Why is the Greek government so popular with left-wingers?

Even though the Greek electorate has elected left-wing leaders, the “the Greek government” hasn’t actually changed all that much.  It is still dysfunctional, corrupt, and very protective of special interests in nationally harmful ways.  Yet I find that if I criticize the Greek government on Twitter I receive many angry, self-righteous comebacks, often but not always from Greeks and usually with a left-wing slant.

One reason the Greek government is so popular with “the Left” has to do, I think, with theories of social change.  I often read or hear it suggested that, if only the truth is spoken in forthright, galvanizing terms, beneficial social change will follow.  This was a common meme in Krugman’s columns for instance over the years.  The claim was that Obama needed to be more like FDR and mobilize a coalition around a commonly articulated series of truths.  I don’t think it was ever promised this would succeed right away, due to Republican intransigience, but it has been portrayed as a good long-run investment in political change through the education of the citizenry.

The new Greek government of course has done this and more.  They have rather flamboyantly staked out extreme positions, insulted their opponents, and warned of the doom that will follow if renegotiations were to run along the lines of EU law rather than the New Old Keynesian economics.  They told their citizenry how much they were standing up for them, and how much this was a moral clash of progressive good vs. austerity evil, with the values of democracy and national sovereignty (supposedly) on the side of good.

The thing is, it’s turned out to be a total catastrophe.  As I had suggested early on, there is, in the ruling Greek coalition, no Plan B.  Germany and especially Spain just held tight on the negotiations and the Greek government more or less had to fold, not even wanting to vote on the negotiated plan.  That plan then failed to receive European approval, nor has Greece drummed up much general support from the other peripheral countries, and now no one knows what to do next.  The ECB, IMF, and others still have Greece “by the balls,” to cite one colloquial expression.  They’re still trying to spin that “the institutions” are not the Troika, but they don’t talk much about liberating the economy as a means of increasing exports.  It seems Emergency Liquidity Assistance may be up for review.  Oops.

The Greek government also riled up its citizens and now doesn’t know how to deliver anything satisfactory to them, to the detriment of political stability.  The latest irresponsible plan is to threaten a referendum on a new government, a new economic plan, or in one case even a referendum on euro membership was mentioned.  Message discipline is scarcely to be seen.

All of that is simply painting the Greek government into a corner all the more, since a referendum will simply heighten the demands for mutually inconsistent outcomes.  Signs of broader eurozone recovery, and the relative success of QE in talking down the value of the euro, have almost completely removed the bargaining power of Syrizas, or so it seems as of early March.

As I’ve said before, these people ruling Greece are The Not Very Serious People, and they are increasingly acquiring a reputation as such within the rest of the EU and eurozone.

All of this reminds me of the wisdom of Dani Rodrik and his propositions about the incompatibility of democracy, national sovereignty, and global economic integration.  Angry words won’t undo those constraints and they are not something you will hear the Greek government mention very often.

Krugman a few times has praised Syrizas for renegotiating the required primary surplus figures, but it seems this is hardly mattering.  Due to plummeting tax collection, the primary surplus is gone in any case, and the agreement with “the institutions” [read: Troika] is not even the main driver of the action here.  Greece needs to take steps to reestablish a higher [read: positive] primary surplus in any case.

The broader lesson is this: if politicians are not “speaking the truth to power,” there are usually some pretty good reasons for that.   As a political strategy, it doesn’t typically work and it is worse than irrelevant as it very often backfires.

The situation is still not beyond repair, but the Very Serious People are serious for a reason.


I'm not left-wing, but I support the Syrizia government because I fear for the end of democracy in Europe. Right now, if you are a European voter, you can vote for either a center-left party that is committed to the neoliberal agenda of EU bureaucratic elites, or a center-right party that is committed to the same thing. If you are a hardcore socialist, you have no real options: EU pressure will continue to erode away the welfare state in the name of efficiency and "market-oriented reforms". If you are a nationalist, you have no real options, any elected government seen as too nationalistic will be isolated and called problematic by the Western European press.

The victory of Syrizia is a beacon of hope to those of us who want to see a Europe where people can choose what kind of society they live in, rather than live in a one-size-fits-all society based on neoliberal nihilism.

"The victory of Syrizia is a beacon of hope to those of us who want to see a Europe where people can choose what kind of society they live in"

The fundamental socialist problem is that you cannot choose away reality. The Greek's are too poor to sustain the society they've chose, and you would have German's pay for Greek choices?

The reality that you can't choose away here, if it can be called a reality, is of the "facts on the ground" type. You can't do that, because we say so.

Every petty tyrant and bully in human history has wanted the same thing, to be seen not as a person, but as a force of nature. Resisting my power is like cursing the sun, you cannot choose away reality (the one I impose on you!)

And yeah, maybe we can't. But it might be worth it anyway to say "No, you move."

Germany is a tyrant because they want to limit the amount of free money they give to Greece?

You are missing the point, if you think what's at stake is Northern vs Southern Europe it is far deeper than that...

Germany is a tyrant because they want to stick Greece with the bill of bailing out their own banks.

Nobody held a gun to the German banks' heads and forced them to lend to obviously lousy projects.

Germany is a hypocrite because they've enjoyed the benefits of "free money" but are now unwilling to pay the costs.

Germany is a tyrant because they want to stick Greece with the bill of bailing out their own banks.

Why don't the borrowers pay back the banks? Aren't they the source of troubles?

"The fundamental capitalistic problem is that you cannot choose away reality."

There, fixed it for you.

As you pointed out the irony here is that the ones fervently trying to choose away reality are sitting in Brusel/IMF/front of Tyler Cowen's computer. Their prescriptions are producing complete disaster in Greece and in EU (I wonder if two quarters of not falling economy in say Cuba or Venezuela would be lauded as taking away neoliberal's bargaining power to question their economic policy), their own targets and predictions are constantly missed by huge margins, everyone sane knows that talks about Greece paying all its debts are nonsense, etc.

Yet, when one points out this and all the other failures, the grand retort is that it's all fault of the reality and the people occupying it to properly live by the theories. And the given solution is double down on the failed path.

This is nonsense.

Greece is responsible for the debts accrued from their unsustainable lifestyle. There's no 'socialist problem', 'capitalist problem' or other adversarial, reductionist 'reality', Weltanschauung, or what have you; *Reality* - the one you see - is the problem before the Greeks. The creditor has a right to collect from her debtor. This is not something wishy-washy. This is not one of Socrates's chit-chats in the forum. This is just how agreements work.

The rhetoric about disasters in the EU, 'bad' predictions, or bad theories are entirely irrelevant. Besides, if we judged a nation by it's predictions, what could we say positively of Greece? That Greeks believed mountains of debt would go uncollected? What would we say about that prediction?

Yeah, I see that in your hard core reality you just blindly throw money around, without slightest care in whose pocket it lands, and then expect it will magically come back to you with fat profits from interest on top. You have teh agreement and besides, IT IS YOUR RIGHT! On the other hand in this fantasy land far far away, if you lend $10,000 to homeless unemployed drug addict, you are not going to see the money back from him. At best you can blow off his head so people will laugh at your financial skills only behind your backs.

I think your post demonstrates who is trying to wish reality away quite nicely. At least we can agree that the EU imposed lifestyle of last five years is unsustainable.

Your argument remains absurd. Recall that Greece lied about it's finances. It lied; end of discussion.

Actually, there's another problem with your statement. German lending can, at best, be construed as imprudent - I'll accept that. But that kind of imprudence under no logic implies that Greece magically is no longer liable for her debts. Arguing otherwise is the kind of hand-wavy nonsense that promulgated Greece's dismal reputation.

German's have every right to fight Greece tooth and nail for its money; how ridiculous that some would argue that Germany shouldn't negotiate as strongly as possible for what's rightfully its own.

Ha, so the left's position comes down to "the Greek state is obviously corrupt, ineffective, etc. and always will be, and the EU should have known this."

> Jeff

But but but the the homeless unemployed addict said he is American prince, first in line to the USA throne! How do you think poor capitalist can guard his billions against that?!?

Besides your argument is absurd. EU/ECB/IMF gobbled up the debt (or more precisely forced Greece to take the money from them so they could save own banks) after it was made absolutely clear to everyone what the state of Greece budget is.

I didn't read rest of your post as I have strange feeling it's just you, fingers-in-the-ears, head-in-sand, crying you are entitled to all the monies you think you are entitled to, regardless of how much money there is left in reality.

