Category Archives: borrowing

Grave errors of the Greeks

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Time for many Greeks to look in the mirror

Political and popular dishonesty

Greek politicians, writes Dalrymple, erred in

offering a substantial proportion of the Greek population a standard of living that was economically unjustified, maintained for a time by borrowing, and in the long run unsustainable, in return for votes. They borrowed the money and then dispensed largesse, like monarchs throwing coins to the multitudes.

The Greek people erred in

accepting the bribe that the politicians offered; they were only too prepared to live well at someone else’s expense.

Cradle of democratic corruption

Popular dishonesty is a problem

wherever the universal franchise is unaccompanied by widespread virtues such as honesty, self-control, providence, prudence, and self-respect.

A reduction in their salaries and perquisites of many Greeks

is not only economically necessary but just.

Is the crisis faced by the Greeks their own fault?

Feeble-minded: Martin Wolf Wolf: feeble-minded

NO, says Martin Wolf. Stupid lenders lose money

This greatly overvalued (and very conceited) journalist writes about high finance. He can be read in the Financial Times, the Irish Times and other prints. He argues:

Nobody was forced to lend to Greece. Initially, private lenders were happy to lend to the Greek government on much the same terms as to the German government. Yet the nature of Greek politics, tellingly described in The 13th Labour of Hercules: Inside the Greek Crisis by Yannis Palaiologos, was no secret. Then, in 2010, it became clear the money would not be repaid. Rather than agree to the write-off that was needed, governments (and the International Monetary Fund) decided to bail out the private creditors by refinancing Greece. Thus began the game of ‘extend and pretend’. Stupid lenders lose money. That has always been the case. It is still the case today.

Dalrymple: incisive and gutsy Dalrymple: incisive

YES, says Theodore Dalrymple. Stupid borrowers lose assets

This greatly undervalued (and very self-effacing) essayist writes about the human condition. He can be read in City Journal, the Salisbury Review and other prints. He argues:

The lenders were foolish, or worse than foolish, relying as they did on Greece’s fraudulent membership of the common currency to forestall any possibility of default. But the Greeks, or rather the Greek government, can hardly be absolved of all blame for the situation. The latter borrowed huge sums of money to fund current consumption, having previously falsified its public accounts in order to meet the criteria to join the common currency. If nobody had to lend to Greece, Greece did not have to borrow, at least not like it did and for the purposes that it did. And if it is true that stupid lenders lose money, stupid borrowers lose their assets. If this is a tale of stupidity, it is of stupidity – or dishonesty – all round.

Dalrymple’s money personality

Giovanni Bellini, Four Allegories: Prudence, c. 1490. Gallerie dell'Accademia, Venice

Giovanni Bellini, Four Allegories: Prudence, c. 1490. Gallerie dell’Accademia, Venice

High finance, writes Dalrymple,

has never really been my forte or my interest. My attitude to finance is primitive: I spend less than I earn.

When, during the boom, Dalrymple’s bank asked if he wanted a loan,

I naïvely told it that I did not need a loan. The bank’s reaction reminded me of that of a newspaper for which I used sometimes to write when I refused to do an article for it on the basis of information that was self-evidently false. What, they asked, had that got to do with it? And for the bank (at the time), what had not taking a loan got to do with not needing one?

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