: Zerohedge notes that IT HAS BEGUN. Businesses are listing prices in drachma."

The DRACHMA is BACKMA!

Anonymous ENthePeasant July 08, 2015 8:16 PM  

Yanis Varoufakis has called for openness and downright press access to the negotiations at all levels of the EU. I noticed six months or so ago that this was upsetting his Government contemporaries who did not want the process opened up. A Greek friend of mine has said over and over, "there's no one more treacherous than a Greek politician and they literally own the media." But she also made it clear that every Greek she spoke to was more than willing to go it alone despite EU polls that showed close to 60% people wanted to remain in the EU (which of course they kept in the forefront of the Greek press) no matter what it took. She was absolutely firm when we spoke that they would win the referendum. They want out and are more than ready. She also doesn't believe that their will be chaos and all the other dire predictions being made by the EU if they won. I'm reminded of all the Bullshit the EU predicted about Iceland. The Greeks are certainly different then Norse, but much like Italy they are used to a semi-collapsed state of government at all times. Reality is upon us, LONG LIVER REALITY!!!

Blogger Groot July 08, 2015 8:29 PM  

69. Steve Brown:

That is some quality commenting. Lacking self-awareness much?

Blogger Tommy Hass July 08, 2015 8:32 PM  

If you were the persident of America what would you do to save your economy?

I'm saying this because almost no one will have the balls to default. You would be blamed for what follows and it would deprive you of the ability to do good otherwise.

As for the Euro, I thought Greeks would be better of with a weaker currency. Why do they want the Euro then?

Blogger Student in Blue July 08, 2015 9:24 PM  

OT: I stand corrected. China blames "hostile" foreigners for their crashing stock markets.

Anonymous zen0 July 08, 2015 10:03 PM  

74. Tommy Hass July 08, 2015 8:32 PM

If you were the persident of America what would you do to save your economy?


I would say that kind of thing is above my pay grade, besides, the Fed and Congress are doing a fine job of addressing these pressing issues.

See. Easy peasy. I only have to get through a few more months of this crap and then its the lecture circuit, golf, and pedophile aircraft flights forever.

Roosevelt figured it out long ago. You do not have to actually care, you just have to give the impression that you do.

Anonymous Jack Amok July 08, 2015 11:25 PM  

1 multimillion dollar lawsuit and 20 years of cheap wages is lost.

Its not just the regulations... its the combination of the litigation and regulation.


Preach it.

And it's not just that there's a lot of regulation and litigation, it's that they're both highly variable and unpredictable. You build a brand new plant to meet today's regulations and tomorrow some alphabet agency changes the rules and makes you unprofitable.

That's why almost nobody is building factories and everybody is going into retail selling crap made in someone else's factory. Well-run retail has at most 2 months inventory on hand, so if you have to cut and run, you're out two months cost. A factory takes years to pay off, you're a sitting duck for the bandits.

Blogger Groot July 08, 2015 11:31 PM  

@zen0:

At first glance, I read "pay grade" as "gay parade," and I thought, I wasn't expecting that from zen0.

Anonymous zen0 July 08, 2015 11:39 PM  

>At first glance, I read "pay grade" as "gay parade,"

You devil, you.

Anonymous Statists are so dull July 09, 2015 1:14 AM  

If you were the persident of America what would you do to save your economy?

Absolutely nothing. It wouldn't be my job. I'd be there to distract the dumb public while steamrollering laws through that benefit my owners. Then early retirement and dissolute, debauched hedonism until the end of my days.

Grown-ups who can read and write still believe politicians do stuff? Hilarious.

Anonymous Toby Temple July 09, 2015 2:46 AM  

If you were the president of America, my love....

fill up whatever you want. START!

Anonymous Steve Brown VFM#0273 July 09, 2015 7:11 AM  

74. Groot
I readily admit I know nothing about the Greek crisis. Although, Mundabor seems to. What do you think?
https://mundabor.wordpress.com/2015/07/09/addendum-part-i-the-big-fat-greek-swindle/

Blogger Nate July 09, 2015 8:01 AM  

"
I'm saying this because almost no one will have the balls to default."

This is like saying no one will have the balls to drive the car with no brakes off the cliff... when the car with no brakes is already blasting toward the cliff at 100 miles an hour.

Balls has nothing to do with it.

America WILL default. one way or another. Because math.

Anonymous Steve Brown VFM#0273 July 09, 2015 8:56 AM  

David Warren also seems to have his thinking cap on.
http://www.davidwarrenonline.com/2015/07/05/the-lies-that-bind/
We'll see soon enough, unless it takes another 15 years.

Blogger Martin Davies July 09, 2015 9:25 AM  

"...hoplite phalanx." Oh dear.
Anyway, Syriza are just a bunch of middle-aged student leftists. They have absolutely no idea how the world works politically or economically.

Blogger CarpeOro July 09, 2015 1:00 PM  

I wonder, where is Mr Greenman and comments about the Left being the side to align with?

Pretty much like investing in China - I don't because I don't put my money on 00 for roulette and expect to win - I felt little need to know anything about Syriza beyond they were left-wing to know putting trust in them would be foolish. It matters little which rumors are true, anyone who can do the math should know better than to trust the Left to have anyone in power that really has good intentions for their people. The Right is mostly the same, there just happen to be some that really have good intentions (Reagan for example) that get over run or make compromises that fail utterly (Illegal immigrant amnesty part 1 for example). Men are flawed and will never build a perfect society. We can only strive to do the best we can and remember that the best always requires the most out of us. Short-cuts always lead to what we have today - the crazies running the show.

Anonymous Kreator July 09, 2015 4:00 PM  

@ Steve Brown

Who is this David Warren and what does he knows? From what I have read on this article is some drivel that has been predicted MONTHS ago before Syriza becoming the leading party.

Basically George Tragas one of the oldest journalists in Greece, said that the out-Greece media will try to paint Tsipras as the new Milosevic. Well, in case of American media, Chavez. Sorry, but this opinion IS worthless.

Blogger Groot July 10, 2015 4:19 AM  

@83. Steve Brown VFM#0273:

Kudos (Greek for "honor") for replying, and not being merely a drive-by graffiti artist. Your link is wordy, but correct, in identifying the perfidy in the Greek position. I don't know what it is about a particular people's position on the topic of honor, repaying one's debts, reputation, I-don't-know-what-to-call-it, but without it, people judge you and you suffer for dishonoring your obligations.

The Europeans don't want the Greeks to have the ability to dishonor their obligations by being able to print their own money. They will not allow it, for allowing it would mean giving your teenagers access to your credit cards. I don't care if you love them, it is a bad idea (and I am the parent of teenagers). It would be madness.

The Greeks are fools, spending their credit cards to the max, oblivious to consequences, and depending on Mommy or Daddy to bail them out.

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