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Typo posted:It's not so much that Euroland wants to interfere in Greek domestic politics for its sake. By forgiving the loan in effect you are telling creditors that the Eu will guarantee any future Greek debt as a way of forestalling their exit from the Euro, which means the Greeks have no incentive to reform their own institutions and lenders have no incentive to stop lending to Greece. Which in turn just means the same poo poo will happen again in 10-20 years and they'll need another bailout. Europe will destroy your economy, impoverish your pensioners and see 1/4 of your population unemployed for half a decade at least, but you think moral hazard on the part of the Greeks is the problem going forward? If Europe was worried about moral hazard they should have put the banks that loaned Greece money in to receivership, unwound their debts/assets and then closed up shop. But I guess moral hazard only applies to foreign people and not local banks? This is a good read.
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Jul 8, 2015 21:33
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MickeyFinn posted:Europe will destroy your economy, impoverish your pensioners and see 1/4 of your population unemployed for half a decade at least, but you think moral hazard on the part of the Greeks is the problem going forward? If Europe was worried about moral hazard they should have put the banks that loaned Greece money in to receivership, unwound their debts/assets and then closed up shop. But I guess moral hazard only applies to foreign people and not local banks? I think you are speaking of Europe as a collection of faceless bankers and bureaucrats, which is a mistake because the it's the average German taxpayer who are unsympathetic to the plight of the Greeks. All across northern Europe the people really do see the Greeks as responsible for their own problems (regardless of how true that is) and don't want to put anymore of their money into the cauldron so to speak because they don't trust the Greeks not to piss more of it away. And the difference between 2015 Greece and 1953 FRG is that Germany historically had a functioning economy and a set of institutions that can be counted on to collect their own taxes after a debt write-down. People thought 1953 FRG was a good investment whereas I don't think anyone thinks 2015 Greece would be.
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Jul 8, 2015 21:53
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Typo posted:I think you are speaking of Europe as a collection of faceless bankers and bureaucrats, which is a mistake because the it's the average German taxpayer who are unsympathetic to the plight of the Greeks. All across northern Europe the people really do see the Greeks as responsible for their own problems (regardless of how true that is) and don't want to put anymore of their money into the cauldron so to speak because they don't trust the Greeks not to piss more of it away. Uhh ok, so replace where ever I said "europe" with "the German people" and my argument remains unchanged. You are the one that said "By forgiving the loan in effect you are telling creditors that the Eu will guarantee any future Greek debt as a way of forestalling their exit from the Euro, which means the Greeks have no incentive to reform their own institutions and lenders have no incentive to stop lending to Greece," are you now attributing that to the German people? The latter part of your argument is something that I argued against on the previous page, so I won't go in to it again.
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Jul 8, 2015 22:04
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Wait I'm just laughing at the idea that electricity generation and the associated networks to distribute that energy isn't a natural monopoly situation Also Boner Slam could you try responding to my entire post instead of cutting out a portion of it and ignoring the context of the entire post?
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Jul 8, 2015 22:07
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The 'moral hazard' ship sailed when bad bankers around the world lined up to get bailed out by various governments so please never utter it again
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Jul 8, 2015 22:29
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MeLKoR posted:I'm crossposting this following from the European Politics thread. Okay we basically agree on monopolistic markets, regulation and so forth. If you think I can or would or want defend the creation of a private monopoly in an infrastructure industry then lol, I dunno what to tell you, except that I have literally produced work in opposition if this etc. I can tell you this much however: Because of the oligopolistic nature of the markets, optimal regulation is difficult (it is anyway in this case). It requires basically a very good regulator, who is independent, has strong reach etc. Failures of privatization here are numerous, even for example in California (for different reasons). If done right, it is beneficial, but it is not something you just do. But now look at the reforms under "product market reforms" which Greece has still to do. Clearly these would be much more beneficial then YET another labour market reform, perhaps even the pension