> Urstoff

You know, I had the impression this is the right's position. Our universal bulletproof policies are failing horribly because Greeks (Spaniards, Italians, French, ...) are corrupt lazy ineffective cheaters. Sorry, we were totally shocked by that and we will continue to be totally shocked by it into foreseeable future as we will watch how our demands to continue in the same failed policies lead to the same failures.

"Ha, so the left’s position comes down to “the Greek state is obviously corrupt, ineffective, etc. and always will be, and the EU should have known this.”"

No, it's Pick A Narrative:

1) The Greek state is obviously corrupt and ineffective, economics is a morality play, and we're all just gonna pretend that German banks made excellent decisions to lend to a corrupt and ineffective state.

2) Something more interesting than an obviously self-inconsistent Morality Play Economics is currently taking place.

I believe it's (2), but that's because my priors don't demand that I accept two completely contradictory statements as being compatible. Other folks have other needs.

I call BS on you not being left-wing; your use of "neo-liberal" does give you away

You are probably correct but certain far and far far right types also complain about the neo-liberal agenda. Neo-liberal for these people is the ideology of anti-nationalism and/or of something like ZOG.

If you're a hardcore socialist and you also want a society where people can chose what kind of society they live in, you're doomed to be disappointed, because the German voters do not want to live in a society where all their money goes to Greeks.

One'd expect that if they don't want to keep giving money to the greek, that they'd stop giving them money. Not that they'd try to force them to get some more. (How many more iterations of "we don't want you to take our money" followed by "take that money or else" will we get?)

It would be nice if people noticed that they are being used, and stopped claiming that the entire situation has any relation to Greece or Germany people, instead of just banks stealing people money in exchange of trash colateral.

You missed the word "all". The Germans are torn, they don't want Greece leaving the Euro but they also don't want to give Greece unlimited funding. Some optimists in Germany may even think there's a chance their debts will be paid back.

I don't think any German minds Greece leaving the Euro; the problem is what happens when Iberia, Italy, Ireland, and the rest of the periphery rethinks their participation. The current German model is colonialist; you can't run a current account surplus without someone else doing you the service of running you a deficit.

Not to mention the obvious fact that hardcore socialism is fundamentally unworkable so you'll be disappointed wherever you live. :)

Perpetual disappointment is the socialist's default state.

If you're a hardcore socialist, then you're insane, a moron, a sociopath, or mad for power. Socialism has never produced anything but oppression, totalitarianism and poverty. Not for lack of trying.

In any case, it's not clear to me that the Greeks want actual socialism and the assured destruction it brings. They seem to just want everything to be nice and good, as before, when they were getting cushy government jobs with big salaries, and big pensions, all on borrowed money.

Money borrowed on lies ran out, and time ran out for them. It's now up to them to face the facts (they're bankrupt) and either follow the path of economic growth (private property, rule of law, high economic freedom) or the one of poverty (anything else). My guess, they'll try to muddle somewhere in between for as long as they can.

+1, good comment

Go to places like Detroit, Flint, or Buffalo and see the uutopia antileft policies have created.

When was the last time that Detroit has had a Republican government? The last Republican Mayor I can find was Louis C. Miriani who was mayor from 1957 to 1962. That is a long time ago.

Flint has a Republican more recently. Paul Calvin Visser was elected Mayor under the old city charter which gave him little power. He governed from 1973 to 1975. I cannot identify the politics of some of the mayors before that. The next previous Republican was Charles A. Mobley 1958-1960.

The last time Buffalo had a Republican mayor was Chester A. Kowal 1962-1962.

These cities have been ruined by Democrats and pro-Union, anti-White policies. Not by the Right.

Yep, the Rust Belt cities all had the exact same problems by complete coincidence.

Anti-white = letting black people move into white neighborhoods...Yeah, white flight is really black people's fault; if they had only stayed in the ghetto. Just like slavery is black peoples fault (as it is often blamed on African tribes who sold slaves to European slavers...so therefore Europeans get a pass on setting up a racial caste system for 400 years based on perpetual chattel slavery).

Michael March 11, 2015 at 1:01 pm

Yep, the Rust Belt cities all had the exact same problems by complete coincidence.

No they did not. Philadephia lost its steel industry but it is not Detroit. The Rust Belt cities had, by and large, Democrats in office. Find me one that did not.

Agra Brum March 11, 2015 at 5:36 pm

Anti-white = letting black people move into white neighborhoods…Yeah, white flight is really black people’s fault; if they had only stayed in the ghetto.

Yes, White flight is entirely Black people's fault. But no, anti-White policies are not letting Black people move into White neighborhoods. That was not the issue when Coleman Young got elected in Detroit. His policies were openly and clearly anti-White. He told them, repeatedly, that if White people did not like his Detroit they could move out. And they did. Policies have consequences. If your policies are making White people pay, the White people are going to leave. Taking all their businesses and jobs with them.

Just like slavery is black peoples fault (as it is often blamed on African tribes who sold slaves to European slavers…so therefore Europeans get a pass on setting up a racial caste system for 400 years based on perpetual chattel slavery).

No doubt this justifies some sort of feeling you have right now. What it is I am not sure. I would guess the thrill of angry self-righteousness. But it has nothing to do with what I said - and if it you were justified in so feeling, it does not make you right.

"The victory of Syrizia is a beacon of hope to those of us who want to see a Europe where people can choose what kind of society they live in, rather than live in a one-size-fits-all society based on neoliberal nihilism."

This is a fairly absurd comment. It's incoherent. You want a system that allows individuals to choose between right-wing nationalism and left-wing socialism? Guess what? The only system that allows for that is liberalism.

So, far from being about nihilism, the whole point of political liberalism is that it allows a truce between people with different political preferences. In the absence of liberalism, the political system simply becomes a raw exercise in accumulating power and wielding it for your constituency. Heck, even with liberalism we get that, but its much better than any instances of when either side manages to get total power.

I too find Syriza to be a beacon of hope: The Euro has shown itself to be weak and not bound by the rule of law. The ECB acts contrary to what was originaly imagined. The Euro is no used by the political elites to disenfranchise the peoples of Europe: The greeks into becoming wards, the germans into becoming dispossessed.

Euopean unification and peaco are to important to be left in the hands of Frankurt and Brussels. The Euro needs to go. Syriza, exactly because they are such failures at politics and economics, is the best weapon we have.

And also once the greeks will have to pay for their Keynesianism by themselves they will probably adapt to realities really fast.

Did Greece join the Euro to avoid their problems of their Democracy?

“The victory of Syrizia is a beacon of hope to those of us who want to see a "Europe where people can choose what kind of society they live in, rather than live in a one-size-fits-all society based on neoliberal nihilism."
The Greeks - both left and right - HAVE chosen the society they live in and it's a shambles. They are now throwing a childish tantrum because they want someone to clean up their shambles and bring them more candy. The last thing they want to do is be responsible for their own choices. The West's mistake was freeing them from the Ottomans in the first place. Their attitudes towards governance and economics are more Levantine than European.

You said it : this gov is corrupt, like every former. Therefore, debts are lenders problems, noone else's

However, Syriza choosed to play the hypocrital eurogame some more time, to leave eurogeniuses some more time to get over it.

This is so foolish. The Greek's can't have what they want without the rest of the Eurozone giving it to them for free - that is why they are in debt, that is what "debt" is. Let the debts be the lender's problem, let second-world status be the Greek's problem.

Second-world status?

Have you tried going poo in Athens?

The debt is the lender's problem IF Greece leaves Euro.

If Greece leaves Euro, Europe / Banks are better off taking the loss, bc Greece will only leave if they cannot bring themselves to live on a current account surplus.

Greece leaving is literally Greece saying, "we're not able to run our state without printing money far faster than the rest of you. We cannot get our shit together."

Greece staying means they are willing to become the South Carolina / Louisiana of Europe. They must compete by reducing wages, reducing regulations, valorizing business (tourism), and cutting govt.

Louisiana produces *twice* as much GDP per capita as Greece. The rest of America considers Louisiana to be a poor, backward place.

What does that make Greece?

An Austerity success story, of course.

If greece is "an austerity story" then The Silcence of the Lambs is romantic-comedy.

A recipient of enormous amounts of money from larger more prosperous states for decades. Huge amounts of federal dollars, and investments, ultimately flowing from prosperous states like New York and California are the reason that Louisiana's GDP is so high.''

