By Yanis Varoufakis, Professor of Economics at the University of Athens. Cross posted from his blog
The world seems convinced that Europe, perhaps under duress, put together a large Solidarity Fund (the EFSF) for the purposes of helping the fiscally-stricken Eurozone member-states avoid bankruptcy once they were frozen out of the money markets. The criticisms waged at this type of ‘solidarity’ centred on two issues: First, that the Fund’s size was not large enough (and thus unable to help Italy and Spain). Secondly, that this Fund resembles more a Victorian Workhouse whose real purpose was not to show solidarity to its residents but, rather, to make their life so unpleasant as to deter able-bodied workers from ever seeking its assistance.
The first criticism, about the EFSF-ESM’s size, is true but irrelevant. As I have argued from day one of the EFSF’s creation, its problem is not its size but its CDO-like structure. Turning to the second criticism, that it resembles a Dickensian Workhouse, Spain’s current predicament is instructive: To get money to give to its decrepit banks, the nation must be humiliated and undergo further fiscal waterboarding so that Italy and others are deterred from turning to the EFSF for help. In this sense, when Europe’s functionaries say that there is no need for further action on Spain since the EFSF is available to help, they are inviting the Spanish to enter the Workhouse for a life of undeserved misery on behalf of their bankers. And they have the audacity to call this ‘solidarity’ with the Spanish people.
Still, many commentators are prepared to give Europe’s leaders the benefit of the doubt. To think of the EFSF-Workhouse like the Victorians did: better than the alternative of being left on the street to perish; a place where ‘tough Victorian love’ is practised in order to refresh Europe’s puritan ethic. Well, be that as it may, I invite those who would like to think this way, to consider the following two examples with a view to establishing whether they are consistent even with this Victorian view of ‘solidarity’.
‘Solidarity’ Exhibit A: Forcing more loans upon the bankrupt
As I wrote in a Le Monde article recently, the bankrupt Greek state was recently forced, by the troika, to borrow 4.2 billion from the EFSF so as immediately to pass it on to the European Central Bank (ECB) so as to redeem Greek government bonds that the ECB had previously purchased in a failed attempt to shore up their price. This new loan boosted Greece’s debt substantially but netted the ECB a profit of around 840 million (courtesy of the 20% discount at which the ECB had purchased these bonds). Is this ‘solidarity with the fallen’, even of a Victorian Workhouse type?
‘Solidarity’ Exhibit B: Taking money from the bankrupt to invest on behalf of prosperous countries
When the 2nd Greek ‘bailout’ was agreed, you may recall that the Finnish government asked for guarantees, for collateral, that would reduce its exposure to Greece. The Greek government conceded, promising collateral of 925 million in value. One might have expected that the said collateral would come in the form of some assets (e.g. Greek government owned real estate). But no! Helsinki would have none of that. Instead, they demanded… cash! And cash they received. Last month, in May 2012, Athens wired 311 million to the Helsinki government, as a first installment. My sources here in the United States tell me that the Finnish government is now seeking to invest this money in joint ventures with US and other European firms. Now that is what I call solidarity with Greece…
To conclude on a sad and desperate note, I would like to call upon northern European governments to cease and desist from more ‘solidarity’ offerings to our fiscally-stricken, fast impoverishing nations. Your ‘solidarity’, your ‘tough love’ is killing our proud nations and, in the process, destroying Europe’s moral, political and economic fabric.
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a place where ‘tough Victorian love’ is practised in order to refresh Europe’s puritan ethic. Yanis Varoufakis
Puritan maybe, Biblical, no.
The Biblical thing, even in the case of honest* debt, is periodic debt forgiveness per Deuteronomy 15 and Leviticus 25.
*But banks don’t honestly lend existing money; instead they drive people and nations into debt with new money lent in exchange for a promise to repay it.
The fault is of everyone except the Greeks.
Great to learn from the professor.
Unfortunately, there are plenty of proud morons in Europe that see everything through their nationalistic miopic eyes.
Ignacio, when watching a World Cup soccer match, do you consider yourself a Spaniard or a European? Twenty years from now, do you think that “Spaniards” and “Germans” would be satisfied rooting for the team from the United States of Europe as it plays the USA for the World Cup title?
USA? Twenty years from now? I don’t think so.
Dear Jim, et. al.;
The history of the USA shows how hard, indeed impossible, a “United States of Europe” really is.
First, the U.S. was essentially a cultural clone of Olde England. All the later immigrant waves had to assimilate into the dominant Anglo culture to advance. So called ‘multi culturalism’ is a recent innovation. (The bitter fight over English only language laws in Florida is a good example of the slowly shifting relationship. We didn’t call Miami “..the northernmost city in Cuba..” for nothing.) [Apologies to parts of New Jersey, of course, but I don’t remember reading about ‘..proud Latinos taking over City Hall in Asbury Park..’ lately.]
Second, the U.S. had to struggle through the Civil War to establish the primacy of the Federal Government. Despite the Ultra Rights best efforts, Federalism doesn’t look to be going away any time soon.
Third, despite the shark eat shark dynamic of the Robber Baron Age, the U.S. financial powers held similar goals and acted roughly in accord. European banks today don’t seem to be quite so ‘sympatico.’ As long as ‘local’ banks have the backing of competing “sovreign” governments, this shake out will probably ‘hang fire’ for a long time to come.
You shouldn’t compare with the USA but with German Unification (from economic zone to unified state) and India (continent-sized federal state with many different languages).
Dear Maju;
Good point there. German Unification, (I assume you mean Bismarks’ Reich,) is also suspect because most, if not all, Germans speak some dialect of the German language. India now, that is a good example to cite. I would posit that the break up post Raj into India and Pakistan supports my more pessimistic hypothesis; linguistic barriers will trump the unifying forces. The Raj was an example of Imperialistic “Order From Above,” much like what (I assume) Eurobankers pine for in their ‘Sphere of Influence.’ In Indias’ case, ethnic differences fueled political movements which created the split. Later, even Pakistan itself split apart.
Nationalism and tribalism are traditional ‘tools’ for elites to use in the “divide and conquer” school of governance. Time to take Warren Buffet up on his boast, (if boast it was,) and start taking Class Warfare seriously.
Well, the Indian split was not linguistic but religious (Hindi and Urdu are like British and US English: the same thing with minor differences, and even less differences are between Indian West Bengal and Bangla Desh). In Europe, Muslim minorities are very localized, largely atheistic nowadays, and all priorize Europe over religious traditions, except maybe in the Caucasus.
The main difference is, as you say, that India was at least partly unified from above (the British colonial empire) and the closest to such thing in Europe is NATO (the US imperial military section, which may not be too interested in European unification after all).
But what really pulled and pulls India together are internal forces (which may be much weaker inside Pakistan, after all an artificial construct based only on religion and a negative definition). Indians generally love India and support it as a unified multiethnic federation… otherwise Britain might have chosen to split the country even further, as it did not only with Pakistan but also with Sri Lanka, etc. For the ex-colonial power there was no particular interest in keeping India together but internal cohesive forces within India itself have managed to keep it “one out of many”, as used to read the US seal before it went fundamentalist.
I think that the general feeling among Europeans used to be unionist, otherwise the EU itself would have collapsed decades ago. But the complexity is probably much greater than in India because the Indian federated states are not arrogant chauvinist middle sized decadent powers like Germany, France or Britain, to mention only the most obvious ones. Tamil Nadu or Gujarat have much more modest recent histories, even pre-colonial ones, what really makes them more like Latvia or Belgium than like Germany or France.
Europe may yet need to fall further before it realizes again the need of union. The small European states (and even Germany is “small” by many measures nowadays) cannot fence for themselves in the modern world. I’d say this applies to the whole world but much more to a subcontinent (not really a continent, let’s be honest with ourselves) which is just a small corner of the World. A keystone until fifty years ago maybe but just another stone once its role as keystone has ended.
I would never confuse politics with soccer.
