8 ms·

This is very good: "Third, it makes no sense to blame the recipients of the capital inflows for causing the crisis. If enough money is sloshing around willing

This is very good: "Third, it makes no sense to blame the recipients of the capital inflows for causing the crisis. If enough money is sloshing around willing to invest in any stupid idea, you shouldn’t be too surprised that a lot of stupid ideas get funded. When, for example, Wolfgang Schaeuble, Germany’s finance minister, says: "The reasons for Greece’s problems can be attributable only to Greece and not to actors outside the country, and certainly not in Germany." As he did during the press conference following his meeting with Yanis Varoufakis, his Greek counterpart, we have to remember that Schaeuble is talking nonsense. It’s logically impossible for excess borrowing to occur unless there is someone sufficiently reckless (or stupid) to provide the financing." And this is also good: "I am hesitant to introduce what may seem like class warfare, but if you separate those who benefitted the most from European policies before the crisis from those who befitted the least, and are now expected to pay the bulk of the adjustment costs, rather than posit a conflict between Germans and Spaniards, it might be far more accurate to posit a conflict between the business and financial elite on one side (along with EU officials) and workers and middle class savers on the other. This is a conflict among economic groups, in other words, and not a national conflict, although it is increasingly hard to prevent it from becoming a national conflict." The German government, in collusion with the German business establishment, has wrecked Europe, first through its irresponsible lending, and then, later, through the pressure it put on the ECB to raise rates despite the weak European economy. The German government can try to blame others for the problems in Europe, but the driving force behind all of these problems has been Germany. Germany had a trade deficit at the end of the 1990s, and they wanted to develop a trade surplus, and they did so through a series of irresponsible measures that have done great harm to Europe.