reform. Why do we need to wait so many years for this stuff? I'll tell you: because they are impossible to implement in Greece without making a shitton of enemies. rscott posted:Wait I'm just laughing at the idea that electricity generation and the associated networks to distribute that energy isn't a natural monopoly situation Electricity _generation_ is not a natural monopoly, at least not in most countries that are not Norway. This is established fact, legislation on EU level exists because of this reason. If you make a baseless assertion against the leading opinion of pretty much everyone in the business, please go ahead and make a case first. rscott posted:Also Boner Slam could you try responding to my entire post instead of cutting out a portion of it and ignoring the context of the entire post? I responded to the relevant part. For your [citation needed]s about currency unions, there's enough articles about that. I don't really disagree that the Euro is a bad setup, so I am not really interested in debating that. You are also well aware that the idea of the EZ was to get economic convergence. This did not happen as the economic convergence was entirely based on a bubble. GDP growth, wage growth, productivity decline. You can make up stories who is to blame here as you like. What should I tell you? Does it surprise me that this happens? No. So what now? Should we blame France? It was their idea in the first place. Maybe we should blame France... As for the rest of the post, see my response. Edit: FAZ (German) has published a nice article about the clientelism and industry structure in Greece http://www.faz.net/aktuell/politik/die-gegenwart/schuldenkrise-in-griechenland-chronik-des-desasters-13686169.html Boner Slam fucked around with this message at 22:53 on Jul 8, 2015 |
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Jul 8, 2015 22:43
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Not really. It's a rehash of the Piketty stuff that's heartwarming if you're looking for a simple moralistic narrative, but rather off the mark from an economic and historical viewpoint. The 1953 agreement was not about jumpstarting West Germany's economy, but about allowing the West German state access to the finance markets again and to instill trust in a new government. There was no legal obligation for West Germany to pay back debts that the Nazis had defaulted 20 years earlier. They still did, so they could earn brownie points. It is quite funny to see the author beating around the bush in the case of the defaulted credits which were cut. He considered the default in 1934 to be a good move. He somehow fails to mention explicitly who defaulted. It was the Nazi government forgoing the debts because they told the world these were "odious debts". So in fact he's giving props to Hitler in a moralistic article. Nice job! But moralistic blather is not relevant to economic solutions anyway. The German political and economic system had undergone huge changes from 1945 to 1953: From dictatorship to democracy, from command economy to the neoliberalism of Erhard, from hegemonial aspirations to integration into the Western hemisphere. Germany was a low wage economy, had repaired the most pressing damages to its industries and infrastructure and had a tax paying population and a working civil service. In a nutshell: West German had undertaken drastic reforms, the government was cooperative, the German economy in a good condition. On the other hand Greece has been very selective in implementing reforms, has not changed its dysfunctional nepotism and has recently elected a radical coalition into government that has promised not to cooperate smoothly with the Troika. How are huge debts holding back Greece? Since the hair cut in 2012 and the restructuring they had a drastic reduction in interest rates and in the short term don't need access to the private capital markets as they are refinancing themselves through the Troika. The goals formulated by the Troika are aiming at the primary deficit/surplus, so the debts don't factor in and finally the nominal debt level is lower than in 2010. So how would the Greek economy benefit from a debt cut? Why would Greece demand a debt cut now instead of getting a debt cut at the end of the reform program?
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Jul 8, 2015 23:23
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Einbauschrank posted:But moralistic blather is not relevant to economic solutions anyway. I argued on the previous page why this isn't just "moralistic blather" and is, in fact, critical to moving forward in the process between Greece and the rest of Europe. quote:So how would the Greek economy benefit from a debt cut? Why would Greece demand a debt cut now instead of getting a debt cut at the end of the reform program? This was answered directly in the article: reform before debt relief has, historically speaking, never worked. Although Picketty (I think) notes that the UK took something like a century to pay back war debt from the Napoleonic war(s). So I'd change "never" to "rarely" and note that I don't think anyone wants to wait generations (how long do Greeks live?) for this to work itself out. Edit: Also, in the short term, it is not the debt that is the problem per se, it is the troika holding Greece's ability to refinance that debt hostage based on reforms (read: austerity) that is the problem. MickeyFinn fucked around with this message at 23:56 on Jul 8, 2015 |
