|From:||Doug Singsen <email@example.com>|
|Sent time:||Sunday, November 06, 2011 4:21:36 PM|
|Subject:||Re: [september17discuss] Greek PM Papandreou resigns, forms coalition with conservatives, continues austerity|
The inflation option -- like QE2 -- can be a disaster in all directions. When currency deflates, large investors abandon it for commodities, which can cause shortages and inflated prices, like the inflated food prices that led to the Arab Spring, directly as a result of QE2.
To be fair, leaving the Eurozone could throw Greece into much greater austerity and a collapse of their banking, which could result in a lot of hardship for the people of Greece. Greece does not export much, so reconstructing its economy could take a long time. Leaving the Eurozone is kind of uncharted seas both for them and for the Eurozone.
Either way, Greece is in for a rocky ride of civil unrest.
On Sun, Nov 6, 2011 at 5:44 PM, Doug Singsen <firstname.lastname@example.org> wrote:
This writer recognizes that austerity will not work, but his proposed solution is hardly any better. First, Davies believes that despite the problems, Greece should still slash social spending and fire workers, continuing the austerity agenda.
The eurozone is often accused of lacking a strategic plan, but that is not true. It does have a plan, and a very clear one. The plan, which has been imposed by the creditor nations led by Germany, requires the debtor nations to take two major actions, both of which will be beneficial in the long term. First, they need to balance their budgets on the timetable agreed in recent summits. Second they need to introduce major reforms to their economic structure, notably involving labour market flexibility and privatisation.
Second, his only solution is that Germany should "grow faster, and accept higher domestic inflation for a while, in order to ease the process of adjustment." But this would do virtually nothing to rescue Greece! It is far too weak to relieve Greece's crushing debt. And third, as Davies himself admits, "In practice, Germany shows no sign of accepting this, but it is the best solution available."
Is this what Greek workers are supposed to pin their hopes on? Instead, Greek workers have a much more effective choice, and one that is actually within their control: force Greece to renounce the debt and leave the Eurozone. Even though Davies recognizes the problem, he is unable to offer a real solution because that would require breaking from the established economic power structure, which he seems incapable of conceiving of, to the point that he doesn't even mention this possibility in his analysis. Further, he looks at this situation entirely from the perspective of policy-makers rather than from that of Greek workers. He never actually mentions workers in his article or acknowledge what the cost of the crisis will be in human terms. So I would say that Davies's support for capitalism does prevent him from imagining an alternate course for Greece.
On Sun, Nov 6, 2011 at 5:10 PM, shaista husain <email@example.com> wrote:
Thank you Doug, but even the most prolific defenders of capital and
writers are speaking about a possible imminent demise of the Eurozone,
Greece only happens to be the most rebellious at the moment (Portugal,
Spain, France are next) the other nations will be in the same
situation shortly. Here is an article by an ex Goldman Sack-head who
writes, "None of the austere budgetary plans which have been announced
during 2011 will achieve their fiscal targets in 2012 in the context
of the recessions which will probably be encountered by many
countries, and that includes France. There is no such thing as
“expansionary austerity”, certainly not in countries which cannot
devalue or reduce their long term interest rates. These countries are
now chasing their own tails.'.."
So wonder what this all entails?
On Sun, Nov 6, 2011 at 4:36 PM, Doug Singsen <firstname.lastname@example.org> wrote:
> This was probably inevitable. All the Greek pro-capitalist parties have now
> merged, leaving the anticapitalist parties of the far left as the only
> political parties outside the "grand coalition" in favor of austerity. The
> anticapitalist parties have been key leaders in the fight against austerity
> and have now achieved unprecedented levels of popular support as a result.
> Papandreou's party, PASOK, is supposedly "socialist" but in fact has
> defended the interests of the bankers and speculators over those of Greek
> workers (much like the Democrats in the US). The whole point of slashing
> social services and laying off workers is to cut government expenses so they
> can pay back more of their loans to banks and speculators, whose high
> interest rates helped drive up the Greek debt in the first place. (The other
> major factors in the creation of massive Greek debt were the inability of
> Greek industry to compete with Germany and other European powers, the lack
> of monetary flexibility caused by Greece's entry into the Eurozone, and the
> economic collapse of 2008, which was also caused by the banks and
> speculators. The supposed "laziness" and "overspending" of the Greek
> government that the US media is always talking about are not the real
> economic causes of Greece's crisis, but rather are designed to distract
> attention away from the real causes, which all go back to the interests of
> the banks, international corporations, and speculators.) Unions, most of
> which had previously supported PASOK, are now in the process of breaking
> with PASOK and allying with the anticapitalist left.
Lower East Side Residents for Responsible Development
622 E 11, #10
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