Save us from the saviors
June 10, 2012 9:35 AM Subscribe
For a humiliatingly long time, up to an age I don't care to mention, I thought and Slavoj Žižek and Željko Ivanek were the same man, leading a crazy polymath double existence. Also, William F. Buckley and William H. Macy. (What a relief it was to sort that out at long last.) So yeah, adolescence was a particularly trying time for me.
posted by two or three cars parked under the stars at 9:48 AM on June 10, 2012 [7 favorites]
posted by two or three cars parked under the stars at 9:48 AM on June 10, 2012 [7 favorites]
There's a great review of Simon Critchley's feud with Zizek in the LARB. I'm not well-disposed towards continental thought, but it's always nice to see a little internecine feuding. To my mind Zizek is a kind of milquetoast Leninite; always willing to analyze Western pop-cultural ephemera in order to expound a return to Communist brutality. It doesn't seem to bother him that under his communist utopia, most of the philosophy, books and movies he adores would never have been made.
posted by anewnadir at 9:57 AM on June 10, 2012 [7 favorites]
posted by anewnadir at 9:57 AM on June 10, 2012 [7 favorites]
He's not that simple, anewnadir - he has a lot of problems with the brutality of actual Communism, and argues in some places that Soviet totalitarianism was a far worse political formation than National Socialism. But he's not that much more complicated either: he likes to argue, to argue the under-represented position or the position that reverses common or conventional sense, and he has seemed to me, for the longest time, to want to emphasize how much he perceives (and how rightly) compared to all those others, be they pundits or philosophers. Hence lines like this one from the FPP link: "The prophets of doom are right, but not in the way they intend." You get a lot of that in his stuff in the last twenty years or so. These days I just kind of take him with a yawn and a nod, as in, "yup, there's that argument Zizek would write."
posted by hank_14 at 10:07 AM on June 10, 2012 [6 favorites]
posted by hank_14 at 10:07 AM on June 10, 2012 [6 favorites]
Thanks for the LARB link, btw - hadn't seen that before. It's a measured and elegant read.
posted by hank_14 at 10:09 AM on June 10, 2012
posted by hank_14 at 10:09 AM on June 10, 2012
The article seem pretty uncontroversial from where I'm sitting. No mention of communism just good solid social critique.
posted by AElfwine Evenstar at 10:23 AM on June 10, 2012 [6 favorites]
posted by AElfwine Evenstar at 10:23 AM on June 10, 2012 [6 favorites]
The article seem pretty uncontroversial from where I'm sitting. No mention of communism just good solid social critique
Zizek, I've found, is quite capable of solid social criticism - which is why it's so frustrating when he insists on jumping off in the middle of a perfectly good lecture or essay into Lacanian psychoanalysis or contrarian neo-Stalinism, because (while he would doubtless differ) the latter really don't seem to be able to contribute anything at all to the issues at hand today.
posted by AdamCSnider at 10:46 AM on June 10, 2012 [1 favorite]
Zizek, I've found, is quite capable of solid social criticism - which is why it's so frustrating when he insists on jumping off in the middle of a perfectly good lecture or essay into Lacanian psychoanalysis or contrarian neo-Stalinism, because (while he would doubtless differ) the latter really don't seem to be able to contribute anything at all to the issues at hand today.
posted by AdamCSnider at 10:46 AM on June 10, 2012 [1 favorite]
As a Greek, I am a bit ... concerned that this Zizek dude is apparently one of the "spiritual fathers" of our new main left party (the quote is from the YT clip, from Mr. Tsipras himself.
Revolution, shmevolution. The Greek Left has been in permanent "revolutionary" mode for the last 40 years or so. What we've ended up with is a political dialectic that is mostly Leftish, with even the Right-wing parties adopting Left terms and policies to appeal to the Center, which at this point is to the Left of most of Europe. Well: the country is bankrupt because social policies require a functioning economy, correction, a functioning market economy, which Greece hasn't had for more or less the last 25 years.
I've had it with the theoreticians and academics of either side really, but Zizek... watch the clip.
posted by costas at 11:18 AM on June 10, 2012 [7 favorites]
Revolution, shmevolution. The Greek Left has been in permanent "revolutionary" mode for the last 40 years or so. What we've ended up with is a political dialectic that is mostly Leftish, with even the Right-wing parties adopting Left terms and policies to appeal to the Center, which at this point is to the Left of most of Europe. Well: the country is bankrupt because social policies require a functioning economy, correction, a functioning market economy, which Greece hasn't had for more or less the last 25 years.
I've had it with the theoreticians and academics of either side really, but Zizek... watch the clip.
posted by costas at 11:18 AM on June 10, 2012 [7 favorites]
costas: "but Zizek... watch the clip."
WTF, did he actually giggle while saying that you can't have an omelet without breaking some eggs? This guy is absolutely insane.
posted by gertzedek at 11:58 AM on June 10, 2012 [1 favorite]
WTF, did he actually giggle while saying that you can't have an omelet without breaking some eggs? This guy is absolutely insane.
posted by gertzedek at 11:58 AM on June 10, 2012 [1 favorite]
The Greeks are not passive victims: they are at war with the European economic establishment, and what they need is solidarity in their struggle, because it is our struggle too. ... By saving Greece from its so-called saviours, we also save Europe itself.
At war with the European establishment? Seriously?
How about stopping to beg for money from the eeevul European establishment then? I mean, you can't really be at war with someone and at the same time have them bankroll your schools, hospitals, police, government officials, etc. It makes you look .... wimpy.
And besides, what solutions does Zizek propose?
If Syriza stops the austerity measures, like they said they would, the IMF and the EU would stop the money flow to Athens, leaving the country immediately bankrupt. There would be a run on the banks, leading to economic collapse. The easiest, and therefore most likely, way to get money flowing again and avoid anarchy would be the return to the Drachma. That will immediately impoverish the majority of Greeks for the next few years. That is, as soon as the Drachma is introduced, it will devalue against the Euro. The result is that Greece will be able to pay pensions and government workers, but the recipient of those pensions and salaries will only be able to buy a fraction of goods produced outside of Greece (i.e. basically everything including not only cars and computers but also tomatoes and olive oil) than they could before.
This might actually be the best possible outcome, and Greece might be back on track within a decade or so. But Zizek is living in friggin lah-lah land if he believes that this is about some kind of war with some kind of European economic establishment, whatever that is supposed to be.
posted by sour cream at 11:59 AM on June 10, 2012 [5 favorites]
At war with the European establishment? Seriously?
How about stopping to beg for money from the eeevul European establishment then? I mean, you can't really be at war with someone and at the same time have them bankroll your schools, hospitals, police, government officials, etc. It makes you look .... wimpy.
And besides, what solutions does Zizek propose?
If Syriza stops the austerity measures, like they said they would, the IMF and the EU would stop the money flow to Athens, leaving the country immediately bankrupt. There would be a run on the banks, leading to economic collapse. The easiest, and therefore most likely, way to get money flowing again and avoid anarchy would be the return to the Drachma. That will immediately impoverish the majority of Greeks for the next few years. That is, as soon as the Drachma is introduced, it will devalue against the Euro. The result is that Greece will be able to pay pensions and government workers, but the recipient of those pensions and salaries will only be able to buy a fraction of goods produced outside of Greece (i.e. basically everything including not only cars and computers but also tomatoes and olive oil) than they could before.
This might actually be the best possible outcome, and Greece might be back on track within a decade or so. But Zizek is living in friggin lah-lah land if he believes that this is about some kind of war with some kind of European economic establishment, whatever that is supposed to be.
posted by sour cream at 11:59 AM on June 10, 2012 [5 favorites]
Greece is broken. Last thursday Ilias Kasidiaris apokespman for fascist Golden Dawn assaulted two leftist politicians on a live TV debate. Kasidieriaris remains at large probably because the police can´t be bothered to arrest him. Metafilter uber critics decide Zizek in a balanced and informative article in a literary magazine is too left wing. Bollocks to that.
posted by adamvasco at 12:17 PM on June 10, 2012 [19 favorites]
posted by adamvasco at 12:17 PM on June 10, 2012 [19 favorites]
Slavoj Žižek (Wikipedia), in case any wonders who this guy is.
posted by stbalbach at 12:23 PM on June 10, 2012 [1 favorite]
posted by stbalbach at 12:23 PM on June 10, 2012 [1 favorite]
adamvasco: the fact that both sides have their own mental health issues doesnt exactly make our (Greeks') choice any clearer...
posted by costas at 12:28 PM on June 10, 2012
posted by costas at 12:28 PM on June 10, 2012
what they need is solidarity in their struggle
Uh, does Žižek intend to show some of that solidarity himself, in the form of cold, hard cash to pay for his fellow university professors' salaries in Greece, or is he only going to contribute empty Lacanian blather?
posted by Skeptic at 12:31 PM on June 10, 2012 [1 favorite]
Uh, does Žižek intend to show some of that solidarity himself, in the form of cold, hard cash to pay for his fellow university professors' salaries in Greece, or is he only going to contribute empty Lacanian blather?
posted by Skeptic at 12:31 PM on June 10, 2012 [1 favorite]
You know I am so sick of this idiotic mindset. Yes, I know idiotic is a strong work. I am not directing it at any mefite, but I have to call this mindset what it is: idiotic. When the people stand up for their rights and for social justice they are somehow deadbeats and looking for a handout, but when bankers come within a nuthair of collapsing the world economy and then come looking for a bailout there is no problem. In fact any challenge to the bailout is immediately decried as delusional and dangerous. Here in the state our lawmakers were literally threatened with martial law if they did not bail out the banks.
posted by AElfwine Evenstar at 12:34 PM on June 10, 2012 [24 favorites]
posted by AElfwine Evenstar at 12:34 PM on June 10, 2012 [24 favorites]
Uh, does Žižek intend to show some of that solidarity himself, in the form of cold, hard cash to pay for his fellow university professors' salaries in Greece, or is he only going to contribute empty Lacanian blather?
Good critique. It cuts right to the heart of what was said in the article and destroys all positions that were presented.
posted by AElfwine Evenstar at 12:36 PM on June 10, 2012 [9 favorites]
Good critique. It cuts right to the heart of what was said in the article and destroys all positions that were presented.
posted by AElfwine Evenstar at 12:36 PM on June 10, 2012 [9 favorites]
*strong word
posted by AElfwine Evenstar at 12:37 PM on June 10, 2012 [1 favorite]
posted by AElfwine Evenstar at 12:37 PM on June 10, 2012 [1 favorite]
Apologies for the mess above.
Costas I tend to agree with you.
This morning I see our Spanishcrooks bankers have just had their bonuses confirmed by a possible Euro 100 billion bailout loan, sorry.
There is never any accountability for any of these parasitic bankers, politicians and their fellow travellers and I just wonder how long the rest of the populace will tolerate it.
posted by adamvasco at 12:46 PM on June 10, 2012 [3 favorites]
Costas I tend to agree with you.
This morning I see our Spanish
There is never any accountability for any of these parasitic bankers, politicians and their fellow travellers and I just wonder how long the rest of the populace will tolerate it.
posted by adamvasco at 12:46 PM on June 10, 2012 [3 favorites]
WTF, did he actually giggle while saying that you can't have an omelet without breaking some eggs? This guy is absolutely insane.
I like Gaiman's formulation in, I think, Neverwhere: You can't make an omelette without killing a few people!
Seems to get right at the heart of the matter for people who use the phrase in a political or social context.
posted by Justinian at 12:54 PM on June 10, 2012 [1 favorite]
I like Gaiman's formulation in, I think, Neverwhere: You can't make an omelette without killing a few people!
Seems to get right at the heart of the matter for people who use the phrase in a political or social context.
posted by Justinian at 12:54 PM on June 10, 2012 [1 favorite]
Unfortunately the police have become more militant and less reluctant to apply an array of force against it's own citizenry. I feel ever more inclined to believe that Democracy will need to defend itself once more with blood.
posted by Shit Parade at 12:55 PM on June 10, 2012
posted by Shit Parade at 12:55 PM on June 10, 2012
In Greece, the banks didn't cause the crisis: the state did, and it's the state that drove our banks to collapse. And the state went bankrupt by pretty much creating social policies that it couldn't pay for in a state-driven, business-unfriendly economy. This the opposite of the rest of the periphery.
posted by costas at 1:01 PM on June 10, 2012 [2 favorites]
posted by costas at 1:01 PM on June 10, 2012 [2 favorites]
Focusing on Zizek being an ass or a wise man is as useful as saying Bush is an idiot. It's colorful commentary, not a discussion on what ought to be done or not done and why.
