29 replies to this topic

[vota dc]

Sneakgab, on 31 January 2012 - 01:16 PM, said:

''The retirement age for Greeks is 55 for men; 50 for women''

This at least would appear to be verifiably false. According to the OECD*, the ''normal retirement age'' (I assume that refers to an average or some such) of Greeks is 65.

*http://en.wikipedia.org/wiki/Retirement#Retirement_in_specific_countries

In Italy was 40, and still both taxes and government cost were lower. God know in which hole they are throwing our money.

[Edric O]

Mihail, on 11 February 2012 - 02:25 AM, said:

I suppose much of it is just a difference of accepted tactics and temperaments, but the Greeks should temper their expectations of a good, easy life and exchange them for something much more unpleasant and realistic... And get on with it. Greece's economy... Well, there's not much of it. Olive oil, shipping, and tourism. Can't help thinking they've been living beyond their means for too long, and the hangover has come around.

I disagree completely (and since Wolf has made basically the same point, this post is in response to him, too).

There is really no such thing as "living beyond our means," when you think about it. Everything that is bought must first be produced. And everything that was produced yesterday can be produced again tomorrow. Unless some kind of natural disaster or war destroyed factories or land or killed workers or otherwise reduced our productive capacities, there is no objective reason why we need to reduce our consumption.

We are used to thinking of money as the resource that must be expended to produce things. But this is an illusion. Money is just a social convention. The actual resources that must be expended to produce things are human labour and raw materials. And the thing is, although Greece (and others) have no money, they still have the same labour and raw materials as before.

There was no natural disaster. There was no war. All the factories and workers that produced things for Greece three years ago are still there, still ready to produce the same things as before. So why is there any need for the Greeks to lower their living standards? In fact, why is there any need for anyone to have lower living standards today than they did in 2007? All the productive capacity we had in the world in 2007 is still there. There is no objective reason why we couldn't produce and consume just as much as we used to (if not more).

In other words: there is no physical problem. The "hardware" of the economy is doing just fine. The problem is with the "software" - the way the global economy is organized, the capitalist system.

Here is what happened. For about three decades after the end of World War 2, Western Europe, North America and Japan had a mixed economic system with widespread regulation of business, high taxes, high public expenditures, a strong social safety net, free or almost-free higher education, strong unions, and (in Europe) state ownership of major sectors of the economy. This kind of social democratic or state-directed capitalism generated the fastest rise in living standards for working people in the history of the West. This was the period when the modern notion of the nuclear family appeared, because newly-married working class people were able for the first time to afford new homes away from their parents. This was the period when ordinary people started buying refrigerators, washing machines, vacuum cleaners, television sets, and cars. It was the birth of consumer society.

Before WW2, working class people in the West had been a brutally oppressed underclass, not being able to afford much beyond food and basic necessities. Hatred of capitalism was widespread among workers, and even capitalism's defenders generally accepted the idea that the working class would sooner or later rise up against them. After WW2, thanks to state intervention and redistribution, all of that changed. The working class was offered the carrot instead of being beaten with the stick. Working people in the West started believing that capitalism could give them a comfortable and relatively affluent life, and a secure retirement. The capitalists successfully averted a communist revolution.

In essence, the capitalists made a deal with the workers after WW2: "We will give you consumer society and constantly rising living standards, in exchange for you giving up thoughts of revolution."

This deal was put in danger in the late 70s and early 80s, when the age of state-driven capitalism ended and neoliberal capitalism took its place. Countless regulations were eliminated, taxes on the rich were drastically cut, state-owned companies were privatized, unions were crushed (sometimes violently), and the social safety net was gradually shredded. The size and strength of the banking sector grew by leaps and bounds, secure lifetime jobs disappeared, and inequality soared. But the workers still expected rising living standards. And the capitalists knew that they could not afford to abandon consumer society, because (1) angry workers might put revolution back on the table, and (2) without mass consumption, demand for many products would collapse, and profits would suffer. But how could the workers be given rising living standards while their real incomes stagnated or declined? The banks provided the answer: borrow, borrow, borrow!

Debt of all kinds has exploded in the age of neoliberal capitalism. Debt has been used for the past 30 years to prop up consumer demand and therefore the entire capitalist system itself. In some countries, such as the US, most of the borrowing was done by individuals. In other countries, such as Greece, the government borrowed in order to fill the hole created by cutting taxes on the rich. But the main trend was the same everywhere: Between WW2 and 1980, the rich had agreed to transfer some of their wealth back to the workers, in order to stimulate demand and avoid social unrest. After 1980, they replaced transferring with lending. The rich still gave some of their money back to the workers, for the same reasons as before, but now they expected the workers or their governments to pay them back (with interest).

