What To Do About Greece ??

[fmw]

Let the Greeks be free of international capitalism

For sure. It looks like capitalism can't afford them any longer. Let them try to earn enough money by spending.

 

[Andalublue]

Greece has an entitlement culture and that's what got them to what they have.

No, they don't. You know there's virtually no welfare state left, don't you? There hasn't been for 5 years and yet the debt is still getting worse. Greece has a capitalism problem. International banking has the entitlement culture. Greece also has a corruption problem - past governments who have siphoned off money that ordinary Greeks haven't seen a cent of, bankers who have sucked up loans, turning their previous profits into private fortunes and their losses into nationalised debt and expecting that ordinary Greeks will pay their tab.

 

[MTAtech]

Well, thing is, they only really object to paying taxes themselves. Taxing others is fine.

Needing growth and getting growth are different. Greece has an entitlement culture and that's what got them to what they have. They have to change their culture. If you have an alternative to not spending what they don't have it would be fascinating. Austerity will be forced on them because that's what lack of money does.

If Greece issued their own currency, you'd need a wheel barrow to carry it to go to the market for bread.

From Dr. Krugman's column today:

...
The first is that the “We’re Greece!” crowd has a truly remarkable track record when it comes to economic forecasting: They’ve been wrong about everything, year after year, but refuse to learn from their mistakes. The people now saying that Greece offers an object lesson in the dangers of government debt, and that America is headed down the same road, are the same people who predicted soaring interest rates and runaway inflation in 2010; then, when it didn’t happen, they predicted soaring rates and runaway inflation in 2011; then, well, you get the picture.

The second is that the story you’ve heard about Greece — that it borrowed too much, and its excessive debt led to the current crisis — is seriously incomplete. Greece did indeed run up too much debt (with a lot of help from irresponsible lenders). But its debt, while high, wasn’t that high by historical standards. What turned Greek debt troubles into catastrophe was Greece’s inability, thanks to the euro, to do what countries with large debts usually do: impose fiscal austerity, yes, but offset it with easy money.

Consider Greece’s situation at the end of 2009, when its debt crisis burst into the open. At that point Greek government debt was near 130 percent of gross domestic product, which is definitely a big number. But it’s by no means unprecedented. As it happens, Greece’s debt ratio in 2009 was about the same as America’s in 1946, just after the war. And Britain’s debt ratio in 1946 was twice as high.

Today, however, Greek debt is over 170 percent of G.D.P. and still rising. Is that because Greece just kept on borrowing? Actually, no — Greek debt is up only 6 percent since 2009, although that’s partly because it received some debt relief in 2012. The main point, however, is that the ratio of debt to G.D.P. is up because G.D.P. is down by more than 20 percent. And why is GDP down? Largely because of the austerity measures Greece’s creditors forced it to impose.

 

[Ockham]

From Dr. Krugman's column today:

At least Krugman is consistently full of **** and doesn't waffle about it.

 

[Andalublue]

At least Krugman is consistently full of **** and doesn't waffle about it.

As usual, Krugman employs impeccable logic, to which the libertarians and cons will just go, "La-la-la, I can't hear you!"

 

[PoS]

As usual, Krugman employs impeccable logic, to which the libertarians and cons will just go, "La-la-la, I can't hear you!"

Great, another Krugman fan. So tell me, what exactly is impeccable about Krugman's "logic" again?

 

[Andalublue]

Great, another Krugman fan. So tell me, what exactly is impeccable about Krugman's "logic" again?

Read him and see. He's analysed the Greek situation perfectly, he's analysed the Canadian history correctly and he's quoting Paul Ryan directly: “There is nothing more insidious that a country can do to its citizens than debase its currency.”

What's your beef with his logic?

 

[Henrin]

Read him and see. He's analysed the Greek situation perfectly, he's analysed the Canadian history correctly and he's quoting Paul Ryan directly: “There is nothing more insidious that a country can do to its citizens than debase its currency.”

What's your beef with his logic?

But Krugman believes in debasing currency.