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Jul 8, 2015 23:40
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Boner Slam posted:How exactly would you go about federalizing the debt? wait, you guys, I think I found a fundamental problem here CapnAndy fucked around with this message at 23:59 on Jul 8, 2015 |
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Jul 8, 2015 23:56
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MickeyFinn posted:I argued on the previous page why this isn't just "moralistic blather" and is, in fact, critical to moving forward in the process between Greece and the rest of Europe. The moralistic blather may be relevant for some Pan-European narrative but it doesn't contribute insight to the problems in Greece. The article doesn't shed any light on why a high debt level should somehow hamper economic development. Correlation is not causation. The short explanation "Because there's no incentive if the fruits of progress go to creditors" isn't very convincing. This might be the case if the Greek government felt no responsibility for the welfare of Greek society but only to its own budget. Though responsibility is not the first characteristic that springs to mind when one thinks of the Greek political culture, it seems far fetched to claim to would sabotage the recovery of the Greek economy. It's in the best interest of the Greek government to have economic growth, even if the budget doesn't increase because they have to pay back debts. Also in the very case of Germany the turnaround and recovery was before 1953 and the debts had already been defaulted on before the new government proposed to take responsibility for them. Neither was there a slump in growth when the FRG suddenly got new old debts, neither did the GDP growth pick up after '53. So the debts weren't a limiting factor and with the growing GDP the debt ratio did decline ven while the talks were going on. Finally, the Greek political system has proven incapable of decisive change from within in the last 30 years. There's no reason to believe this will change now. Much of the inability is due to the clientelism that's *expected* of political parties. To press for an end of nepotism etc. means you are pressing for a restructuring of Greek societty. You need outside pressure to enable the system's actors to reform this dysfunctional entity. And this is the main reason the debts are not cut. The moral hazard argument is still valid to my mind, there are many more countries in the EZ with a high debt level, and many of them are much more important to the EZ than Greece. If blackmailing is established as a bargaining tool, they can flush the Euro down the crapper. Nobody is expecting the Greeks to pay back their debts, this is a convenient lie told by the decision makers to the electorate, but nobodywith half a brain believes it. And it doesn't matter whether they default today or in 5 years, they will need further "loans", i.e. gifts, to prevent them from imploding, more than ever with Syriza in charge. These "loans" also won't be paid back.
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Jul 9, 2015 00:41
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Einbauschrank posted:The moralistic blather may be relevant for some Pan-European narrative but it doesn't contribute insight to the problems in Greece. All of these words are engaging in the sort of "but this time it is different" reasoning that Reinhart warns against. Doubly so because you are comparing a country that had more debt forgiven (Germany) with a country that has not had as much forgiven (Greece) and that debt that was forgiven came with economy destroying austerity requirements. The article is a single New York Times piece. I don't think it should tell the reader everything about the history of who paid what to whom and why in the past and why they are all different, the salient feature of debt repayment over the last two hundredish years of debt repayment in Europe (and Latin America) is that the successful countries don't pay their debts back when those debts get really, really big. quote:Nobody is expecting the Greeks to pay back their debts, this is a convenient lie told by the decision makers to the electorate, but nobodywith half a brain believes it. And it doesn't matter whether they default today or in 5 years, they will need further "loans", i.e. gifts, to prevent them from imploding, more than ever with Syriza in charge. These "loans" also won't be paid back. Although I would not word things this way, I agree. Europe has two choices at the moment that were included in the linked post. They can either bail Greece out, which would be defacto rule making within the eurozone that members will be bailed out even when they get "Greece bad." Or they can let Greece go, which would be defacto rule making within the eurozone that members will not be bailed out when they get "Greece bad." Hopefully, either situation will be followed with actual rule making. But, the current myth of debtors repaying debts of the size that Greece currently has, regardless of what fraction of those debtors were true ubermensch, needs to go away along with the deal making (reform for austerity) that accompanies it because "this time it is different because of <whatever>."
