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Why I Think Greece Should Default

by on February 22, 2012 3:24 pm in MAIN

Many years of bad governance and an unethical plan by a huge financial company has put Greece in the position it is in today. But it isn’t just Greece. Other countries in Europe and the Middle East have had the same problem.

Here’s a great article I found that explains the Greek problem which is similar to the problems in other countries:

The real cause of the Greek sovereign debt crisis

By Nasos Mihalakas *

The Greek sovereign debt crisis has captured the attention of the world, both for what it says about the viability of the euro and the European Union integration project, but also for the warning signs it sends to governments around the world about governance and public finances. In the US, politicians both on the right and the left are using Greece as an example of how bad management of public finances can lead to economic catastrophe.

In particular for the right, Greece is at the edge of the abyss because of the bloated government bureaucracy, the unreasonably generous pension and healthcare benefits, and the sclerotic labor market. For the left, Greece’s financial troubles could easily be resolved if people paid their taxes properly, and the uber-wealthy were prevented from tax-evading so blatantly.

However, the true cause of the Greek sovereign debt crisis is the same as the reason why Europe cannot manage the greatest threat to ever hit the eurozone: the failure of the governance system. The Greek system of governance has failed to address the type of economic issues present in almost every country in the world — issues well known to all, and easily fixable. Poor management of public finances in Greece is not some generically inherent predisposition of the Greek people — rather it’s what happens when you have a bad system of governance.

Even though an agreement was reached this week on how to reduce the government’s debt, and reform the economy to meet future debt obligations, doubt persists in Europe and around the world. Until the governance system is reformed, and everybody recognizes the connection between governance structure and policy results, Greece is bound to repeat the mistakes of the past. This is because certain systems of governance will always produce certain policy results.

A parliamentary system of governance, where executive and legislative branches blend and tend to be dominated by the same actor, will often spend more, save less, and kick the proverbial can down the road. Federal/republican systems of governance, where there are district separations of powers and checks of the government’s authority will often be more cautious, reserved and adhere to the philosophy of small government. This is not always true, and of course there are exceptions to every rule, but Greece and Southern Europe are making a mighty powerful case for this argument. [more]

I know I post a lot about Greece and it’s problems, but it’s important. It’s important because if not handled right, it could throw the world economy into a tailspin again. If handled right, it will prove that Austerity doesn’t work. Two important things right now. And it may also prove that we need stiff regulations for Banks and Financials not only here but world wide. It is a Global Economy and everyone must play with the same rules.


Second Greek bailout a charade?

On Tuesday, the Eurozone finance ministers settled on a 130-billion-euro bailout for Greece. According to reports, the bailout was necessary to avert a default and the move comes after the Greek government cut thousands of public jobs which lead to many angry Greeks taking to the streets in protest. The deal is supposed to cut Greece’s debt to GDP to 120.5 percent by 2020 which many critics are saying is pointless. Here is the latest on the Greek bailout.

The European Union has already installed a Technocrat to run the Greek Government, one who was not voted in by the people of Greece and have installed advisers to make sure the Greek debt is paid first. (Reminds me of the Emergency Managers appointed by the Governor of Michigan.) Again, all this will not help the Country of Greece but does protect the bond holders to some degree but mostly the Banks who have pushed off their risk to the Bond Holders and they would take a similar cut in a structured default.

Continuing these “bailout” deals for Greece is just hurting the country more because, at this point, it will never get out from under the debt that has been piled on it to keep it from defaulting which in the end will hurt the Banks the most. With a structured default and a new government and government structure along with strict regulations for the Government and Banks and Financials there is a very good chance for Greece to recover from it’s Depression. It would have been better had this happened earlier, before the “good money after Bad” happened. Also the government should have enlisted the help of the people of Greece to work toward a better future to replace the pain they are feeling now. Something to look forward to.

The lesson here is that Good Governance is the most important. And this is true here as well as in Greece or any other country. We must make the politicians accountable to the people for their choices by regulating them. Not more regulations, just stronger regulations that the politicians must live by. Like getting money out of politics. And the same for the Banks. They must be regulated or we will have this problem again.

Image credit [top]: “Greeks Protest Austerity Cuts” By PIAZZA del POPOLO

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475 Comments

  • Crank Bait February 29, 2012 6:30 am

    @60th Street:
    Horatio Sanz is the prime suspect. I can’t see what he was doing in the beginning of the sketch but he was certainly egging it on after the contagion took hold.

    ReplyReply
  • Crank Bait February 29, 2012 6:41 am

    Santorum has done what few could do. He fostered a bipartisan consensus against him.

