Category Archives: Greek economy

Cradle of democratic corruption

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Popular dishonesty, writes Dalrymple, is ‘an inherent problem wherever the universal franchise is unaccompanied by widespread virtues such as honesty, self-control, providence, prudence, and self-respect’.

Wir haben auch Familie

But do our Greek debtors?

But do our Greek debtors?

In return, writes Dalrymple,

for yet another pretence that its debt is performing and does not have to be written off,

Greece’s creditors are demanding that the country’s shops open for Sunday trading. Dalrymple points out that such trading is forbidden in Germany, and comments:

I have not noticed that the prohibition has had too devastating an effect on Germany’s prosperity.

Anything that Greek shops sell will moreover be subject to 23% value-added tax —

hardly an incentive to buyers.

Besides,

the problem for Greeks is not that they do not have enough opportunities to buy, it is that they do not have the money with which to buy.

The sage of CMC Markets

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Michael Hewson: han är respekterad för sina öppna och direkta åsikter om vad som händer på marknaden

Dalrymple realises how foolishly he has frittered away so much of his time when he reads the following statement by Michael Hewson of CMC Markets:

Having had a couple of days to absorb the details of the new Greece debt deal, equity markets have continued to remain upbeat, despite the fact that the proposal is economically illiterate and probably doomed to fail.

Dalrymple comments:

Economically illiterate and only probably doomed to fail? In other words, the link between economic literacy on the one hand and success or failure on the other is uncertain at best. Economically illiterate but possibly will succeed? Economically literate but possibly will fail? Mr Hewson of CMC Markets clearly doesn’t want to put all his eggs in one predictive basket. Therefore I say, throw economics to the dogs.

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.

Attire that connotes the plebeian but denotes anything but

Screen Shot 2015-03-31 at 22.35.33The mandarin and the masses

A smug, moneyed, adolescent, Leftist poseur

Motorbike, leather jacket, T-shirt, jeans connote proletarian mass but denote Marxist mandarin

Yanis Veroufakis, the Greek finance minister, has been described as the pop star of the left. This is, as Dalrymple points out,

hardly a term of approbation, rather the reverse.

He has a powerful motorcycle, and likes to dress in a leather jacket, T-shirt and jeans. He is going quite bald. Screen Shot 2015-03-31 at 22.49.25His facial expression

is that of considerable self-satisfaction. He no doubt thinks of himself as deeply unconventional, but in a world of six billion people it is hard to escape convention, and in any case it is not a worthy object.

In fact

he is that most conventional of figures, the adolescent who cannot bear to be fully adult, who wants to be 18-20 forever. In a few years’ time we shall see the first 80-year old adolescents.

Screen Shot 2015-03-31 at 22.51.21While Veroufakis’ clothes have proletarian connotations,

their denotation is anything but. You can see that his black leather jacket must have been very expensive indeed, and his motorbike is not the kind that students ride, but a top-of-the-range swank model [a Yamaha XJR1300].

Veroufakis married into money and a high standard of living, that of the upper 0.1 per cent of the population, and Dalrymple guesses that

he has no great vocation for giving up his privileges for the benefit of the people.

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How the Greeks were most ably assisted by Goldman Sachs

Screen Shot 2015-02-02 at 22.09.15Dalrymple writes that the Greek government,

ably assisted by Goldman Sachs, cooked its books and was allowed to join the euro, the European leaders having been duped, or at least having allowed themselves, or pretended, to be duped; whereafter the banks felt emboldened to lend colossal sums in Greece in the full knowledge that default would not be permitted, and that they never would have lent if Greece had retained its drachma.

What was the vast influx of money used for, apart from the inflation of the value of assets, to the great comfort of the possessors thereof?

Why, to pay the salaries of a bloated bureaucracy, reliant for its good fortune on the political parties that hired it, and which it did nothing to justify, at least from an economic point of view.

It was all

a rather beautiful, smooth-running mechanism, in a way, a bit like that of Mr Madoff’s splendid pyramid scheme that seemed so solid and dependable for a time.

The Hellenic People’s Republic, hope of a new world

Marxist miracle worker

Marxist miracle worker

This glorious European spring

Leftists descended on Athens as student revolutionaries once descended on Havana

After, writes Dalrymple,

we were all Charlie for a day, we all became Greek for a night. Out came all the hopeful young people with shiny joyful faces, lighting candles in the dark and punching the air.

It was spring in Europe, like the Arab spring,

though perhaps the moment was not indisputably auspicious to make the analogy: on the day Greeks were voting for their spring, the Egyptian police were shooting dead 17 people who were commemorating the fourth anniversary of theirs. In Greece, it may yet come to that.

Grand socialist dream

The leftists

dreamed — there was much talk of dreams, which is always a bad sign — of a world in which there were no economic realities, nothing had to be paid for, and prosperity could be decreed, though with satisfying vengeance on the rich and prosperous.

Alexis Tsipras, the prime minister, made

the monument to the memory of the Greek resistance to the Nazis his first port of call, just to remind his people how awful the German chancellor, and the German chancellor’s countrymen, still are.

Prosperity by decree

He then promised to decree Greeks back to prosperity. He

  • pledged many thousands of them free electricity, not noticing that he thereby turned electricity bills for the rest of the population into a form of income tax as well as a payment for services received
  • promised to create jobs, both in the private and public sector, more or less by command, jobs that would have a minimum salary paid in a currency whose emission he could not control and which Greece cannot possibly earn in sufficient quantities to pay for the fulfilment of these promises

How the socialist miracle was to be achieved,

no one knew: but, as all left-leaning commentators agreed, it is permitted to hope and to dream.

Goldman Sachs, Greek economics and the Madoffian model

Screen Shot 2015-02-01 at 22.40.46In Greece, all roads lead to disaster

The pyramid scheme that was the Greek economy

Most of the Greek population appeared to benefit from the scheme that has now collapsed, Dalrymple writes. The two main political parties before the rise of Syriza

operated a system of patronage paid for by borrowing on a huge scale. The system would have been corrupt even if no politician had enriched himself personally. And the European élite believed, or affected to believe, that the national accounts concocted by the Greek politicians in collusion with Goldman Sachs qualified the country for membership of the euro.

The country having acceded to the euro,

French and German banks proceeded to act as if Greek debt were more or less the same as German debt, because membership of the eurozone was supposedly irreversible.

When the equivalence of Greek and German debt

turned out not to be the case, as any tolerably observant visitor to Athens for half an hour could have told them, the fool’s paradise in which the Greeks were living collapsed.

Today

the circle cannot be squared. There is no way out that could possibly justify the hopes placed in Tsipras and his party.