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Jul 9, 2015 01:47
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Boner Slam posted:Look, I don't want to downplay your insights on the Portugese situation. It's just that I have no knowledge about the crisis in Portugal, the measures which were taken or not taken. From what you tell me, it was badly executed. What should I say?  ". We have done nothing but vote for "respectable people" from "respectable parties" that promise us they will put an end to corruption. Sooner or later you realize that's a suckers game because the only people that manage to get to a position were they can get elected (the center parties) would never get there if they weren't corrupt already.I don't understand what people that bring up this "just vote the corruption away" argument think we are. Like every other person on the planet we want better lives for our children and we - not foreign creditors - are the first and biggest victims of corruption, if it was simply a matter of "just vote it away" we'd have done it ages ago. Part of my anger at austerity as is being forced down on us is that it's reinforcing this hold they have. We already had the highest inequality in Europe before, by removing worker protection laws and increasing unemployment we are more than ever in their hands. People don't dare miss a day at work to go to the hospital because they'll be fired and there is a fuckton of other desperate people just waiting to take their job earning a pittance. Understand this once and for all, I (and most others I believe) are not arguing against "balancing the budget" per se, what revolts us is that the way it's being done is hurting the working class first and foremost not the corrupt politicians and oligarchs, those are doing great. You say "austerity" is not to blame for this but from where I'm standing it's either being done on purpose (our politicians) or disinterest (the EU, maybe if we're being generous). Assuming "austerity" worked (which it isn't and it won't) at the end of it we'd have exactly the same amount of corruption but the working class has taken such a beating that we'd be in an even worse place to do anything about it. The unemployed are not the oligarchs. Pensioners are not the oligarchs. And in my country in particular there is the spectre of the dictatorship, not in the sense that Salazar will rise from the grave but in the sense that all improvements in education/healthcare/worker rights that took us 40 years to make are very quickly being destroyed. Life was "not good" back then. MeLKoR fucked around with this message at 19:44 on Jul 9, 2015 |
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Jul 9, 2015 19:40
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MeLKoR posted:My post was more of a reply to the tendency pro-austs have of saying "why don't greeks/portuguese vote for non-corrupt politicians?
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Jul 9, 2015 20:20
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Charlie Mopps posted:Its amazing how 'reforms' are always code for ' destroy workers protection', isnt it. Are you talking about the 80% pensions and a retirement age of 58? Regardless of what role you think Greeks played in their own demise, that is just a stupid idea.
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Jul 9, 2015 23:44
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MeLKoR posted:My post was more of a reply to the tendency pro-austs have of saying "why don't greeks/portuguese vote for non-corrupt politicians? I think here you lay words in my mouth which I would not say. An acute inability of the political system to follow the will of the people is not something we have previously discussed. I have been attacking the idea that SYRIZA is without fault. Basically, all I can do is to defend the idea behind certain reforms (ie. the non-austerity ones) which I have worked on and I know to be right, not only because I have seen then working but also because I know why they work or not work. I will reiterate: I know next to nothing about Portugal, and I would prefer to talk about the issue at hand, which is Greece. Otherwise my reply will pretty much be "Ok". quote:Like every other person on the planet we want better lives for our children and we - not foreign creditors - are the first and biggest victims of corruption, if it was simply a matter of "just vote it away" we'd have done it ages ago. Part of my anger at austerity as is being forced down on us is that it's reinforcing this hold they have. We already had the highest inequality in Europe before, by removing worker protection laws and increasing unemployment we are more than ever in their hands. People don't dare miss a day at work to go to the hospital because they'll be fired and there is a fuckton of other desperate people just waiting to take their job earning a pittance. But it is important to me that Greece implements the correct structural reforms, in the right order, such that these things do not happen. And does so with or without external incentives, as a _working_ reform is clearly in the interest of the people of Greece. All my information points me to the conclusion that many things are going wrong in Greece which should not, and the fixes are often not dependent on the outside financement. I know the reforms of product markets, IF they can be correctly implemented, will help the Greek people in the coming months, hell, might even be crucial to the final outcome if Greece exits. And since I am unconditionally pro haircut/debt forgiveness, you can see that this intend is honest, I give no poo poo about Schäubles black zero and the CSU can die in a fire for all I care... From my perspective what counts now is the final outcome for the Greek people, and perhaps my involvement here and my insistence is just a sign that I am not able to do anything irl at the moment. Today I talked with two economists from Ecuador and Venezuela about the development with respect to their countries and their immediate perspective is also very different from what the ideologicial marching band in this forum proposes. The economic development is a factor of many things, many political. But if your basic provision of goods, services and factors is institutionally broken, you will be scarcely able to produce any progress no matter how much money you receive.