Consider this:
Why? In the middle of a huge crisis, Adelson _expects_ the government to give some kind of subsidy (in form of reduced taxes, simplified permissions, etc) because he plans to build a giant fucking Vegas, the industrialized incarnation of smoke and mirrors.
Some will counter: but that will give spanish people a lot of jobs! Maybe so. Maybe a thousand, maybe two thousand, maybe less or more, but what's the business model that should finance this?
One that relies on human ignorance, implicitly promotes perpetuating human ignorance (once you know the Vegas games are rigged and you can't win more than you have spent, if you keep on playing..so you stop playing the game)... a Potemkin Economy of smoke and mirrors that would employ much less people than other Entertainment Circuses.
Instead, why isn't money being invested by privates enterpries on training unemployed people to do -other jobs-? Because it's expensive and they can't "own" people, they expect workers to train themselves and pay for their own training..and if your skills are no longer needed, too bad..it so happen that production requires a lot less workforce..and for any mass&cheap workforce there's always the rest of the globe, so you're fucked.
posted by elpapacito at 1:02 PM on June 10, 2012 [12 favorites]
Consider this:
Sheldon Adelson, a casino tycoon, is expected soon to choose between Madrid and Barcelona for a €16 billion ($21 billion) gambling resort. The euro-zone turmoil does not faze him: “It will take us four to five years,” he told Forbes magazine. “By then everything will be solved.” Mr Adelson’s Las Vegas Sands (LVS) hopes to create a “Euro Vegas”, capable of attracting the 1 billion people who live in the 50 countries within a five-hour flight from Spain. He chose the country because of the weather and because its unemployment rate, now at 23%, “assures us the support of the government”.Let's assume this piece of news is true. In my opinion, it's pure insanity.
Why? In the middle of a huge crisis, Adelson _expects_ the government to give some kind of subsidy (in form of reduced taxes, simplified permissions, etc) because he plans to build a giant fucking Vegas, the industrialized incarnation of smoke and mirrors.
Some will counter: but that will give spanish people a lot of jobs! Maybe so. Maybe a thousand, maybe two thousand, maybe less or more, but what's the business model that should finance this?
One that relies on human ignorance, implicitly promotes perpetuating human ignorance (once you know the Vegas games are rigged and you can't win more than you have spent, if you keep on playing..so you stop playing the game)... a Potemkin Economy of smoke and mirrors that would employ much less people than other Entertainment Circuses.
Instead, why isn't money being invested by privates enterpries on training unemployed people to do -other jobs-? Because it's expensive and they can't "own" people, they expect workers to train themselves and pay for their own training..and if your skills are no longer needed, too bad..it so happen that production requires a lot less workforce..and for any mass&cheap workforce there's always the rest of the globe, so you're fucked.
posted by elpapacito at 1:02 PM on June 10, 2012 [12 favorites]
The "OMG I can't believe he said omelet" people: you know that Z has written thousands of words, in more than one of his books, unpacking that cliche as an encapsulation of what (he claims) Lacan can bring to post-Marxist political thought, right? I'm sure you're not just trying to score cheap LOLPoliticalViolence points.
posted by RogerB at 1:04 PM on June 10, 2012 [7 favorites]
posted by RogerB at 1:04 PM on June 10, 2012 [7 favorites]
It doesn't seem to bother him that under his communist utopia, most of the philosophy, books and movies he adores would never have been made.Yes, obviously anyone who critiques capitalist excess is in love with Stalin. If you're not in favor of Goldman sachs alumni running your fiscal union currency zone then you're totally the same as Mao, and would definitely be censoring pop culture and everything else.
As a Greek, I am a bit ... concerned that this Zizek dude is apparently one of the "spiritual fathers" of our new main left party (the quote is from the YT clip, from Mr. Tsipras himself.Oh, a bunch of out of context clips. And captions in a language I can't read! Compelling footage!
How about stopping to beg for money from the eeevul European establishment then? I mean, you can't really be at war with someone and at the same time have them bankroll your schools, hospitals, police, government officials, etc. It makes you look .... wimpy.There are a lot of strings that come with that money. Here's the thing: If Greece had it's own currency, it could devalue. In that case, banks, schools, hospitals, police and government officials would instantly become much cheaper. So would factory workers, exports and tourism for foreigners. That would make the economy grow. People would lose wealth initially, but unemployment would drop, solving a lot of the social problems.
Just look at Iceland, they have their own currency, and their banks were hit extremely hard by the banking collapse. Yet, they devalued their currency, let the banks fail (It would have been completely impossible for them to cover their banks losses) and recovered quickly.
Or look at the countries with the highest debt/GDP ratios. It's the US, UK and Japan. The US and Japan have the lowest borrowing costs in the world, and the UK isn't anywhere near the crisis levels in other eurozone countries. People know that they can devalue their currencies if they need too. But the same is not true with Greece or spain, portugul, italy, etc.
So the solution is simple. Declare bankruptcy and break away from the Euro. The only question is how much "Punishment" the rest of the Eurozone decides to inflict (by revoking their citizens right to free travel, kicking them out of the single market, etc) But in that case, the problems will be the punishment, rather then the act of disconnection.
posted by delmoi at 1:04 PM on June 10, 2012 [14 favorites]
I've read a lot of Slavoj Zizek, both his popular writings and his more straightforwardly theoretical works (I'm now reading 'Less Than Nothing', which I'm really enjoying). I read Zizek because I find him extremely intelligent, articulate, and informed, and because I learn a ton from reading him, either directly or as a result of independently following up on connections I've made myself. For me, he's one of the most stimulating writers I know of. He doesn't speak for me, and I don't need to defend him. He's much more knowledgeable than I am about most, maybe all, philosophical topics, but that doesn't mean that I'm his follower, or that I don't think for myself. I've never met the guy - he could be a total creep, I have no idea.
I think it's possible that I wouldn't be able to read him if I thought he was a neo- or crypto-Stalinist, because I would find that repulsive and ugly. I still might, though, because of the other benefits I would still likely get. However, I don't think that's a plausible interpretation of his beliefs or political orientation. I found the following after just a few moments searching, and I think it's pretty representative of Zizek's attitude towards Stalin. He seems pretty clearly to be saying that Stalinism was "an authentic revolution perverted", and he seems to believe (not just based on this quote) that a successful leftist or Communist revolution is possible and/or desirable. I don't agree, but I don't think Zizek is an idiot or an asshole for thinking so.
The quote's from a 2005 article in the same magazine, the London Review of Books, called "The Two Totalitarianisms":
"It’s appropriate, then, to recognise the tragedy of the October Revolution: both its unique emancipatory potential and the historical necessity of its Stalinist outcome. We should have the honesty to acknowledge that the Stalinist purges were in a way more ‘irrational’ than the Fascist violence: its excess is an unmistakable sign that, in contrast to Fascism, Stalinism was a case of an authentic revolution perverted. Under Fascism, even in Nazi Germany, it was possible to survive, to maintain the appearance of a ‘normal’ everyday life, if one did not involve oneself in any oppositional political activity (and, of course, if one were not Jewish). Under Stalin in the late 1930s, on the other hand, nobody was safe: anyone could be unexpectedly denounced, arrested and shot as a traitor. The irrationality of Nazism was ‘condensed’ in anti-semitism – in its belief in the Jewish plot – while the irrationality of Stalinism pervaded the entire social body. For that reason, Nazi police investigators looked for proofs and traces of active opposition to the regime, whereas Stalin’s investigators were happy to fabricate evidence, invent plots etc."
posted by facetious at 1:05 PM on June 10, 2012 [12 favorites]
I think it's possible that I wouldn't be able to read him if I thought he was a neo- or crypto-Stalinist, because I would find that repulsive and ugly. I still might, though, because of the other benefits I would still likely get. However, I don't think that's a plausible interpretation of his beliefs or political orientation. I found the following after just a few moments searching, and I think it's pretty representative of Zizek's attitude towards Stalin. He seems pretty clearly to be saying that Stalinism was "an authentic revolution perverted", and he seems to believe (not just based on this quote) that a successful leftist or Communist revolution is possible and/or desirable. I don't agree, but I don't think Zizek is an idiot or an asshole for thinking so.
The quote's from a 2005 article in the same magazine, the London Review of Books, called "The Two Totalitarianisms":
"It’s appropriate, then, to recognise the tragedy of the October Revolution: both its unique emancipatory potential and the historical necessity of its Stalinist outcome. We should have the honesty to acknowledge that the Stalinist purges were in a way more ‘irrational’ than the Fascist violence: its excess is an unmistakable sign that, in contrast to Fascism, Stalinism was a case of an authentic revolution perverted. Under Fascism, even in Nazi Germany, it was possible to survive, to maintain the appearance of a ‘normal’ everyday life, if one did not involve oneself in any oppositional political activity (and, of course, if one were not Jewish). Under Stalin in the late 1930s, on the other hand, nobody was safe: anyone could be unexpectedly denounced, arrested and shot as a traitor. The irrationality of Nazism was ‘condensed’ in anti-semitism – in its belief in the Jewish plot – while the irrationality of Stalinism pervaded the entire social body. For that reason, Nazi police investigators looked for proofs and traces of active opposition to the regime, whereas Stalin’s investigators were happy to fabricate evidence, invent plots etc."
posted by facetious at 1:05 PM on June 10, 2012 [12 favorites]
AElfwine, I'm sorry, but the problem is very simple: money. I'm all for standing for social rights and justice, but ultimately somebody has to pay the salaries of teachers, nurses and university professors. The Greek government has had to ask for a lot of money, money which has had to come from the public purses from all the other European countries. And their voters, not "the European establishment" want it to be eventually paid back because they need it for their own rights and social justice. Now, if Tsipras has found some magic formula to find that money, great. If it involves soaking some greedy bankers, even better (like adamvasco, as a Spaniard, I'm not in a particularly friendly mood towards bankers these days). But if all he has to offer are Žižek's empty words, I'm afraid that the Greek people are not out of the woods.
posted by Skeptic at 1:05 PM on June 10, 2012 [1 favorite]
posted by Skeptic at 1:05 PM on June 10, 2012 [1 favorite]
delmoi, Tsipras is not proposing to leave the euro. He isn't doing it because 70% of Greek voters want to remain in the euro. I also think that your proposed solution would be disastrous for a country that, notably, needs to import all of its energy in a hard currency.
But in any case, whether it is a good or a bad solution, if you think that this is Tsipras real intention, then he is simply lying to his voters.
posted by Skeptic at 1:09 PM on June 10, 2012 [1 favorite]
But in any case, whether it is a good or a bad solution, if you think that this is Tsipras real intention, then he is simply lying to his voters.
posted by Skeptic at 1:09 PM on June 10, 2012 [1 favorite]
I find him extremely intelligent, articulate, and informed...
Nah, he's full of shit.
posted by R. Schlock at 1:12 PM on June 10, 2012 [1 favorite]
Nah, he's full of shit.
posted by R. Schlock at 1:12 PM on June 10, 2012 [1 favorite]
The Eurozone is run by lunatics. The greeks are, sensibly, concerned about being lead off a cliff by them. As the french were as shown by the election of "Far Left" (and Socialist)
"but the problem is very simple: money." Is a cute slogan, but money itself is anything but simple. So saying that the problem is money isn't the same as saying the problem is simple at all.
In the US, if one state has a bad economic problem, it isn't nearly as big of a deal for the citizens, because social programs are mainly paid for by the federal government. If Mississippi blows up it's economy, tax payers in NY and California will still pay for the hospitals, doctors and nurses in the state. They'll pay for some of the teachers and they'll pay for professors (through student loans) They also pay for roads and other infrastructure.
And after 230 years of this, the result is that our poorest states are actually richer, per capita then many European states. Mississippi (which is the poorest state in the union) actually has a per-capita GDP of about €26.36k, compared to €26.3 for France.