    ReplyReply
  • Kate Anne February 29, 2012 7:03 am

    @toniD: Hope things go well at the doctor’s. I’ve been doing a little lurking — not enough. Will try to pipe in more often. Work has been NUTS! Even the Netflicks’ subscription has been languishing. HUGS!! (And thanks!!)

    ReplyReply
  • dan February 29, 2012 7:10 am

    @Crank Bait: thats the problem with a flavor du jour.

    so who will be the next to float to the top of the punch bowl?

    ReplyReply
  • toniD February 29, 2012 7:22 am

    The Associated Press The Associated Press ‏ @AP

    1 person killed, 13 injured when possible tornado hits trailer park in southwest Missouri: apne.ws/zzviCn - VW

    The Associated Press The Associated Press ‏ @AP

    Israeli troops raid 2 private Palestinian TV stations in West Bank, confiscate equipment: apne.ws/wqdyxb -VW

    Current TV Current TV ‏ @current

    Obama to sign order creating trade enforcement unit bit.ly/xpx9OE

    via @reuters

    ReplyReply
  • Kate Anne February 29, 2012 7:27 am

    @Crank Bait: The Debbie Downer Disneyland SNL segment really was a LOL snippet. Thanks. Good way to start the morning after the cat left a surprise in my bed. Smirk.

    ReplyReply
  • toniD February 29, 2012 7:31 am

    @Kate Anne: Thanks Kate Anne. This weird weather is making me hurt more. Maybe I’ll get a shot today.

    @dan: Or the toilet.

    For 60th:

    The Raw Story ‏ @RawStory

    Ecuador may have found last Inca emperor’s tomb is.gd/fohWCf

    ReplyReply
  • toniD February 29, 2012 7:42 am

    Reuters Top News ‏ @Reuters

    Syrian army assaults rebel district in Homs reut.rs/whBynK

    The Associated Press The Associated Press ‏ @AP

    European Central Bank makes second round of crisis loans to stabilize euro: apne.ws/y41ETr – VW

    BBC News (World) BBC News (World) ‏ @BBCWorld

    #China’s foreign minister tells Arab League head that #Beijing supports humanitarian aid for #Syria bbc.in/wxtzGl

    ReplyReply
  • toniD February 29, 2012 7:45 am

    Happy Leap Day!

    Dan…Tornadoes may be headed your way so be careful please.

    Lots of Tornado damage in So. Illinois, Missouri, Indiana, Tennessee, Kentucky already this AM!

    ReplyReply
  • toniD February 29, 2012 7:55 am

    March Birthdays:
    Jmach1P March 12
    Kate Anne March 14
    ToniD March 18
    BibiMimi March 29

    April Birthdays:
    Cat Chew April 1
    Chris April 24
    Michael April 25

    ReplyReply
  • Kate Anne February 29, 2012 7:56 am

    @toniD: Also it is a fun day for those celebrating their actual birthdays. Meanwhile, looks like it is another gorgeous unseasonable day in NYC. March may come in like a lamb but even that won’t likely make a difference. Or maybe we will have a freak snowfall in May…. (Our biggest snowfall this year was that in October.)

    ReplyReply
  • toniD February 29, 2012 8:26 am

    Corseted Minds: Does Fear of Irrelevance Send Conservative Men Fleeing to the Victorian Age?
    By Lynn Parramore, AlterNet
    Posted on February 28, 2012, Printed on February 29, 2012

    In the last 50 years, American women have finally been able to reliably earn a living, thus rendering men economically unnecessary. Women are outstripping men in education. We’re breaking the glass ceiling. Childbirth out of wedlock no longer carries disgrace. There’s enough sperm stashed away in banks to promulgate the human race indefinitely. On a biological level, modern science has debunked the Adam’s rib story about the female being a derivative of the male.

    Still more shattering, there’s even worry that the Y chromosome is in danger of extinction. At the very least, it has seen better days. As the New York Times recently reported:

    “Men, or at least male biologists, have long been alarmed that their tiny Y chromosome, once the same size as its buxom partner, the X, will continue to wither away until it simply vanishes. The male sex would then become extinct, they fear, leaving women to invent some virgin-birth method of reproduction and propagate a sexless species.”

    That’s gotta make Rick Santorum nervous. (Though the Times does concede that men may have “long-term viability” after all).

    Conservatives find themselves in an era of technological advance, information on steroids, women on the rise, and men who do not know what their role is supposed to be. Can we be surprised that they look back wistfully on a “simpler time” when gender roles were strictly defined – and when men did the defining?

    The Angel in the House

    Fools rush in where angels fear to tread. And young conservatives, apparently. In a recent episode of the birth control battles, James Poulous, a Georgetown grad student styling himself a “postmodern conservative,” plunged into political quicksand on Tucker Carlson’s blog “The Daily Caller” with a much-reviled essay: “What are women for?” This question, he announces, is the most pressing of our time. Writes Poulous:

    “In a simpler time Sigmund Freud struggled to understand what women want. Today the significant battle is over what women are for. None of our culture warriors are anywhere close to settling the matter.”