Proud German,
No, the fault is of everyone who keeps dishonestly trotting out the strawman that the Greeks are taking no responsibility for their predicament.
Wasn’t it easier when you could just splice between footage of people and rats to marginalize and dehumanize entire subsets of humanity? Now you have to make rational, logically consistent arguments to promote bigotry, or risk being called out on your drivel. And with bigotry being inherently logically inconsistent, that’s just not fair. Where’s a minister of propaganda when you need one?
Well said, Christophe.
The post has been privatized. That’s why we have MSM.
Look, chauvinist, I really hope Greece declares bankruptcy in a couple of weeks so you see how your stupid blame game is useless and all the EU collapses in a matter of months, Germany losing its neo-colonies and having to face itself alone in the World, as it deserves.
…‘Solidarity’ Exhibit C: Squeezing deposit accounts that rich people maintain at under-capitalized banks of the bankrupt member-state to borrow short-term at near zero rates driven by massive inflows in advance of expected currency appreciation.
There are more Catholics alone than Evangelicals and Jews COMBINED. Yet google ‘Catholic vote’ versus ‘Jewish vote’…. the dispartiy in the results tells you its not about votes or this swing state nonsense.
Every time you read ‘The Jewish Vote’ it really means ‘Jewish money.’
Though they are <3% of the population, they are about 1/2 of the millionaires, and several legit sources say half or more of personal donations to *both* parties.
This disparity is never discussed, probably due less to a media 'conspiracy' than a fear of being smeared as 'anti-Semitic.'
This cowardice in the face of a sham smear grows more and more dangerous. Just look at the number of chickenhawk neocon Israeli dual citizens in Romney's foreign policy 'expert' team…. fat pasty men who've never gone to war {unless for Israel} and whose awful ideas should have been consigned to the dustbin of history 10+ years ago.
But we can't talk about disproportionate Jewish wealth and political and financial and media influence. They aren't a monolith, we're told, and that's true.
Yet the amount of Jews, particularly right-wing Likdunik Jews in the Bush and Obama administrations, at State, the Pentagon, at the Federal Reserve, is absolutely amazing.
Yet no prominent media figure will touch it, even as the same neocons and the same hyperethnocentric millionaires lead us into more elective wars for Israel.
Zionism and Judiasm are different, we can safely rely on the imprecision of the English language on this one.
I’ve read a few things that try to account for the rate of Jewish success. One that is used is the IQ gap between Jews and everyone else, and though I’m sure 4 points in an ideal environment could compound to a substantial difference, there are plenty of indicators that the IQ gap isn’t it. I mean look at the politicians in Israel, and people vote for them.
There are theories about the high rate that Jews fill high-skill occupations. I’m sure it doesn’t hurt, but in absolute terms the numbers are small.
There are the stereotypes and borderline racist theories that aren’t worth mentioning, but there is one more thing that I believe is worthy of explaining things… maybe even the largest constributor.
First, Judaism is a mostly closed religion – you don’t see too many Jewish missionaries or rabbi’s looking to swell the congregation. That, and (in my opinion) some unfortunate wording in the Old Testement places Jews, to some degree, as a group apart… at least spiritually. All races can claim it to some degree, but it’s pronounced in Judaism.
Then, combine that with a long tradition (for lack of a word) of suffering, both real and to a degree, percieved (because of high sensitivity to it). The religion stresses the collective, and the use of guilt is steeped in the Jewish tradition. It is used to further a cause, and it certainly is used to bend a son’s will toward the wishes of his mother!
The point I’m getting to is there might be a natural, even if unintended bias toward Jews by Jews, that can cumulatively result in far greater advantages than 4 point of IQ. That’s my opinion, of course.
I don’t think it’s nefarious, but I do think it is recognized, but not disscussed in polite company.
It’s known as ethnic networking or, in Sicilian Italian: “cosa nostra” (our stuff). The only reason nobody speaks of the Jewish mafia is because it is so powerful that it can erase its own tracks by means of accusing everyone around of “antisemitism”, even Jews. Nobody would accuse you of anti-Latinism if you mention the Italian mafia or of anti-Slavism if you mention the Russian mafia… well…
Said that, there is still another 50% of billionaires who are not Jewish.
How is all this stuff about Jews relevant to the article?
I went back over the article and the thread of comments, and couldn’t find the relevance.
What did I miss?
You’re right Kevin but ask Dershowitz and Ackermann above, I’m just commenting on their comments.
Josh,
Did you read the article? Or did Google just mysteriously misdirect you to this page, where you felt the need to spray your mark?
Yanis,
you wrote: “… undergo further fiscal waterboarding..”
You might want to reconsider this wording: isn’t it insulting and hurting to the people who have been waterboarded?!
It is an apt metaphor. And if it is too strong, then perhaps the ones employing should consider that, not the one describing it.
No. Austerity causes suicide rates to increase, as shown in Greece, Portugal, and Italy. Torture and austerity are absolutely moral equivalents, if that is your point. Further, torture and and austerity are also operational equivalents (read Shock Doctrine). The author’s metaphor is exact, and appropriate.
Lambert,
That goes too far. There are any number of circumstances in life that might drive one to suicide. But as someone who is disabled with a severe chronic pain condition, and also knows what it’s like to be unemployed for extended periods, I can state unequivocally that nothing could possibly compare to serious torture. I would rather be a poor Greek than a tortured Afghan, or Palestinian, or Syrian, or anyone else anytime in history, every time out.
With suicide rates in Greece 40% up, it seems for many people in Greece there IS something worse, and it is living in Greece at the moment. Even a waterboarded person still has a life to live. Those who commit suicide don’t.
But they a hearty lot, and one assumes happier. These numbers (updated 2011) put the scaled of “up by 40%” in perspective, as well as Greece’s better record than most in this respect:
http://en.wikipedia.org/wiki/List_of_countries_by_suicide_rate
Talking about solidarity: it seems there is a problem within Greece itself, al least if one listens to the former prime minister Papandreou at a recent conference (zeitgeist 2012)
http://www.youtube.com/watch?v=SW99H1uYP88
Between 3:58 – 4:23 Mr Papandreou is saying:
“..Problem of governance,
lack of monitoring,
lack of transparancy,
bad allocation of funds RATHER THAN the lack of funds (!), waste,
unequal distribution of money,
clientalism,
craft rather than the rule of law,
unequal privileges rather than s sense of justice for all, YES, a badly managed country.”
Well, that is the former prime minister putting it mildly.
Why should a Finnish teacher, working hard, send her honestly earned money (via some eu construct) to the Greek government when a rich lawyer in Athens does not give part of his income nor of his wealth?
“Why should a Finnish teacher, working hard, send her honestly earned money”
Why shouldn’t he? The economics professor from Athens needs money so that he can write BS articles at various forums. Otherwise, we shall be miss getting these propaganda pieces.
I suggest it is high time you get off your moral high horse and stop reading German tabloids like the Bild. It is not only tiring, but outright insulting. Since you have a very short memory, here is what the Western nations did for Germany in 1953:
“Germany’s prewar debt amounted to 22.6 bn marks including interest. Its postwar debt was estimated at 16.2 bn. In the agreement signed in London on 27 February 1953 these sums were reduced to 7.5 bn and 7 bn respectively. |6| This amounts to a 62.6 % reduction.
The agreement set up the possibility to suspend payments and renegotiate conditions in the event that a substantial change limiting the availability of resources should occur. |7|
To make sure that the West German economy was effectively doing well and represented a stable key element in the Atlantic bloc against the Eastern bloc, allied creditors granted the indebted German authorities and companies major concessions that far exceeded debt relief. The starting point was that Germany had to be able to pay everything back while maintaining a high level of growth and improving the living standards of its population. They had to pay back without getting poorer. To achieve this creditors accepted first, that Germany pay its debt in its national currency, second, that Germany reduce importations (it could manufacture at home those goods that were formerly imported), |8| third, that it sell its manufactured goods abroad so as to achieve a positive trade balance. These various concessions were set down in the above-mentioned declaration. |9|
Another significant aspect was that the debt service depended on how much the German economy could afford to pay, taking the country’s reconstruction and the export revenues into account. The debt service/export revenue ratio was not to exceed 5%. This meant that West Germany was not to use more than one twentieth of its export revenues to pay its debt. In fact it never used more than 4.2% (except once in 1959).