The third poorest, West Virginia has a per-capita GDP of €28k, which is higher then the United Kingdom at €27k. If it hadn't been for those transfers over the decades it's extremely unlikely that those states would have anywhere near those levels of wealth.
It's likely that the imbalance of tax revenue to spending in states will persist forever, and poor states will always be sucking in more money then they draw. And while there is some minor complaining, no one is seriously arguing that they be cut off and the people there be left to fend for themselves.
posted by delmoi at 1:26 PM on June 10, 2012 [8 favorites]
AElfwine, I'm sorry, but the problem is very simple: money. I'm all for standing for social rights and justice, but ultimately somebody has to pay the salaries of teachers, nurses and university professors. The Greek government has had to ask for a lot of moneyYeah, and as I said, those people would cost less if they were paid in Drachma and the government devalued the currency.
"but the problem is very simple: money." Is a cute slogan, but money itself is anything but simple. So saying that the problem is money isn't the same as saying the problem is simple at all.
delmoi, Tsipras is not proposing to leave the euro. He isn't doing it because 70% of Greek voters want to remain in the euro.Perhaps that's their preference, but they are clearly unhappy with the "deal" that they got, which is why they kicked out the leaders who agreed too it. If the Eurozone wants to Greece to stay in the zone, then they have to offer the people who live there a deal they would be willing to accept.
In the US, if one state has a bad economic problem, it isn't nearly as big of a deal for the citizens, because social programs are mainly paid for by the federal government. If Mississippi blows up it's economy, tax payers in NY and California will still pay for the hospitals, doctors and nurses in the state. They'll pay for some of the teachers and they'll pay for professors (through student loans) They also pay for roads and other infrastructure.
And after 230 years of this, the result is that our poorest states are actually richer, per capita then many European states. Mississippi (which is the poorest state in the union) actually has a per-capita GDP of about €26.36k, compared to €26.3 for France.
The third poorest, West Virginia has a per-capita GDP of €28k, which is higher then the United Kingdom at €27k. If it hadn't been for those transfers over the decades it's extremely unlikely that those states would have anywhere near those levels of wealth.
It's likely that the imbalance of tax revenue to spending in states will persist forever, and poor states will always be sucking in more money then they draw. And while there is some minor complaining, no one is seriously arguing that they be cut off and the people there be left to fend for themselves.
posted by delmoi at 1:26 PM on June 10, 2012 [8 favorites]
And after 230 years of this, the result is that our poorest states are actually richer, per capita then many European states. Mississippi (which is the poorest state in the union) actually has a per-capita GDP of about €26.36k, compared to €26.3 for France.
I can't remember where I saw it, but it turns out that lack of infrastructure actually adds to the GPD, whereas government health care and other things that are generally believed to be a good thing (at least outside the US) contribute comparatively less (than price-inflated privatized healthcare).
Thus, per-capita GDP is a notoriously unreliable indicator of the standard of living.
posted by sour cream at 1:47 PM on June 10, 2012 [1 favorite]
I can't remember where I saw it, but it turns out that lack of infrastructure actually adds to the GPD, whereas government health care and other things that are generally believed to be a good thing (at least outside the US) contribute comparatively less (than price-inflated privatized healthcare).
Thus, per-capita GDP is a notoriously unreliable indicator of the standard of living.
posted by sour cream at 1:47 PM on June 10, 2012 [1 favorite]
If the Eurozone wants to Greece to stay in the zone, then they have to offer the people who live there a deal they would be willing to accept.
If you read the German press, you'd notice that the average German voter would kick Greece out of the eurozone sooner rather than later. The same is true over most of Northern Europe, from Holland to Finland. So, if Tsipras goes to "the EU political establishment" and asks new terms for Greece's debt in exchange of staying in the eurozone, he'll be laughed out of the room.
Also, if you think that François Hollande and his French Socialist Party are "far left", you are very much deluded. They are, BTW, in the same Party of European Socialists as the Greek PASOK which agreed to the terms of the bailout and was, as you point out, kicked out by the voters.
posted by Skeptic at 1:50 PM on June 10, 2012 [1 favorite]
If you read the German press, you'd notice that the average German voter would kick Greece out of the eurozone sooner rather than later. The same is true over most of Northern Europe, from Holland to Finland. So, if Tsipras goes to "the EU political establishment" and asks new terms for Greece's debt in exchange of staying in the eurozone, he'll be laughed out of the room.
Also, if you think that François Hollande and his French Socialist Party are "far left", you are very much deluded. They are, BTW, in the same Party of European Socialists as the Greek PASOK which agreed to the terms of the bailout and was, as you point out, kicked out by the voters.
posted by Skeptic at 1:50 PM on June 10, 2012 [1 favorite]
I didn't say GDP indicated standard of living, but rather transfer payments are helpful in keeping states wealthy overall. It depends on
posted by delmoi at 2:06 PM on June 10, 2012
I can't remember where I saw it, but it turns out that lack of infrastructure actually adds to the GPDYeah... that sounds like BS to me.
Also, if you think that François Hollande and his French Socialist Party are "far left", you are very much deluded.I'm sure he would be far left by US standards. Thus the quotes.
posted by delmoi at 2:06 PM on June 10, 2012
Yeah... that sounds like BS to me.
This isn't the source I had in mind, but Wikipedia says this: "For example, government-provided clean water confers substantial benefits above its cost. Ironically, lack of such infrastructure which would result in higher water prices (and probably higher hospital and medication expenditures) would be reflected as a higher GDP."
Or take public transport: If everyone and their Grandma has a car or two and drives around a lot, that is reflected by higher GDP. More efficient modes of transportation (mass transit) on the other hand lead to lower GDP.
posted by sour cream at 2:16 PM on June 10, 2012 [1 favorite]
This isn't the source I had in mind, but Wikipedia says this: "For example, government-provided clean water confers substantial benefits above its cost. Ironically, lack of such infrastructure which would result in higher water prices (and probably higher hospital and medication expenditures) would be reflected as a higher GDP."
Or take public transport: If everyone and their Grandma has a car or two and drives around a lot, that is reflected by higher GDP. More efficient modes of transportation (mass transit) on the other hand lead to lower GDP.
posted by sour cream at 2:16 PM on June 10, 2012 [1 favorite]
Yeah, come on, delmoi, go try being an average (or even better, poor) person in Mississippi and in France and tell me the former is better. What a strange argument.
posted by adamdschneider at 2:27 PM on June 10, 2012 [2 favorites]
posted by adamdschneider at 2:27 PM on June 10, 2012 [2 favorites]
Well that essay wasn't at all interesting.
If you read the German press, you'd notice that the average German voter would kick Greece out of the eurozone sooner rather than later.
I'll believe it when I see it. Should Greece be allowed to leave the union then, well, that would be the end of the union. The German people may not realize this but the German elite surely recognize this and, in light of this political reality, they have to put on this ongoing, pointless theater where they pretend to get tough on the Greeks and then eventually give them more money. They can't and won't take the initiative; instead they will wait until their hand is forced and then they'll do what they should've but couldn't do earlier. It's a very expensive game but that's politics.
So the solution is simple. Declare bankruptcy and break away from the Euro. The only question is how much "Punishment" the rest of the Eurozone decides to inflict (by revoking their citizens right to free travel, kicking them out of the single market, etc)
The only real question is what will happen to interest rates. That's what this is about, after all, and that's the only thing that matters in the short term and even more in the long term. So if Greece were to leave what kind of rates would they face on the open market? What kind of rates would Ireland, Portugal, Spain and Italy and even France see? What kind of rates would depositors demand for putting money in the banks of these companies? (Or would they even put money in these banks? Could we see massive capital flight out of these companies?)
My own suspicion is that the ultimate cost of allowing Greece to leave (effectively making membership in the union optional) is much, much more than the cost of bailing out Greece forever. And if people think this cost will stop at Europe's borders then they are very mistaken. I expect we'd see a revaluation of the risk of all sovereign debts. Globally rising rates at the very worst time could tumble us all into a real depression. And while a depression may actually be what's needed, I think the elites understand that it'd also be political suicide. (Really, it's hard to judge the real cost of a Greek exit but I bet even the trillion dollar figure being thrown around is pretty low.)
The Greeks are not passive victims: they are at war with the European economic establishment, and what they need is solidarity in their struggle, because it is our struggle too.
This is nonsense. And, man, why does the LRB keep printing this nonsense about the European crisis? And how do they manage to so reliably find the fools to shit this stuff out? This is not a war. The Greeks have absolutely no desire to fight Europe and the "neoliberal establishment." This is a control failure. What's needed is the exact opposite of what Zizek recommends: Europe needs more democracy, more integration, more finely grained control mechanisms so that the only two choices in a crisis are not (1) endless bailouts (2) destroy the union. If Zizek had any kind of clue at all he wouldn't be arguing for the Greeks to go to war, he'd be arguing for the Europe to grow up and get its shit together and become a real union of republics.
(Seriously, we should probably stop posting nonsense from the LRB. Between this and the last post I've seen nothing but complete nonsense out the LRB.)
posted by nixerman at 2:33 PM on June 10, 2012 [6 favorites]
If you read the German press, you'd notice that the average German voter would kick Greece out of the eurozone sooner rather than later.
I'll believe it when I see it. Should Greece be allowed to leave the union then, well, that would be the end of the union. The German people may not realize this but the German elite surely recognize this and, in light of this political reality, they have to put on this ongoing, pointless theater where they pretend to get tough on the Greeks and then eventually give them more money. They can't and won't take the initiative; instead they will wait until their hand is forced and then they'll do what they should've but couldn't do earlier. It's a very expensive game but that's politics.
So the solution is simple. Declare bankruptcy and break away from the Euro. The only question is how much "Punishment" the rest of the Eurozone decides to inflict (by revoking their citizens right to free travel, kicking them out of the single market, etc)
The only real question is what will happen to interest rates. That's what this is about, after all, and that's the only thing that matters in the short term and even more in the long term. So if Greece were to leave what kind of rates would they face on the open market? What kind of rates would Ireland, Portugal, Spain and Italy and even France see? What kind of rates would depositors demand for putting money in the banks of these companies? (Or would they even put money in these banks? Could we see massive capital flight out of these companies?)
My own suspicion is that the ultimate cost of allowing Greece to leave (effectively making membership in the union optional) is much, much more than the cost of bailing out Greece forever. And if people think this cost will stop at Europe's borders then they are very mistaken. I expect we'd see a revaluation of the risk of all sovereign debts. Globally rising rates at the very worst time could tumble us all into a real depression. And while a depression may actually be what's needed, I think the elites understand that it'd also be political suicide. (Really, it's hard to judge the real cost of a Greek exit but I bet even the trillion dollar figure being thrown around is pretty low.)
The Greeks are not passive victims: they are at war with the European economic establishment, and what they need is solidarity in their struggle, because it is our struggle too.
This is nonsense. And, man, why does the LRB keep printing this nonsense about the European crisis? And how do they manage to so reliably find the fools to shit this stuff out? This is not a war. The Greeks have absolutely no desire to fight Europe and the "neoliberal establishment." This is a control failure. What's needed is the exact opposite of what Zizek recommends: Europe needs more democracy, more integration, more finely grained control mechanisms so that the only two choices in a crisis are not (1) endless bailouts (2) destroy the union. If Zizek had any kind of clue at all he wouldn't be arguing for the Greeks to go to war, he'd be arguing for the Europe to grow up and get its shit together and become a real union of republics.
(Seriously, we should probably stop posting nonsense from the LRB. Between this and the last post I've seen nothing but complete nonsense out the LRB.)
posted by nixerman at 2:33 PM on June 10, 2012 [6 favorites]
It's worth pointing out—wrt conversation above about what German voters might like to do to Greece—that it isn't legally possible to force a country out of the eurozone.
posted by nfg at 3:06 PM on June 10, 2012
posted by nfg at 3:06 PM on June 10, 2012
And the state went bankrupt by pretty much creating social policies that it couldn't pay for in a state-driven, business-unfriendly economy.
