Quick question: Why is anyone trying to bail out Greece? Specifically, why does anyone think loaning Greece even more money will result in anything different than what has been happening?
I don't think the entities who want to bail out Greece are doing so because they expect to profit directly from further loans to Greece. In fact, the bailout proposals have all involved the lenders taking huge writedowns on the existing loans.
It seems that the incentive to bail out Greece has a fair bit to do with the potential negative consequences to some parties if Greece leaves the EU.
First and probably foremost, there's the matter of the global markets. I don't pay much attention to the foreign markets, but I can tell you the Dow has been on quite a rollercoaster ride as Greece vacillates between deal and no deal. Keep in mind that, sadly, Greece isn't worth that much money. Their GDP is only a little higher than Apple's annual revenue. It may simply be that the hit to the markets from a Grexit is more painful to the financial organizations involved than the writedowns on the loans.
Second, 40% of the Grecian voters find remaining in the EU to be in their interest even with fairly severe austerity riders attached, based on the results of the referendum. True, they're in the minority, but that's still a lot of people.
Third, there are people with a vested interest in the concept of the Eurozone, whether it be because of advantageous monetary power (poorer countries like Greece get the short end of the stick from centralized monetary policy) or political ideology. (the EU is a small scale experiment in globalized top-down monetary policy and if it fails, so does that idea) These people are worried about the precedent a Grexit would set. If a country can simply turn its back and go its own way when the externally imposed monetary policy is no longer appealing, then globalizing the policy starts to seem like a futile exercise. To the ideologues, paying Greece off in the form of a writedown on its loans is a small price to pay to avoid this precedent being set. Germany could buy Greece a hundred times over. (Without having to borrow any money.)
And yet, these "ultimate causes" result directly from capitalism's modus operandi: use your position of power to dispossess those with less power of their capital.
The reason I suggested talking about the actual human decisions behind the crisis was to encourage rational discussion that can be conducted on the basis of facts as opposed to things like this. This is just an empty Marxist slogan.
To narrow down the blame for the crisis to those who are acting within capitalism, rather than looking at the conditions that make their poor decisions rational (from the perspective of the lender) or seemingly necessary (from the perspective of the borrower), is to miss the forest for the trees.
In Western liberal society, we all act within capitalism, and blame attaches only to moral agents. Therefore any blame that we do or can assign will be assigned to those acting within capitalism. To blame capitalism is to blame the forest when someone chops down some of the trees.
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A limit of time is fixed for thee
Which if thou dost not use for clearing away the clouds from thy mind
It will go and thou wilt go, never to return.
Blaming capitalism for the current Greek economic crisis is like blaming Newton's laws when someone is killed by a drunk driver. Sure, physics was the proximate cause -- but the drunk guy at the wheel and his poor decision making were the ultimate cause.
I would suggest focusing on the ultimate causes -- the moral decisions made by human beings that led to the accumulation of more debt than could conceivably be repaid.
TomCat mentioned one of them -- lending that would be irresponsible but for the reliance of lenders on the fact that "bailouts" have now been enshrined as standard practice. If it wasn't clear why those crazy right-wingers were shouting about how that was a bad idea, well, I hope the picture is getting less fuzzy now.
Private Mod Note
():
Rollback Post to RevisionRollBack
A limit of time is fixed for thee
Which if thou dost not use for clearing away the clouds from thy mind
It will go and thou wilt go, never to return.
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I don't think the entities who want to bail out Greece are doing so because they expect to profit directly from further loans to Greece. In fact, the bailout proposals have all involved the lenders taking huge writedowns on the existing loans.
It seems that the incentive to bail out Greece has a fair bit to do with the potential negative consequences to some parties if Greece leaves the EU.
First and probably foremost, there's the matter of the global markets. I don't pay much attention to the foreign markets, but I can tell you the Dow has been on quite a rollercoaster ride as Greece vacillates between deal and no deal. Keep in mind that, sadly, Greece isn't worth that much money. Their GDP is only a little higher than Apple's annual revenue. It may simply be that the hit to the markets from a Grexit is more painful to the financial organizations involved than the writedowns on the loans.
Second, 40% of the Grecian voters find remaining in the EU to be in their interest even with fairly severe austerity riders attached, based on the results of the referendum. True, they're in the minority, but that's still a lot of people.
Third, there are people with a vested interest in the concept of the Eurozone, whether it be because of advantageous monetary power (poorer countries like Greece get the short end of the stick from centralized monetary policy) or political ideology. (the EU is a small scale experiment in globalized top-down monetary policy and if it fails, so does that idea) These people are worried about the precedent a Grexit would set. If a country can simply turn its back and go its own way when the externally imposed monetary policy is no longer appealing, then globalizing the policy starts to seem like a futile exercise. To the ideologues, paying Greece off in the form of a writedown on its loans is a small price to pay to avoid this precedent being set. Germany could buy Greece a hundred times over. (Without having to borrow any money.)
Which if thou dost not use for clearing away the clouds from thy mind
It will go and thou wilt go, never to return.
The reason I suggested talking about the actual human decisions behind the crisis was to encourage rational discussion that can be conducted on the basis of facts as opposed to things like this. This is just an empty Marxist slogan.
In Western liberal society, we all act within capitalism, and blame attaches only to moral agents. Therefore any blame that we do or can assign will be assigned to those acting within capitalism. To blame capitalism is to blame the forest when someone chops down some of the trees.
Which if thou dost not use for clearing away the clouds from thy mind
It will go and thou wilt go, never to return.
I would suggest focusing on the ultimate causes -- the moral decisions made by human beings that led to the accumulation of more debt than could conceivably be repaid.
TomCat mentioned one of them -- lending that would be irresponsible but for the reliance of lenders on the fact that "bailouts" have now been enshrined as standard practice. If it wasn't clear why those crazy right-wingers were shouting about how that was a bad idea, well, I hope the picture is getting less fuzzy now.
Which if thou dost not use for clearing away the clouds from thy mind
It will go and thou wilt go, never to return.