Another exceptional measure was that interest rates were substantially reduced (between 0 and 5%).
Finally we have to consider the dollars the United States gave to West Germany: USD 1,173.7 million as part of the Marshall Plan from 3 April 1948 to 30 June 1952 with at least 200 million added from 1954 to 1961, mainly via USAID.
Thanks to such exceptional conditions Germany had redeemed its debt by 1960. In record time. It even anticipated on maturity dates.”
http://www.cadtm.org/The-Marshall-Plan-and-the-Debt
Is this AMAZING or what? This was just a few years after you had destroyed Europe and killed millions of people with that exact same arrogant superiority attitude you exhibit today. But the Western nations showed you solidarity, real solidarity and helped you rebuild from scratch. But I guess when other nations’ taxpayers helped you, it was great. We didn’t see indignant Germans protesting then for other people’s money.
But of course Germany’s crimes are nothing compared to the crimes of the European periphery today. And of course irresponsible German banks had nothing to do with it. And of course, the fact that it was Germany that first broke the fiscal rules when it suited her is irrelevant.
Even if your world view today were not completely self-serving bullshit (bad periphery borrowing, good German lending), at least the way your partners treated you after WWII, with real solidarity with real taxpayer money, should give you pause. But it doesn’t. Because deep down, to all you people reading the Bild and buying your Bundesbank and Frankfurt propaganda, you are still the Master race and the others the inferiors.
So be it. Let the Euro disintegrate. We will all be happy to see you become the ‘sick man’ of Europe again. Which will again mean the most unhappy workforce in the world will have to be sacrificed again (recent Spiegel article).
Good luck with your DM. Good riddance.
Geez, Africans turned you from monkeys to humans, Arabs gave you number system and Chinese gave you everything else. Let’s send little more money to the lazy greeks for that too.
Lazy Greeks, huh? Here is OECD on the matter:
http://stats.oecd.org/Index.aspx?DatasetCode=LEVEL#
So the Greeks work more than Germans (partly because of so many Germans working part-time, with no benefits, just as your Frankfurt masters want it). I guees you wouldn’t know that reading German Master race propaganda.
Here is an advice:
“”Better to remain silent and be thought a fool than to speak out and remove all doubt”
Abraham Lincoln
What? ????? Yves i am making a motion to ban this whining Nazi
Don’t ban him. I’m throughly enjoying Alan’s severe ass kicking he laying out.
(Note to self: don’t argue with Alan)
Lazy Germans is it: Germans work much less than Greeks and get paid much more (in both salaries and state welfare). The data is there, but you are just like a clone of Goebbels, parroting a lie once and again with a racist prejudice behind until it becomes a religious “truth”.
You are (if you are German at all, what I legitimately doubt) a clear example of why Germany is the key problem in EU.
http://forwhatwearetheywillbe.blogspot.com.es/2011/06/those-lazy-germans-truth-behind-myths.html (Those lazy Germans!, the truth behind the myths)
http://forwhatwearetheywillbe.blogspot.com.es/2012/02/who-works-how-much-in-eu.html (Who works how much in Europe (or “I want to be Dutch!”)
It should be remembered that Europe was a buffer country during this period, hence the terms.
Skippy… @Proud German… how would your economy have done, if the bubble (cheap credit) was never created in the periphery, in the first place. Did labor just get sucked along in the vortex of it all and now finds its self suspended midair, with out its effects present? Lots of denial going around… methinks
The partial war reparation debt forgiveness has to be seen in the context of massive wealth extraction from Germany by the Allies after WW2 in form of industrial machinery, transfer patents, land, top science talent and billions in assorted wealth transfered and looted.
It’s easy to forgive some of the imposed debt when the debtors already had their fill. Don’t get me wrong, Germany started the war, lost and ultimately got off mildly, all things considered. The point here is that the debt reduction did not happen in a vaccum and not repeating the castastrophic mistakes made after WW1 was reasonable.
Also, what the article you linked fails to mention is that Marshall Plan aid to Germany was actually repaid. IIRC, Germany and Austria were the only receiving countries that fully repaid it with interest.
What’s, of course, missing from this latest round of “find a harebrained argument to blame the Germans for the Greek problem” is the fact that this has fuck all to do with the current Eurozone problems. But hey, as long as we know who the bad guys are, right?
Never mind Goldman currency swaps that the Greeks used to hide a big chuink of their deficit. What are details, when there is a morality tale to be spun? Evil Boogeyman Germany using the wealth garnered as a result of generous Post-WW2 debt forgiveness to make predatory loans to Greece, after having suckered them into the Eurozone. It’s all so clear now…
And yet, the fact is still that German *bankers* are responsible for most of the Eurozone problems right now — the rest of the problems are the fault of London bankers and US bankers, of course.
German govrenment policy right now is centered around trying to prevent its banks from having to write down the bad loans they made. This is stupid policy. The US has equally stupid, identical policy.
That’s not a “fact”, that’s a claim. German banks hold about 22 billion of Greece’s 350 billion public debt and the private banks have long unloaded most of it to the Landesbanken, i.e. the German tax payer.
German bankers are responsible for most of the Eurozone problems? I’m sorry, but I am having a hard time taking your wild claims serious, especially considering that the German finance sector is comparably small. Why are “German bankers” the problem and not the French ones or the Belgian bankers or the Italian bankers or the Spanish bankers? Or, for the matter, the Greek bankers who hold more than twice as much in Greek public debt than the Germans do?
“Germany using the wealth garnered as a result of generous Post-WW2 debt forgiveness to make predatory loans to Greece, after having suckered them into the Eurozone. It’s all so clear now’
Thats a reasonable, arguable postion..the proud krauts’ neandertalish slurs are not. This kind of shit – “african and monkeys built you country,go beg china to coddle the lazy Greek fellow lazy american”. Does not belong here. And note the canine way he just automatically tried to cut the author out of the group and gas him. doesnt really belong here, not on this site.
“Thats a reasonable, arguable postion..”
No, it’s not. It’s just another element to the simplicistic morality tale that is so popular here – you know, the one that finds the Greeks free from all fault and blames it all on Germany.
That’s not meant to excuse “Proud German’s” drivel. The guy is clearly disturbed.
I’m sorry Kirste, but if you are going to argue in such an opionated way, you better get your facts straight. German banks hold 22 billion of Greece’s debt? Yeah, that’s what they hold now. But how much did they hold before operation “kick the can down the road till we get rid of 300-400 billion and push them onto European taxpayers” started. Here is a good start, take it up from here and educate yourself:
“In the millions of words written about Europe’s debt crisis, Germany is typically cast as the responsible adult and Greece as the profligate child. Prudent Germany, the narrative goes, is loath to bail out freeloading Greece, which borrowed more than it could afford and now must suffer the consequences.
Would it surprise you to know that Europe’s taxpayers have provided as much financial support to Germany as they have to Greece? An examination of European money flows and central-bank balance sheets suggests this is so.
Let’s begin with the observation that irresponsible borrowers can’t exist without irresponsible lenders. Germany’s banks were Greece’s enablers. Thanks partly to lax regulation, German banks built up precarious exposures to Europe’s peripheral countries in the years before the crisis. By December 2009, according to the Bank for International Settlements, German banks had amassed claims of $704 billion on Greece, Ireland, Italy, Portugal and Spain, much more than the German banks’ aggregate capital. In other words, they lent more than they could afford.
When the European Union and the European Central Bank stepped in to bail out the struggling countries, they made it possible for German banks to bring their money home. As a result, they bailed out Germany’s banks as well as the taxpayers who might otherwise have had to support those banks if the loans weren’t repaid. Unlike much of the aid provided to Greece, the support to Germany’s banks happened automatically, as a function of the currency union’s structure.