That's an extremely selective interpretation of what happened. I would argue endemic fraud (especially tax), corruption and ridiculous lending and borrowing contributed to the collapse much more than social policies. Of course, if the GFC hadn't happened everyone would probably still be pretending that Greece was in great shape and that all those loans were totally solid...
posted by smoke at 3:53 PM on June 10, 2012 [3 favorites]
That's an extremely selective interpretation of what happened. I would argue endemic fraud (especially tax), corruption and ridiculous lending and borrowing contributed to the collapse much more than social policies. Of course, if the GFC hadn't happened everyone would probably still be pretending that Greece was in great shape and that all those loans were totally solid...
posted by smoke at 3:53 PM on June 10, 2012 [3 favorites]
Yeah, come on, delmoi, go try being an average (or even better, poor) person in Mississippi and in France and tell me the former is better. What a strange argument.
The people I know from Mississippi seem to like it alright. The state government employees are not having their wages halved like I have heard is happening in Greece.
posted by bukvich at 4:06 PM on June 10, 2012
The people I know from Mississippi seem to like it alright. The state government employees are not having their wages halved like I have heard is happening in Greece.
posted by bukvich at 4:06 PM on June 10, 2012
I don't think Lacan is babble, but I don't think that Zizek uses him well, and I don't think that it's entirely useful for every circumstance.
I keep wondering, re:austerity measures if Spain, Ireland or Greece said, nope we ain't playing this game, what would happen?
posted by PinkMoose at 4:24 PM on June 10, 2012
I keep wondering, re:austerity measures if Spain, Ireland or Greece said, nope we ain't playing this game, what would happen?
posted by PinkMoose at 4:24 PM on June 10, 2012
The people I know from Mississippi seem to like it alright. The state government employees are not having their wages halved like I have heard is happening in Greece.
What social class are they? Have they lived in France? Did I mention Greece?
posted by adamdschneider at 4:30 PM on June 10, 2012 [2 favorites]
What social class are they? Have they lived in France? Did I mention Greece?
posted by adamdschneider at 4:30 PM on June 10, 2012 [2 favorites]
If it makes you feel any better, it was humiliatingly recently that I figured out that Tommy Lee and Tommy Lee Jones were not the same person.
It was quite a while before I figured out that Stephen Colbert and Mo Rocca were not the same person playing two different characters on The Daily Show.
posted by deanc at 4:43 PM on June 10, 2012
It was quite a while before I figured out that Stephen Colbert and Mo Rocca were not the same person playing two different characters on The Daily Show.
posted by deanc at 4:43 PM on June 10, 2012
Saying the politics of austerity that have caused Greece’s predicament as the author does gets it totally backwards. Why is austerity necessary? Because Europeans, and Greeks more than anyone else, have for years lived well beyond their means, with vast, unaffordable social safety networks and deep-rooted senses of entitlement fueled by debt. In Greece's case, the government outright lied for years about the size of its deficits, but in all cases Europeans are collectively guilty of looking the other way as every country violated its deficit targets.Public debt as a percentage of GDP in the EU is lower than that of the US, and roughly the same as Canada. Scandinavian countries, which are known for the size and comprehensiveness of their welfare, typically have percentages less than half that of the US. If austerity is not needed in the US, then it's certainly not needed in the EU.
posted by Jehan at 4:44 PM on June 10, 2012 [7 favorites]
delmoi, Tsipras is not proposing to leave the euro. He isn't doing it because 70% of Greek voters want to remain in the euro.
Yes, staying in the Euro while ending the austerity policies and telling Greece's creditors to pound sand is pretty much the "have your cake and eat it too" solution.
Basically, the solution is either to lose the Euro or for Germany to pretty much dump mass amounts of money into Greece so that the country can maintain public spending at a level that will preserve living standards and prevent an economic downward spiral.
And since the latter isn't going to happen, the solution left is the former.
posted by deanc at 4:47 PM on June 10, 2012
Yes, staying in the Euro while ending the austerity policies and telling Greece's creditors to pound sand is pretty much the "have your cake and eat it too" solution.
Basically, the solution is either to lose the Euro or for Germany to pretty much dump mass amounts of money into Greece so that the country can maintain public spending at a level that will preserve living standards and prevent an economic downward spiral.
And since the latter isn't going to happen, the solution left is the former.
posted by deanc at 4:47 PM on June 10, 2012
Why is austerity necessary? Because Europeans, and Greeks more than anyone else, have for years lived well beyond their means, with vast, unaffordable social safety networks and deep-rooted senses of entitlement fueled by debt.
Most people, when saddled with more debt than they can handle, do not starve themselves and their children of food and education in the hopes that this will get them out from under their predicament. Instead, they declare bankruptcy, wipe out their debts, and reorganize.
Around the world, and in the EU specifically (including the UK, which is outside the Eurozone), all we see is that each round of austerity causes the economy to get worse and causes deficits to increase.
It looks like the EU is starting to learn its lesson with Spain and has decided simply to shovel money into the country without insisting on major budget cutting. We'll see if they recover.
posted by deanc at 4:51 PM on June 10, 2012 [1 favorite]
Most people, when saddled with more debt than they can handle, do not starve themselves and their children of food and education in the hopes that this will get them out from under their predicament. Instead, they declare bankruptcy, wipe out their debts, and reorganize.
Around the world, and in the EU specifically (including the UK, which is outside the Eurozone), all we see is that each round of austerity causes the economy to get worse and causes deficits to increase.
It looks like the EU is starting to learn its lesson with Spain and has decided simply to shovel money into the country without insisting on major budget cutting. We'll see if they recover.
posted by deanc at 4:51 PM on June 10, 2012 [1 favorite]
I thought and Slavoj Žižek and Željko Ivanek were the same man, leading a crazy polymath double existence. Also, William F. Buckley and William H. Macy.
If it makes you feel any better, it was humiliatingly recently that I figured out that Tommy Lee and Tommy Lee Jones were not the same person.
When I was a little kid, it took me a while to sort out that Jerry Lewis and Jerry Lee Lewis were two different people. My young brain had a great deal of trouble trying to comprehend how the same person could be responsible for both "Great Balls of Fire" and "The Nutty Professor."
posted by Nat "King" Cole Porter Wagoner at 5:12 PM on June 10, 2012 [3 favorites]
If it makes you feel any better, it was humiliatingly recently that I figured out that Tommy Lee and Tommy Lee Jones were not the same person.
When I was a little kid, it took me a while to sort out that Jerry Lewis and Jerry Lee Lewis were two different people. My young brain had a great deal of trouble trying to comprehend how the same person could be responsible for both "Great Balls of Fire" and "The Nutty Professor."
posted by Nat "King" Cole Porter Wagoner at 5:12 PM on June 10, 2012 [3 favorites]
I swear this is not a joke. For quite some time I didn't understand why, or how, György Lukács would make Star Wars and also write the incomprehensible books that my older cousins had lying around.
posted by kandinski at 5:26 PM on June 10, 2012 [12 favorites]
posted by kandinski at 5:26 PM on June 10, 2012 [12 favorites]
I was seven.
posted by kandinski at 5:27 PM on June 10, 2012 [1 favorite]
posted by kandinski at 5:27 PM on June 10, 2012 [1 favorite]
Is the Euro Crisis a Class Issue? Do these Austerity Measures make the working class in Greece pay for the excesses of financial speculators?
posted by ovvl at 5:44 PM on June 10, 2012 [1 favorite]
posted by ovvl at 5:44 PM on June 10, 2012 [1 favorite]
Yeah, come on, delmoi, go try being an average (or even better, poor) person in Mississippi and in France and tell me the former is better. What a strange argument.
There's no doubt that being poor in france is better then being poor in france then mississippi. If your dead average, though it may be abouut the same as in mississippi. I've never been there, but I doubt its that different then the rest of the us as far as the typical suburbanite. It depends on what you. Value too. If you like driving a gas guzzling suv its probably nice.
Anyway, the main point is that while it's its about the same as france the real point is that its much nicer now then greece or spain or something. No matter how bad it is in mississippi, the social services are paid for by people in other states
posted by delmoi at 5:46 PM on June 10, 2012
There's no doubt that being poor in france is better then being poor in france then mississippi. If your dead average, though it may be abouut the same as in mississippi. I've never been there, but I doubt its that different then the rest of the us as far as the typical suburbanite. It depends on what you. Value too. If you like driving a gas guzzling suv its probably nice.
Anyway, the main point is that while it's its about the same as france the real point is that its much nicer now then greece or spain or something. No matter how bad it is in mississippi, the social services are paid for by people in other states
posted by delmoi at 5:46 PM on June 10, 2012
Why is austerity necessary? Because Europeans, and Greeks more than anyone else, have for years lived well beyond their means, with vast, unaffordable social safety networks and deep-rooted senses of entitlement fueled by debt.
It's been pointed out many, many times that Spain was running budget surpluses until the real estate bubble popped.
posted by gimonca at 5:56 PM on June 10, 2012 [5 favorites]
It's been pointed out many, many times that Spain was running budget surpluses until the real estate bubble popped.
posted by gimonca at 5:56 PM on June 10, 2012 [5 favorites]
You can only escape reality for so long. You can't force people to lend to you, and, if you've joined a common currency, you can't lend to yourself by printing money
Right, but thee question is, why is austerity worse then leaving the euro so the can devalue and lend to themselves? It seems like, for the average person, it would be a lot a much less painful solution, and if austerity and exit and devaluatuion were put to a vote, why would the average greek vote for austerity over exit and devaluation? (Obvoiusly they would want to keep their current euro savings, which should be possible)
posted by delmoi at 5:59 PM on June 10, 2012
Right, but thee question is, why is austerity worse then leaving the euro so the can devalue and lend to themselves? It seems like, for the average person, it would be a lot a much less painful solution, and if austerity and exit and devaluatuion were put to a vote, why would the average greek vote for austerity over exit and devaluation? (Obvoiusly they would want to keep their current euro savings, which should be possible)
posted by delmoi at 5:59 PM on June 10, 2012
I'm rather ignorant about all of the issues surrounding the whole Greek debt crisis (despite my attempts at finding articles that provide both a critical and balanced viewpoint). Thanks, MeFi -- and especially folks like delmoi, nixerman, and sour cream -- for helping to clarify the issues.
It seems like whatever Greece does, the common folk are fucked. If the European people want to condemn the Greeks to a decade of misery by either forcing them out of the EU or imposing draconian austerity measures, then Europe is no more civil than the US and no more able to embrace cultural heterogeneity.
Of course -- as Zizek notes -- the Greeks aren't victims; they're culpable as well. How many billions in taxes have both the rich and middle class alike avoided? Any government that's legitimately "for the people" should claw back as much as that revenue as possible and use it to alleviate the suffering of the masses as the country undergoes hard times.
As for the EU, if they wanted to establish a more enlightened and perfect union, they would pay specialists from other countries to come to Greece and other less advanced countries to train workers in the fields where there's high demand. Look at Israel and Singapore. They get by with virtually zero natural resources. Such a training and education program would pay the more successful professionals of advanced economies to improve the odds of the less advanced economies. Everyone benefits at least a little.
I wonder if the European elite would ever embrace a massive program of free or low-cost training. The corporate elite in America seem to relish an uneducated, uninformed working class. I hope Europe's rich realize that, ultimately, we're all in this together.
posted by GnomeChompsky at 6:05 PM on June 10, 2012 [1 favorite]
It seems like whatever Greece does, the common folk are fucked. If the European people want to condemn the Greeks to a decade of misery by either forcing them out of the EU or imposing draconian austerity measures, then Europe is no more civil than the US and no more able to embrace cultural heterogeneity.
Of course -- as Zizek notes -- the Greeks aren't victims; they're culpable as well. How many billions in taxes have both the rich and middle class alike avoided? Any government that's legitimately "for the people" should claw back as much as that revenue as possible and use it to alleviate the suffering of the masses as the country undergoes hard times.
As for the EU, if they wanted to establish a more enlightened and perfect union, they would pay specialists from other countries to come to Greece and other less advanced countries to train workers in the fields where there's high demand. Look at Israel and Singapore. They get by with virtually zero natural resources. Such a training and education program would pay the more successful professionals of advanced economies to improve the odds of the less advanced economies. Everyone benefits at least a little.