nhstanley 12y ago
When you think about it, Germany is like the hot girl in a small town high school. She doesn't care if she's pretty (rich) in the absolute sense, she only cares that she's prettier (richer) than all the other girls in the small town (Europe). Instead of focusing on optimizing Europe's collective wealth, they are trying to maximize their wealth relative to the rest. There is certainly concerns about things like corruption in the periphery, and Spain and Greece certainly had their inefficiencies, but Germany is going about fixing it in a completely wrong way.
pastProlog 12y ago
> The German government, in collusion with the German business establishment, has wrecked Europe, first through its irresponsible lending... I do agree that this sanctimonious moralizing of the virtues of the German over the Greek is risible. However, with common assumptions in place, what Germans did makes sense. Businesses had high productivity, lots of capital investment, and nowhere to send the excess of the commodities it could produce, the domestic market was satiated. So they lent money to the Greeks etc. and had a place to send these excess commodities for a few years. They kicked the can down the road so that they could figure out what to do with this overproduction and - today is the result. I see a worldwide self-reinforcing cycle for slow growth, unemployment, recession and depression. Companies have it over employees so money goes to profit more than wages. This happens eveywhere so money goes to capital, not consumption. But the more impoverished workers have no money to buy commodities. So a temporary solution is found - debt. Things go along again and then one day the game of musical chairs ends and you have a situation like now. Greek youth is not going to put up with a 65% unemployment rate forever, and the election of Syriza points to that. So does the rising number of votes going to Golden Dawn and the KKE. I see news commentators calling Syriza "far left" - they are not far left, they are just socialists. People are so used to soi disant socialist and labour parties performing neoliberal cuts when elected to government, the idea that a socialist politician wants a floor to living standards is a shock to them.
- _delirium 12y ago
  > I see news commentators calling Syriza "far left" - they are not far left, they are just socialists. They do have a fairly strong far-left faction, which perhaps contributes to some of that perception. However I agree the party as such isn't, particularly the leadership that is actually in control of the party. Tsipras and his allies have fairly effectively sidelined the leftist faction over the past few years, in an attempt to turn the party into an electoral force that could win. The faction around Tsipras is inclined more towards a kind of pragmatic populist socialism, not a more hardline ideological leftism (Varoufakis is de facto in the Tsipras faction too, although I believe he's formally not even a member of Syriza).
- NotableAlamode 12y ago
tsotha 12y ago
>I am hesitant to introduce what may seem like class warfare, but if you separate those who benefitted the most from European policies before the crisis from those who befitted the least, and are now expected to pay the bulk of the adjustment costs, rather than posit a conflict between Germans and Spaniards, it might be far more accurate to posit a conflict between the business and financial elite on one side (along with EU officials) and workers and middle class savers on the other. I don't buy this for a minute. The big beneficiaries of the Greek borrowing binge were Greek civil servants, who go 50% plus wage increases.
- StavrosK 12y ago
  Why can't it be both?
  - tsotha 12y ago
    Oh, I don't doubt financial institutions benefited. But the idea the average Greek was just standing there minding his own business when a wall of debt washed over him is patent nonsense.
    - StavrosK 12y ago
      Do you really think the average person knew what was going to happen, when economists and banks didn't?
      - tsotha 12y ago
        Most people are smart enough to know the money has to come from somewhere. Over the long haul a country's budget isn't that different from that of a household. They voted for ever increasing levels services - if they didn't know the bill would eventually come due they certainly should have. And the idea economists and banks didn't realize ever increasing amounts of debt would be a problem just isn't credible.
        vidarh 12y ago
NotableAlamode 12y ago
Nonsense and victim blaming. Please look at who got what votes in the ECB board, and look who voted how. Also please check who had lent Greece the most. As far as I'm aware that was French banks. Next please take into account that the Euro was forced onto Germany. Then please realise that nobody forced Greece to take on these loans (and then use them to subsidise cushy government jobs). Finally please realise the Germany has a trade surplus because they produce goods that are internationally competitive.
- justincormack 12y ago
  You cant have a trade surplus just by having great goods. People need money to buy them. The Germans lent them the money, with no means for it to be paid back.
  - vacri 12y ago
    So you're saying that without Germany, Europe has no economy? The answer to this problem is for the public to demand stronger financial regulations from their own government. The problems facing you (rhetorical 'you') are mostly due to corruption in your own government - they're the ones taking crappy loans. So what if you blame one other country. Cut all ties with them... and the corruption in your own government will find some other way to spend your money on their personal baubles.
    - drumdance 12y ago
      Germany was basically financing their exports. It's as if GM offered great terms to all comers regardless of creditworthiness, then complains when the buyers can't make the payments.
      - NotableAlamode 12y ago
        Victim blaming. The Euro, and it's easy credit was forced upon Germany by France as a price for reunification. Several German members of the Executive Board and the Governing Council of the European Central Bank (ECB), and one German head of state resigned in protest against the insane monetary policies that the southern European states voted for.

nhstanley 12y ago

When you think about it, Germany is like the hot girl in a small town high school. She doesn't care if she's pretty (rich) in the absolute sense, she only cares that she's prettier (richer) than all the other girls in the small town (Europe). Instead of focusing on optimizing Europe's collective wealth, they are trying to maximize their wealth relative to the rest. There is certainly concerns about things like corruption in the periphery, and Spain and Greece certainly had their inefficiencies, but Germany is going about fixing it in a completely wrong way.