How It Worked
Here’s how it worked. When German banks pulled money out of Greece, the other national central banks of the euro area collectively offset the outflow with loans to the Greek central bank. These loans appeared on the balance sheet of the Bundesbank, Germany’s central bank, as claims on the rest of the euro area. This mechanism, designed to keep the currency area’s accounts in balance, made it easier for the German banks to exit their positions.
Now for the tricky part: As opposed to the claims of the private banks, the Bundesbank’s claims were only partly the responsibility of Germany. If Greece reneged on its debt, the losses would be shared among all euro-area countries, according to their shareholding in the ECB. Germany’s stake would be about 28 percent. In short, over the last couple of years, much of the risk sitting on German banks’ balance sheets shifted to the taxpayers of the entire currency union.
It’s hard to quantify exactly how much Germany has benefited from its European bailout. One indicator would be the amount German banks pulled out of other euro-area countries since the crisis began. According to the BIS, they yanked $353 billion from December 2009 to the end of 2011 (the latest data available). Another would be the increase in the Bundesbank’s claims on other euro-area central banks. That amounts to 466 billion euros ($590 billion) from December 2009 through April 2012, though it would also reflect non-German depositors moving their money into German banks.
By comparison, Greece has received a total of about 340 billion euros in official loans to recapitalize its banks, replace fleeing capital, restructure its debts and help its government make ends meet. Only about 15 billion euros of that has come directly from Germany. The rest is all from the ECB, the EU and the International Monetary Fund. ”
http://www.bloomberg.com/news/2012-05-23/merkel-should-know-her-country-has-been-bailed-out-too.html
******
I know you will not learn this easily from German media. Too bad, and maybe it is time to ask yourself why. Feel free to provide me with some more Frankfurt bs claims (“25 billion is all is at stake for us”) to shoot down while we are at it, I’ll be more happy than happy to oblige. We can for starters also look at the wonders this crisis has done for the German economy and actually quantify it a bit. Which makes some people suspicious already that this might be a reason Merkel drags her feet while letting everybody else suffer.
Waiting.
German banks hold 22 billion of Greece’s debt? Yeah, that’s what they hold now. But how much did they hold before operation “kick the can down the road till we get rid of 300-400 billion and push them onto European taxpayers” started. Here is a good start, take it up from here and educate yourself:
—
I don’t want a “a good start” to educate myself. If the number I quoted is wrong, then provide a better one and don’t just continue your extremely tiresome habbit of argumentation by posting other people’s writing in full.
Gee, I guess you don’t like reading anything that might make you feel uncomfortable.
This article from Bloomberg which uses Bank of International Settlements figures proves that Germany’s banks got rid of something like 700 BILLION DOLLARS of loans to the periphery and offloaded them to European taxpayers in less than 2 years! And it explains exactly how it happened. You on the other hand mentioned 25 billion to prove that supposedly the German banks were not very irresponsible, big deal. Well, this is unfortunately horseshit. Get the point now???
Maybe you don’t like facts, but facts are stubborn things. It’s hard to argue with the BIS, I’m sorry.
Alan,
You said:
“This was just a few years after you had destroyed Europe and killed millions of people with that exact same arrogant superiority attitude you exhibit today.”
I don’t give a shit what “Proud German” says or doesn’t say, but I think this incessant allusion to the Nazi past is in 2012 utter crap. You cannot possibly imagine what it must’ve been like to be born in Germany post-WWII and be forever tarred with your forebears social insanity – a disease that strikes every society at one time or another.
In addition, the Marshall Plan had nothing to do with helping Germany, and everything to do with Soviet “containment”. US planners had this object in view before the war even started. There is no charge so disgraceful as a collective one, and most especially one against people 3 generations removed from the crime.
As for who should pay who what to bail out Europe, I nominate by far the wealthiest country on the planet, one far wealthier than Germany, the same one which owns the IMF and has supported “austerity” every inch of the way – also the one which happens to owe Europe a very large sum of money.
http://www.bbc.co.uk/news/business-15748696
I’m sorry if this hurts your feelings, but I’d rather be more concerned with the victims here. And yes, Germans may not want to be held responsible, but the truth is that Germany received a great deal on the condition that after reunification it would compensate the victims. The intergenerational claim of non-responsibility is a strawman, countries are not like persons. And as the good professor points out in the above article, if you are going to avoid responsibility when it suits you, then stop waiving the finger while pretending to hold the moral high ground. And if you have a problem with collective responsibility, and I agree with that, then tell the whole world to stop assigning collective responsibility to Greeks for their predicament today. You can’t have it both ways. Afterall, Hitler won his election too.
? I have to Agree with Alan here. Germany invaded Greece and the rest of the Balkans, Illegally, and killled hundreds of thousands of people. Incidentally they also got mauled by Tito and the Greek Partisans. No actually they got OMFG MAULED. Then they lost the war that they started in a big way. The were properly and correctly judged to be mainly responsible for all the damage and orderd to pay it back when they could. Its been many years now, they are in a position to pay it back, and they have reneged, defaulted, on thier legal and moral obligation to do so…to anyone who is just had it uo to here with all that Nazi stuff (what did they do anyway i forget?) – encourgage the Germans to repay thier war debt. Oh not to the US or Britain..but how about to Greece, and Romania, Slovenia and some others.
In response to Alan and the post about how the western world helped Germany after WW2 they tried to turn Germany into a 4th world agrarian society with programs like operation paperclip. It was Stalin’s soviet union that re-built East German industry and r&d sites like perm to the point that the west complained about rebuilding the German war machine to the soviet union but if it wasn’t for them than Germany would be totally wiped out and only selling forced below market price coal like they were immediately after the war so Russians are Germanys true friends who didn’t sew them nonstop after the war, Russia built itself up without stolen money.
And as a side note I don’t think he is German just a fake.
I’m sorry, Carol, but this is not the NakedCapitalism apporved narrative. It goes like this:
Greece is a EU periphery country that is poor but honest, like the rest of the PIIGS. The European “core”, on the other hand, is a bunch of predatory wealth extractors and robber barons. The present crisis is the result of exploitation by the predatory European “core”. The poor Greeks were duped into entering the EU and adopting the euro. The evil “core” gave the Greeks grants and cheap credit, like the White Man gave Firewater to the Indians. Eventually, Greece were sucked dry: but the “core’s” greed knows no bounds! They want to gain more through usury and,ultimately, political domination! This is the continuation of WW2 by other means. You see, as EU technocrats are really the reincarnation of the Wehrmacht and the Greek government are the modern Quislings.
At any rate, Geek is not to blame.
Got it?
I bet that felt good. Nothing like a good long fart.
“At any rate, Geek is not to blame.”
This is a strawman. Nobody said the Greeks are not at fualt for their inefficient economy, tax avoidance of the rich and so on. Of course they are. What everyone is getting tired of is German opinionated moralists who avoid to look at their banks and Bundesbank games closely. While also forgetting that whenever it suits Germany, former bailouts with extremely favorable conditions are forgotten, war reparations agreed to be paid when reunification happens get erased from collective memory, fiscal rules can be broken, and the making of an example of Greece so that others ‘learn’ is supposed to be treated like ‘solidarity’.
You better wake up and smell the coffee. What is happening to Spain now will let a lot of these cats out of the bag.
Finally, as far as I am concerned (and same with a lot of other people, especially in Europe), the best thing to happen would be to actually see Germany leave the Euro. As I said. So be it. Take your moral self-serving bs and constant insults in your media and from your finance minister and go back to the DM. See how fast you’ll be the ‘sick man’ of Europe again.
Best regards and good luck.
The only “moral self-serving bs” I am reading here is the constant barrage of one-sided arguments designed to lay all the blame for the Eurozone woes on Germany exclusively.
So much nationalism!
Alan’s point is true but that does not mean that the blame is on “Germany” (you speak of Germany as if it were a person, that’s kind of funny).