 

[PoS]

Read him and see. He's analysed the Greek situation perfectly, he's analysed the Canadian history correctly and he's quoting Paul Ryan directly: “There is nothing more insidious that a country can do to its citizens than debase its currency.”

What's your beef with his logic?

What? :roll:

Did you even read his column that was cited? All he did was absolve the Greeks from any responsibility (by first saying it was the lenders fault and then saying that their borrowing wasnt historically bad- meaning it was OK- and then by saying that the whole problem could have been solved by devaluing their currency- the classic "debt means nothing and just devalue if everything goes wrong" theory that Keynesians love so much) and he then turns the whole issue into a bash against the Republicans, as if they had some sort of responsibility for what happened in Greece. You call that impeccable logic? :doh

 

[Henrin]

On the other side, leading Republicans like Representative Paul Ryan incessantly attack the Federal Reserve for its efforts to boost the economy, delivering solemn lectures on the evils of “debasing” the dollar — when the main difference between the effects of austerity in Canada and in Greece was precisely that Canada could “debase” its currency...

Can anyone explain the logic to me?

 

[Andalublue]

Did you even read his column that was cited? All he did was absolve the Greeks from any responsibility (by first saying it was the lenders fault

Wow! Cognitive dissonance at its finest.

Greece did indeed run up too much debt (with a lot of help from irresponsible lenders).

Does he say that Greece didn't run up too much debt? No. He didn't. Did he say the lenders did it? No. He didn't. He said they 'helped'. Which they did.

and then saying that their borrowing wasnt historically bad- meaning it was OK- and then by saying that the whole problem could have been solved by devaluing their currency- the classic "debt means nothing and just devalue if everything goes wrong" theory that Keynesians love so much)

And he gives concrete example of where it worked. There are plenty of others available too.

and he then turns the whole issue into a bash against the Republicans, as if they had some sort of responsibility for what happened in Greece. You call that impeccable logic? :doh

I can't work out whether it's hackery or illiteracy that leads you to the conclusion that he was blaming Republicans for anything to do with Greece. He's taking them to task for hankering after the kind of strait-jacketed currency controls that have driven Greece to bankruptcy. You want a return to the gold standard?

His main point, and the inescapable truth of his analysis is:

if the right gets its way on economic policy — slashing spending while blocking any offsetting monetary easing — it will, in effect, bring the policies behind the Greek disaster to America.

 

[MTAtech]

At least Krugman is consistently full of **** and doesn't waffle about it.

Of course, you write that without one word of counter argument to a 700 world column that makes a lot of sense.

 

[MTAtech]

Read him and see. He's analysed the Greek situation perfectly, he's analysed the Canadian history correctly and he's quoting Paul Ryan directly: “There is nothing more insidious that a country can do to its citizens than debase its currency.”

What's your beef with his logic?

But Krugman believes in debasing currency.

What Krugman was showing was how wrong Ryan in particular, and the right-wing in general, have been wrong. It's summing up in the fourth paragraph:

They’ve been wrong about everything, year after year, but refuse to learn from their mistakes. The people now saying that Greece offers an object lesson in the dangers of government debt, and that America is headed down the same road, are the same people who predicted soaring interest rates and runaway inflation in 2010; then, when it didn’t happen, they predicted soaring rates and runaway inflation in 2011; then, well, you get the picture.

Ryan was crowing Ron Paul folk-law, that says if the Fed increases the money supply, the value of the dollar falls. The dollar is now higher than when Ryan made the statement, proving, once again, he doesn't know what he's talking about.

By the way, Paul Ryan, who makes his staff read Ayn Rand novels, and Rand Paul, who was named after Ayn Rand, both believe in the gold standard, that would straight-jack U.S. monetary policy.

 

[PoS]

Wow! Cognitive dissonance at its finest.

Does he say that Greece didn't run up too much debt? No. He didn't. Did he say the lenders did it? No. He didn't. He said they 'helped'. Which they did.

Here is Krugman's exact quote since you obviously cannot understand English:

Greece did indeed run up too much debt (with a lot of help from irresponsible lenders). But its debt, while high, wasn’t that high by historical standards.

