Greece took on vast and un-payable debts, lied about them for years and years, all the while while going more and more insanely over streatched and finally imploded under a weight of bad debts and empty assurances so large, they could not pay them.
Not good. I think Greece has a case to answer and some work to do to sort themselves out.
BUT… We should remember these crimes are also exactly what every major bank is the US and the UK did and are still doing to this day. Exactly. the same things. In fact, it was accountants and Bankers from our banks and accountant firms who ‘advised’ and ‘helped’ the Greeks to lie.
The banks did everything the Greeks did. Yet one is bailed out the other must pay.
Isn’t there something ugly, perverted and deeply wrong about that? Doesn’t it tell you something about who has power and who doesn’t?
There is something very, very wrong when you contrast Latvia, Estonia, Ireland, Iceland, Greece and Portugal on the one hand with Citi, AIG, JPMorgan, Wells Fargo, Lloyds, RBS, Soc Gen and the other.
The banks are not going to be forced to accept austerity measures. The Greek people are. Banks tell us we must do nothing that would harm their ability to ‘recover’. In the US and UK the banks are adamant that any punitive actions against them, any regulation of their bonus culture, or their risk taking and speculating would precipitate a further downturn.
Yet these very same bankers are icily sanguine when it comes to punitive cuts to nations and people. Latvia has been forced by the IMF and its creditors, to cut its spending so savagely, it has had to close hospitals and schools, cut education spending on its children and suffer 22% unemployment. And the cuts have had the effect of making Lativia’s recession longer and deeper. In two years of IMF austerity Latvia’s GDP has collapsed 25%. It will be 2015 before it even returns to where it was in ’06 – and that’s IF you believe the IMF experts. I don’t.
Why one necessary strategy for the banks themselves and the opposite for people and nations?
Part of the IMF/EU austerity plan Greece has to bow to is that ordinary Greek people are to have taken from them many of the rights to collective bargaining they have struggled to get since the over-throw of the generals. Why? Why must a people be told they can no longer organise themselves as they see fit? I thought such power of self determination was part of what democracy was there to protect and champion?
Do the bankers feel people are irresponsible and must have taken from them the ways and means of doing things the bankers think would be bad for… for who? For the people? Or the banks? You may think that collective bargaining, is wrong, or what the Greeks use it to fight for is wrong or stupid. But is it right that they have this power of self determination taken away from them by a faceless outside power? I do. We can agree that if the Greeks want money, then their creditors have a say. But then why do we have no say over the bankers who needed and got our money?
The Greek people are being told they must accept simply immense pay cuts. Bankers on the other hand are not even to have minimal over-sight of their bonuses. Am I missing something here?
The bail-out of Greece may top 120 billion euros. Outrageous? Yes. But the bail out of AIG has already cost that and will cost more. Yet there have been NO austerity measures for AIG. Bonuses flow like wine.
What I see are two groups of people who engaged in the same idiocy and greed. Their greed was, in fact, two parts of the same greed. And yet one group have set themselves above any punishment the other group to face its full force. One group to be rewarded and coddled. The other impoverished and reduced to serfs in their own country.
I do not like double standards.
We are told by bank experts that nations must cut spending and it matters not if that hobbles them and their ability to earn and grow. Yet banks make the opposite argument for themselves. They must, under no circumstances, suffer financial burdens or cuts because it would hurt their growth.
Further we are informed that bankers, if we wish them to work hard, must not have their rewards cut or curbed. People however must work harder for less money, less security and less hope for their children.
Banks must regulate themselves. People and nations must be regulated by the bankers.
If you cannot see in this something wrong and dangerous then you and I live in different realities.
WAKE UP PEOPLE. This is now more than economics. This is oppression coiling like a serpent round our necks.
Yes, Mr. Golem, but how do we transform this insight into political action? What content the new social contract, and how do we bring it about?
Do you think you will have the opportunity to comment also on the situation of nations with big trade surpluses, creditor nations like China (or like my country, Norway). The riches wiped out by defaults?
This is getting quite scarey. I'm coming round to the idea that banks are becoming so immensely powerful that it is they who are calling the shots and can more or less decide the fate of entire nations. Quite what their purpose in this is I do not understand. Once they have crippled all targeted nations what is their satisfaction?
Hello Mr. Eirik,
Thank you for your comment. Your questions are, of course, the critical ones. I shall offer you what thoughts I have. Perhaps they will provide grist for you own mill and those of others who read here.
I have written about China but you're right I have written little on nations with trade surpluses specifically. I will do so.
oldgustaf,
It is scary. A new political order is congealing around us and we are, so far, unprepared. I believe the banks, the financial class is calling the shots. Our politicians have been co-opted and intellectually captured.
There are good reasons to be scared. We need to call ourselves to "mental fight" and be prepared to defend ourselves and our children. The first line of that defence is, I believe, not being afraid to disbelieve those who tell us they know better.
Second, we must not be allow ourselves to be set against each other. If we do then those who are really to blame will laugh at how easily we can be set to fight for their profit and amusement,like cocks in a pit.
A good point Golem. The FT site has an interesting calculator that allows an individual to select the areas for cuts. I only managed about 18 Billion. Far short of the 38 Billion needed. It is amazing just where the money goes and surprising just where you can make big savings.
But on to your point: I think there will be a ground-swell of unrest if some of these proposed cuts (such as means testing some benefits, stopping school building, cutting public sector jobs etc).
Interesting multimedia interview in this mornings FT with Carmen Reinhart — book — This Time its Different — only a few minutes ! —-
http://video.ft.com/v/82349517001/May-3-800-years-of-financial-crises
Gdn editorial on greek default is worth a look too .
As the video demonstrates, the 1997 Asian Crisis started off in one smallish economy — and then …
Keep writing Golem, and don't be reticent about putting your site on posts ! So many good posts from many others also go down the CiF memory hole which is a shame.
What measures would you introduce if Chancellor on friday ?
I'm off to my veg garden, and maybe the ATM later …