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Jul 10, 2015 03:00
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Boner Slam seems to have this perspective I see pretty often where economists at organizations like investment banks and the IMF are viewed as being able to evaluate situations (more) "objectively" and solve economic issues much like you would a problem in engineering. The views of others, including academic economists that express opposing views (like Piketty or Krugman) are viewed as being tainted by their politics/ideology. While I'm not sure why they only extend this "these guys are looking at the situation objectively" view to organizations like the IMF, it's very important that they realize that organizations like the IMF and investment banks do, in fact, have their own interests and that the solutions offered by their economists tend to reflect these interests. Since I majored in finance at an investment bank feeder school and know many people who went to work in various areas of "high finance," I'm more familiar with this sort of viewpoint than I'd like to be. They seem to have this view that only they have access to the skills and knowledge to correctly diagnose and treat economic problems, and that academic economists - particularly those that are left-leaning - are overly idealistic and not grounded in the "real world." For the record, I acknowledge that the Greek issue is uniquely difficult. Unlike post-war Germany, it's entirely possible (and even likely, it seems) that they don't have the economic fundamentals to experience significant economic growth after being provided debt relief and stimulus money. It seems like the people in Greece are in a bad situation where they don't have any options they can pick during elections that will actually implement useful reform (like actually enforcing tax increases that primarily target the upper classes). This is why I think it is dumb to blame the Greek people; it doesn't seem like there's anything they can do (short of a coup, which is unrealistic and probably wouldn't even be helpful) to solve the problem of corruption in their government. It is a bad situation, and I honestly don't think that a good solution realistically exists. You would have to combine significant debt relief and other financial aid from the EU with magically filling the Greek government with people honestly and intelligently seeking to improve their economy. I don't see either of these things happening. Overall, I am still far more inclined to trust the judgement of economists like Piketty over pro-austerity IMF economists. I don't feel that the solutions they suggest would fix the Greek economy, but I believe that they would at least be the lesser of two "evils".
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Jul 10, 2015 06:53
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ChrisHansen posted:Are you talking about the 80% pensions and a retirement age of 58? Regardless of what role you think Greeks played in their own demise, that is just a stupid idea. This is unfortunately correct. I mean who wouldn't want this, but the fact is people simply too long at this point. This problem will only be exacerbated as medical research has a lot of potential in the area of life-extension right now. It's all part of the hugely unproductive clientalist- based system that has formed over the years. Look, for how much hate the IMF gets they've actually been pretty level-headed as of late. They realize austerity often cripples countries going through recessions while the underlying economic structure is still solid. The problem is Greece really has not committed to the reforms they promised. The simple reality is that Greece was bubbled through cheap access to credit and some 'austerity' is required because the system is unsustainable: Olivier Blanchard posted:Why insist on pensions? Pensions and wages account for about 75% of primary spending; the other 25% have already been cut to the bone. Pension expenditures account for over 16% of GDP, and transfers from the budget to the pension system are close to 10% of GDP. We believe a reduction of pension expenditures of 1% of GDP (out of 16%) is needed, and that it can be done while protecting the poorest pensioners. tsa fucked around with this message at 07:03 on Jul 10, 2015 |
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Jul 10, 2015 06:58
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I was in Portugal last year when their second largest bank failed. From what people were telling me the country lost a million people to emigration in a year because the prime minister told their young people they were too educated and should go find jobs somewhere else. Not sure I lost some context in translation but that sounds devastating.
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Jul 10, 2015 07:11
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Ytlaya posted:Boner Slam seems to have this perspective I see pretty often where economists at organizations like investment banks and the IMF are viewed as being able to evaluate situations (more) "objectively" and solve economic issues much like you would a problem in engineering. The views of others, including academic economists that express opposing views (like Piketty or Krugman) are viewed as being tainted by their politics/ideology. Krugman is a center-left Democrat; Rubinites of his stripe hardly lack influence. For example: Robert Rubin. Even if I were mining for academic economists I wouldn't go with Krugman or Piketty, anyway (trade and long-term-growth respectively). Maybe Rodrik?
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Jul 10, 2015 07:41
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ChrisHansen posted:Are you talking about the 80% pensions and a retirement age of 58? Regardless of what role you think Greeks played in their own demise, that is just a stupid idea. No, its a perfectly sensible idea. Even here in the Netherlands people above 55, once they lose their job, rarely if ever get a new job due to their age. So we basically humiliate them with all kinds of checks and punishments to make sure they keep applying to jobs they know they wont get, all so they wont lose their benefits. And we force them into following useless courses like 'how to behave during an interview' (like they ever get one  ). So it makes sense to remove those people from the labour market. It leaves more jobs for the young and those who are retired might do volunteering or other socially useful jobs.