    All righty then. The sophomoric and risible qualities of his posting aside, Poulous has an argument, of sorts. He makes a roundabout suggestion that the utilitarian purpose of women is to get married and make babies. But not quite comfortable with leaving women as two-legged cattle, he endows us, based on our “privileged relationship with the natural world,” with a moral purpose, too. Women are here to civilize the barbaric ways of men. In response to the predictable social media/web backlash, Poulous has posted two defenses of his original essay. Amid the hurly-burly of the gender wars, he notes that “everyone else feels their civilization is in peril, and the bile rises accordingly.”

    I’ll say. Poulous is like a cat spitting up a hairball, unaware of what has irritated his tummy and looking around in vague embarrassment at the mess he has made on the living room floor.

    So let’s play the veterinarian and find out what brought on the attack.

    [more]

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  • toniD February 29, 2012 8:41 am

    EPA Warned Of Water Contamination From Hydraulic Fracking Back In 1987
    By Jack Swint

    Thirty Year Old Study States Contaminated Well Water Is Irreversible

    The recent NY court judges ruling that backs townspeople’s right to ban hydraulic fracking by natural gas drilling companies will most likely have a downward trickle effect to states like West Virginia who are facing the booming new method of the natural gas exploration industry known as “fracking.”

    On February 24th, 2012 the NY judge sided with the citizens of Dryden that will prohibit the gas well drilling in their town even though state law allows it. Mahlon Perkins, Dryden’s town attorney, says the case is not about fracking. “This case is about land-use authority,” he told the Ithaca Journal. “It comes down to whether a municipality that has land-use authority, such as a village, city or town, can determine where heavy industrial uses are allowed or if they are allowed.”

    The Dryden case is merely the latest in a string of numerous health and safety issues arising from Colorado to Pennsylvania dealing with the methods of “hydraulic fracking” within the natural gas exploration industry. Problems that the EPA outlined as far back as 1987.

    Environmental And Health Hazards Related To Fracking Discovered In WV (1987)

    The EPA warned Congress back in 1987 of its findings in tests conducted on the well water of James and Ruth Parsons of Ripley WV that led them (EPA) to declare that high levels of pollutants and contaminates were associated with the gas well that had been fracked within 600 feet of his well causing Parsons water to no longer be suitable for drinking.

    The EPA claims that WV authorities knew as far back as 1984 when the department of mines performed water well inspections on the Parsons property due to the oil and gas well that was drilled in October 1982 by Delaware Company of Kaiser Exploration and Mining. The report states that the Kaiser gas well was “hydraulically fractured.”

    That 1984 report claims contamination problems in the water were “first noticed about a year and a half after the Kaiser gas well was hydrofracted and that from the outset, the state suspected that the nearby gas well was the cause of the water contamination problems.”

    A final report by the WV Department of Energy, Oil and Gas Division on August 7, 1985 states that an inspector went out to the Parsons water well 3 years after it was drilled and more than a year after the pollution was found. He found adequate cement strength in that well and adequate fresh water casing.

    This is significant because in alleged cases of water pollution from fracturing, the industry often says that there was a failure of the well casing. The report also said that more than a year after pollution had first shown up in the Parsons water well, the inspector of the gas well found no signs of surface or underground pollution.

    [more]

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  • toniD February 29, 2012 9:14 am

    HuffPost Media HuffPost Media ‏ @HuffPostMedia

    Journalist detained by police at Mitt Romney event huff.to/xanO6N

    Lamont Cranston ‏ @LCranston1939

    Ayn Rand Worshippers Should Face Facts: Blue States Are the Providers, Red State Are the Parasites bit.ly/AncIm2 #topprog #p2

    ReplyReply
  • toniD February 29, 2012 9:43 am

    LOLGOP LOLGOP ‏ @LOLGOP

    Jon Stewart slams Fox News for basing talking points on RNC memo: submitted by wang-banger to politics [link]… bit.ly/yaDH8H

    Comedy Central is down for maintenance so you can watch one of Jon’s best attacks on Fox new and Romney’s gaffe at the above link.

    ReplyReply
  • toniD February 29, 2012 9:44 am

    have to get ready. Dr.’s appt. this AM

    later!

    ReplyReply
  • toniD February 29, 2012 9:50 am

    One more:

    ReplyReply
  • toniD February 29, 2012 11:18 am

    David Dreier To Retire From House

    Rep. David Dreier (R-CA), the Rules Committee chairman who has served in the House since 1981, will not seek reelection this year, he announced Wednesday in a floor speech.