If the relationship between Germany and Greece were similar to the relationship between Louisiana and New York, Germany would simply be sending billions of euros to pay for infrastructure and services in Greece year after year, decade after decade without even thinking about it.

No, no. Greece needs a guaranteed minimum income. The EU will provide it, but Greece decides what they do to earn it (chooses its own boss).

“we’re not able to run our state without printing money far faster than the rest of you. We cannot get our shit together.”

Well that's the whole point, right - different countries should have different rates of inflation in order to manage their economies. Lumping all of Europe together into a monetary union was an insane idea from an economic policy perspective. Printing money at an appropriate rate does not mean you don't have your "shit together" - small countries can boost their economy by devaluing their currency to boost exports.

One question to all this:
I've read all the Syriza articles I could get my hands on. And could easily divide them into:
1. Syriza failed on all fronts. (like this article)
2. Syriza managed to achieve a very minor movement into the right direction.
And both sound extremely logical, as one reads these articles, one is inclined to believe them.
This brings me to my conclusion: neither argument is correct, neither writers of those arguments have any clue what they are talking about.
The demonization of the Left is nothing new, and has been going on since the fall of Warsaw Pact. And most of the anti-Syriza arguments have been nothing but that. I am still confused why are you, TC, on board with it. Your writing always went beyond the simplistic left/right dialectics.
Varufakis, as a mathematician, is I am sure, very well aware of all the nuances of economics, at least as much as you.
And the dialectics of Germany as the biggest expoerter is trying to force the south Europe to try and be the same, even though that idea was absolutely NEVER a part of their culture. But I guess the cultures are there to die.
But Syriza has a primary agenda, to prove that anti-austerity economy is possible. To prove that austerity is not going to help anyone except those 80 people who own 1/2 of the planet. And that the situation where it is but a few dozen people who own 50% of the planet is unsustainable. And them and Podemos are the only ones trying to do something about it. Everyone else is falling in line. Including you. My question is WHY?

And we constantly see all the economies that've accepted austerity failing step by step, turning country after a country into a ghetto. I still cannot comprehend how is that good for economy (apart from those 80 people). Yet you TC, seem to have an idea. So please, do answer the question.

Just explain how Greece can perpetually consume more than they produce and the "demonization of the Left" will fall flat. You can't, and that's why magical thinking is all the rage.

You've obviously not read my comment in its fullness. One thing is living beyond means, everyone should get punished for that. But what about the foreign powers unwilling to deal with real problems of a country but instead making deals with pure corruption. Why are they not accountable. Hope I was short enough to be able to be read this time.

What makes you think a foreign power deal with the real problems of another country? We've had centuries of various colonial efforts, they generally don't work out that well. Foreign powers don't know much about the country they're intervening in, particularly they generally don't know how to build a lasting political settlement, they get blamed for everything, and they get lousy feedback because they're a foreign power.

"everyone should get punished" Yea, unto the 7th generation. Man, you conservatives are super into other people suffering. There's a word for that sort of thing.

"Sadist", but I'm fascinated by your false equivalence.

Just to add. I state somewhere that who lives beyond his means should suffer. But you never saw that. Your hate for the left is blinding you

That's how things work in the united states - some states perpetually consume more in government spending then they produce, and have forever. http://www.ritholtz.com/blog/2012/02/is-your-state-a-net-giver-or-taker-of-federal-taxes/

And we constantly see all the economies that’ve accepted austerity

There is no austerity.

I wish

Andrej this Art Deco, is another ridiculous right wing pro-market troll, dont bother about his opinion... He does not even know the meaning of the word "reality".

There is no austerity. The ratio of public spending to domestic product is 0.59

The problem is not austerity itself. The problem was reckless spending beyond means that entails austerity when markets refuse to lend more.

What is austerity? Seriously, every time someone uses this word I want you to provide a quantitative definition.

'Austerity' = living within your means.

+1 Great definition.

Austerity = the delusion that a government and a household are the same thing, in exactly the same way that a prion and an ecosystem are the same thing.

Governments that can't print their own money are like households.

Magical thinking: sovereign debt means nothing because money means nothing.

Governments that can't print their own money are more like households than governments that can't print their own money. That is a true statement. But it's a statement on the order of "a tundra ecosystem is more like a prion than a rainforest ecosystem." It's TRUE, but it's also a way of looking at things that obscures more than it illuminates.

The only difference between a sovereign and a household is that a sovereign can unilaterally debase its currency. That can't go on forever, because other people aren't stupid, and aren't "on the program". The idea that any sovereign can debase itself to prosperity is a tenent of modern leftist economics. See Krugman to Keynes.

Really? The only difference between a Westphalian state with a military and made up of millions of individuals and a household is . . .

one thing? You're absolutely sure it's one thing? Just like the difference between a prion and a tundra is one thing.

So if my future child cannot pay for university it's his/her fault, not the baby boomers' (people who had mostly free education and now are demanding that subsequent generations pay more for the same services they got practically for free). Or better yet, it is the fault of children for not having money to pay for it.

As noted above, these people are super-into the suffering of children. I'm starting to view that as their primary motivation, with everything else just an intellectual smokescreen.

austerity is inviting your poor college friend out for a fancy dinner and when he can't cover his half of the check, leaving him in a tub of ice with a kidney missing - and then using the money left over from selling the kidney to buy a sports car.

austerity is not inviting your poor college friend out for a fancy dinner and then covering the bill - for the fifth time in a row.

The annoying part of the last dinner is when he wouldn't even look at the jobs section of the newspaper I brought for him.

Your poor college friend should be adult enough to realize that there are a finite number of free meals that you are willing to provide.

Your poor college friend should be adult enough to realize you're the kind of person who steals people's kidneys to amuse yourself.

But . . . we don't always realize that in time.

Let's get down to it, Mike. How many hours of labor do each of us owe to you, and how many hours of labor do each of us owe to Greece?

Thomas, you owe me your entire life, in perpetuity, because you have no idea what to do with it that would make either you or anyone else happy. That's a personal thing, though, and separate from this conversation.

Anyone stupid enough to lend to a bad project in Greece owes them . . . nothing! Because that's what "bad loan" means.

Greece can make the choice to default - and to permanently reduce it's standard of living. Seriously, in this debate there are only two sides - those that say: "Do what you want, Greece" and those that say: "Support the Greek decision with your own labor and wealth". Guess which side I am on.

Ah, but which side is Germany on?

Austerity= destruction of all social programs and reduction of corporate taxeS. Any policy that brings us closer to Dickensian life

Austerity= Tax increases in excess of spending increases and/or spending cuts in excess of tax cuts

"those 80 people who own 1/2 of the planet"

Haha, cute. Did you make this up yourself or is there a lie repository for leftist demagogues?

Really, this sort of conflation has to be intentional, and not merely incoherent -

'Even though the Greek electorate has elected left-wing leaders, the “the Greek government” hasn’t actually changed all that much.'


'The new Greek government of course has done this and more'

It isn't possible to have it both ways between 3 paragraphs - either the 'Greek government' hasn't changed, or it has. By the 4th paragraph, at least the phrase 'ruling Greek coalition' accurately reflects the situation. Shame that it only appears once, followed by three more appearances of 'Greek government.' But at least the post is aware of the reality that the EU and the eurozone are two distinct entities.

The whole point is that the talk has changed dramatically, but the fundamental realities haven't.

Germany holds the whip hand; German talk has not changed.

I think Tyler just had to vent, since the answers to his questions were evident.

Why does the left love Syriza? Mood affiliation.

Why does the left attack? Because that is how progressives behave.