The design of the currency union determined that German (and other northern) capital would flow to Greece (and Spain, etc) eventually leading to choke the Greek economy once the flow stopped. Then in a couple of years, by the mechanism explained to you by Alan, the flow reversed and German bank exposure was reduced to the level you quote, bringing German banks to a safer position. So you hear German authorities saying that “Europe” is now better prepared for a Greek default than it was in 2009.
So Alan´s point is fact, but the main ultimate culprits of this gigantic mess are not German investors doing their normal business of seeking a better yield, but rather (1) the designers of the currency union that were not competent enough to anticipate the magnitude of the effect of a sudden stop of capital flows, a technical flaw, and (2) the Greek politicians that lied about their State’s deficit when they applied to join the Eurozone, a moral flaw.
Oh, not exclusively. Mainly.
“So Alan´s point is fact, but the main ultimate culprits of this gigantic mess are not German investors doing their normal business of seeking a better yield”
I’m sorry, but this is hogwash. Anyone can seek a better yield, but overlending by expert, ‘sophisticated’ investors that leads to insolvency and bankruptcy is in normal capitalism a very nice way to get out of business. But not in our kind of crony capitalism, where socializing the losses has become a ‘normal’ business model.
When debts cannot be paid, they will not be paid. This is credit-land reality for at least 3 millennia. Offloading all the bad loans and toxic assets to taxpayers instead is a moral outrage.
“(2) the Greek politicians that lied about their State’s deficit when they applied to join the Eurozone, a moral flaw.”
More hogwash. Many countries lied, including (gasp!) the French and the Italians, who also used the services of Goldman Sachs. Brussels knew very well what was happening, but made political decisions at the behest of who, you guessed it, financial interests. This is also why the supposed ‘investigation’ on Goldman swaps for Italy and Greece never led to any report. Guess who was doing God’s work for Italy? Monti’s department at Goldman. Guess who was head of the National Bank of Greece back then? A guy named Papademos who a few years later became the ECB’s VP.
The only moral of this whole travesty is that financial institutions that drive themselves to insolvency by running amok will be bailed out by taxpayers, while those unfortunate enough to live in the countries where corrupt politicians played ball for votes see their weakest citizens driven to despair, like pensioners committing suicide to spare themselves the indignity of looking at garbage cans for something to eat (google the name Dimitris Christoulas). Quite a price to pay for the moral failings of the bankrupt countries, while the other half of those transactions get bailed out stealthily, because after all, they were only ‘looking for better yield’.
Judging by your moral priorities, you must be working for the industry. If not, I would beg you to reconsider what morality is.
“Judging by your moral priorities, you must be working for the industry. If not, I would beg you to reconsider what morality is.”
You raise many intriguing points and I am ready to be educated. The most interesting one is your claim that Italy and France also hired G & S to hide their deficits and thus join the Eurozone. I thought only the Greek govt did that and so I put that original sin as one of the two main causes of the current mess. You say my pointing out to that original sin is hogwash because France and Italy did the same. Please provide evidence.
My other point that you somehow claim is hogwash was that the capital flow whose sudden stop choked the Greek economy was a necessary consequence (given profit-seeking by ivestors) of a poor design of the Eurozone. I think German investors did not count on being helped to remove their positions in Greece, as it happened. Sorry for the reiteration.
By the way, both Monti and Papademos are the brilliant technocrats who later had to become Prime Ministers and save the world.
You might also see a pattern after a while, where alternately those institutions and persons are either totally brilliant or, occasionally, kinda incompetent who can absolutely never be blamed for ‘unforeseen’ events, even if they also walked the semi-legal grey line, whatever fits the story at the time. Thus, when for example European banks buy toxic waste from Wall Street, they are ‘sophisticated’ investors who played and lost (unless you are part of the big club like Deutsche, then you get bailed out by the American gov.). But when they buy periphery government bonds, they are unfortunate gullible children who were suckered by nefarious sovereign monsters and now have to be bailed out. Because, we all know how easy it is to evaluate AAA MBS when you are ‘sophisticated’ but how difficult it is to evaluate non-AAA government bonds for countries famous for their corruption when you are in this occasion just another clueless bank looking for some yield.
Same with Papademos and Monti. They helped those countries fail morally and hide their debts, but a few years later, here they are to save the world, because they are after all brilliant technocrats helping to steer those countries in the righteous path.
Amazing that people still buy this bs. You can’t make this up.
1) I never said France hired Goldman Sachs, perhaps you misunderstood because I put them on the same sentence. France got in even though its fiscal deficit (estimated!) was 3.3% of GDP, thus in violation. I said Italy did. Too bad the responsible parties refuse to co-operate and we never had an investigation. Here is a start if you want to look this further up:
http://www.efinancialnews.com/story/2012-03-21/italy-gustavo-piga-urges-mario-monti-ecb-eu-to-release-derivatives-data
Piga has unearthed some very interesting derivatives trades. The rumour when the scandal of the Greek swaps broke out was that Italy was even deeper in such trickery and that there were others involved too, like Portugal. I don’t know, but it wasn’t Greece that invented creative accounting, so let’s hope someone persuades the ECB and the European Commission to provide some data. Which they won’t. I wonder why.
2) The flow stopping and the systemic flaw is not the hogwash. Please read again. It is a hogwash to call overlending where everyone ends up insolvent with the creditors stealthily bailed out simple operating procedure. It’s not. Those banks, French and German, should have failed.
3) No comment on the moral system of all this, where it is a ‘moral flaw’ to lie about the deficit but bailing out private banks for their reckless lending is not, but ‘normal business’. And where all the pain and consequences fall on the debtors, but not the creditors. Please explain.
Alan,
You´re probably right that Italy´s govt also used accounting tricks to hide deficit and ease the country´s admission to the Eurozone. See:
http://www.nytimes.com/2010/02/14/business/global/14debt.html?_r=1&pagewanted=all
The article does point out though the Greece’s govt chicanery went further.
However, I’m not convinced that lending to Greece to re-pay German (and French) investors before Greece defaults (which is what has been going on in the last two years) is as morally reprehensive as the original Greek govt fabrication of the State’s deficit data.
That fabrication by Greek govt elites and the technically flawed design of the Eurozone by European elites are the ultimate causes of the current mess, not any so-called reckless creditor behavior (which was not so reckless after all since the exposure has been greatly reduced before the shit hits the fan).
Regarding the Greek suffering population, well, they elected their idiotic and corrupt leaders. I hope they vote them out on the 17th, put Syriza in top govt positions, and default and return to the drachma, or at least get a better deal from the European elites. In case of the former, I am ready for the shockwaves.
In other news, a leader of the Golden Dawn party in Greece punched two leftist MPs on live television.
http://www.guardian.co.uk/world/2012/jun/07/golden-dawn-tv-assault-greece?newsfeed=true
They were both women, too. I suppose that’s the end of Golden Dawn as a protest vote. Couldn’t happen to a nicer party.
As I read that headline, I thought, which party benefits. Any polling data on Golden Dawn 2nd choice?
Don’t know of any polls on that, but I would guess the largest portion of their voters would turn to LAOS, since they’re fascists and all.
They are collapsing. Wikipedia has all the poll results until, by law, can’t be made anymore:
http://en.wikipedia.org/wiki/Greek_legislative_election,_June_2012#Opinion_polls
From 7% they have fallen to a bare 4%, enough to get some seats but barely so.
The real question is how much will Syriza get because before the last elections, opinion polls gave them barely 12% at the most and they got almost 17%. Considering that it is the bourgeois media who pay for most if not all opinion polls, there is a high likelihood that they have a pro-right, anti-red bias.
‘They are collapsing’
Well, that’s a small but real consolation, if the trend becomes confirmed.
Actually I realized, after replying to you, that WP does not include another recent poll by Public Issue (http://forwhatwearetheywillbe.blogspot.com.es/2012/06/greece-could-well-have-ample-red.html) that gives SYRIZA 32% of the vote and, together with just DIMAR or KKE (but only one), ample majority to rule the country for the next four years.