What do you think he is saying here? He is saying that while Greece ran up their debt it wasnt that high- meaning it was OK. And he lays a lot of the blame on the lenders. He pretty much minimizes the Greeks fault in this.

And he gives concrete example of where it worked. There are plenty of others available too.

Citation needed. Krugman mentions Canada and then admits that it used austerity to get itself out of trouble. Name me an instance in which a country with no revenue (which Krugman doesnt even bring up) can wipe out its debts by devaluing its currency.

I can't work out whether it's hackery or illiteracy that leads you to the conclusion that he was blaming Republicans for anything to do with Greece.

What part of this quote by Krugman do you not understand?

Greece’s formula for disaster, in other words, didn’t just involve austerity; it involved the toxic combination of austerity with hard money.
Continue reading the main story

So who wants to impose that kind of toxic policy mix on America? The answer is, most of the Republican Party.

Krugman is a hyper partisan who uses his economic columns to bash the GOP every chance he gets even though the argument has got nothing to do with the Greek crisis at hand and yet he sneaks in a jab at the GOP just because he can. And Im not even Republican (I hate both parties) but I can smell his BS a mile away. Tell me how does bashing the GOP have any effect on whats happening with Greece right now?

 

[MTAtech]

What? :roll:

Did you even read his column that was cited? All he did was absolve the Greeks from any responsibility (by first saying it was the lenders fault and then saying that their borrowing wasnt historically bad- meaning it was OK- and then by saying that the whole problem could have been solved by devaluing their currency- the classic "debt means nothing and just devalue if everything goes wrong" theory that Keynesians love so much) and he then turns the whole issue into a bash against the Republicans, as if they had some sort of responsibility for what happened in Greece. You call that impeccable logic? :doh

My grandmother used to say, if you don't know something, it's better to keep quiet and have people think you a fool, than to comment and confirm any doubts.

Your bolded comment above confirms any doubt. If Greece issued its own currency and devalued it, while owing 250 billion Euros, Greece would still owe 350 billion Euros. Devaluing your own currency has no effect on debt owed in other currencies. What devaluing does is lower prices, relative to other currencies, for Greek products and services, making them more competitive and bringing needed cash into the country; which raises employment and GDP.

 

[MTAtech]

...
Krugman mentions Canada and then admits that it used austerity to get itself out of trouble. Name me an instance in which a country with no revenue (which Krugman doesnt even bring up) can wipe out its debts by devaluing its currency.
...

The point obviously escapes you. Krugman specifically stated that Canada did have austerity but off-set it with easy money. Greek cannot do that because they don't have their own currency, as Canada does. Thus, Greece cannot use a powerful tool, monetary policy to attack its depression.

 

[Henrin]

What Krugman was showing was how wrong Ryan in particular, and the right-wing in general, have been wrong. It's summing up in the fourth paragraph:

Ryan was crowing Ron Paul folk-law, that says if the Fed increases the money supply, the value of the dollar falls. The dollar is now higher than when Ryan made the statement, proving, once again, he doesn't know what he's talking about.

That's because it's not that simple. Generally though, If the money supply grows faster than real output it will cause inflation.

By the way, Paul Ryan, who makes his staff read Ayn Rand novels, and Rand Paul, who was named after Ayn Rand, both believe in the gold standard, that would straight-jack U.S. monetary policy.

Geez. I don't know about Paul Ryan, but Rand Paul was not named after Ayn Rand. If you ever bothered to look up his name on Google you would see that his real name is Randal. What actually happened is that Randal Howard Paul likes to be called Rand instead of Randal. Really, who could blame a man for not really caring for the name Randal?

 

[fmw]

Great, another Krugman fan. So tell me, what exactly is impeccable about Krugman's "logic" again?

It is curious. People often confuse economics with science and logic. I has nothing to do with either. It is a collection of opinions. Nothing wrong with preferring one opinion over the other. The problem arises when opinion is confused with ironclad fact. Krugman's opinions are preferred by the left because he is leftist with a leftist agenda. And he supports activities that appear to debase the currency. See the post above.