pastProlog 12y ago

> The German government, in collusion with the German business establishment, has wrecked Europe, first through its irresponsible lending... I do agree that this sanctimonious moralizing of the virtues of the German over the Greek is risible. However, with common assumptions in place, what Germans did makes sense. Businesses had high productivity, lots of capital investment, and nowhere to send the excess of the commodities it could produce, the domestic market was satiated. So they lent money to the Greeks etc. and had a place to send these excess commodities for a few years. They kicked the can down the road so that they could figure out what to do with this overproduction and - today is the result. I see a worldwide self-reinforcing cycle for slow growth, unemployment, recession and depression. Companies have it over employees so money goes to profit more than wages. This happens eveywhere so money goes to capital, not consumption. But the more impoverished workers have no money to buy commodities. So a temporary solution is found - debt. Things go along again and then one day the game of musical chairs ends and you have a situation like now. Greek youth is not going to put up with a 65% unemployment rate forever, and the election of Syriza points to that. So does the rising number of votes going to Golden Dawn and the KKE. I see news commentators calling Syriza "far left" - they are not far left, they are just socialists. People are so used to soi disant socialist and labour parties performing neoliberal cuts when elected to government, the idea that a socialist politician wants a floor to living standards is a shock to them.

_delirium 12y ago
> I see news commentators calling Syriza "far left" - they are not far left, they are just socialists. They do have a fairly strong far-left faction, which perhaps contributes to some of that perception. However I agree the party as such isn't, particularly the leadership that is actually in control of the party. Tsipras and his allies have fairly effectively sidelined the leftist faction over the past few years, in an attempt to turn the party into an electoral force that could win. The faction around Tsipras is inclined more towards a kind of pragmatic populist socialism, not a more hardline ideological leftism (Varoufakis is de facto in the Tsipras faction too, although I believe he's formally not even a member of Syriza).
NotableAlamode 12y ago

tsotha 12y ago

>I am hesitant to introduce what may seem like class warfare, but if you separate those who benefitted the most from European policies before the crisis from those who befitted the least, and are now expected to pay the bulk of the adjustment costs, rather than posit a conflict between Germans and Spaniards, it might be far more accurate to posit a conflict between the business and financial elite on one side (along with EU officials) and workers and middle class savers on the other. I don't buy this for a minute. The big beneficiaries of the Greek borrowing binge were Greek civil servants, who go 50% plus wage increases.

StavrosK 12y ago
Why can't it be both?
- tsotha 12y ago
  Oh, I don't doubt financial institutions benefited. But the idea the average Greek was just standing there minding his own business when a wall of debt washed over him is patent nonsense.
  - StavrosK 12y ago
    Do you really think the average person knew what was going to happen, when economists and banks didn't?
    - tsotha 12y ago
      Most people are smart enough to know the money has to come from somewhere. Over the long haul a country's budget isn't that different from that of a household. They voted for ever increasing levels services - if they didn't know the bill would eventually come due they certainly should have. And the idea economists and banks didn't realize ever increasing amounts of debt would be a problem just isn't credible.
      - vidarh 12y ago

NotableAlamode 12y ago

Nonsense and victim blaming. Please look at who got what votes in the ECB board, and look who voted how. Also please check who had lent Greece the most. As far as I'm aware that was French banks. Next please take into account that the Euro was forced onto Germany. Then please realise that nobody forced Greece to take on these loans (and then use them to subsidise cushy government jobs). Finally please realise the Germany has a trade surplus because they produce goods that are internationally competitive.

justincormack 12y ago
You cant have a trade surplus just by having great goods. People need money to buy them. The Germans lent them the money, with no means for it to be paid back.
- vacri 12y ago
  So you're saying that without Germany, Europe has no economy? The answer to this problem is for the public to demand stronger financial regulations from their own government. The problems facing you (rhetorical 'you') are mostly due to corruption in your own government - they're the ones taking crappy loans. So what if you blame one other country. Cut all ties with them... and the corruption in your own government will find some other way to spend your money on their personal baubles.
  - drumdance 12y ago
    Germany was basically financing their exports. It's as if GM offered great terms to all comers regardless of creditworthiness, then complains when the buyers can't make the payments.
    - NotableAlamode 12y ago
      Victim blaming. The Euro, and it's easy credit was forced upon Germany by France as a price for reunification. Several German members of the Executive Board and the Governing Council of the European Central Bank (ECB), and one German head of state resigned in protest against the insane monetary policies that the southern European states voted for.