Tuesday, July 14, 2015

Greece, Grexit, #ThisisaCoup

As anyone who reads this blog will know, I am trying to find better ways to read the news (and perhaps always improving upon this process). So when it comes to something that's big news and seems to be a story about simple economics (and so one would hope there would be much to agree upon in terms of economic policy). Yet what I see presented is, again, something like a horrid but necessary situation.

Now, much of this is not so much a matter of anything horrendous, just the media's need to present such a situation in the light of a showdown (and thus, probably, increase ratings). Yet, again, it seems that for someone who wants to get to the bottom of the entire situation, there is much chaff to get through. And so it goes, you say, but I think my own experience with this situation (one I didn't have much experience with, and thus had to find someone trustworthy, in addition, I didn't have much time to do the searching). 

To be certain, I have a bias here and read the blogs of a handful of economists, from whom I have learned that Greece is being hammered by German banks for no other reason than spite. Hard to disagree with this, is it? In addition to #thisisacoup being true, there is the matter that not only were Germans offered more leniency in the past, not only did they owe Greece reparations for WWII (and didn't pay), but they loaned Greece all this money so that the Greeks could buy from these banks. In other words, there is something of a narrative in Germany (inept Greeks living high on loans, they don't work hard, and this is their just desserts) and I imagine in the banks, and no one is really pointing this out. Even the Economist, who one would think would be in their forte here, have a weak response on the matter of the austerity project (as per, there's only a listing of what must be done, nothing to the weakness of said austerity in destroying the economy).

This isn't just a matter of the Masters of the Universe (who, for some reason are being painted as the serious ones, when, again, they aren't), for many people in Europe feel this way too. They sense that the Greeks need to get what's coming to them. Economic warfare it is, then. And conservatives here in the US who (usually the ones silent when Bush was in charge, but angry when the Kenyan-Muslim came into power [/s people]) think that America is going the way of Greece, because, you know, it has to be. Meanwhile on the far left, people seem to see the horrendous hand of banks taking over democracy. And this time, there is nothing masking these takeovers. 

The funny thing is that the far left, if filled with more vitriol for the banks than the conservative section of the world, seem to be more in line with the facts: there is nothing good that will come from the euro project and even less from the austerity now bludgeoning Greece. The economists, having pointed out all the hypocrisy use less verbose language, but come to much the same conclusion (is spite that much more different of a word than powers punishing a state that isn't toeing the line?).

And as for the rest of the conservatives and the Europeans who all would rather not deal with facts, but rather the morality play that has themselves as clean, while the other (Greece now, though the IMF and its history in Third world countries is something else) is being immoral and needs to be punished. Again, same story repackaged for a different time—the facts be damned, the human suffering be damned too. Thoughts?

UPDATE: Just a quick thought. I have mentioned how I think The Economist has fallen out of favor with me, and this is just another example. Note, however, that the article appears to be very even-handed. And yet it misses so much of the truth while being true that, as Chomsky would have it, it very much shows how propaganda works (while the far left article, though correct, isn't "serious" and thus overlooked by the elites). I have yet to give a full post on my contentious relationship with The Economist, but I will in due time.

Update 23JUL2015: One thing that I find funny on this matter is the point that for the longest time there has been quite the push to make sure that the Federal Reserve and other such banks are free of the constraints of democracy (as an ex-reader of The Economist, I took this as fact, without, again, asking). Indeed, when one sees gold bugs here try to make odd claims about our Fed needing to stop the printing presses, one is certainly worried about that sort of overreach (which would, funnily enough make the Fed more like the ECB).

Yet what we're seeing with regard to the Euro is how having such little oversight of the printing presses is indeed leading to a horrendous situation. What to do to solve such things? The likes of Krugman et al seem to think that better intentions are all that are needed. That seems a little much. Shouldn't there be some level of a better check and balance? Is what we have here in the US still a viable long-lasting situation? (We have below needed inflation, though one wonders how much of that is politics or heuristics—the hard money disease that afflicts the ECB—and not the eggheads at the Fed not carrying out what their models tell them).

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