Good Old Greeks

Ordinary people often have more sense than the elite and, hopefully, the Greeks will vote against the austerity package tomorrow. Today’s 48 hour strike is a good start. Why should the Greeks accept 30 years of debt service to pay for the mistakes of bankers and the politicos who are supposed to regulate them?

It is odd that the elite of the world’s banking/political leadership think that ordinary people must pay for the banks’ failure.

It’s even odder when no explanation is offered as to why ordinary people should bail out the elite.


It’s odder still when nothing is being done to stop bankers continuing to over-pay themselves.


And it’s supremely odd when no measures have been put in place to stop it happening again.


The bankers and politicos appear to be in cahoots to screw ordinary people, so it is every ordinary person’s duty to give the finger to their governments.  



  1. Follow the money, Dr Jeff. China has the money and the West has the debt. As you imply, the ‘wealth creation’ of the West appears to be an illusion, just as the cost-cutting ‘efficiencies’ in councils, businesses, hospitals etc delivers worse service and more money for the top people. ‘Market forces’ is window-dressing for the process of depriving the poor to give to the rich and, as you say, it’s endemic – not just the bankers. It’s the unfortunate, but logical, conclusion of monetarism taken to extremes.

  2. I agree – but I’m just not so sure it’s that simple.
    The point I believe is that ‘good old capitalsm’ has evolved into something very different. Where ‘wealth’ creation is assumed to be inherent in all sorts of global practices under the guise of ‘the markets’.
    Is the banking sector just a symptom of this malaise, or the cause?
    I’m not altogether sure.

  3. Frightening stuff, Lefty, but I think you’re right – we need to develop an alternative banking system. Post Offices, unions and companies could play a big part. The banks could then be marginalised as gambling organisations and left to sink or swim.

  4. How can we avoid politicians who when they retire from politics typically go into banking? Or cushy non-executive director positions with multi-national corporations?
    Blair is now a bankster for example with JP Morgan.
    There is simply no way to avoid the banks collapsing under their bad gambling. The situation we have now is perptually “propping up” the banking system with whatever measures can be imposed to capture assets or savings from citizens.
    The business model is broke.
    The other problem is a lack of sound money. Money should be a “token of labour” – however it is actually debt instrument into the fractional banking system.
    Money is never “lost” – it is a game of allocation – the folks who are good at the game now have most of the worlds wealth – and how on earth can the playing field be levelled in any meaningful way now?
    A solid honest and legal credit union system could be an answer. The trade unions could easily form credit unions for their members to offer better saving rates to savers and a simple fixed-rate long term loans to lenders.
    It is of course quite frightening. If there is a run on the banks then a lot of savers go broke. The fractional banking system relies on an illusion of wealth shared by millions of people.

  5. A very interesting thread – particularly intrigued by the descriptions of ‘Flat Money’ vis a vis deflation and inflation. But the general flavour of this thread questioning where this debt arises within global economics and what will resolve this is comforting.
    I’ve often seen capitalism as working because it has negative feedback, stabilising the populous and encouraging work by aspirations – the closed system of economics driving the machinery which creates wealth, which we must not forget is about resources and consumption, not money. IMHO the ‘markets’ have a license to be accepted in society because they help to oil the machinery, but we must never pretend they create anything, they are part of the control system, not the power supply..
    I do question one issue posted above, that is this concept of a generation in debt and passing this debt to its children. I cannot see the sense in this analysis, assuming there is no major growth in population, or decline of planetary resources (both are issues, but on a different timescale) then there is no difference in wealth of the planet today compared to the ‘good’ years before this recession, indeed it could be argued to be more wealthy, due to advances in technology.
    Extending the analogy to a circuit, there may be internal biasing problems, which stop the machinery working (i.e. wasted talent or opportunity due to poor credit, closed factories, failure to provide investment in manufacturing), but the overall system power supply hasn’t changed, although it may be threatening an internally unstable mode.
    Clearly this is not a time of global debt to some alien power, this is an internally contrived imbalance of money supply which threatens to derail everything that capitalism claims to provide.
    Conclusion – this needs to be corrected with those who hold the +ve bits of paper, not those holding the -ve ones.
    Although the Greeks with their -ve papers in abundance can have a good go!

  6. Time for Revolution, Lefty, can ordinary people still overthrow governments? It’s either that or, as you say, serfdom under our politico/bankster masters.

  7. “The bankers and politicos appear to be in cahoots to screw ordinary people”
    Plus ca change…… as johnny foriegner would have it.

  8. Can we afford “the rich” anymore?
    Can the rich “afford us” anymore?
    RBS had to be bailed out – it owns Coutts – the queen’s bank! – and the bank of the majority of the world elite.
    Welcome to serfdom.

  9. Stark choices, John, this crisis is showing us who the villains are.

  10. I don’t disagree, but I pity that leader. If he/she really is to address the huge disparity between wealth being created and wealth being distributed, there are a lot of unpleasant facts and vested interests to be addressed.
    These days votes tend to go to whoever promises what we want. I smile when reading quotes of people like Franklin or even back to the ancient Greeks describing that the society would come to an end after people became accustomed to voting themselves more money. Fast forward a couple of thousand years and that “failure” is the dominant economic method – as “debt” is simply tomorrow’s earnings spent today, we just spend our kids money, as our parents spent ours. Sustainable?
    A friend analogised it thus; imagine you had a disease – you could deal with it by significant changes to an enjoyable lifestyle…or it could be painlessly transferred to your children. How many of us would give it to our kids? I’ll wager it’s far, far fewer than accept to do so by economic means. I wonder why – lack of awareness?