As for Golden Dawn they are collapsing, yes (4.5% in this poll) but would still get 12 seats, to which you should add the 8 that the liberal-fascists and racists of Recreate Greece may get if they overcome the 3% threshold.
But overall, Greeks are a smart people with a general tendency to lean to the left, in fact they have the strongest Left of all Europe, at levels that even here in the Basque Country we could envy.
The Basque country is so different to the rest of Spain. One example: even now as the Spanish govt is dismantling its already weak science and technology system, the Basque govt stubbornly keeps investing in science and technology at levels close the the European average. Euskadi’s govt has also refused to downgrade its education and health services to third world levels despite Spanish govt decrees ordering such downgrade. Euskadi also has the soundest finances of all the autonomies. I wonder, what would the Basque people do if Spain goes the way of Greece?
It would’ve been so much better all around politically if Ireland had voted “No” in the referendum, but unfortunately they bought the Wall Street/London “Doomsday” crap hook, line and sinker. A “No” would’ve ended the asset-strip Europe project (that is, the GS Eurocrat/globalist cartel project) right then and there. That was a huge blow to any prospect of a broad leftward movement across Europe.
So, assuming the scenario you depict comes to pass, will that new Greek Government have the courage to follow through and reject the globalist elites’ plan and exit, or just try for a better deal within that badly damaged institution?
Homeownership is 80% in Greece and 40% in Germany. On average the Greeks might have more assets than the Germans.
So, first let the Germans have the houses. Then, we’ll see.
How about the Germans pay their war reparations and the ‘loan’ they extracted by force from Greeks with their own houses?
“Germany owes Greece a debt
Germany’s ducking of the war reparations issue makes its attitude to the current Greek debt crisis somewhat hypocritical
by Albrecht Ritschl
The Germans are not amused these days. Look everywhere from tabloids to the blogosphere, and it seems that the public mood has reached boiling point. Loth to shoulder another national debt increase and finance another bailout, the Germans have started questioning everything from the wisdom of supporting Greece to the common euro currency, or indeed the merits of the European integration project altogether. This might be strange for a country that is nudging ever closer to full employment, and which is about to recapture its position as the world’s leading exporter of manufactured goods from the Chinese. But the Germans say they’ve had enough: no more underwriting of European integration, no more paying for this and that, and certainly no more bailing out the Greeks.
What is truly strange, however, is the brevity of Germany’s collective memory. For during much of the 20th century, the situation was radically different: after the first world war and again after the second world war, Germany was the world’s largest debtor, and in both cases owed its economic recovery to large-scale debt relief.
Germany’s interwar debt crisis started almost exactly 80 years ago, in the last days of June 1931. What had triggered it was Germany’s aggressive borrowing in the late 1920s to pay reparations out of credit. A credit bubble resulted, and when it burst in 1931, it brought down reparations, the gold standard and, not least, Weimar democracy.
Having footed the resulting massive bill, after the second world war the Americans imposed the London debt agreement of 1953 on their allies, an exercise in debt forgiveness to Germany on the most generous terms. West Germany’s economic miracle, the stability of the deutschmark and the favourable state of its public finances were all owed to this massive haircut. But it put Germany’s creditors at a disadvantage, leaving it to them to cope with the financial aftermath of the German occupation.
Indeed, the London debt agreement deferred settlement of the reparations question – including the repayment of war debts and contributions imposed by Germany during the war – to a conference to be held after unification. This conference never took place: since 1990, the Germans have steadfastly refused to reopen this can of worms. Such compensation as has been paid, mostly to forced workers, was channelled through NGOs to avoid creating precedents. Only one country has challenged this openly and tried to obtain compensation in court: Greece.
It may or may not have been wise to put the issue of reparations and other unsettled claims on Germany to rest after 1990. Back then, the Germans argued that any plausible bill would exceed the country’s resources, and that continued financial co-operation in Europe instead would be infinitely more preferable. They may have had a point. But now is the time for Germany to deliver on the promise, act wisely and keep the bull away from the china shop.”
http://www.guardian.co.uk/commentisfree/2011/jun/21/germany-greece-greek-debt-crisis
See also:
http://www.neomagazine.com/2011_11_november/18a.html
*******
According to several estimates, that debt would be 500+ billion dollars today. That would leave Greece debt-free with a 100 billion surplus! Be careful when playing morality plays about debts. You never know what might hit you.
So yeah. German houses sound good as collateral!
Thank you. Very well said.
The retardation has reached new levels with this comment. War reparations. My, my.
Indeed, Kiste, you have proved yourself very retarded.
The war reparations are, amusingly, legal obligations of Germany to Greece, which Germany has been evading. So much for Germany’s claims that Greece should pay it’s “legal obligations” to German banks. Apparently legal obligations are a matter of who can get away with what.
The war reparations are, amusingly, legal obligations of Germany to Greece, which Germany has been evading.
—
You don’t know what you are talking about. Please provide a link that documents this legal obligation.
Let’s also just forget about the almost 40 billion German Marks of German economic aid that Greece received from Germany (both, bilaterally and through the EU) between 1960 and the day Greece joined the Eurozone.
@Nathanael
“The war reparations are, amusingly, legal obligations of Germany to Greece, which Germany has been evading.”
Really? Please feel free to share a copy of the legal document. After all that was the cry of your ilk vis-a-vis MERS……I am quite sure that it will be less remote to prove debt in MERS than in some thing like War reparations. In MERS the seeming documentation issues were technicalities, here (War reperations) you will find only conjucture, Further indeed a lack of representative contractual ability if anyone from the German (defeated) side signed anything at that time.
“The retardation has reached new levels with this comment. War reparations. My, my.”
The article I linked to is from a German professor who is a economic historian at the London School of Economics. I know cognitive dissonance makes arguing with historical facts hard, but you better read both articles. Carefully. And the whole point was, be careful with self-serving morality plays. Let me repost:
“Indeed, the London debt agreement deferred settlement of the reparations question – including the repayment of war debts and contributions imposed by Germany during the war – to a conference to be held after unification. This conference never took place: since 1990, the Germans have steadfastly refused to reopen this can of worms. Such compensation as has been paid, mostly to forced workers, was channelled through NGOs to avoid creating precedents. Only one country has challenged this openly and tried to obtain compensation in court: Greece.
It may or may not have been wise to put the issue of reparations and other unsettled claims on Germany to rest after 1990. Back then, the Germans argued that any plausible bill would exceed the country’s resources, and that continued financial co-operation in Europe instead would be infinitely more preferable. They may have had a point. But now is the time for Germany to deliver on the promise, act wisely and keep the bull away from the china shop.”
Indeed.
The article I linked to is from a German professor who is a economic historian at the London School of Economics.
—
I’m not interested in arguments from authority.
At any rate, nothing of this has anything to do with the problem at hand. So what’s your point?
If you still don’t get the point, never mind. It’s hopeless. Have a nice day.
And read this: http://www.nakedcapitalism.com/2012/06/yanis-varoufakis-solidarity-euro-style-finnish-loans-ecb-bond-purchases-efsf-tough-love-and-assorted-horror-stories-from-the-postmodern-euro-workhouse.html#comment-732205
OK. That’s just silly.
You of course know Germany was stuck by the “Allies” with the bill for WWI, a bill they neither deserved, nor could honour without inflicting massive damage to their economies. You also know that Allied stupidity of “reparations” was a huge driver for the eventual ascendency of Hitler et al.
Anyone with a brain would’ve (and most with brains did) not get into another idiotic argument about reparations again post WWII. Any fair assessment would see Germany making payments to most of Europe’s countries, as well as the US and UK. Meanwhile, the US/UK and “allies” would by rights need to make payments in turn to Japan and Germany, for needless obliteration of major population centres with millions dead. Russia would have to be paid by everyone, as it took by far the worst beating, while contributing the most to winning. Reparations is a grotesque game invented by and for wars winners, irrespective of the moral character and actions of the claimants. For example, does that absolute shit of a well-off Frenchman deserve recompense when he in fact betrayed his fellows for the keys to the safe? How about the poor angel over here Norway that got nothing but grief from everyone on all sides. Or this broken wreck of a man that was caught in a cross-fire. What about him.