I wonder if the European elite would ever embrace a massive program of free or low-cost training. The corporate elite in America seem to relish an uneducated, uninformed working class. I hope Europe's rich realize that, ultimately, we're all in this together.
posted by GnomeChompsky at 6:05 PM on June 10, 2012 [1 favorite]
with vast, unaffordable social safety networks
Ha, vast is the last adjective anyone in Greece would think to use. The problem is efficiency (and thus funding), not size and the social safety networks are arguably not the main issue.
posted by ersatz at 6:39 PM on June 10, 2012
Ha, vast is the last adjective anyone in Greece would think to use. The problem is efficiency (and thus funding), not size and the social safety networks are arguably not the main issue.
posted by ersatz at 6:39 PM on June 10, 2012
Can somebody who understands these things explain to me how devaluing your currency does not amount to telling your creditors to go pound sand?
posted by flabdablet at 7:21 PM on June 10, 2012
posted by flabdablet at 7:21 PM on June 10, 2012
It does, flabdablet. That's why "the elite" hate inflation so much (which is essentially currency devaluation in a global marketplace).
posted by GnomeChompsky at 7:24 PM on June 10, 2012 [2 favorites]
posted by GnomeChompsky at 7:24 PM on June 10, 2012 [2 favorites]
That's what I thought. So why do I hear so many pundits claiming that Greece dropping the Euro would somehow be a better option than negotiating with its creditors in order to straight-up default on some portion of its debt?
posted by flabdablet at 8:39 PM on June 10, 2012
posted by flabdablet at 8:39 PM on June 10, 2012
Returning to the Drachma (and an ensuing devaluation) would do a few extra things:
1) Lower real wages (at least for potential foreign investors), making Greek labor cheaper and drawing foreign investment.
2) Decrease the cost of Greek exports on the international market (though it would also increase the cost of imports).
3) Make Greece more attractive to tourists since their money would go farther.
It may do some other things as well, but those are three of the biggies.
posted by GnomeChompsky at 8:46 PM on June 10, 2012
1) Lower real wages (at least for potential foreign investors), making Greek labor cheaper and drawing foreign investment.
2) Decrease the cost of Greek exports on the international market (though it would also increase the cost of imports).
3) Make Greece more attractive to tourists since their money would go farther.
It may do some other things as well, but those are three of the biggies.
posted by GnomeChompsky at 8:46 PM on June 10, 2012
Seems to me that (3) is just a particular case of (2), and that with unemployment rising the way it is then (1) is going to happen anyway which will naturally result in (2) in due course.
It also seems to me that switching to a devalued drachma, as opposed to sticking with the Euro and part-defaulting and letting (1) (2) and (3) settle themselves out, would mainly penalize Greeks with savings. Are there enough Greeks with savings that pickpocketing all of them would help Greece recover more quickly?
posted by flabdablet at 8:58 PM on June 10, 2012
It also seems to me that switching to a devalued drachma, as opposed to sticking with the Euro and part-defaulting and letting (1) (2) and (3) settle themselves out, would mainly penalize Greeks with savings. Are there enough Greeks with savings that pickpocketing all of them would help Greece recover more quickly?
posted by flabdablet at 8:58 PM on June 10, 2012
Everything I know about Europe I learned from Žižek.
posted by Apocryphon at 9:57 PM on June 10, 2012
posted by Apocryphon at 9:57 PM on June 10, 2012
From The Guardian, Is Žižek the Borat of philosophy?
posted by From Bklyn at 12:06 AM on June 11, 2012 [1 favorite]
posted by From Bklyn at 12:06 AM on June 11, 2012 [1 favorite]
My own suspicion is that the ultimate cost of allowing Greece to leave (effectively making membership in the union optional) is much, much more than the cost of bailing out Greece forever.
Absolutely - this is basically what Krugman and Wolf and company have been saying. On the one hand we have bailouts and the ambiguous threat of "moral hazard", and on the other hand we have the potential collapse of the Euro and the rise of hard-right governments due to populist anger against austerity programs. Pick one.
posted by mek at 12:28 AM on June 11, 2012
Absolutely - this is basically what Krugman and Wolf and company have been saying. On the one hand we have bailouts and the ambiguous threat of "moral hazard", and on the other hand we have the potential collapse of the Euro and the rise of hard-right governments due to populist anger against austerity programs. Pick one.
posted by mek at 12:28 AM on June 11, 2012
There are two main stories about the Greek crisis in the media: the German-European story (the Greeks are irresponsible, lazy, free-spending, tax-dodging etc, and have to be brought under control and taught financial discipline) and the Greek story (our national sovereignty is threatened by the neoliberal technocracy imposed by Brussels). When it became impossible to ignore the plight of the Greek people, a third story emerged: the Greeks are now presented as humanitarian victims in need of help, as if a war or natural catastrophe had hit the country. While all three stories are false, the third is arguably the most disgusting.
Actually, all three stories are true.
Žižek is good at saying clever, insightful things.. He can make you think, but he rarely offers any realistic solutions to anything.
posted by j03 at 12:33 AM on June 11, 2012
Actually, all three stories are true.
Žižek is good at saying clever, insightful things.. He can make you think, but he rarely offers any realistic solutions to anything.
posted by j03 at 12:33 AM on June 11, 2012
A purely economic perspective lacks the historical and political perspective required to understand why the Greek crisis is so difficult to solve. From the Treaty of Rome in the 1950s, which was a direct response to the horrors of WWII, to the Treaty of Maastricht in 1992, which was a direct response to the end of the Cold War, and the introduction of a single currency and the European Constitution which became the Treaty of Lisbon in 2007, the history of the EU is one of progressively tighter integration, not just in an economic sense but in a political or world-historical sense as well. To allow Greece to 'exit the Euro', whatever that means, since there is no legal foundation or precedent for such a thing, would reverse this trend and sow lasting distrust, which will immediately impact Italy, Spain, and Portugal and feed the the largely populist Euro-skepticism in countries like France, the Netherlands, Germany and Denmark, and thereby undermine and perhaps wholly dismantle the vision of a unified Europe, free from war and strife. This idealistic aspect has always been the backdrop against which the other reforms have taken place, and Zizek's piece is interesting in that it gives primacy to the perspective of solidarity over the centrifugal forces of capital - Europa is nicht nur eine Wirtschaftssache aber eine Herzenssache.
posted by deo rei at 2:26 AM on June 11, 2012 [1 favorite]
posted by deo rei at 2:26 AM on June 11, 2012 [1 favorite]
1) Lower real wages (at least for potential foreign investors), making Greek labor cheaper and drawing foreign investment.
Except that reneging on past debts, or devaluing them, is hardly going to draw future foreign investment. And Tsipras isn't proposing a particularly investor-friendly attitude.
The first concern of any investor, in particular in the current climate, is certainty. The Democratic Republic of Congo offers really low real wages, yet investors (except the most exploitative, least scrupulous sort) don't exactly queue at the door. Merely promising high returns isn't enough in there are unpredictable risks involved. Put yourself in the shoes of an investor and ask yourself: would I bet on that horse?
2) Decrease the cost of Greek exports on the international market (though it would also increase the cost of imports).
And since Greece currently imports a lot more than it exports, the short-term impact would be devastating (consider just its oil imports!). Even if you suddenly become hugely competitive, you can't ramp up production overnight: you need to build new factories, hire and train workers, etc. How are you supposed to do that without access to credit and with your international supply chain in tatters?
3) Make Greece more attractive to tourists since their money would go farther
Tourists are even less tolerant of turmoil than investors. There is a reason why the French Riviera, although bloody expensive, consistently draws millions of tourists every year. Also, like any other industry, the tourist industry can't ramp up capacity overnight: you can only stuff as many beds into your hotel rooms. Who is going to lend you the money to build another hotel?
Finally, few industries are as dependent of global supplies, and in particular fuel supplies, as tourism. If there are fuel shortages following a "Grexit", you can kiss the Greek tourism industry goodbye.
posted by Skeptic at 2:35 AM on June 11, 2012
Except that reneging on past debts, or devaluing them, is hardly going to draw future foreign investment. And Tsipras isn't proposing a particularly investor-friendly attitude.
The first concern of any investor, in particular in the current climate, is certainty. The Democratic Republic of Congo offers really low real wages, yet investors (except the most exploitative, least scrupulous sort) don't exactly queue at the door. Merely promising high returns isn't enough in there are unpredictable risks involved. Put yourself in the shoes of an investor and ask yourself: would I bet on that horse?
2) Decrease the cost of Greek exports on the international market (though it would also increase the cost of imports).
And since Greece currently imports a lot more than it exports, the short-term impact would be devastating (consider just its oil imports!). Even if you suddenly become hugely competitive, you can't ramp up production overnight: you need to build new factories, hire and train workers, etc. How are you supposed to do that without access to credit and with your international supply chain in tatters?
3) Make Greece more attractive to tourists since their money would go farther
Tourists are even less tolerant of turmoil than investors. There is a reason why the French Riviera, although bloody expensive, consistently draws millions of tourists every year. Also, like any other industry, the tourist industry can't ramp up capacity overnight: you can only stuff as many beds into your hotel rooms. Who is going to lend you the money to build another hotel?
Finally, few industries are as dependent of global supplies, and in particular fuel supplies, as tourism. If there are fuel shortages following a "Grexit", you can kiss the Greek tourism industry goodbye.
posted by Skeptic at 2:35 AM on June 11, 2012
Tourists are even less tolerant of turmoil than investors.
And insulting your best customers doesn't exactly help either.
Who wants to risk (a) being called a Nazi, and (b) potentially missing the flight back home due to yet another strike, when there are cheaper and friendlier destinations right next door?
posted by sour cream at 5:11 AM on June 11, 2012
And insulting your best customers doesn't exactly help either.
Who wants to risk (a) being called a Nazi, and (b) potentially missing the flight back home due to yet another strike, when there are cheaper and friendlier destinations right next door?
posted by sour cream at 5:11 AM on June 11, 2012
By completely ignoring the economic situation that Greece is in at the moment, Žižek comes off as a little facile, no? So Greece is being held down by a Brussels technocracy that they finally have a chance to cast off due to the crisis situation. Well, great, but who gets stuck with the bill?
posted by goingonit at 6:04 AM on June 11, 2012
posted by goingonit at 6:04 AM on June 11, 2012
Zizek sometimes enjoys playing devil's advocate or the fool publically, to his detriment, but does sometimes have some very interesting things to say.
The problem with Greece is that more than 50% of police are literally fascists and the army has had a strange bout of spending recently. Last year saw a very odd complete removal of the army's top brass by then-governing neoliberal leftish PASOK; the army chiefs were appointed by a conservative government, and the whole thing really only makes sense as a measure to forestall a coup.
It does seem to the outside observer that, if Syriza wins elections, a police and army coup is rather likely. In which case those worried about the impact of bringing back the drachma on the ordinary greek have no need to be concerned, although more than a few might be worried about things like political imprisonment, death squads, stadiums, and the other hallmarks of right wing coups. Quite how the EU with all its human rights legislation would react to this remains to be seen.
posted by kosmogrrrl at 6:25 AM on June 11, 2012
The problem with Greece is that more than 50% of police are literally fascists and the army has had a strange bout of spending recently. Last year saw a very odd complete removal of the army's top brass by then-governing neoliberal leftish PASOK; the army chiefs were appointed by a conservative government, and the whole thing really only makes sense as a measure to forestall a coup.
It does seem to the outside observer that, if Syriza wins elections, a police and army coup is rather likely. In which case those worried about the impact of bringing back the drachma on the ordinary greek have no need to be concerned, although more than a few might be worried about things like political imprisonment, death squads, stadiums, and the other hallmarks of right wing coups. Quite how the EU with all its human rights legislation would react to this remains to be seen.
posted by kosmogrrrl at 6:25 AM on June 11, 2012
kosmogrrl If there was a military coup in Greece, I find it very difficult to believe that the EU would not act under Art. 7 of the Treaty on European Union.
As for Greece's military spending, this is not a "recent bout". Greece consistently has had a very high level of military spending, mostly because of its testy relationship with close and much bigger neighbour and supposed NATO "ally" Turkey (of course, corruption also helps).