I think TC is also just playing to the sensationalist gallery. Last I visited Greece to pull some money out of some Greek banks, at the peak of the hysteria over default a few years ago (which influenced me I admit), there were reports of riots "in Athens" yet when I landed, the only place in commotion were the few, isolated, usual places in downtown Athens where the college kid anarchists (mostly poseurs, though a few professional bank robbers posing as revolutionaries and a few earnest political theorists also hang out there). The suburbs, a mere 10 miles away, were calm, same as they always are. I think these TC sentences, unsourced, are designed to just get people excited: "The Greek government also riled up its citizens and now doesn’t know how to deliver anything satisfactory to them, to the detriment of political stability", "As I’ve said before, these people ruling Greece are The Not Very Serious People, and they are increasingly acquiring a reputation as such within the rest of the EU and eurozone" - increasingly? Hmm, lol I guess it depends on your baseline and how knowledgeable you are about Greece. These TC sentences, if you live there as I do, are about as profound as saying "I think DC bureaucrats are not doing very much good and I predict the US economy will suffer as a result" -- true perhaps, but not very informative. Here is a more specific 'prediction' by me, who lives there from time to time (I am a citizen): nothing much bad will happen from a Greek default; some people will lose money, some may even lose their lives, but, like happened in Cyprus, life goes on. So much ado about nothing. This is not the WWII German invasion repeated, just some Greek bank money at stake from those who don't have the wherewithal or time to move said money to Switzerland or elsewhere (as I and most that I know have already done). As for the Greek economy after default, and property there, it may even go up after some price discovery (wouldn't surprise me). As for the 'domino theory' of contagion for the rest of the EU if Greece defaults, it may turn out to be false, as it was in Vietnam by analogy.

"Life will go on" -- well of course. The bomb isn't being dropped on Athens. The entire discussion is about policy and its effect on the future path of GDP for Greece, and to a lesser extent the euro zone.

Many on this blog, myself included, believe that if Greece defaults that the path of its future GDP will be lower. Further, we believe that the only argument being proposed by the left is that they should spend OPM to enact policies that make them feel good and we think that is, at a minimum, a shortsighted policy and at worst the most vile behavior in the world.

@Alain, you message is internally inconsistent, but thanks for thinking lofty thoughts of me and my fellow citizens. But truth be told, the only time foreigners are interested in GRE is when their present money or ancient cultural artifacts are at risk. That's the cold hard reality. The people complaining about the Greeks are not so-much Good Samaritans as you purport to be, but the mouthpieces of bankers who are owed money. What is going on now is brinkmanship by the creditors, in an attempt to extract more money out of the debtors. If you don't see that, you probably are living with rose-colored glasses. In any event, as a practical matter nothing that happens in GRE is liable to affect anybody reading this blog, unless they have vested interests in GRE, as I do. By contrast, when and if the USA goes the way of Japan and follows a deflationary/inflationary death spiral, as more and more unserviceable debt is added, akin to what GRE is doing now, then it will affect the entire world. How you protect yourself when that event happens is of interest to me... I wish more mainstream economists blogged on this, but we're stuck with gold bug nuts at the moment.

"The people complaining about the Greeks are not so-much Good Samaritans as you purport to be, but the mouthpieces of bankers who are owed money. "

Yes, isn't this the question? Will Greece have a better future paying off the banks who lent them money, or are they better going into basically bankruptcy?

It seems that Tyler thinks its the former, but has this debate really been settled?

"I wish more mainstream economists blogged on this, but we’re stuck with gold bug nuts at the moment."

+1 for self-awareness.

The big problem is buying oil. Everything else can be solved; it's gonna be rough for Greece to run even a Mississippi level economy without some oil.

Why so much hate for the Left?

Wrong on all counts (except for TC, I really cannot judge there).
Why does left love Syriza? Because they represent a scientific way to try to avoid austerity that has thus far only brought misery to most and happiness to those 80 people that own half of the planet.
Why does the left attack? What kind of biased question is this. It is just a string of words that carry no meaning.

Andrej Ristic March 10, 2015 at 4:07 am

Why so much hate for the Left?

On the order of 120 million innocent victims of Communism. People don't much like Nazis either. Remember Syriza are the people who knew what Stalin did, and thought he was too moderate.

Andrej Ristic March 10, 2015 at 4:21 am

Why does left love Syriza? Because they represent a scientific way to try to avoid austerity that has thus far only brought misery to most and happiness to those 80 people that own half of the planet.

What scientific way would this be? What austerity? No one of note has tried austerity yet. Not the British. Not the Americans. Not the Greeks. What they have tried, Syriza has changed how? How has the lot of ordinary Greeks improved in any way? If their approach was scientific they could explain it. They cannot. Hell, they could agree what it was. They cannot.

As for misery for most, half the world's population of absolutely poor has been lifted out of absolute poverty into something better by neo-liberalism. Mainly the Chinese. 400 million people now live on more than a dollar a day. I suspect that those people are pretty happy.

Why does the left attack? What kind of biased question is this. It is just a string of words that carry no meaning.

And yet he is getting angry responses when he says something about the clown show in Athens. Refusing to accept reality does not make it go away. You and Syriza both.

Regarding austerity:
I call that this movement that existed from the 90s. Whereby the funding for schools and social programs has been systematically and religiously cut and where the ONLY method for benefiting economy has been seen in corporate tax cuts. And that is getting stronger and stronger.
And regarding commie crimes, you sound like they were the only ones. As if West never killed off its people on ideological grounds. Just today I learned that there is a village in Alberta where swearing will get you fined and having your kids (younger than 18) outside past 10pm will land you in jail. If that is liberty, than I didn't know the meaning of the word.

I am sorry did you just compare the murder of 120 million innocent people with Albert jailing people for swearing? Do tell. I am fascinated. Do you have a magazine I might buy perhaps?

Whatever you think about Alberta, they are not murdering people for owning two cows.

As for austerity, as usual your trolling is poor. Spending on education has not been cut. It has only gone up right across the West. In fact in the US it is about twice as much as was spent in the 1970s.

So the left believes that countries can just keep spending money beyond their means indefinitely?

Yes. Next question.

Something something Krugman, something something sovereign debt, something something magical scientific equations, something something the long run never comes.

Basically Syriza promised to the Greeks that their debts would be paid by other EU citizen (plus a bit from IMF). I understand this appeals to the Greeks, who voted massively for them, but to other Europeans? Such policy is not particularly left wing; minister Panos Kammenos who is right wing is perfectly confortable with it. Most of the EU lest sympatise with Syriza "tax & spend" posture without realising that they aim to tax other EU taxpayers rather that Greek ones.

Not their debts. German banks' bad loans. In a free market, banks eat bad loans. In Greece, Greek citizens eat German banks' bad loans.

In a free market, banks enforce foreclosure. In a post-default Greece, who is willing to give goods on credit? Let them eat Drachma.

Precisely; Germans set the terms of trade, German banks make wildly unsecured loans, German banks get bailed out, Greek citizens are held in bondage for a couple generations to create the surplus necessary to cover the bad loans.

Problem solved!

I don't think you understand the situation. The Greeks can choose to default, the Greeks can choose to continue their government spending, but the Greeks cannot choose to default and continue their government spending. The Greeks can't support themselves at this level. I don't care if they pay or if they join the second world. I find such humor in their supporters demanding the rest of the Eurozone continue to fund their profligate republic, as if Greece had claim over the work of others.

This continues to be adorable. Syriza hasn't proposed a default or any form of debt forgiveness; that was off the table before negotiations started.

What color is the sky on your planet? This has nothing to do with "government obligations," it has to do with "total economic collapse." You can't pay back loans from an economy that was destroyed as a lesson to the voters of Portugal, Spain, Italy, France, and maybe Ireland. The point is to destroy Greece, a point Syriza continues to illustrate by making ever more reasonable demands ("Can we tie our interest rate to GDP growth? That way we both win.") and being roundly rejected.

The long and short of it is that Greece has been consuming more than Greece has been producing. You can obfuscate all day long, but you can never change the underlying facts. The truth of my statement is obvious when we consider this question: How can Greece go forward on its current trend without getting free goods from the rest of the world?

Michael March 10, 2015 at 8:54 pm

Syriza has not proposed a default because their debt has been all but forgiven. It has been written down so much that they are only being asked to make a token payment. Even this they are refusing.

The point is not to destroy Greece. The point is for the Greeks to engage in actual reform. They have structural problems with their economy and they are refusing to do anything about it. Which is fine. If they don't want to reform, they do not have to. But there is no way anyone is going to lend them any more money unless there is a small chance it will be repaid. Syriza is refusing to do the sort of things that would suggest they will repay.

Insisting that repayment is tied to future economic growth is not reasonable. Given they are refusing to do anything to restore economic growth. It is just a way of reducing their payments even more and kicking the can down the road.

The bottom line remains the same - the Greeks can be as irrational as they like. But no one will lend them any more money without some token effort showing their good will. The ball is in Athens' court.

"It has been written down so much that they are only being asked to make a token payment"

What color is the sky on your planet?

Why is the Greek government so popular with left-wingers?

Because people with an adolescent cast of mind have an affinity for their own?