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Jul 10, 2015 08:32
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So it seems that the Greek PM is finally giving in to the austerity demands at least to some degree. http://www.bbc.com/news/world-europe-33473779 Can anyone do or find a rough point by point comparison of this latest offer by Greece versus the creditor's demands, so that we can judge if Greece gained anything through the negotiations?
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Jul 10, 2015 09:31
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Didn't the voters just reject more austerity? Or is this "democracy" in action again when it comes to banks.
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Jul 10, 2015 10:26
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Rand alPaul posted:Didn't the voters just reject more austerity? Or is this "democracy" in action again when it comes to banks. Probably yes to both.
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Jul 10, 2015 10:30
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this is really confusing, refuse proposal, greeks vote no too, then the greek government themselves offer the proposal?
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Jul 10, 2015 10:39
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Celexi posted:this is really confusing, refuse proposal, greeks vote no too, then the greek government themselves offer the proposal? Syriza promised to reject austerity and remain in the Eurozone, when it and everyone else (except the Greek people apparently) knew that that is an either/or proposition.
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Jul 10, 2015 10:50
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Word is it's basically the same deal as was demanded by the creditors about a month ago. So SYRIZA has capitulated, in spite of having a clear mandate not to. This will have big ramifications. It doesn't just discredit SYRIZA as a party, but the left in Europe in general - far-right parties are going to get a major boost. The referendum, which they were hoping to give them a better bargaining position, is now a noose around their necks. All because the social democrats have no spine. A clear run to a grexit/default+repudiation was their best long-term solution, they're now stuck with an unpayable debt load crushing an economy that is itself strangled by austerity. Ports and other public assets being privatized for a pittance will continue.
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Jul 10, 2015 11:03
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it does suggest that SYRIZA may talk in terms of some Marxian/old-Keynesian synthesis, but acts as if it actually accepts an neoliberal analysis of its negotiating position, since its statements have been steadfastly in favour of not only full repayment to creditors but even repaying its IMF arrears (that it already defaulted upon) cynical manipulation of a base that believes in an ideology that the party leadership doesn't would also correspond to the referendum-was-intended-to-lose theory ronya fucked around with this message at 11:25 on Jul 10, 2015 |
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Jul 10, 2015 11:23
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Dreylad posted:I was in Portugal last year when their second largest bank failed. From what people were telling me the country lost a million people to emigration in a year because the prime minister told their young people they were too educated and should go find jobs somewhere else. Not sure I lost some context in translation but that sounds devastating. Irish government did the same. The department of social protection sent letters to young unemployed advising them to emigrate for work. For all they say about us being an austerity success story we lost tens of thousands of young people who had no choice but to leave the country.
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Jul 10, 2015 13:21
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Marenghi posted:Irish government did the same. The department of social protection sent letters to young unemployed advising them to emigrate for work. I guess shrinking your future tax base is part of austerity now!
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Jul 10, 2015 13:25
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Mr.48 posted:So it seems that the Greek PM is finally giving in to the austerity demands at least to some degree. From what I've seen it's focused mainly on reducing the defense budget, increasing pension age, coporate tax levels and increasing VAT on tourism related buisnesses. Tsipras allegedly also demanded debt relief as part of the settlement, something which Hollande is supporting him with. At the end of the day we won't know untill monday after the vote. Postorder Trollet89 fucked around with this message at 13:33 on Jul 10, 2015 |
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Jul 10, 2015 13:30
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tsa posted:This is unfortunately correct. I mean who wouldn't want this, but the fact is people simply too long at this point. This problem will only be exacerbated as medical research has a lot of potential in the area of life-extension right now. It's all part of the hugely unproductive clientalist- based system that has formed over the years. Gerontology has not really extended people's effective working years. Go ask your grandparents to lift a hundred pounds, if they're still alive.