This strategy has now reached its inevitable end. The demands of the rich to be paid back can only be met through massive cuts in the living standards of the workers. In the US, where so much debt is individual, these cuts often come in the form of people being kicked out of their homes because they can't pay mortgages, or having to drop out of college, or being unable to afford health care. In Greece (and much of Europe), where the government took on a lot of the debt, governments are the ones who can no longer afford to pay back the rich and must therefore cut basic services.

So let us be clear here. What is happening in Greece and the entire world is that the rich are telling working people, "the deal we made with your grandparents after WW2 is over. We allowed you to enjoy rising living standards for a while. No more. From now on, most of the value that you used to consume will be given to us instead."

In capitalism, a small rich minority controls most of the wealth. For sixty years, they've been willing to share a large chunk of that wealth with us in one form or another. Now they want to keep it all for themselves. That is the real problem in Greece. As I said in the beginning of this post, the physical "hardware" of the economy is doing just fine. We could all continue to produce and consume as we did before 2007, if we really wanted to. But the capitalists - or, to be more specific, the banks - refuse to allow us to do so.

The solution is not to say to them, "ok, fine, we'll pay, we'll do whatever you ask." The solution is to remind the capitalists that the working class is the producer of all wealth and that the money we borrowed from them should have been rightfully ours in the first place. The solution is to cancel all debts and tell the banks to shove it.

[Caid Ivik]

I wouldn't be so sure about the usefulness of pure marxist dichotomy in this problem. The problem with Greece seems to me to be in consumption, not in government's unproductive investments.

When I borrow to start a business, the debtor rightly expects from me to repay him; if I'm succesful, my productivity raises and I'm able to repay the debt. Problem with Greece is that it didn't use the money for improvement of its productivity. It borrowed on the EU market, but couldn't produce wares capable of competition there. Yes, that means sometimes bonuses for big companies with know-how and modern technologies too. You can have thousand factories, but if they don't improve their products, you can't have wage increases. Yet, what does actually Greece produce? Baklava? You get it ten-times cheaper across the border in Kjustendil or Edirne. Greece couldn't improve its private sector, so the state absorbed many persons unable to find or start to work. Immense administrative, low retirement age, with wages and rents on a "western" level, despite economy's unproductivity. The only argument against the cuts, ad nauseam repeated by Greek politicians, is that their voters won't accept this. The "workers" have their say, I think, they are thus the cause of Greek turmoil. They have chance to 1.) become like Bulgaria, an austere state with minimal welfare, but open for EU support, or 2.) like Syria and damage the whole EU.

In Greece, the problem is populism and total irresponsibility towards the financial resources. People think the state is omnipotent and ignore simple mathematics.

[That Guy]

Caid Ivik, on 23 February 2012 - 10:57 AM, said:

I wouldn't be so sure about the usefulness of pure marxist dichotomy in this problem. The problem with Greece seems to me to be in consumption, not in government's unproductive investments.

Really, this would imply otherwise: http://www.zerohedge...itary-purchases
As if the people currently have any real power. Governments are usually in control of the finances of a country (ie. not the people), especially in the case of Greece.

[Sneakgab]

''I wouldn't be so sure about the usefulness of pure marxist dichotomy in this problem. The problem with Greece seems to me to be in consumption, not in government's unproductive investments.''

The problem is Greece's consumption? What part of Edric O's post did you read exactly, apparently it was the imaginary part that speaks about unproductive government investments.

Seems like you're just speaking random nonsense to me.

''It borrowed on the EU market, but couldn't produce wares capable of competition there.''

''Yet, what does actually Greece produce? Baklava? You get it ten-times cheaper across the border in Kjustendil or Edirne. Greece couldn't improve its private sector, so the state absorbed many persons unable to find or start to work.''

And this is the fault of the Greek on the street how? Might want to re-familiarize yourself with the topic.

''The "workers" have their say, I think, they are thus the cause of Greek turmoil''

And what gives you that idea? The Greek government has been the loyal lap dog of the Troika, who, it is said, even appointed their new prime minister (I don't know much about the prime minister business to be honest)

''low retirement age, with wages and rents on a "western" level, despite economy's unproductivity''

Low retirement age? I believe we've been through that. While I'm on the topic, here are some facts supported by reputable organizations (mostly anyway).... ya know, if anyone is interested in that sort of thing:

'' Public spending: according to the Center for American Progress, public spending in Greece is only 44.6% of GDP. This is lower than the EU average, lower than Germany’s 46.6% and considerably lower than Sweden’s 55%.