Suggest Greece is in the pickle it's in because it's politicians lie and and their lying is rewarded by a Greek public which can only bear so much reality. The trouble is, reality is what remains in front of you even if you stop believing in it.

As a working political society, Greece is a failure. The trouble is, there is no reason to believe ready alternatives (e.g. a military regime) would do better; you'd swap out one set of boneheads for another.

It is the Greek people's fault....typical right wing bs: people are poor because they are stupid... The problem is not Greece itself, it is the fact that a country like Greece is in the euro, which does not make any sense at all.

One can be stupid and get by as long as they are hard working, but stupid AND hardworking, well that's a losing combination.

Being a stupid person, however, is not really the same thing as being a stupid voter. Greece (and the United States, really) is filled with stupid voters, and that is ultimately the bigger problem. Collectively they all think they can vote themselves other people's money.

OK then, leave the Euro and default on your external debts. If that's what the Greek people want, that's an option.

However, opinion polls tend to suggest that the Greeks want to stay in the EU, stay in the Eurozone while somehow avoid paying back any of their official creditors.

So which is it? Stay in the EU and play by Troika rules or leave the EU and strike it out on your own?

Both are bad. They're looking for another way.

The only other way is "Foreigners produce goods and send them to Greece".

That's how all economies work, Thomas. Autarky sucks.

This is the reality to which I am referring, Michael - not everyone can consume more than they produce. The status quo may be unfair, but that doesn't change the fact.

Tell that to German elites. They seem to be extracting just fine.

It is the Greek people’s fault….typical right wing bs: people are poor because they are stupid… The problem is not Greece itself, it is the fact that a country like Greece is in the euro, which does not make any sense at all.

Yes, the Greek public is at fault, because they have objects which are incompatible with each other.

All of this reminds me of the wisdom of Dani Rodrik and his propositions about the incompatibility of democracy, national sovereignty, and global economic integration.

Hmmm interesting. If Dani Rodrik's wisdom is correct, then I will choose more of the democracy+national sovereignty and less of the the global economic integration.

Lots of people agree with me, and if you don't it's due to your axioms and basic principles of faith rather than anything empirical.

99% of politicians in EU (and in the US) prefer only global economic integration, the other two, are already on the trashbin.

I'm not an economist, but S. Korea, Israel, Turkey all seem to prefer the other two. Also Japan, but i suppose it would be said they are suffering for it.

Good, go live in Turkey like a nice reactionary chap. The unterwomenschen are being put in veils there.

"The unterwomenschen ". Großartiges zweisprachiges Wortspiel !

Hmm all right democracy, national sovereignty, and global economic integration. Is this one of those "choose two" games? Let's see if the formatting tags work:

USA Communism Inc. / \ Third Reich
\ \ / \ / /
/ \
global econ. — — — national
integraton | | sovereignty
| |

PS. 'pre' tag doesn't work...

Also Millian you suck.

The only relevant truth is that you can't persistently spend more than you earn.

Everything else is noise.

Yes, look at the US

Indeed look at the US. Or Japan. A rich nation can go on for a long time spending accumulated capital. Greece just doesn't have any to spend.

The solution for Greece is to live on the output it produces. The problem with that is that it doesn't produce very much.

My understanding is that Syriza's proposal is for Greece to live on the output it produces, going forward.

Yes. Greece has already agreed to live under Austerity to please the Germans. That wasn't enough. Greece has to make reparations so vast that its economy crumbles under the weight.

Maybe some Germans have good memories of the collapse of the Weimar Republic, I dunno.

Sux to not make your own oil. If they could, Greece could make a go of escaping.

Sure you can. https://en.wikipedia.org/wiki/List_of_countries_by_external_debt

the wisdom of Dani Rodrik and his propositions about the incompatibility of democracy, national sovereignty, and global economic integration. Angry words won’t undo those constraints and they are not something you will hear the Greek government mention very often.

Oh, come on. Argentina did default, but a hundred of other countries did not, so if anything, the experimental results prove fundamental compatibility of democracy, national sovereignty, and global economic integration.

Now, Argentinians have a bit harder times accessing capital markers; Europeans aren't keen about selling GMO products; Germans don't want to give more money to Greeks. Anyone cares to explain how those are threats to global economy? :)

You're in a good mood today.

The credo of the Ultra-Left in Europe in general, in France and Greece for example, is simple:
Contempt of the democratic process and the rule of the majority
Surprisingly they share an exclusive positive passion for Islamism...

Their purpose is unique: Control the Party - Bolshevism - to control the society as a whole. It is the law of the balance of power.

These political Parties are a sort of cluster of persons totally focused on themselves and convinced that their worldview and their political agenda are the only truth bearers. They surround themselves with lackeys and create small groups that are in permament conflict with one another first, and with the rest of the universe incidentally.

It is the first time, with Siryza, that this type of Party comes to power, and all the frustrated of the True Left are in paradise.

Still, the practice of permanent conflict within the Party dominates and excludes all other considerations.

Krugman - which I like elsewhere - is totally naive in politics. So he supported Hollande in 2012 without even having seen that the socialist program was inept and inconsistent. Result: the Real Socialist France is governed by a policy mix Reagan / Thatcher rather kitsch and suddenly, violently, Krugman is angry because his blindness is is so cruelly exposed.

I guess the Syriza model: Marxist-Leninist-Trotskyist-Maoist-Chavist-Castroist is completely incomprehensible elsewhere than in Southern Europe. It is a kind of fossil that is revered by all these lost children of the Great Revolution in their desperate quest for transcendence.

Nothing to worry, Tyler. Just a blip.

This was as biased as Fox News. You just know whom to hate and you are enjoying it. There is a huge difference between the Left that looks what it can do, and those antizionist idiots you are talking about. True left does not care about Zionism either way. And antiamerican is also crap. Left does not care about USA. This argument is as idiotic as the argument whether God exists. True Left observes whole first, individual second. American individualism observes what it needs, but never the whole. And that is much different that biles of hate you are spewing here.

It would be nice if there was some true hard left without any of the faults of the actual left. Sadly the actual hard left is made up of people like Theodoros Karypidis and the people in Syriza who consider Pannos Kammenos an appropriate partner. The strongest characteristic of the actual left is it's refusal or inability to come to terms with all the horrible results of its ideas and its belief that these results were the fault of someone other than the true left. The actual hard left in Greece is and has always beem anti Israel and anti American and anti-capitalist and this has nothing to do with Fox News. Syriza is not composed of social democrats with a vision of some kind of Scandanavian Greece it is a party formed from fragmented elements of the far left. Below an interview with Stathis Kouvelakis where he argues "Syriza has a strong anticapitalist line, and it has very sharply set itself apart from social democracy" which discusses the strong influence of the communist party and his hopes that the election will be the start of a European wide revolutionary process amongst other crazy stuff. https://www.jacobinmag.com/2015/01/phase-one/

The hard left is what comes after the Right gets done shooting the actual left.

As they say in protestant churches:
Testify brother! Testify!

To be clear, making broad accusations like you did, with anti-Zionism and similar, it was your discourse in the first message that I referred to as the Fox News propaganda.

Either you don't know anything about the far left in Greece or you are being dishonest. Fox news is happy to call a left of centre democrat in America a crazy socialist but Syriza is not composed of democrats. The far left in Greece has always been fiercely anti-American I don't really see how this can be in dispute. Syriza has overlapping membership and supporters of the Revolutionary organization 17th November & of Revolutionary Nuclei. Petros Tatsopoulos had to offer his resignation when he brought out into the open the question of sympathy amonst Syriza members for the terrorists. Perhaps you could actually read material produced in the past by the collection of individuals and groups who constitute the current party. As for anti-Zionism even though Theodoros Karypidis was disendorsed for his crazy Jewish conspiracy ranting these views are widely held on both the far left and amongst their partners on the far right (as Kammenos' comments about Jews not paying taxes demonstrate). In public Syriza restricts itself to diatribes about Israel's unjust slaughters and racist expropriations but behind the scenes they are much more open. Again this is something that you could easily discover for yourself and it is no secret or misrepresentation. As I said before Fox news is happy to misrepresent mainstream left of centre views as dangerously radical but Syriza is not of the mainstream left.

Very well said, Jean-Louis:

"The credo of the Ultra-Left in Europe in general, in France and Greece for example, is simple:
Contempt of the democratic process and the rule of the majority
Surprisingly they share an exclusive positive passion for Islamism…"

Actually, the passion of the radical Left for Islam is not so surprising. Both Left and Islam worship the totalitarian power of the state.