Quite frankly, as much as Greece's brass may find Syriza distasteful, I'm quite certain that they would like the prospect of being booted out of both the EU and NATO even less. Of course, if Tsipras himself takes Greece out of the EU and NATO, then all odds are off.
posted by Skeptic at 7:22 AM on June 11, 2012 [1 favorite]
As for Greece's military spending, this is not a "recent bout". Greece consistently has had a very high level of military spending, mostly because of its testy relationship with close and much bigger neighbour and supposed NATO "ally" Turkey (of course, corruption also helps).
Quite frankly, as much as Greece's brass may find Syriza distasteful, I'm quite certain that they would like the prospect of being booted out of both the EU and NATO even less. Of course, if Tsipras himself takes Greece out of the EU and NATO, then all odds are off.
posted by Skeptic at 7:22 AM on June 11, 2012 [1 favorite]
Some members of the fascist organization Golden Dawn allegedly participated in the Srebrenica massacre. Fascism is very much the real danger here and Greece has been down this path before.
posted by adamvasco at 7:25 AM on June 11, 2012 [1 favorite]
posted by adamvasco at 7:25 AM on June 11, 2012 [1 favorite]
Also it would be extremely interesting to know where Golden Dawn´s funding comes from.
posted by adamvasco at 7:27 AM on June 11, 2012 [3 favorites]
posted by adamvasco at 7:27 AM on June 11, 2012 [3 favorites]
The rise of a kind of (neo-)fascist xenophobia has been apparent throughout the EU for years, not just as an insidious cultural phenomenon, from the odious activism of Breivik in Norway to the outright racism that pervades much of Poland, the Balkans and the south of Italy and Spain, but also politically, from Haider in Austria to Le Pen in France to Orban in Hungary to Wilders in the Netherlands. Opposite but linked to this, in a dynamic of polarization that brings to mind the confrontational politics of the 1930s, we have tens of thousands of people on the streets in the ongoing protests in Madrid and the constant threat of violent eruptions in the banlieues of Paris. The prospect of violent instability is certainly not limited to Greece. If only! NATO could deal with that as they dealt with the Balkans. But the problems are deeper.
posted by deo rei at 7:41 AM on June 11, 2012
posted by deo rei at 7:41 AM on June 11, 2012
deo rei, I can't speak for other countries, but if there's one single positive aspect in the response to the crisis by my own country (Spain) is that racism and xenophobia have remained remarkably subdued. This is even more remarkable in a country which has had an unprecedented influx of immigration in the last fifteen years. Sure, there is a lot of low-level racism, but people are blaming home-grown bankers and politicians, not immigrants, for the crisis. So far, attempts by fringe parties to capitalise on this have largely failed.
I don't want to minimise, even less justify the dumb, low-level racism of some, but I must wonder if, to some extent, it has not worked as a "safety valve" against a worse infection. While in Spain I must often cringe at some comments, there isn't the pent-up tension that I've witnessed in more "politically correct" countries, such as Holland. It isn't perhaps coincidental that the only place in Spain where a specifically anti-immigration party has made some headway is the comparatively progressive region of Catalonia.
Of course, there also was the "vaccination" of forty years of dictatorship. This is also something worth noting about Greece: after all, "Golden Dawn", brutish as it may be, polled less than 7% of the vote in April, and is expected to do significantly worse this week. This, despite Greece's terrible situation, is a far cry from the figures of far right parties in Holland, Flanders, France, Hungary, Austria, etc. It isn't even significantly better than the equally transparently neo-Nazi NPD fares in Germany itself.
posted by Skeptic at 8:24 AM on June 11, 2012 [1 favorite]
I don't want to minimise, even less justify the dumb, low-level racism of some, but I must wonder if, to some extent, it has not worked as a "safety valve" against a worse infection. While in Spain I must often cringe at some comments, there isn't the pent-up tension that I've witnessed in more "politically correct" countries, such as Holland. It isn't perhaps coincidental that the only place in Spain where a specifically anti-immigration party has made some headway is the comparatively progressive region of Catalonia.
Of course, there also was the "vaccination" of forty years of dictatorship. This is also something worth noting about Greece: after all, "Golden Dawn", brutish as it may be, polled less than 7% of the vote in April, and is expected to do significantly worse this week. This, despite Greece's terrible situation, is a far cry from the figures of far right parties in Holland, Flanders, France, Hungary, Austria, etc. It isn't even significantly better than the equally transparently neo-Nazi NPD fares in Germany itself.
posted by Skeptic at 8:24 AM on June 11, 2012 [1 favorite]
Correction: It isn't even significantly better than the equally transparently neo-Nazi NPD fares in some parts of Germany itself.
posted by Skeptic at 8:30 AM on June 11, 2012
posted by Skeptic at 8:30 AM on June 11, 2012
> There's a great review of Simon Critchley's feud with Zizek in the LARB.
Thanks very much for that; it's an excellent read (if your mind doesn't go blank with rage at the sight of the word "religion"), and Critchley seems like an interesting thinker I should read more of.
For the life of me, I don't know why anyone takes Slavoj Žižek seriously; god knows he doesn't.
posted by languagehat at 9:19 AM on June 11, 2012
Thanks very much for that; it's an excellent read (if your mind doesn't go blank with rage at the sight of the word "religion"), and Critchley seems like an interesting thinker I should read more of.
For the life of me, I don't know why anyone takes Slavoj Žižek seriously; god knows he doesn't.
posted by languagehat at 9:19 AM on June 11, 2012
From The Guardian, Is Žižek the Borat of philosophy?Well, it's fairly obvious that a lot of the time the guy is obviously joking. Very dry and long-winded jokes that are funny in full but are easy to take out of context in order to make him sound like a lunatic, for people who are politically opposed to him.
It also seems to me that switching to a devalued drachma, as opposed to sticking with the Euro and part-defaulting and letting (1) (2) and (3) settle themselves out, would mainly penalize Greeks with savings. Are there enough Greeks with savings that pickpocketing all of them would help Greece recover more quickly?The problem with "letting "1 and 2 work themselves out" is that lowering salaries in real terms is extremely difficult, and takes years and years, while devaluation is instantaneous.
As far as savings goes, no one has savings in Drachmas in the first place, so it's a non-issue. There's no reason why they would need to convert existing euro accounts, instead the government starts issuing Drachmas, starts paying it's employees in them and they work their way through the economy.
The other problem is that you have massive unemployment and suffering now and you are worrying about some hypothetical problem that mainly impacts rich people who are too lazy to diversify their investments.
Plus, holy shit this happens all the time! It isn't like some crazy unheard of thing. It happens all the time in small countries and it works fine (The other thing to remember is that external debt for small countries is usually denominated in other currencies, so creditors don't get screwed)
Actually, all three stories are true.No, greeks work more hours per year then Germans. Their government was certainly irresponsible, and there is clearly a lot of tax dodgers. But they are less lazy then the Germans.
From the Treaty of Rome in the 1950s, which was a direct response to the horrors of WWII, to the Treaty of Maastricht in 1992, which was a direct response to the end of the Cold War, and the introduction of a single currency and the European Constitution which became the Treaty of Lisbon in 2007, the history of the EU is one of progressively tighter integration, not just in an economic sense but in a political or world-historical sense as well. To allow Greece to 'exit the Euro', whatever that means, since there is no legal foundation or precedent for such a thing, would reverse this trend and sow lasting distrust, which will immediately impact Italy, Spain, and Portugal and feed the the largely populist Euro-skepticism in countries like France, the Netherlands, Germany and Denmark, and thereby undermine and perhaps wholly dismantle the vision of a unified Europe, free from war and strife.Well, the problem here is the pursuit of a political ideal by imposing an economic system that causes mass suffering. How can that possibly work? How can you pursue political ideal of unity by calling your fellow Europeans lazy scumbags that need to suffer for their sins, and then cause this to happen to the poorest and weakest in their society? It's clearly insane.
The first concern of any investor, in particular in the current climate, is certainty. The Democratic Republic of Congo offers really low real wages, yet investors (except the most exploitative, least scrupulous sort) don't exactly queue at the door. Merely promising high returns isn't enough in there are unpredictable risks involved. Put yourself in the shoes of an investor and ask yourself: would I bet on that horse?That's not actually true. Raw wages may be so low, but in a lot of these severely fucked up countries you have to pay so many bribes that the end costs end up being higher then high wage countries.
The rest of your post is just as nonsensical. Government debt has nothing to do with private equity. When you invest in building a hotel somewhere, you're not lending money, your borrowing it and taking ownership of property. Conflating the two is just intellectual laziness. Investment is all about risk.
The idea that switching to the Drachma would somehow scare off tourists is nonsense. Why would they care? As long as there isn't violence or transport strikes (or something) tourist aren't going to be impacted.
By completely ignoring the economic situation that Greece is in at the moment, Žižek comes off as a little facile, no? So Greece is being held down by a Brussels technocracy that they finally have a chance to cast off due to the crisis situation. Well, great, but who gets stuck with the bill?Former creditors? Or tax payers in other countries, the same way tax payers in rich US States pay for people in poor US states, decades over decades. This works fine in the US, why do people think it's somehow impractical in the EU? If you're not willing to do that, then you have to give up on the euro, or else the eurozone is over.
Why do people pretend like these questions are unanswerable?
posted by delmoi at 9:42 AM on June 11, 2012 [1 favorite]
This isn't the source I had in mind, but Wikipedia says this: "For example, government-provided clean water confers substantial benefits above its cost. Ironically, lack of such infrastructure which would result in higher water prices (and probably higher hospital and medication expenditures) would be reflected as a higher GDP."Clean drinking water is a public health issue. Obviously if everyone had to buy bottled water, those costs would be part of the GDP. But on the other hand it not having it would raise the cost of any job that requires clean water to operate (such as food processing) You'd need to buy a water purifier, which would increase investment costs.
Or take public transport: If everyone and their Grandma has a car or two and drives around a lot, that is reflected by higher GDP. More efficient modes of transportation (mass transit) on the other hand lead to lower GDP.
But like I said, clean water is public health infrastructure, not an economic infrastructure (If people were coming down with malaria all the time the medical treatment would add to the GDP too!)
Something like having power lines, for example. Sure, it would cost money if everyone had to run their own generators, but it would almost certainly result in a lower GDP overall because pretty much every factory needs power and if they all needed to do their own generation a lot of factories just wouldn't get built so in the long run GDP is obviously lower.
Roads are another example, without roads, the costs of shipping stuff around to various factories goes up. A lot of economic activity that would be profitable if there were roads around the country would be impractical in their absence. So even if transport costs were higher, they wouldn't come close to making up for lost profits.
posted by delmoi at 9:47 AM on June 11, 2012
Loved this description of Žižek as the Borat of philosophy.
posted by twsf at 10:45 AM on June 11, 2012 [1 favorite]
posted by twsf at 10:45 AM on June 11, 2012 [1 favorite]
There's no reason why they would need to convert existing euro accounts
See, delmoi, this is where your reasoning is wrong. So, so wrong. There is a very good reason, and that is namely that otherwise all Greek banks would become automatically insolvent. In the balance of a bank, bank accounts are liabilities, to be offset by assets. Most of the assets of Greek banks are domestic, starting with Greek state bonds. If Greece leaves the euro and converts those domestic assets of the banks into devalued drachmas, but maintains their liabilities (such as the accounts) in euros, it automatically sinks all the banks. Not to mention the fact that Greek banks have had to draw big liquidities from the Eurosystem during the past few months. If Greece leaves the euro, they no longer will be able to.
How is such an exit carried out, then? Well, you have mentioned Argentina in previous threads. Let me tell you what happened in Argentina in 2001: all bank accounts were frozen overnight, and withdrawals severely limited. Before they were unfrozen again, all dollar-denominated accounts were forcibly converted into devalued pesos.
instead the government starts issuing Drachmas, starts paying it's employees in them and they work their way through the economy.
Paying government employees in worthless scrip, while they'd still have to pay their food, utility bills, mortgages, rents, etc. in euros doesn't exactly strike me as the acme of social justice. If you would force landlords, banks, utilities, supermarkets to take that scrip at a given value, you'd be pushing them into bankruptcy unless you converted their liabilities as well. And so on...
