From:   rob hollander <lesrrd@gmail.com>
Sent time:   Sunday, November 06, 2011 5:53:53 PM
To:   september17@googlegroups.com
Subject:   Re: [september17discuss] Re: Greek PM Papandreou resigns, forms coalition with conservatives, continues austerity
 

Argentina paid its IMF debts, and Chile recovered with the "neoliberal miracle" of privatization. I think Charles is right, capital flight will bring the country down faster, but the consequent civil unrest will keep a lot of tourists away despite the devaluation of their currency. How many unemployed workers can subsist on fishing? It's not Iceland.

On Sun, Nov 6, 2011 at 6:48 PM, Doug Singsen <dougsingsen@gmail.com> wrote:
Exactly. Well said. Didn't Chile and/or Argentina do basically the same thing by defaulting on IMF loans, and it worked out well for them?

On Sun, Nov 6, 2011 at 6:45 PM, Charles <chcreinhardt@gmail.com> wrote:
Yeah, I have been under the impression that Greece's biggest export is
tourism, so a devalued drachma would make more people come to its
islands, resorts and hostels. Sure there would be capital flight, but
the government could engage in expansionary monetary policy to make
its new debts more manageable. Look at what happened with Argentina
and Iceland. I'm not saying it would be a walk in the park, but they
would hit rock bottom faster and maybe that would paradoxically lead
to less suffering in aggregate once growth begins again, unburdened by
huge interest payments.

On Nov 6, 6:21 pm, Doug Singsen <dougsing...@gmail.com> wrote:
> Can you expand on that? Why would leaving the Eurozone result in greater
> austerity and a collapse of Greek banking?
>
>
>
>
>
>
>
> On Sun, Nov 6, 2011 at 6:14 PM, rob hollander <les...@gmail.com> wrote:
> > 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 <dougsing...@gmail.com>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.
>
> >> Doug
>
> >> On Sun, Nov 6, 2011 at 5:10 PM, shaista husain <shaistahus...@gmail.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.'.."
>
> >>>http://blogs.ft.com/gavyndavies/2011/11/06/the-eurozone-decouples-fro...
> >>> So wonder what this all entails?
>
> >>> On Sun, Nov 6, 2011 at 4:36 PM, Doug Singsen <dougsing...@gmail.com>
> >>> wrote:
>
> >>>http://www.guardian.co.uk/world/2011/nov/06/papandreou-greek-leaders-...
>
> >>> > 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.
>
> >>> > Doug
>
> > --
> > Rob Hollander
> > Lower East Side Residents for Responsible Development
> >http://savethelowereastside.blogspot.com/
> > 622 E 11, #10
> > NYC, 10009
> > 212-228-6152




--
Rob Hollander
Lower East Side Residents for Responsible Development
http://savethelowereastside.blogspot.com/
622 E 11, #10
NYC, 10009
212-228-6152

< PREV INDEX SEARCH NEXT >