I gotta add one more thing.
My former homeland, Yugoslavia was destroyed. It had a functional economy. Then the "foreign investors" arrived, bought out most of the industry, and bit by bit dismantled it. Greece is going through the same thing. If austerity continues, and it will, we'll end up with a few people owning the planet. TC, how is that a sound economy? Please answer.

Wasn't the primary force behind most of the destruction the civil war? In other ex-communist countries where there was no war, foreign investors made those countries prosperous. Just look to Estonia, Slovakia, Cesky or Poland. Even Slovenia, which was part of Yugo today is quite well off, mostly because it was mostly not hit by the civil war.

I live right on the border to Slovakia and the transformation is incredible. Their shopping malls, car factories and office space are on par with western standards. Incomes are rising fast. Not as fast as they would like but after 45 years of communism, the turnaround is still amazing. And a lot of these investments in factories and offices were done by foreigners (who were lured by low taxes and cheap labor for sure).

Why would an investor buy stuff and then "dismantle" it anyway?

Great comment. Does anyone have any more information regarding to what degree the boom in Slovakia has been a product of FDI? Is there much resentment in Slovakia toward foreign investors and banks in general?

FDI in Greece has been effectively zero since...forever.

No, Andrej, sorry, Yugoslavia had no functional economy. Only mountains of debt and later, when it ran out of the borrowed money, hyperinflation followed.

Yugoslavia had the following story:
Most of its population was lazy and the dictator Tito held them in line for a while. And the country had a working economy, literally because of its dictatorship. Then the country got greedy, borrowed and started building stuff (bridges, dams,...). Then IMF changed the terms of the agreement (Yugoslavians were too dumb hence they signed bad contracts, just like Greeks did). This change came with the rise of Reagan and his people, his people were involved in those contracts. Then came different companies giving resources to separatists, in essence, building an army that will secure them monetary gain in contracts, once they effectively become own, indeependent states. (Just look at the attempts of trying to drill under Adriatic sea, something Yugoslavia would have never allowed, but Croatia does). And let us look at Serbia. Where a company Magnohrom was functional, then sold to south Asian investors who downsized it, probably justifiably, than misimismanaged it, than it was resold, downsized and mismanaged again and one more time. Third time it meant dismantling. About 100k people originally depended on it. Now they are jobless. That is what is being done. Religious wars are/were only a smokescreen. I'm telling you, this was the real problem.
And why would the foreign investor/occupier care about the national treasures of Adriatic, or about leaving 100k people jobless? Yugoslavia had a system to prevent that. That is what needed to be dismantled.

The terrible mishandling of the transformation of the Yugoslav economy has little to do with voracious capitalists wanting to destroy the country's economy and everything to do with war-related political mismanagement messing everything up. I'd point to the example of Slovenia, which was fortunate enough to have a brief war and went on to integrate speedily with the European Union.

I can't think of any significant number of people or governments who wanted Yugoslavia to fail so badly. Before 1989, Yugoslavia had already become one of the Communist countries with the longest history of integration with Europe. Had Yugoslavia managed a successful and peaceful transition, whether as a reformed federation or as a collection of independent states, this would have been to everyone's benefit. That this transition did not occur is ultimately the fault of the nationalists who took over the different republics, opting for war instead of reform.

You say some words, yet there is no proof of what you're saying. I can think of many people who wanted Yugoslavia to fail. Reagan's administration tried to start it, Bush senior said that USA will negotiate only with the separatists. In essence, all you said was untrue.

And why there was many Slavic states with some level of integration between the Slav nations. Today, this "free" world considers countries with more than 1 Slavic nation opressive. Why? Simply because there was a lot of anti Slavic sentiment in destruction of those countries.

"I can think of many people who wanted Yugoslavia to fail. Reagan’s administration tried to start it, Bush senior said that USA will negotiate only with the separatists."

Are we talking about the late 1980s, when the status of Kosovo under martial law became a major issue?

Many people in the West wanted the democratization of Yugoslavia, and its conversion to a capitalist economy. This is not the same as wanting the country to break up.

As for the collapse of Czechoslovakia and the Soviet Union, those were initiated by Czechs and Slovaks and Ukrainians and Russians themselves. No one forced those federations to break up, and, as Bush's infamous "Chicken Kiev" speech illustrates, many in the West would have preferred unity.

(And anti-Slavic sentiment in the West? This is the same West that included Slavic countries in central and southeastern Europe in its organizations, right?)

Yugoslavia was not destroyed by foreign investors. That's an absurd claim.

As you surely know, Yugoslavia was destroyed by a series of bloody civil wars, secessions and the resulting collapse of its internal trade network. Out of a prewar population of 24 million, 4 million were displaced during the 1990s. Another 140,000 were killed.

The conflict was on a similar scale to the current civil war in Syria. Would anyone say that Syria's current economic problems are the result of meddling Turkish investors?

You've no idea what you're talking about. Sorry, not true at all. Don't confuse the symptom with the illness

To add, just read my response to the story above.

And one more time: this question boils down to two things:
1. The people who measure others based on left/right dialectics are idiots whose opinion is either irrelevant, or if they have any pull - scary (like Fox News).
2. The question of austerity is more important there than anything else. If people get indebted with a gun to the head (Greece, Yugoslavia) where the international community is dealing only with the most corrupt of them, is it their fault.
Any reply that does not include analysis of austerity I will consider as hate speach.

And so we see Stalinism at work.

How did either Greece of Yugoslavia get endebted with a gun to their heads? Who forced the Greeks to borrow all that money and then spend it on a massive shopping splurge? The Germans invaded and we did not notice?

What austerity? At most Greece is being asked to spend something like what it makes. No more. That seems reasonable to me. The insane credit card spree they have had with German money cannot continue. The Germans have cut up their card. So what can they do? Even if they default on all their debts - and they very nearly have - they still cannot go on as they are. They need to collect more tax, work harder, export more and spend less. There is no other option.

Consider this hate speech if you like. It won't change the fact that Syriza are hate-filled people who endorsed genocide on a Stalinist scale. This is also a fact that won't go away because you wish it to.

SMfS, is clearly one of the blogs most fanatic right-wing pro-market trolls... No Greece did not implement any austerity at all looool ... quit being ridiculous please...

Not one of these foolish promoters can answer the simple question: How can Greece perpetually consume more than it produces? Moreno can't, Andrej can't, Michael can't. No one can, because it's an impossibility, it is fundamentally in conflict with reality.

I am torn. It looks like you are smart enough to know why this is a non-response. But it is possible that I am wrong.

So Moreno, I have a simple question - which is more shameful: that you do know this is a morally and intellectually vacuous answer and you did it anyway, or that you are not bright enough to realize that and you think that your response was worth the bandwidth it took to send it? What do you think?

Greece has not implemented anything like austerity.

Sorry about hate speach thing. There was a guy on this page accusing Left of being antizionist, antiamerican and such. I was under the influence of his words, that looked as if lifted directly from Fox News.

Austerity is a fiction!

If people get indebted with a gun to the head (Greece, Yugoslavia) where the international community is dealing only with the most corrupt of them,

1. What do you mean by a gun to the head? What was Greece's option besides taking the money?

2. Are you saying that the previous government was corrupt and that the current government has no obligation to live up to it?

If you're actually interested, this may help:


I was interested in my questions to understand his comment. I'm not interested in the game of "here's 100 pages that might contain the answer."

Sorry, thought you actually wanted some historical analysis that might improve your priors. I'll cut-and-paste a paragraph for ya:

"But didn’t Spain have a choice? After all it seems that Spain could have refused to accept the cheap credit, and so would not have suffered from speculative market excesses, poor investment, and the collapse in the savings rate. This might be true, of course, if there were such a decision-maker as “Spain”. There wasn’t. As long as a country has a large number of individuals, households, and business entities, it does not require uniform irresponsibility, or even majority irresponsibility, for the economy to misuse unlimited credit at excessively low interest rates. Every country under those conditions has done the same. What is more, even if the decision about the disbursement of the inflows could have been concentrated in the hands of a single, responsible entity, the experience of Germany after 1871 suggests that it is nearly impossible to prevent a massive capital inflow form destabilizing domestic markets."

If someone put a gun to my head and forced me to take billions of dollars at attractive interest rates, I could either waste the money and cry later (Greece, et al), or I could invest that money and make a handsome profit. Please, someone, place the gun to my head and give me billions.