No more war drama. Germany is being squeezed every bit as hard by the US/UK financial mafia as anything it is inflicting on anyone else.
You are missing the point entirely. The professor points out that Germany agreed to postpone payments for reparations when unification would come. In 1990, Germany said she wouldn’t pay. Whether this was right or wrong, is a difficult and sensitive discussion that will also depend on one’s perspective. Poor countries like Greece and others might have a different opinion than yours, as I do, but this is not the point.
The point is that you cannot turn around two decades later when you are the creditor now and play morality plays while insulting the debtors. In the matter of Greece, there was also a loan which was taken away from Greece while tens of thousands of Greeks were dying on the streets of Athens because of starvation. This was a ‘loan’. Depending on estimation methodology, it is anywhere between 50-150 billion euros. It was never repaid.
See where I’m going? The whole point is that there should be real solidarity, not insults, especially coming from Germany to a country like Greece. There are sensitive matters. And let’s not forget that Greeks know full well who got bailed out and that it was German and French banks, not them. The Greeks actually have a much bigger debt now, after the ‘haircut’ and the ‘bailout’. Read the article I linked to from Bloomberg which shows using Bank of International Settlements’ figures that 700 billion of German bank loans to the periphery got offloaded on European taxpayers’ backs. Then the ‘haircut’ was allowed to go forward, but Greeks end up having a higher debt than in 2009, when the haircut should have happened then, German and French banks should have failed and Merkozy should have had then to explain to their citizens why they should bailout the banks.
Greece, for all its faults, is a convenient scapegoat here, insulted left and right while the collective responsibility of its ‘lazy’ population is a given, while Germans of course don’t want to apply the same standard to themselves, or Americans for Bush’s Iraq war to themselves etc, the list could be endless. The hypocrisy is mindboggling.
When it comes to this, things get bad. Mark my words, now that Spain goes the same way like Greece with Italy soon to follow, the German elite’s and media’s stance and the population’s misinformed attitude will backfire big time. Fasten your seatbelt. It won’t be pretty.
I have argued since 2010 that Greece would default at some point, therefore should default as soon as possible and leave the EZ. Greece was looted and betrayed by its own elites in the interim. It would still be best if they voted to leave. There is no possible “fix” for this that is not a short-term lift, then failure, because even if the entire German leadership disappeared overnight, Europe, and Greece would still be caught in the web of the far more ruthless predators across the water – the US financial/multinational/military complex.
Jay Gatsby is Dead
I consider it a minor hell to have to read about this shit every day. The breathless and erudite debrief on the latest financial fudge and dodge — where success is the capacity for evasion and predation — a daily drip from some intravenous tube of absract derision, caged in words that degenerate into acronyms and then into nothing at all.
But it must be so much worse to have to live it “on the ground” as the saying goes. And there are two hells in that case. The hell of those who loot you from afar. And from those who loot you from within.
I had a sudden mind shot thinking about this. F. Scott Fitzgerald’s phrase “the foul dust that floats in the wake” of Gatsby’s dream. All the hangers on and lusters and imitators, the parasites and con men who feasted on the great Dionysian colossus that Gatbsy was, which was such a metaphor for something about America, at that time.
My mind shot, I was laying on my side staring at the wall in the dark, that exploded in the instantly suffused illumination of a vision from a dream was that the entirety of the financial class is a moiling mass of motes wafting in the last deliquesent rays of a dying twilight — in Europe and in America. And it occurred to me that the light was so weak because Gatsby is dead. And in his place are those who possess only his potency and not his romanticism, and are therefore only destroyers, abstract murderers, who lack the wordless but sublime vision of a hopefilled and transcendent world that all true creators possess. Or something like that, anyway.
Gatsby’s entourage seemed to celebrate more than money, although money was the jeweled surface of something that transcended it, in search of life itself. Now, the money is all there is and the life is dead. So Gatsby is dead.
I guess living in that kind of world is normal for much of humanity. But certainly not for the Greeks, who may have never had a Gatsby as innocent and democratic as ours, but we’re all human and so there must have been some who could see and feel their fellow citizens as something more than tools, and be animated by some idyllic dream of beauty and desire beyond what money could buy.
And now, to live among the parasitic dust that floats in the wake of the money dream, and takes as much as it can, from whoever it can, whenever it can, as a final objective, devoid of any transcendence and in fact, instead, driving downward into something that we can call darkness for lack of a better word, right now. That must be an absolutely living hell. Reading about it, and all the contorted rationales and the acronyms that cloak it with a veneer of credibility is a misery of daily tedium and disgust. But living in it, every day, that would break me in half and then in half again until like Zeno’s arrow, I’d be down to nothing, myself.
This was truly wonderful. Thank you, with all my heart.
Maybe the parasitic dust accreting money as it floats downward or is lofted upward, the way real dust accretes moisture and becomes rain, will also fall as it must and rejoin all the waters flowing to a great big collective source one day.
craazyman, that was beautifully expressed. Fundamentally, below the “beauty” that floats in America’s “elite rich” quarters, lies a terrible darkness. It’s that when grave loss is at stake, the elite choose murder over loss every time, and the rest of us must live in the corrupt society they create. This dark underbelly of “American success stories” is shown in at least three works by major artists:
“An American Tragedy” by Theodore Dreiser;
“The Great Gatsby” by F. Scott Fitzgerald;
“Crimes and Misdemeanors” by Woody Allen.
This underbelly is “Old Europe” in America.
Dear LBR;
Woody Allen is a ‘major artist?’ I would much prefer James or Vidal.
While that was one very fine piece of writing, I must protest – Gatsby is very much alive:
http://www.commondreams.org/view/2012/06/05-2
This dude is Justice with global reach… some say the greatest Gatsby ever.
Craazymaan, you described our world and it took my breath away. Thank you.
A triumph!!!
Skippy… you’ve have been holding back, boyo.
I was about to make the following comment on the post “Cleaning Up The Mess: What To Do About Teetering Eurobanks?”, but wondered if I should read this one first. Glad I did. I will post as is, and just note I must withdraw my statement indicating I had believed some progress had been made re simplistic German-bashing that so very much suits the purposes of the real bastards who are running this show. I find a number of the comments on the present post just incredibly hypocritical. And with that sad revision:
I was expecting to see another comment barrage of anti-German invective diverting attention away from the real issue, i.e., how are this world’s peoples going to take power back from the Anglosphere’s financial/corporate globalist overlords – those supreme pricks who are about to double down again on their bets that Mr. Market (the one they own and operate) will have no trouble extorting further Central Bank (and within 6 months, fiscal) money-bombs on taxpayers’ dimes everywhere. Pleased to see that sort of simplistic crap (blame it all on Germany) appears to be receding.
I’ve been wondering of late why reckless levels of indebtedness so easily became the widespread “solution” to shortfalls in worker income/government tax revenues in the first place. To my mind, it’s not enough to point to Reagan/Thatcher financial deregulation and the rest as sufficient explanation, as it does NOT explain the peculiar circumstances that produced these and other regressive political phenomena. How was the population sold on such a despicable set of values?
Check out the debt Graph 2 on Page 7 of this piece from the BIS (one I believe Yves posted several months ago). You will all have seen similar graphs. Note the huge leaps in debt in the ’80’s, and again in the ’00’s. Is it just possible the underlying dynamic of the problems attending these explosions in indebtedness might in large part be the unintended consequences of truly staggering increases in our collective longevity?