  11. I think you’re right, John, this whole thing is a squalid evasion of root causes to keep the bankers happy and the politicians in power. Funnily enough, I think the ‘smartest guys in the room’ might be the ordinary Greek people shouting in the streets, because they seem to sense the truth – that these measures will not solve their problems. There’s a rottennness at the top of Greek society – I notice rich Greeks got their money out at the first sniff of trouble – and this rottenness will continue until Greece gets a leader with real patriotism and guts who takes back Greece for the Greeks.

  12. I think it was from “Blood Diamond” – in the end it’s all about who gets what.
    The headline is Greece being bailed out – but of course “Greece” is not being bailed out. The people being bailed out are those who bought Greek debt. Taking money from central banks at 0.1%, and buying Greek debt paying 10% – pocketing the difference. Well, it pays 10% for a reason, and that reason is the risk of not being paid.
    We’re supposed to believe “the smartest guys in the room” can’t figure that out? They’re the smartest guys in the room because they know / make sure they get bailed out. However there’s no free lunch – someone takes that loss, the difference between the amount of goods created in the world and the amount of money (debt) created in the world. In this case it looks like the Greek people specifically, and taxpayers of Europe generally. That will continue to be the case until sufficient people recall the use of the word “no”.
    For sure there are massive issues in Greece (heck, across Europe and the world), but in semiconductors you get nowhere without addressing the root cause. In the parallel universe of politics it seems you go places by not addressing the root cause!

  13. I thought Syria was trying to get rid of the aptly named Mr Bashir not solve a debt crisis [Anonymous]

  14. Andy, I agree with every word.

  15. I have been on a quest for many years now to try to discover how the EU functionally works. I mean if the UK, France and Germany put serious amounts of money into the EU and other countries like say Ireland, Portugal Greece etc keep taking these monies out, how does all this work? Why don’t we bypass the EU and just send the Greeks the money?
    Why don’t we try to model the EU like a business and see how all the flow of funds work, because I can’t see any real sense with what is happening at the moment.
    From what I can see it’s just a large politicians club, they seem to be inventing their own jobs and ignoring the tough jobs (how about harmonising the VAT and allowing me to offset say my German travel VAT on a UK system?) When I fly to Brussels I’m normally seated close to the toilets, however I notice that MEPS and civil servants seem to collect at the front of the plane, when I stay in a hotel it’s generally €80 not our dear friends the politicians choice of hotel.
    I can just see a whole mess in the EU’s administration, too many gravy trains, ambiguous targets, shirking from the real jobs. With far too high administration costs if they were a Company they would die (perhaps they will anyway?)
    When the UK entered the EU I was pleased that we had sort of joined Europe, however the more I learn about it the more disappointed I am with the waste and political manoeuvring.
    Then we have the €…………………………….

  16. >
    Is this not what Syria is trying to do?

  17. That is most interesting, Robert, thank you. I hope others follow the Greeks. I suppose many of us have followed the Greeks in the past judging by the spread of democracy.

  18. IMHO the real problem is simply the demographics of an aging population. Japan has been hamstrung by this problem for over 20 years and now the rest of us are getting our chance to first hand just how corrosive deflation truly is. The first countries to fall are naturally those where the credit was supplied by foreigners. After-all why should the youth of Greece pay for the folly of French and German bankers. So default is an easy and a viable option in Greece just as it was an option for Iceland.
    The next level of escalation occurs when the youth of the country refuse to honor the obligations (debts) created by their own elders and owed to fellow citizens. Japan is the first country where this is happening. Twenty years after the collapse of the Nikki the young are still refusing to buy over priced assets from the last generation, so you have an ongoing deflationary train wreck. This is the flip side of Fiat money. Because just as money is effectively created by asset inflation in a fiat money system, asset deflation destroys Fiat money.
    Unfortunately demographics cannot be altered by any amount of political will, so this situation is guaranteed to play out in other western nations and all that anyone can do is to delay the start.

  19. The general consensus is that they’re bust, jimbob, so, like everyone else who’s bust, it’s best to take the medicine and ask for bankruptcy proceedings – in this case default, exit from the euro, return to the drachma, international shame but national independence from bankers, IMF, EU and the rest of the dreary debt servicing apparatus which will otherwise afflict them for a generation.

  20. Isn’t a default highly likely whether they have the sticking plaster of a bailout now or not – doesn’t it just depend (to quote a colleague)on whether they sell up all their assets beforehand in a futile attempt to service the debt?
    I also thought that the likelihood of a default was why their interest repayment rates were so high, so the bankers are charging the Greeks as a bad risk, whilst wanting governments to prop up their loans; I thought that this should have been factored into the credit assessment in the first place.

  21. Well if they won’t pay taxes, RobertI, perhaps bankruptcy is the best thing for them because, without tax revenue, they’ll never be able to pay back their debt. Surely they’d be better off if they were left out of any serious economic system and just went on in their own merry, feckless, fiesta-style way.

  22. The slight flaw in the argumant is that, because of the extreme reluctance of Greek residents to pay taxes, the Greek government has been running a ‘primary deficit’ for many years. A ‘primary deficit’ is before any debt servicing costs are taken into account.

  23. Well yes, jimbob, I remember Harold Wilson’s devaluation. It didn’t have any bad effect on anyone I knew. What badly affected everyone was the EU’s decimalisation project which put all the prices up.

  24. It is worth looking at the effect that defaulting has had on Russia, or Argentina, for example. As far as I understand, there was a temporary increase in the cost of borrowing, but then it stabilised, just without such a large debt burden.

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