 

[Andalublue]

What do you think he is saying here? He is saying that while Greece ran up their debt it wasnt that high- meaning it was OK. And he lays a lot of the blame on the lenders. He pretty much minimizes the Greeks fault in this.

Only in PoS-speak.

What part of this quote by Krugman do you not understand?

I understand it fine. And what part of that suggests the GOP was responsible for the Greek situation? He's warning Americans not to pursue the 'same kind of toxic policies' that the Troika have forced on Greece. C'mon, that would be obvious to a 4th grader whose reading level hasn't got beyond Dr. Seuss.

Tell me how does bashing the GOP have any effect on whats happening with Greece right now?

Cripes! He's using the Greek lesson as a salutory reminder of the dangers of the kind of economically illiterate macro-economic policies the GOP favours. You can agree with that or disagree with it. What you can't do is make the ridiculous claim that he's arguing "as if they had some sort of responsibility for what happened in Greece."

 

[sawdust]

No, they don't. You know there's virtually no welfare state left, don't you? There hasn't been for 5 years and yet the debt is still getting worse. Greece has a capitalism problem. International banking has the entitlement culture. Greece also has a corruption problem - past governments who have siphoned off money that ordinary Greeks haven't seen a cent of, bankers who have sucked up loans, turning their previous profits into private fortunes and their losses into nationalised debt and expecting that ordinary Greeks will pay their tab.

Sorry, you're wrong. They have a chance for a bail out because last night Merkel open the door. Their new demands from the EU require entitlement and pension cuts, something near and dear to the Greek people. The welfare state is very much alive as it is in many parts of Europe.

 

[sawdust]

From Dr. Krugman's column today:

Stopped reading at Krugman. He's an idiot.

 

[Ben K.]

Krugmans persistent mistake is to think that a solution in one place will work in another. He displays very little understanding of local cultures.

Of course, the euro group elites are obviously guilty of the same thing.

 

[JohnfrmClevelan]

It is curious. People often confuse economics with science and logic. I has nothing to do with either. It is a collection of opinions. Nothing wrong with preferring one opinion over the other. The problem arises when opinion is confused with ironclad fact. Krugman's opinions are preferred by the left because he is leftist with a leftist agenda. And he supports activities that appear to debase the currency. See the post above.

There are some hard facts out there that you can start with. We know how money is created, we know how banks operate, we know how currencies float in value, we can measure prices, etc. Opinion only becomes an issue when people keep hanging on to their theories even when they don't mesh with the known facts. That's when you know that you've got a guy that cares more about politics than understanding how things actually work. This isn't a problem Krugman has; at least, not very often. It is a problem that deficit hawks and monetarists have, and neoclassicals, too. Anybody that looks at the real facts around the Greek problem and thinks that more of the same (austerity) is the answer - that is a political decision, not one based in economics.

 

[MTAtech]

That's because it's not that simple. Generally though, If the money supply grows faster than real output it will cause inflation.

All this goes back to the economists of the 1930s, such as Keynes and Hicks. Anyone who understood IS-LM knew that under the condition of a liquidity trap, which occurred during the Great Depression and in the 2007/8 Great Recession, that increasing the money supply would not cause inflation, devalue the currency or cause high interest rates. That's been proven.

Geez. I don't know about Paul Ryan, but Rand Paul was not named after Ayn Rand. If you ever bothered to look up his name on Google you would see that his real name is Randal. What actually happened is that Randal Howard Paul likes to be called Rand instead of Randal. Really, who could blame a man for not really caring for the name Randal?

Ok, ok, you're right about this.

 

[Andalublue]

Sorry, you're wrong. They have a chance for a bail out because last night Merkel open the door.

Can you link us to where she said that? She's always said she's open to a bail out, but bail out ≠ debt relief. She's never opened the door to that, unless you can show us different.

Their new demands from the EU require entitlement and pension cuts, something near and dear to the Greek people.

The EU hasn't made any new demands. You must be referring to the Greek's own new offer. We know they've offered to cut pensions, what other specific entitlements are you referring to?

The welfare state is very much alive as it is in many parts of Europe.

Yes, it is, and as relevant and welcome as ever. The Germans' is particularly generous.