Longer life means offspring don’t “get ahead” as quickly, nor do they inherit as quickly, yet are expected (indeed instructed by elite-owned media) to at least emulate, if not match or exceed, the older generation’s material affluence (so why not borrow in anticipation of receiving that inheritance?). On the other hand, older folks’ money/savings is either slowly exhausted (government spending on assistance grows) or, if well-off to rich, is available for longer periods for banks to lend out gleefully. People of modest means, lower income, or outright poor, are of course saddled with the additional burden of supporting their parents for years.
The first huge increase in longevity in modern times came with the introduction of sanitation and nutritious food abundance from roughly 1875 through WWI. The second great leap came with drugs & other medical “miracles” from WWII to the advent of the “knowledge economy”. Whether a third leap is in store, or if gains become more incremental (or are limited only to the wealthy) going forward remains to be seen.
But consider what it means when whole “extra” generations, generations that believe they possess what they possess, very much including “money”, take exception to the thought that their “wealth” is nothing more than figments of accountants imagination.
http://www.bis.org/publ/othp16.pdf
“I had believed some progress had been made re simplistic German-bashing that so very much suits the purposes of the real bastards who are running this show.”
You are absolutely right. While the plutocracy everywhere laugh all their way to the bank, we have morons like ‘Proud German’ and well-meaning misinformed Germans (I assume) like Kirste go to a mental war with Greeks, Spaniards, Italians and so on. This a classic misdirection game that pits the victims (ordinary taxpayers) against each other.
The first step in my opinion, is to dispel the myths German elites use, for the benefit of the German public. This is not German-bashing, it is German elite-bashing, and rightly so. I have nothing but sympathy for German workers. What has happened to them in the last two decades is a disgrace. Thankfully ordinary Greeks don’t need anything of the sort, they know all too well how corrupt their financial and political elites are. Then, ordinary taxpayers might start getting that they all, collectively, are the losers. And that it’s only gonna get worse.
The way things are right now, maybe even a Euro disintegration could be the best thing to happen. Clearly, the way things are right now, the people have nothing to gain from such a dysfunctional union. Maybe next time it will be done the right way, to benefit Europeans and not the banking cartels or the Brussels bureaucracy.
I would like to have hopes for the American public too, but I’m afraid it’s hopeless until the middle class really suffers. I hope I’m wrong.
Then, hopefully, we can have something political going on. For the benefit of the people, for real wealth created and shared, for true solidarity. I don’t like living in a crony plutocracy.
Hard at times not to believe it’s past the point of no return vis a vis democratic and decent outcomes given the immense power at the disposal of Management. Perhaps, if it’s impossible to change Management, it’s nevertheless still possible to change Management’s inclinations – maybe we’ll be lucky enough to have some sort of huge technical or environmental “near miss” that puts the Fear back in them. Victory by best argument is foreign to them, as they never, ever, activate the links between their fundamental assumptions and essentials of character (the ones with meaning for them) with that part of their ratiopathic minds that might hold them up to scrutiny.
Luck has always figured big in human history. Just maybe we’ll get one more crack at decency before the real economic/environmental/war bomb hits a decade or so out.
Maybe it will all work out, but it might also get to the point where the famous quote attributed to Lenin becomes prophetic:
“The Capitalists will sell us the rope with which we will hang them.”
We’ll see.
On one side, my grandparents, who were of the Great Depression and WWII generation (born in 1910 and such), all lived to their 70-many or 80s, and so did my great-grandparents (one even reaching the venerable age of 101), so I do not notice any age gap. What I do notice is that the older generations made money more easily than we can, probably because the cost of their housing was a lot cheaper (a lot!) My generation (and I’m already in my 40s) could not find work as easily and had to pay huge amounts of money for housing, be it ownership or rent.
“Note the huge leaps in debt in the ’80′s, and again in the ’00′s”.
Household debt? Yes. Flat under Clinton’s eperorship (but growing government debt instead).
“To my mind, it’s not enough to point to Reagan/Thatcher financial deregulation and the rest as sufficient explanation”…
Actually it is but not as much financial deregulation (that also) but cuts in public spending. A growing economy needs an ever increasing pump of money, this was public injection in the 50s and 60s and even to some extent in the 70s but since the 80s most of the injection has been private in form of credit bubble.
Today we have neither private nor public money injection, hence low demand, hence massive slump.
Maju,
See my note “Clarification” below if you’re interested in the notion I was badly trying to express.
And let’s hope you’re right vis a vis the Greek election. It’s just a crying shame Ireland didn’t seize the opportunity presented to kill a Eurozone run by global terrorists. I still believe we’re about to see major CB actions soon to be followed by fiscal stimulus pretty much everywhere – talked about this year, actioned early next at latest. Greece though, and everyone else really, ought to be thinking through the BS of these pathetic serial can-kicks to solutions with some real prospect of consistent, stable success. The idea that conventional capitalist “growth” is ever going to take off sustainably for weaker countries in this international corporate criminal paradise of an environment is just not adequately tethered even if the entire German 1% dropped dead. The structure Europe must operate within was built by and for US-based globalist empire administration.
Here’s to a victory for the Greek people, and people everywhere.
Clarification:
My apologies to all I may have misinformed or misled in relaying this particular concept (and more than once). In suggesting the initial “extra generation” consisted of longevity gains from 1875 to roughly WWI due to sanitation, nutritional factors, etc., I assigned too much weight to “longevity increases” of the adult population and far too little to infant mortality declines after 1900. So what happened to a significant degree was an increase in “density”, i.e., fewer gaps between more siblings.
Anyway, I’m just trying to get a handle on the mindsets of the people who constitute TPTB’s of 1980 and 2000 and, more importantly perhaps, that of the people who supported these total disasters. In my wee neck of the lefty woods, I was the only one who thought Nixon would get elected twice, Reagan twice, Clinton twice, Bush twice, and Obama, a twice-to-be. But Reagan and Bush have never made any sense whatever to me from a pure people perspective (note: Clinton was and is despicable, but it was at least understandable how the public could buy his glib crap with a seemingly peaceful technology revolution and enormous bubble as backdrop).
And that said, here’s a table and piece on infant mortality to consider. Or not:
http://www.infoplease.com/ipa/A0005140.html
http://jn.nutrition.org/content/131/2/401S.full
Sure is a lot of finger pointing going on and no real discussion about public versus private money, the banking system that is screwing up the social incentives and what the hell can be done to develop a coherent path forward.
And don’t dare talk about inheritance and private ownership of stuff. These are given givens.
In my understanding either form of “European solidarity” is what is generally known as neocolonialism.
First the good news, our European elite finally admit that its banking sector is insolvent and if this were any of sector it would be allowed to wither.
The US and UK banking sector is also insolvent and backstopped by the state.
Solution, given the banking sector in general in both most of Europe and the USA is failing to extend credit/loans to the real economy, would it not be better for all nations to nationalise the payments infrastructure, i.e., you still have a functioning flow of money and accounts are safe if backed by FDIC style guarantees.
By nationalising the payments infrastructure, you at once remove the gun from the economy’s head and the insolvent banks can be allowed to go bankrupt, thus negating the requirement for huge liquidity flushes, state-sponsored bailouts and continued near zero interests rates that are penalising the prudent, pension service providers and insurance.
Given the trillions of US dollars thrown at the banking sector since the demise of Northern Rock in August/September 2007, most G10 economies flatlining or in a technical depression – see real US jobless, and now the sovereign debt problem as a direct result of nations offering blank cheque guarantees to the banking sector – all to no avail. Best we rid our selves of this milestone around our necks ASAP.
Genuflection is a wonderful thing, in September/October 2008 I too believed it necessary to backstop failing banks to prevent a depression of epic proportions – all given with no guarantees or reciprocity on behalf of the banking elite – to- date those very same institutions that were driven into the ground by senior management have failed to change their ways, failed to extend loans to the real economy and profited handsomely from both low interest rates and punitive interest rates on any loans extended, be these business, private or sovereign.
So, lets just let them go under whilst maintaining the payments infrastructure which is the very part the real economy actually requires.
But they’re not going to just go under as long as they effectively own the government, are they?