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Jul 10, 2015 14:17
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Ytlaya posted:Boner Slam seems to have this perspective I see pretty often where economists at organizations like investment banks and the IMF are viewed as being able to evaluate situations (more) "objectively" and solve economic issues much like you would a problem in engineering. The views of others, including academic economists that express opposing views (like Piketty or Krugman) are viewed as being tainted by their politics/ideology. Piketty and Kruggles are not in opposition to my view, duder. quote:While I'm not sure why they only extend this "these guys are looking at the situation objectively" view to organizations like the IMF, it's very important that they realize that organizations like the IMF and investment banks do, in fact, have their own interests and that the solutions offered by their economists tend to reflect these interests. Since I majored in finance at an investment bank feeder school and know many people who went to work in various areas of "high finance," I'm more familiar with this sort of viewpoint than I'd like to be. They seem to have this view that only they have access to the skills and knowledge to correctly diagnose and treat economic problems, and that academic economists - particularly those that are left-leaning - are overly idealistic and not grounded in the "real world." Who claims that finance people are qualified in economic policy matters? That's an entirely different education. quote:For the record, I acknowledge that the Greek issue is uniquely difficult. Unlike post-war Germany, it's entirely possible (and even likely, it seems) that they don't have the economic fundamentals to experience significant economic growth after being provided debt relief and stimulus money. It seems like the people in Greece are in a bad situation where they don't have any options they can pick during elections that will actually implement useful reform (like actually enforcing tax increases that primarily target the upper classes). This is why I think it is dumb to blame the Greek people; it doesn't seem like there's anything they can do (short of a coup, which is unrealistic and probably wouldn't even be helpful) to solve the problem of corruption in their government. It is a bad situation, and I honestly don't think that a good solution realistically exists. You would have to combine significant debt relief and other financial aid from the EU with magically filling the Greek government with people honestly and intelligently seeking to improve their economy. I don't see either of these things happening. I am having trouble understanding how this relates to my position. Both Piketty and Krugman are in agreement with me on actual proposals of structural reforms. Pikettys "Let's hate the Germans" is ultimately pretty meaningless in the discussion, the conclusion for a debt haircut is of course correct - but not because Germany has some sort of historic guilt towards Greece. It's a matter of what is right NOW. We disagree on who is to blame, but not in economic policy. Otherwise I am not sure I know where you are disagreeing with me...
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Jul 10, 2015 14:21
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Dreylad posted:I guess shrinking your future tax base is part of austerity now! What do you mean 'now'? It is a core feature!
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Jul 10, 2015 14:43
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Everything I've read suggests that the proposal is not really a proposal as much as it is a "We totally agree with the Austerity Measures you suggested previously".
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Jul 10, 2015 14:46
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How is Greece ever going to be able to generate any kind of income that could pay off the debt? Their economy and civil society was a shambles before Syriza and now they've spent the last six months feeding the countries business ties through a woodchipper and achieved basically square one austerity. How many greek doctors and engineers fled the country during this period? How much previously circulating capital is stuffed under mattresses never to return to the official economy? They are going increase revenue, by taxing the few productive parts of the coutries (tourist islands) even more?
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Jul 10, 2015 14:52
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Because Syriza won't be in power in the next 2 months due to the backlash over this.
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Jul 10, 2015 15:01
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Hungriest Hippo posted:How is Greece ever going to be able to generate any kind of income that could pay off the debt? Their economy and civil society was a shambles before Syriza and now they've spent the last six months feeding the countries business ties through a woodchipper and achieved basically square one austerity. How many greek doctors and engineers fled the country during this period? How much previously circulating capital is stuffed under mattresses never to return to the official economy? They are going increase revenue, by taxing the few productive parts of the coutries (tourist islands) even more? They need forgiveness, and QE. They also need to collect taxes by gunpoint if necessary.
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Jul 10, 2015 15:04
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Na Greece is done, because now nobody will trust any of the political parties unless they're named Golden Dawn.
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Jul 10, 2015 16:11
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Slipknot Hoagie posted:They need forgiveness, and QE. They also need to collect taxes by gunpoint if necessary. Without reforms QE makes the situation worse. You can't get out of a bubble by pumping it with more money. The whole problem in the first place is money going to unproductive clientalism, for QE to work you actually need to have a functioning economy to begin with. The IMF has not been opposed to helping Greece out, the problem is Syriza is doing jack poo poo to actually fix their underlying issues.
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Jul 10, 2015 18:39
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tsa posted:Without reforms QE makes the situation worse. You can't get out of a bubble by pumping it with more money. The whole problem in the first place is money going to unproductive clientalism, for QE to work you actually need to have a functioning economy to begin with. The IMF has not been opposed to helping Greece out, the problem is Syriza is doing jack poo poo to actually fix their underlying issues. lol nice bubble this Greek economy yes
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Jul 10, 2015 18:41
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