That's not actually true. Raw wages may be so low, but in a lot of these severely fucked up countries you have to pay so many bribes that the end costs end up being higher then high wage countries.
Which must be why the likes of Marc Rich and Glencore, doing business in such countries, are so poor.
For an investor, the biggest problem with corruption is not the actual cost itself, but the fact that it is completely unpredictable. You can budget for high wages or high taxes. You can't budget for the new minister deciding on a whim that he wants a new yacht, or, worse, your whole business. Adventurers who nevertheless do business in such places are high-stakes gamblers, and they consequently expect high returns. Those are paid by the populations of those countries. Corruption is not a mere transfer of wealth, like wages or taxes. It is a severe destruction thereof, because it increases risk and uncertainty, and you also have to pay for that.
The rest of your post is just as nonsensical. Government debt has nothing to do with private equity. When you invest in building a hotel somewhere, you're not lending money, your borrowing it and taking ownership of property. Conflating the two is just intellectual laziness. Investment is all about risk.
It is all about controlled risk. Take your hypothetical example. I take a euro-denominated credit in Germany, and invest it in building a hotel in Greece. Tomorrow, Greece exits the euro, and all my assets there are devalued: the hotel, if I've had the time to build it, otherwise just the real estate and building materials, and, unfortunately, all the money which I may have put in a Greek account to facilitate transactions. Suddenly I'm underwater, and the bank manager who agreed to lend me the money is pretty much fired.
The idea that switching to the Drachma would somehow scare off tourists is nonsense. Why would they care? As long as there isn't violence or transport strikes (or something) tourist aren't going to be impacted.
You've seen what happened in Argentina. Being on holiday and suddenly not being able to withdraw any money doesn't sound particularly relaxing. Neither is being stranded in an Aegean island because the ferry company can't pay its fuel anymore. Or having rolling blackouts for the same reason.
In any case, your question isn't even an hypothetical. Tourists are already scared off.
posted by Skeptic at 12:32 PM on June 11, 2012 [1 favorite]
See, delmoi, this is where your reasoning is wrong. So, so wrong. There is a very good reason, and that is namely that otherwise all Greek banks would become automatically insolvent. In the balance of a bank, bank accounts are liabilities, to be offset by assets. Most of the assets of Greek banks are domestic, starting with Greek state bonds. If Greece leaves the euro and converts those domestic assets of the banks into devalued drachmas, but maintains their liabilities (such as the accounts) in euros, it automatically sinks all the banks. Not to mention the fact that Greek banks have had to draw big liquidities from the Eurosystem during the past few months. If Greece leaves the euro, they no longer will be able to.
How is such an exit carried out, then? Well, you have mentioned Argentina in previous threads. Let me tell you what happened in Argentina in 2001: all bank accounts were frozen overnight, and withdrawals severely limited. Before they were unfrozen again, all dollar-denominated accounts were forcibly converted into devalued pesos.
instead the government starts issuing Drachmas, starts paying it's employees in them and they work their way through the economy.
Paying government employees in worthless scrip, while they'd still have to pay their food, utility bills, mortgages, rents, etc. in euros doesn't exactly strike me as the acme of social justice. If you would force landlords, banks, utilities, supermarkets to take that scrip at a given value, you'd be pushing them into bankruptcy unless you converted their liabilities as well. And so on...
That's not actually true. Raw wages may be so low, but in a lot of these severely fucked up countries you have to pay so many bribes that the end costs end up being higher then high wage countries.
Which must be why the likes of Marc Rich and Glencore, doing business in such countries, are so poor.
For an investor, the biggest problem with corruption is not the actual cost itself, but the fact that it is completely unpredictable. You can budget for high wages or high taxes. You can't budget for the new minister deciding on a whim that he wants a new yacht, or, worse, your whole business. Adventurers who nevertheless do business in such places are high-stakes gamblers, and they consequently expect high returns. Those are paid by the populations of those countries. Corruption is not a mere transfer of wealth, like wages or taxes. It is a severe destruction thereof, because it increases risk and uncertainty, and you also have to pay for that.
The rest of your post is just as nonsensical. Government debt has nothing to do with private equity. When you invest in building a hotel somewhere, you're not lending money, your borrowing it and taking ownership of property. Conflating the two is just intellectual laziness. Investment is all about risk.
It is all about controlled risk. Take your hypothetical example. I take a euro-denominated credit in Germany, and invest it in building a hotel in Greece. Tomorrow, Greece exits the euro, and all my assets there are devalued: the hotel, if I've had the time to build it, otherwise just the real estate and building materials, and, unfortunately, all the money which I may have put in a Greek account to facilitate transactions. Suddenly I'm underwater, and the bank manager who agreed to lend me the money is pretty much fired.
The idea that switching to the Drachma would somehow scare off tourists is nonsense. Why would they care? As long as there isn't violence or transport strikes (or something) tourist aren't going to be impacted.
You've seen what happened in Argentina. Being on holiday and suddenly not being able to withdraw any money doesn't sound particularly relaxing. Neither is being stranded in an Aegean island because the ferry company can't pay its fuel anymore. Or having rolling blackouts for the same reason.
In any case, your question isn't even an hypothetical. Tourists are already scared off.
posted by Skeptic at 12:32 PM on June 11, 2012 [1 favorite]
Skeptic, I do agree there is a strong anti-racism movement in Spain. I think some of that is rooted in Spain's progressive/leftish tradition. But the tremendous influx of immigrants over the past decade, in particular poor Africans, does seem to have eroded tolerance. The Spanish National Statistics Institute reports that in 2010, Spain had the highest percentage of foreigners in the EU except the Baltic states and in absolute numbers came second only to Germany. Since Spain does not record incidents of racism (and the UN Committee on the Elimination of Racial Discrimination raises this among other issues in its 2011 report), it is hard to get a quantitative feel for the problem but just traveling along the coastal areas, from Cadiz to Barcelona, as you no doubt know, will leave you with countless impressions of callous disregard for immigrants' rights and welfare. Not that is particular to Spain by any means - similar images or much worse can be seen all across the Mediterranean, desperate panhandlers from Senegal, Ivory Coast, Liberia... It is a real problem.
posted by deo rei at 2:11 PM on June 11, 2012
posted by deo rei at 2:11 PM on June 11, 2012
I am amazed that leftist media, Guardian included has not looked more closely at Golden Dawn. (Helen Smith Jan 2003 Greece faces shame of role in Serb massacre).
In May Robert Callus blogged a bit about them titled It's Time for Fear.
Several members of Golden Dawn served in the Greek Volunteer Guard after Archbishop Seraphim of Athens had invited Bosnian Serb leader Radovan Karadžić to visit Athens in 1993 where he proclaimed: "We have only God and the Greeks on our side.
Murkier and murkier and state sanctioned.
posted by adamvasco at 3:11 PM on June 11, 2012 [1 favorite]
In May Robert Callus blogged a bit about them titled It's Time for Fear.
Several members of Golden Dawn served in the Greek Volunteer Guard after Archbishop Seraphim of Athens had invited Bosnian Serb leader Radovan Karadžić to visit Athens in 1993 where he proclaimed: "We have only God and the Greeks on our side.
Murkier and murkier and state sanctioned.
posted by adamvasco at 3:11 PM on June 11, 2012 [1 favorite]
delmoi, it is a fair criticism that the current policy of austerity is ruinous for Greece, but at this point it is hard to see what would not be ruinous for Greece. The current initiative at least has the virtue of trying to install safeguards to prevent a similar situation from occurring in the future, by strengthening the monetary union. Even if it is true that an exit and devaluation could save Greece, the resulting turmoil outside of Greece might make it a Pyrrhic victory. But at this stage, who knows? There is some research to suggest that the entry by Greece into the EMU has had a negative net effect on Greek trade, so perhaps there is economic sense in a Greek exit, and perhaps it is worth sacrificing the political ideal for that. But to understand why Greece has not left the Euro yet and why great efforts are being made to prevent this, it is necessary to understand the political and even emotional considerations that come into play.
posted by deo rei at 4:52 PM on June 11, 2012
posted by deo rei at 4:52 PM on June 11, 2012
Backgrounders from the Australian Broadcasting Corporation's Four Corners:
Dicing with Debt
The Great Euro Crash
posted by flabdablet at 3:30 AM on June 12, 2012
Dicing with Debt
The Great Euro Crash
posted by flabdablet at 3:30 AM on June 12, 2012
and the army has had a strange bout of spending recently.
Oh Grauniad, you have the facts but you can't put them in the right order. Greece is one of the best arms customers of the U.S., Germany and France. This is why although Greece and Turkey are both NATO member-states, aggression between the two countries remains (cf. Imia or the recently discovered plot of Turkish military staff to create tension to destabilise their own government). This is why EU won't guarantee its borders, which would allow arms spending to be reduced and have the happy side effect of getting rid of the the leeches who live off of sales fees. The bout of spending was the quid pro quo of the first loan package.
The other problem is that you have massive unemployment and suffering now and you are worrying about some hypothetical problem that mainly impacts rich people who are too lazy to diversify their investments.
In the case of an exit from euro the Bank of Greece predicted, about 15 days ago, a depression of 22% and a reduction in the average income of at least 55%. My link is in Greek, unfortunately. And rich people are the last ones to be impacted in such a scenario because their money is already in Switzerland.
posted by ersatz at 6:49 AM on June 12, 2012 [1 favorite]
Oh Grauniad, you have the facts but you can't put them in the right order. Greece is one of the best arms customers of the U.S., Germany and France. This is why although Greece and Turkey are both NATO member-states, aggression between the two countries remains (cf. Imia or the recently discovered plot of Turkish military staff to create tension to destabilise their own government). This is why EU won't guarantee its borders, which would allow arms spending to be reduced and have the happy side effect of getting rid of the the leeches who live off of sales fees. The bout of spending was the quid pro quo of the first loan package.
The other problem is that you have massive unemployment and suffering now and you are worrying about some hypothetical problem that mainly impacts rich people who are too lazy to diversify their investments.
In the case of an exit from euro the Bank of Greece predicted, about 15 days ago, a depression of 22% and a reduction in the average income of at least 55%. My link is in Greek, unfortunately. And rich people are the last ones to be impacted in such a scenario because their money is already in Switzerland.
posted by ersatz at 6:49 AM on June 12, 2012 [1 favorite]
See, delmoi, this is where your reasoning is wrong. So, so wrong. There is a very good reason, and that is namely that otherwise all Greek banks would become automatically insolvent.How much of the assets of greek banks are actually greek government bonds? It seems like the government bonds in the eurozone are spread around all over the place, with lots of greek debt being owned by banks in other euro countries, which is why there are so many problems now.
How is such an exit carried out, then? Well, you have mentioned Argentina in previous threads. Let me tell you what happened in Argentina in 2001: all bank accounts were frozen overnight, and withdrawals severely limited. Before they were unfrozen again, all dollar-denominated accounts were forcibly converted into devalued pesos.The fact that something happened in the past doesn't mean the same thing has to happen in the future.
Unless I'm mistaken, can't anyone in the EU get a bank account in any other EU country? Why would a Greek exit affect a bank account based in France, or Spain, or Bulgaria for that matter?
In the case of an exit from euro the Bank of Greece predicted, about 15 days ago, a depression of 22% and a reduction in the average income of at least 55%The problem is, Greece is already in the middle of a depression, the unemployment rate is 21%. Compare that to 16% in the US, in 1936 (or 19% in 1938).
And the argument is that Greece needs to lower wages anyway, and the government has already cut public employee wages 50%. So the question is whether wages should fall quickly and efficiently, by devaluation, or slowly and painfully in a way that takes years and years of misery to complete?
Paying government employees in worthless scrip, while they'd still have to pay their food, utility bills, mortgages, rents, etc. in euros doesn't exactly strike me as the acme of social justice.It's Happened in California Nobody died.
posted by delmoi at 1:32 AM on June 13, 2012
In any case, your question isn't even an hypothetical. Tourists are already scared off.Which actually proves that not exiting won't somehow make things better.
My guess is that Greece will probably exit. Either that, or you'll have a massive, massive aide package.
posted by delmoi at 1:36 AM on June 13, 2012
Why would a Greek exit affect a bank account based in France, or Spain, or Bulgaria for that matter?