Tax collection: the real problem is not social expenditure on the poor but the lack of tax collection from the rich. From 2001 to 2007, Greece collected only an average of 39.4% of GDP in taxes, compared to the EU 44.4% average.



Hours worked per week: According to Eurostat data of 2005, the Greeks worked 43.1 hours per week (compared to 35.7 hours in so-called ‘thrifty’ Germany, with its much-touted ‘Protestant work ethic’).
Hours worked per year: More recent OECD data shows the Greeks to work an average of 2,119 hours per year — 690 hours more than the average German, 467 more than the average Brit and 356 more than the OECD average. In fact, out of all OECD countries, only the Koreans work more.
Amount of paid holidays: The paid leave entitlement in Greece is 23 days per year. This is actually below the EU average, and significantly lower than the minimum of 28 days in the UK and 30 (!) days in Germany.
Retirement age: Again, Eurostat data from 2005, shows the average age of exit from the labour force in Greece to be 61.7. This was higher than in Germany, France or Italy and higher than the EU27 average. It is being raised even further now as a part of the EU-IMF bailout conditions.



According to Eurostat, even before crisis, in 2008, one in five Greeks (among them almost half a million children) lived under the formal poverty line of 500 euros per month.
An independent survey by Kapa Research and the London School of Economics found even worse data: a third of the Greek population now live in formal poverty (and mind you: this was in 2007 – it’s actually gotten a lot worse since as a result of these draconian austerity measures).
Every child in Greece is born with a 40,000 euro debt on their name.
Greece’s youth are now referred to in the country as Generation 700: because that’s the maximum monthly wage that young Greeks will typically make – that is, if they are lucky enough to find a job: according to the Financial Times, over 35 percent of young Greeks is out of work right now.
The so-called 13th and 14th salaries (Christmas, Easter and summer bonuses) are not additional salaries. As a Greek reader on this blog, Amalia, pointed out: “Greeks do not get two extra salaries a year; their annual salary is simply divided by 14 and they get two installments at Christmas, one and half at Easter and one and a half sometime in the summer.”
The Dutch get a 13th month worth of salary and Austria has a 14th month. Since these countries are not experiencing a similar budget crisis, this simply can’t be the cause of Greece’s debt.
The bottomline is: it doesn’t matter in how many installments you receive your salary (whether it’s in 12, 13, 14 or 2,000 parts); what matters is your annual salary. As long as you make less than 6,000 euros a year (as is the case for 20 percent of Greeks) you live in poverty — period.
Living costs in Greece are the highest of all of Europe.
As a result of this lethal combination of low wages and high living costs, millions of Greeks are forced to work two or three jobs just to survive.
Since last year’s bailout, the Greek economy contracted almost 5%, 50,000 to 65,000 business have been closed, unemployment increased by 400,000, industrial activity declined by 11%, the construction sector contracted by 73%. Partly as a result, suicide rates are reported to have nearly tripled.
All in all, this is a humanitarian tragedy of unprecedented proportions. How could Mr. O’Brady possibly keep a straight face arguing that the people experiencing all of the above, are somehow spoilt children?



First of all, the bailout is not a handout: the Greek people don’t actually benefit from the EU-IMF bailout. Even if the bailout money really did go to the Greeks, this wouldn’t necessarily be beneficial for the Greek people at all. After all, the bailout is a loan for which the EU and IMF charge an exorbitant 8 percent interest rate, meaning northern European tax payers and the IMF should make a handsome profit from their so-called ‘rescue aid’, while the Greeks will only be further indebted by it.
The bailout serves not Greece but Europe’s insolvent banks: as former IMF Chief Economist Kenneth Rogoff pointed out last year already, “a lot of European banks are insolvent.” The real problem of the European crisis isn’t the fiscal crisis in the periphery, it’s the financial crisis in the banking sector of the core.
Private bank exposure to Greek sovereign debt: BNP Paribas: 5bn – 7 percent of equity; Société Générale: 2,5bn – 6 percent of equity; Postbank: 1,2bn – 21 percent of equity; Kommerzbank: 2,9bn – 27 percent of total equity. That’s just a handful. More data here.
Central Bank exposure to Greek debt: the European Central Bank has 190bn of exposure to Greek debt.
ECB close to insolvency: according to a recent report by Open Europe, asset losses as small as 4.25% could tip the ECB into insolvency. Greek default alone would chip 2.35% to 3.47% off of the ECB’s capital base. Add in a Portuguese or Irish default and you have the European Central Bank – the flagship of European capitalism – literally going bankrupt.''