Again, you wanna check out a historical example where that actually happened?


I'm not interested in 1871 - 73. Answer me these questions (maybe I'm wrong?)

1. Does Greece consume more than it produces?
2. How can it continue to do so without more money (goods) from others?

(1) The question is meaningless for a small country during a Depression as vast as this one. If Greece manufactured its own oil, it might make more sense, but it doesn't. Certainly, it was close enough to be let into the Euro in the first place, before the Germans began detonating the Euro.

(2) Assumptions not in evidence, your honor.

"1. Does Greece consume more than it produces?"

"(1) The question is meaningless for a small country during a Depression as vast as this one."

No, the question is not meaningless. You are just refusing to confront data that is uncomfortable to your world view.

I'm not the one that whined that studying history is HAAAAAAAAARD, bud.

The system is in place where a country coming out of dictatorship is an easy target for dishonest investors. And it is working. Just as it worked for decades in south America.

Where did this work in South America? Can you be specific?

There has never been any chance that Greece would repay it's debts. The only real negotiations occurring are how many years can be stretched out before someone's accounts have to take the hit for the write-off and who exactly will take how much.

Yes, and since some German Banks would be severely hit by this, German politicians are a little bit afraid of that :)

You are right about that, but if you don't want to get run over be a steamroller don't hang around in front of it.

There are no angels here. Germany was just plain stupid to think that their vendor finance scheme would work out. Greece was just as stupid to think that the easy terms would continue.

It has hit the wall, and whoever has leverage uses it. There is no free money anymore. There is a certain value in a nationalist type government uniting people behind a cause of national reconstruction, with shared sacrifice and a certain pride in pain. Everyone unite to build the new Greece. Although that has some nasty historical precedent. All I see is something akin to a client group trying to make noises so someone coughs up a subsidy.

Greece is bankrupt, it needs to cut the cost of government below 50% of GDP. Even if gdp drops. It has some resources, but it's hidebound ways are driving out the generation that has the energy to make them valuable. Syriza looks to me like an inevitable and predictable step towards failed state.

"it needs to cut the cost of government below 50% of GDP. Even if gdp drops. "

Do you understand what a denominator is?

Yes, an excuse to keep on spending money you don't have.

The economy cannot recover with the cost of government being so high. So it shrinks, making the problem worse.

"Do you understand what a denominator is?"

If the Greeks didn't want more money the negotiations would be a lot simpler. It's not just about not paying their current debts. It's also about persuading the rest of Europe to give them more money. That's the reality.

Ah, no. Greece is asking for less much money than current principal going forward. Actual debt forgiveness is so far off the table, Syriza has not even proposed it as something worthy of discussion.

Pollyanna Rosser here again,

The answer to the basic question is that Syriza has pushed all the left buttions symbolically and stylistically and rhetorically. So, hot stuff! What other regime around the world is making loud lefty noises and looking cool (and, hey, the Brits and the Germans may not like Varoufakis's unwillingness to wear ties to meetings, but all the hipster think he is really really cool)?

My only serious complaint with this post, Tyler, is your usage of "total catastrophe." What? Lots of people were predicting that they would be totally collapsed by now, with total bank runs and them run out of power. They may have lost more than they won in the most recent round with the Germans and troika, but the worst has clearly not happened. Last I looked their stock market is reasonably steady about where it was a month ago, and the ten yerar bond is below 10%, well below where it was previously. This is very simply not a "total catastrophe," even if it is not an outstanding triumph. You were wiser when you put off your forecast of Grexit to a couple of years from now, which may still not happen even then.

As it is, although this goes contrary to most of the rhetoric, their leftie stance may help Syriza achieve a useful part of austerity, collecting taxes from rich elites, which lefties love, and the Germans and troika also ought to support as it will help the Greek fiscal situation. And so should you, Tyler.

Still looks like muddling through to me, as I have been predicting all along.

Well, the bank run happened, deposits are fleeing the country. It's just that the ECB is still willing to prop up the Greek banking system.

Hehe, you think "austerity" includes collecting taxes from rich elites. That's absolutely adorable in an adult human being.

Pretty pathetic. You think the Euro elites don't want Greece to reach a primary surplus by taxing the Greek rich? They may want other things, but you are a fool if you think that the only thing going on here is some nefarious neoliberal hidden agenda to strip away the social safety net and give all the money to the rich.

I definitely think the Euro elites are not in favor of elite taxation.

+1 Tyler's piece reads more like a polemicist commenting on a three month old government than an economist. Read Economides at NYU for a more rational discussion.

Debt extension, rather than Grexit. Barkley is again correct.

I can't help but feel I'm being trolled here...

Also I think you're mischaracterizing Krugman. If anything, Krugman has attacked the view that OBAMA JUST HAS TO LEEEEEAAAADDD or to just "focus on the economy" or some other platitude, and all the problems of deliberate Republican constipation will just melt away under the warmth of bipartisan feelgoodery.

>It is still dysfunctional, corrupt, and very protective of special interests in nationally harmful ways.

And yet it is popular with lefties. Gee. What could possibly explain this incredible discrepancy.

Fox Butterfield, call your office.

I am Greek and I do not support Syriza. A left wing supermarket where you can find anarchists, hardcore communists, political activists, closet capitalists and everything in between. Only a few years ago they were clearly defined separate factions. All these people have strong opinions and do not agree with each other. And that's an understatement.

It's more something like "Greece, the Venezuela of Europe (minus the oil)" VS "Greece, the experimental Soviet State" VS "We want to stay in the EU but can we change the rules in our favor?" and so on. The differences of opinion were swept under the rug in order to form a solid party (Syriza) and make use of +50 seats bonus(out of 300) that the winning party gets at elections. But know decisions that involve numbers have to be made. Plans and shiny words have to be quantified. An impossible task for a supermarket party. Here is something indicative. A deal was struck at the previous Eurogroup, which is the only thing that's keeping us afloat. Syriza painted it as an amazing victory, the beginning of a new era! Syriza did not dare bring this agreement to parliament for validation, fearing more what the hardcore leftists, members of his own party would have to say about it.

For the record. In these elections only 63% of the voters exercised their right to vote. Syriza got 36%. His percentage wasn't even strong enough to form a government on his own and had to form an alliance with a deranged, opportunist, obese gentleman who managed a 4.5%.

So when you hear Mr. Tsipras saying that he represents all Greek people,know that he actually represents 36% of the 63% that bothered to vote.

Tsipras: European conservative forces tried to destabilize the new government!


So Greece's realistic choices are either

a) Junta 2.0
b) direct rule from Brussels
c) Cuban-style autarky.

Right now we have (b). Greeks don't like it very much, by all accounts, being convinced that Brussels considers the well-being of more prosperous nations farther north a higher priority than the well-being of Greeks. (How much truth there is to that is beside the point.)

What Syriza and Brussels (for their own reasons) are trying to prevent is (a). In practice, Syriza's leaderships run a real, personal risk of being among Junta 2.0's first casualties.

In practice, (a) may well result in (c), at least to a greater extent than in 1967. Explicitly anti-democratic government is incompatible with EU membership, and Junta 2.0 would be a pariah from day one, even assuming they didn't start another Balkan or Cypriot war.

And, again, there's no guarantee Junta 2.0 would be any more "serious" than Syriza. The exemption of the shipping industry from taxes, for example, was a Junta 1.0 initiative.

>Right now we have (b).

We really don't. If Brussels were ruling, Greece would have actually seen some serious reforms in the last 5 years. Instead, the country keeps borrowing and feeding special interests without even pretending to try its hand at structural reforms.

That's adorbs. Brussels is getting everything it wants. When will you people realize that 30% unemployment isn't a side effect, it's the point?

Yes. Brussels wants Greeks to stop working. It's all part of the plan to get Greeks to pay back debts. Brilliant.

This isn't about getting Greeks to pay back debts; it's about current elites never being held accountable for previous mistakes, and that requires a display of tremendous power.

"Nice country. Shame if something happened to it."

Current elites are totally against government dominating GDP spending. Elites can never get government to send money in their direction - governments only care about non-elites.

"governments only care about non-elites" Sky, color, planet, etc.

Exactly, Michael, I was being sarcastic.

That renders your comment nonsensical. We're all grownups here. We all know that in a system dominated by private power, private elites are the primary benefactors and that in a system dominated by public power, private elites are the primary benefactors. Every agency has a price, eventually.