And that exactly is the calculation that millions of Greeks are doing right now, and taking their money out of the country, bringing the economy close to a collapse.
You see, printing money isn't a problem. I can print money. You can print money. The Greek government can print money. The problem is convincing anybody that that money is worth anything. Ultimately, the entire modern economy is based on a collective suspension of disbelief regarding the little funny bits of paper in our wallets which we call money. And that would be the Greek government's problem if it started printing drachmas again, because it would be an admission that it has run out of any "real" money. Sure, it could force its employees and suppliers and even some of its creditors to take that as a payment. But could it force then anybody else to believe that those printed admissions of defeat are worth anything? Would you accept at face value an IOU from a known deadbeat?
You see, I've been to Cuba. There, you have two parallel currency systems: regular pesos and convertible pesos. The difference is that, at least theoretically, you can bring your convertible pesos to a bureau de change and get dollars or euros in exchange. As a result, the Cuban government doesn't print more convertible pesos than it can afford to (it is constantly trying to cheat, of course, which ensures that there's also a lively black market in hard currency, but just this black market competition keeps the government relatively honest). On the other hand, you can't exchange regular pesos. The Cuban government just prints as many regular pesos as it wants, and pays its employees in them. However, the trouble, when you have regular pesos, is managing to spend them. You can get some of the basics of life, of extremely bad quality, for regular pesos in state-owned shops. But toilet paper and other "luxuries"? For that you need convertible pesos or hard currency, that is, either some generous relatives abroad or a nice gig in the tourism business.
posted by Skeptic at 3:19 AM on June 13, 2012
And that exactly is the calculation that millions of Greeks are doing right now, and taking their money out of the country, bringing the economy close to a collapse.
You see, printing money isn't a problem. I can print money. You can print money. The Greek government can print money. The problem is convincing anybody that that money is worth anything. Ultimately, the entire modern economy is based on a collective suspension of disbelief regarding the little funny bits of paper in our wallets which we call money. And that would be the Greek government's problem if it started printing drachmas again, because it would be an admission that it has run out of any "real" money. Sure, it could force its employees and suppliers and even some of its creditors to take that as a payment. But could it force then anybody else to believe that those printed admissions of defeat are worth anything? Would you accept at face value an IOU from a known deadbeat?
You see, I've been to Cuba. There, you have two parallel currency systems: regular pesos and convertible pesos. The difference is that, at least theoretically, you can bring your convertible pesos to a bureau de change and get dollars or euros in exchange. As a result, the Cuban government doesn't print more convertible pesos than it can afford to (it is constantly trying to cheat, of course, which ensures that there's also a lively black market in hard currency, but just this black market competition keeps the government relatively honest). On the other hand, you can't exchange regular pesos. The Cuban government just prints as many regular pesos as it wants, and pays its employees in them. However, the trouble, when you have regular pesos, is managing to spend them. You can get some of the basics of life, of extremely bad quality, for regular pesos in state-owned shops. But toilet paper and other "luxuries"? For that you need convertible pesos or hard currency, that is, either some generous relatives abroad or a nice gig in the tourism business.
posted by Skeptic at 3:19 AM on June 13, 2012
The problem is, Greece is already in the middle of a depression, the unemployment rate is 21%. Compare that to 16% in the US, in 1936 (or 19% in 1938).
And the argument is that Greece needs to lower wages anyway, and the government has already cut public employee wages 50%. So the question is whether wages should fall quickly and efficiently, by devaluation, or slowly and painfully in a way that takes years and years of misery to complete?
Yes, Greece is already in the middle of a depression. Since people are struck hard by a 15% depression and 20-30% cuts, imagine adding another 22%+55% respectively, only now you're starting from 22% unemployment.
I consider the argument that wages should be lowered specious. Big part of the Greek economy was inwards-focused and wage reductions, in addition to uncertainty about further cuts and fees, have struck a severe blow to demand. The solution for Greece isn't to go to 150-250-euro wages as in Romania or Bulgaria, but to reform investment & business rules, as well as the state. Even the troika admitted that the second wage cuts had no effect, but the last agreement still demands further cuts. After all the story will always be about the failure of Greece, not about the failed plans of its 'advisors'.
posted by ersatz at 3:48 AM on June 13, 2012 [1 favorite]
And the argument is that Greece needs to lower wages anyway, and the government has already cut public employee wages 50%. So the question is whether wages should fall quickly and efficiently, by devaluation, or slowly and painfully in a way that takes years and years of misery to complete?
Yes, Greece is already in the middle of a depression. Since people are struck hard by a 15% depression and 20-30% cuts, imagine adding another 22%+55% respectively, only now you're starting from 22% unemployment.
I consider the argument that wages should be lowered specious. Big part of the Greek economy was inwards-focused and wage reductions, in addition to uncertainty about further cuts and fees, have struck a severe blow to demand. The solution for Greece isn't to go to 150-250-euro wages as in Romania or Bulgaria, but to reform investment & business rules, as well as the state. Even the troika admitted that the second wage cuts had no effect, but the last agreement still demands further cuts. After all the story will always be about the failure of Greece, not about the failed plans of its 'advisors'.
posted by ersatz at 3:48 AM on June 13, 2012 [1 favorite]
Skeptic, you speak like revaluation or currency conversion is utterly impossible. It's happened many times before. Turkey, Mexico, etc. Sometimes inflation happens. It doesn't necessarily lead to apocalypse.
posted by mek at 3:49 AM on June 13, 2012
posted by mek at 3:49 AM on June 13, 2012
Skeptic, you speak like revaluation or currency conversion is utterly impossible. It's happened many times before. Turkey, Mexico, etc. Sometimes inflation happens. It doesn't necessarily lead to apocalypse.
As delmoi says above, "the fact that something happened in the past doesn't mean the same thing has to happen in the future". In this particular case, it's difficult to see how a Greek exit would be anything short of cataclysmic. Firstly, it isn't just a devaluation. It means creating a new currency from scratch and building trust in it, at a time when trust is in short supply. This is why 2001 Argentina is a much more apt parallel than the devaluation in Turkey or Mexico or even past Greek devaluations.
Secondly, Greece is much more integrated into a wider unit (the EU), than any one of the countries which you cite. Greece is much more dependent on trade and there's a much bigger freedom of movement of both people and capital out of the country. Argentina in 2001 could fence itself in and rely on its own plentiful natural resources to bounce back. Greece can't afford to do either.
I do agree with ersatz that the emphasis of the creditor countries on wages is ridiculous. What Greece (and other countries like my own) need aren't lower wages, but more internal competition to drive external competitiveness. Of course, that requires facing up to Greece's own oligarchy (not "the EU technocrats"), and dismantling its oligopolies. And that is much, much harder than "just" cutting wages.
posted by Skeptic at 4:37 AM on June 13, 2012
As delmoi says above, "the fact that something happened in the past doesn't mean the same thing has to happen in the future". In this particular case, it's difficult to see how a Greek exit would be anything short of cataclysmic. Firstly, it isn't just a devaluation. It means creating a new currency from scratch and building trust in it, at a time when trust is in short supply. This is why 2001 Argentina is a much more apt parallel than the devaluation in Turkey or Mexico or even past Greek devaluations.
Secondly, Greece is much more integrated into a wider unit (the EU), than any one of the countries which you cite. Greece is much more dependent on trade and there's a much bigger freedom of movement of both people and capital out of the country. Argentina in 2001 could fence itself in and rely on its own plentiful natural resources to bounce back. Greece can't afford to do either.
I do agree with ersatz that the emphasis of the creditor countries on wages is ridiculous. What Greece (and other countries like my own) need aren't lower wages, but more internal competition to drive external competitiveness. Of course, that requires facing up to Greece's own oligarchy (not "the EU technocrats"), and dismantling its oligopolies. And that is much, much harder than "just" cutting wages.
posted by Skeptic at 4:37 AM on June 13, 2012
And that exactly is the calculation that millions of Greeks are doing right now, and taking their money out of the country, bringing the economy close to a collapse.Right, which means it won't be a problem for the people who have done so. So you must have been pretending that hadn't been happening happening when you wrote some of your comment about how Greeks all had their money in Greek banks. If a Greek bank has most of it's assets in Greek government debt, then it's already insolvent. But those banks could be based in any country. Look at MF Global, which was based in the US but went belly up due to various eurobonds. On the other hand, it's entirely possible a Greek bank might have assets from other countries.
Ultimately, they key issue would be who was insuring deposits. A German bank with deposit insurance provided by the German government would be much safer then a Greek bank with deposits insured by the Greek government.
You see, printing money isn't a problem. I can print money. You can print money. The Greek government can print money. The problem is convincing anybody that that money is worth anything.I realize there is more tax evasion in Greece then other places, but the value of a government's currency comes from it's tax base. You need to acquire currency to pay your taxes.
You see, I've been to Cuba. There, you have two parallel currency systems: regular pesos and convertible pesos...What does that even have to do with anything? You said yourself, in Cuba the convertible currency has value, so if the Greek government printed a convertible currency, it would have value, just like every other country in the world.
I live in the US. If I want too I can go onto E*Trade, which is based in the US and convert some of my dollars into other currencies. Whatever the fed does to the value of the dollar has zero impact on my holdings in other currencies. Why would it?
I consider the argument that wages should be lowered specious. Big part of the Greek economy was inwards-focused and wage reductions, in addition to uncertainty about further cuts and fees, have struck a severe blow to demand.Well that's what the EU is demanding. The thing about a devaluation is that for locally produced stuff the rate is the same So your groceries, fruits and vegetables, rent, mortgage, etc don't change. Only the relative value of imports changes, and then maybe over time relative prices changes.
On the other hand, if you force corrections everything happens at different points in time, so your wage halves but your rent does not. The price of groceries stays the same. It's a huge mess and takes years and years to work itself out.
Even the troika admitted that the second wage cuts had no effect, but the last agreement still demands further cuts. After all the story will always be about the failure of Greece, not about the failed plans of its 'advisors'.Right, see, the demand is for further wage cuts which will of course continue the current depression and make it worse (I'm assuming '15% depression' means a 15% loss in GDP?)
it's difficult to see how a Greek exit would be anything short of cataclysmic.Please. Define "Cataclysmic". The current situation is already a cataclysm. suicide rates spiked 40% in 2011.
"It's never just one thing, but almost always debts, joblessness, the fear of being fired are cited when people phone in to say they are contemplating ending their lives," said Eleni Beikari, a psychiatrist at the non-governmental organisation, Klimaka, which runs a 24-hour suicide hotline.What exactly do you think would happen, dollar for dollar, with a greek exit?
Klimaka received around 10 calls a day before the crisis; it now gets more than 100 in any 24-hour period
"Most come from women aged between 30 and 50 and men between 40 and 45 despairing over economic problems," said Beikari. "In my experience it's the men, suffering from hurt dignity and lost pride, who are most serious."
So far, what you've been saying has been based on a number of weird assumptions: That everyone in Greece has money in banks that have their assets in Greek government debt (even though you knew that wasn't true), that those banks will convert all existing accounts to Drachma, like what happened in Argentina, that the Drachma wouldn't be convertible, or something (like the Cuban peso) and so on.
What exactly is the 'cataclysm' that will happen, and how is it worse then what's already going on?
posted by delmoi at 3:48 PM on June 14, 2012
ersatz: That's something that's already happened to government workers. And that's what the EU is demanding happen in the rest of the private sector as well. So not exiting won't prevent that from happening
posted by delmoi at 1:04 AM on June 16, 2012
posted by delmoi at 1:04 AM on June 16, 2012
NYRB: The Violent Visions of Slavoj Žižek, by John Gray
The Guardian: Less Than Nothing by Slavoj Žižek: A march through Slavoj Žižek's 'masterwork'
Jacobin Magazine: Slavoj Žižek Responds to His Critics
posted by the man of twists and turns at 4:36 PM on July 5, 2012 [2 favorites]
The Guardian: Less Than Nothing by Slavoj Žižek: A march through Slavoj Žižek's 'masterwork'
Jacobin Magazine: Slavoj Žižek Responds to His Critics
posted by the man of twists and turns at 4:36 PM on July 5, 2012 [2 favorites]
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