Courtesy of Jerome E. Roos, who somehow managed to actually dig this shit up.

http://huey3man.word...a-lies-exposed/

The Eurostat, OECD, Open Europe, Financial times, e.t.c links are all on the page.



''The actual resources that must be expended to produce things are human labour and raw materials''

Even raw materials can be put in terms of human labour. It's not like we'll ever actually run out of anything, it just takes more and more to get to it. Taken together with technological advance, this can make raw resource acquisition either more or less expensive.

[Caid Ivik]

Sneakgab, on 24 February 2012 - 07:56 PM, said:

''I wouldn't be so sure about the usefulness of pure marxist dichotomy in this problem. The problem with Greece seems to me to be in consumption, not in government's unproductive investments.''

The problem is Greece's consumption? What part of Edric O's post did you read exactly, apparently it was the imaginary part that speaks about unproductive government investments.

EdricO - Between WW2 and 1980, the rich had agreed to transfer some of their wealth back to the workers, in order to stimulate demand and avoid social unrest. After 1980, they replaced transferring with lending. The rich still gave some of their money back to the workers, for the same reasons as before, but now they expected the workers or their governments to pay them back (with interest). This strategy has now reached its inevitable end. The demands of the rich to be paid back can only be met through massive cuts in the living standards of the workers. In the US, where so much debt is individual, these cuts often come in the form of people being kicked out of their homes because they can't pay mortgages, or having to drop out of college, or being unable to afford health care. In Greece (and much of Europe), where the government took on a lot of the debt, governments are the ones who can no longer afford to pay back the rich and must therefore cut basic services.

My point is, if you at least tried to read my post as a whole, that a government must stimulate country's production to rise if it wants to ever think of paying back. EdricO says here the government tries to pay it back by lowering consumption; my view is they shouldn't even create such a welfare system if they can't afford it. When you do, you're making debt slaves from your children.

Sneakgab, on 24 February 2012 - 07:56 PM, said:

And this is the fault of the Greek on the street how? Might want to re-familiarize yourself with the topic.

Where did I say it is?

Sneakgab, on 24 February 2012 - 07:56 PM, said:

Low retirement age? I believe we've been through that.

Averages don't show big differences - http://www.thisismon...e-compared.html
Early retirement does - http://www.usatoday....tire18_ST_N.htm

From your link, number of still employed:
55-59 years - Germany 64%, Greece 31%
60-64 years - Germany 23%, Greece 18%
65-69 years - Germany 3%, Greece 4%

Couple of hard-working geronts enables early retirements of many, isn't it so?

[Caid Ivik]

That Guy, on 24 February 2012 - 05:11 PM, said:

Really, this would imply otherwise: http://www.zerohedge...itary-purchases
As if the people currently have any real power. Governments are usually in control of the finances of a country (ie. not the people), especially in the case of Greece.

Yes, that's a funny point, especially when I look at Wolf's post about Germans being angry at Greece's military spending...

[That Guy]

Caid Ivik, on 25 February 2012 - 09:51 AM, said:

Yes, that's a funny point, especially when I look at Wolf's post about Germans being angry at Greece's military spending...

I'm afraid I don't quite understand what you're trying to imply or say, could you elaborate?

[Caid Ivik]

That Guy, on 26 February 2012 - 12:28 PM, said:

I'm afraid I don't quite understand what you're trying to imply or say, could you elaborate?

In the link you've posted is a lot of German products involved. It shows part of the fact that the measures taken to prevent Greece from defaulting are actually aimed to help creditors, not the debitor.

Wolf: The Greek debt crisis has been discussed ad nauseam and I think there's very little doubt that much of the blame really does rest squarely on Greek shoulders. I mean, for Heaven's sake, the country has the world's 23rd largest military but a population of only roughly 10 million. They've got almost as many main battle tanks as Israel for crying out loud and--if I'm not mistaken--Greece ought to be primarily a maritime power. No wonder the Germans are furious.

[That Guy]

Caid Ivik, on 26 February 2012 - 01:10 PM, said:

In the link you've posted is a lot of German products involved. It shows part of the fact that these measures to prevent Greece from defaulting is actually aimed to help creditors, not the debitor.

My apologies, I never actually read Wolf's post properly.