Historically speaking, the trade union movement has served as a balance that allows for mass prosperity. Democratic systems help, because at least the incompetent oligarchs tend to only last so long.

The question isn't whether or not German elites want to reduce Greece to penury. The question is WHY German elites want to reduce Greece to penury. Motives matter.

Brillante entrada Sr. Cowen!

I think it was always foolish to think Greece would ever fundamentally reform in anything less than a couple of centuries. The debts they have accumulated are simply unrecoverable. You wrote that the EU has the Greeks by the balls, but that is only because Greece continues to labor under the impression that the rest of the world will actually net fund their government if only they don't default. Either the EU as a whole continues to roll over and increase the debt owed by Greece, or default eventually happens. If the latter, which I think is almost sure to happen, Greece will then have a real chance at reforming their decrepit government. I hope they take it, though it won't be living Greeks that get the benefit.

"...Greece will then have a real chance at reforming their decrepit government."

I saw an interesting article this morning about Argentina.

Where's the beef? How Argentina humbled a once-mighty economy.
A murder mystery in Argentina, a country that a century ago rivaled the US as the richest in the Americas, has spotlighted its political and economic missteps. This year's elections could offer an alternative path.

Although the subtitle of this article says,"This year's elections could offer an alternative path", the impression I get from the article is that Argentina will continue to find ways to screw up.

Maybe there are some countries where the current nature of the people is incompatible with responsible government. Argentina seems like that. Maybe Greece, too.

Why did the 'Very Serious People' extend so much credit to Greece in the first place, since they clearly hold the Greeks in the deepest contempt ?

Or is the German problem that they have yet to come clean with their own electorate how foolish they have been ?

Well, clearly, they don't hold the Greeks in sufficient contempt to let them fail on their own feet. However, I understand that the Left is motivated by childish Oedipal complexes, and the Germans here are a stand-in for father figures, so it makes sense.

We certainly can't hold German banks responsible for making bad loans, or the ECB responsible for making terrible monetary policy. To a reflexive worshiper of authority, elites can never fail; they can only be failed.

If Greece really can run a primary surplus, isn't default a credible threat?

Of course, TC thinks that they can't collect the taxes. Well than that should be Syriza's policy focus over the next few months. Being able to run a surplus gives their threats credibility. Otherwise all they have are their intellectual appeals about the immorality or foolishness of the Belgium position... which given previous Greek fiscal dishonesty are not getting much traction...

Or is there something I am missing?

troll harder.

Ok, the sewage lines appeared when YOUR MOM was conceived.

TC, does mercatus give you a quota of these NVSP posts or are they pro-bono? they've got a strange 'u mad bro' tone to them that's generally quite unlike your regular posting.

Funny, this kind of righteous indignation is Krugmanite standard fare, yet nobody complains about tone when they agree with the sentiment.

He wasn't complaining; he was noting the clickbait. I was certainly fished in, but I freely admit that I'm looking for any reason to mock sadists.

As Chang notes, why would a libertarian bother to engage with a lefty? Our values are so profoundly different that we are essentially incapable of communication.

For example, you note that lefties think that a given action will have good long-term consequences, then evaluate it exclusively based on a couple months' result. To a lefty, that makes no sense; if the claim is long-term, the evaluation is long-term. To a libertarian, there is no long-term, because there is no society. All those sewage lines magically appeared at the moment of your conception, and they will magically disappear upon the moment of your demise. A lefty claim that perhaps this is not so is incomprehensible on a fundamental level.

What in the actual fuck are you talking about?

Your mom. I am talking about your mom.

"Our values are so profoundly different that we are essentially incapable of communication."

Case in point.

Hey, if we're pretending to a Joke Line level of civility, I would like to point out that it was not I who uncivilly used a word that is bleeped out on Basic Cable first.

That is the actual fuck I am talking about.

Yeah, the left is all about the long-term. You nailed it dude!

I'm calling Poe's Law on this one.

"To a libertarian, there is no long-term, because there is no society."

That line was the best. "In the long run, we're all dead" - Libertarians.

I guess my fundamental problem with this post is this sentence: "They have rather flamboyantly staked out extreme positions"

What are the extreme positions Syriza is supposed to have staked out? It's important to remember that they are the ones advocating fairly conventional economic doctrine about how to respond to a slump, while the Institutions or Troika or what have you are the ones pushing magical thinking based austerity.

We on the left like Syriza because they are trying to stand up for their constituents and make the smart, beneficial choice - in contrast to their predecessors in the Greek government. Who knows whether they'll ultimately be allowed to do so by their creditors, but we should clearly hope that they succeed in enacting the policies they advocate.

The ratio of public spending to domestic product in Greece is 0.59. How much do you have to spend before you're no longer practicing 'austerity'?

"Why is the Greek government so popular with left-wingers?"

There are people who know don't know much about a subject, but know enough to have an idea of their ignorance. They often stay quiet when the topic comes up, aware of the vast potential for embarrassing misunderstanding. Then there are those so profoundly ignorant of a topic, so spectacularly out of their depth, that they haven't even begun to grasp the extent of their ignorance. Here the potential for idiocy is at its greatest. We could the people who fall prey to such potential dangers "idiots", but it would perhaps be kinder to call them "not very serious people on that particular topic" - a title that fits well the author of this article.

Well, I think the current Greek government is just as delusional as Reagan's free lunch economic policies, (what HW Bush called voodoo economics) and just as crazy as Michelle Bachmann et al who argued for defaulting on US debt obligations, so by definition, I can safely say "I am not a leftist."

Syriza's popular because they push all the leftist buttons: anti-neoliberalism, anti-austerity, and so forth.

The problem is that they started off with an untenable position and couldn't do anything to change it. Their threats to the EU were only good so long as they could credibly threaten to Grexit - but there's no public support for doing a Grexit (most Greeks still want to keep the Euro). So they had nothing but bluster, and it showed.

What we're seeing in individual countries such as Greece is merely a symptom of the real problem, which is a constitutional crisis of the EU itself. The gap between the promises that were made when the Euro was created (the stability pact, the absolute ban on any country bailing out another, and the promise that countries that didn't keep their spending in line would be kicked out) is looking eerily similar to the dysfunction of the Articles of Confederation government in the US.

The difference, I think, is that when the US started to obviously collapse, all the states saw the danger that the King would be back to take them over again; so in the end, they all cooperated with the transition to the Constitution. Europe faces a similar menace now (from Moscow), but many of the members don't see the threat and won't cooperate. So I predict a grand collapse of the EU within the next two years, unless a miracle occurs.

That's a sane analysis, and I think it's on the mind of German leaders. Germans, obviously, want to keep the Euro -- but, more importantly, they want to keep it precisely as it is, no matter how many generations of Greeks, Iberians, or Italian workers are impoverished.

That's why Greece's suffering has to be prolonged and irrevocable. It's the only way to make Spain, Italy, or even France (!) put up with a German-owned Euro.

If you think that Moscow is going to roll into Europe you're as silly as the Americans who seriously thought that the British would bother to reconquer their colonies. Very.

A common way to suppress fears that everything isn't working out as planned is to insist on doubling down. So if the stimulus didn't stimulate, it should have been twice as big! If you can't pass the bill you want through Congress, you should turn it into an executive order! If creditors are holding your feet to the fire, you should exit the Euro!

If you keep on doubling down long enough, you'll reach a point where nobody is willing to follow you. Now you can blame those horrible obstructionists for everything.

Krugman in particular has been an enthusiastic cheerleader for the economic policies of the last seven years. If he has any reservations, they're of the "it should have been twice as big!" variety.

Syriza, for whatever reason, is trying a doubling down strategy. It won't work, but it delays the need for a reckoning and reevaluation, which is otherwise starting to become an issue.

"Krugman in particular has been an enthusiastic cheerleader for the economic policies of the last seven years."

Tylenol is good for fever, though if it's causing you to hallucinate, I'd consider a trip to urgent care.

Because the left wants to renounce their college loans in similar fashion.

How much did Corinthian College pay you? C'mon, I won't tell.

So weak to label "Not Very Serious People" as a way to avoid confrontation of ideas. Weak. Mister Cowen should actually try to deal with the scholarship of Varoufakis. But he won't.

I can think of no label I would wear more proudly than to be "insulted" in that fashion. Watch out for the Invisible Bond Vigilantes, and inflation is always Just Around The Corner.

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