    The Associated Press The Associated Press ‏ @AP

    Stocks leap one day after Dow Jones’ big milestone as the Nasdaq hits 3,000 for first time in 12 years: apne.ws/w2GCpS -EF

    Senator Patty Murray Senator Patty Murray ‏ @PattyMurray

    Just so we’re all on the same page: @Senate_GOPs won’t allow debate on roads until we’ve debated whether #women should have #contraception.

    Don Millard ‏ @OTOOLEFAN

    RT @brianstelter: Here’s the NYT story on James Murdoch giving up his role overseeing News Corp’s UK newspapers: nyti.ms/xtYm05

    ReplyReply
  • toniD February 29, 2012 2:12 pm

    Senate Democrats ‏ @SenateDems

    Fast Fact via @SenatorBoxer: 15% of #women r prescribed #birthcontrol b/c they want 2 avoid ovarian cancer. Saying #NoContraceptionBan 2 GOP

    Guardian news ‏ @guardiannews

    Davy Jones of the Monkees dies, aged 66 gu.com/p/35p4p/tf

    [Heart attack]

    ReplyReply
  • toniD February 29, 2012 2:27 pm

    Olympia Snowe Opposes GOP’s Anti-Contraception Blunt Amendment

    By Alex Seitz-Wald on Feb 29, 2012 at 1:50 pm

    Sen. Olympia Snowe (R-ME) came out today against a piece of legislation her fellow Republicans are advancing to stop the Obama administration’s new birth control rule. The amendment, sponsored by Sen. Roy Blunt (R-MO), would go much farther the Obama rule and allow any employer to deny coverage for contraceptives and other preventative health care services to their employees. The measure puts “your boss in your bedroom and in between you and your doctor,” as ThinkProgress’ Josh Dorner noted, and could endanger millions of women’s insurance coverage for preventive health care.

    Republican lawmakers have rallied around Blunt’s amendment. A vote is scheduled for tomorrow, attached to an unrelated transportation bill. But Snowe — who announced her retirement yesterday — said on MSNBC today that the Blunt Amendment goes too far:

    SNOWE: With respect to the Blunt amendment, I think it’s much broader than I could support. I think we should focus on the issue of contraceptives and whether or not it should be included in a health insurance plan and what requirements there should be

    .

    Watch it:

    Fellow Maine Republican Sen. Susan Collins joined Snowe in breaking ranks with the GOP to support Obama’s contraception rule, after he made an accommodation to religious organizations. So far, Collins is undecided on the Blunt amendment and others may oppose it too.

    Sixty-seven percent of voters oppose legislation like Blunt’s, a recent poll found.

    ReplyReply
  • toniD February 29, 2012 2:34 pm

    Republicans Are Crazy, But That’s Pretty Normal

    —By Kevin Drum | Mon Feb. 27, 2012 9:56 PM PST

    Ten years ago John Judis and Ruy Teixeira wrote The Emerging Democratic Majority, which argued that a variety of demographic trends spelled doom for the Republican Party. Unfortunately for Judis and Teixeira, Republicans ignored their demographic doom and won a convincing victory in 2004. But hey, that was due to 9/11 and Iraq and the war on terror, and who could have predicted that? Then Democrats chalked up big wins in 2006 and 2008 (whew!), but in 2010 Republicans came roaring back. But hey, that was because of an epic recession, and who could have predicted that? Any day now, those demographics are going to kick in and Republicans will be doomed once and for all. Honest.

    I am, obviously, being a smart ass about this. In fact, as Jon Chait writes today in “2012 or Never,” the demographic trends that Judis and Teixeira wrote about really are continuing apace. Smart Republicans are well aware of this, and they’re especially well aware that one of the biggest demographic trends working against them is the growth of the Hispanic population. So a few years ago, as a way of peeling off some Hispanic votes from the Democrats, they took a stab at passing a moderate immigration bill. Unfortunately, their base went into a full-bore revolt and began demanding a harsher anti-immigrant policy instead of a more moderate one. As Jon says, this was about like publicly announcing an electoral suicide pact on national TV.

    And it gets worse. At the same time that Republicans are deliberately adopting policies that spell long-term disaster, they’ve also adopted an uncompromising all-or-nothing political strategy that appeals to their existing base but has cost them dearly in the form of short-term Democratic victories. A more moderate party could have stopped or watered down healthcare reform, but instead they got Obamacare. A more moderate party could have struck a historic spending deal with Obama, but instead they got nothing. And like lemmings going over a cliff, virtually all of them voted for Paul Ryan’s budget roadmap, which was extremely unpopular with most voters. What’s going on?

    The way to make sense of that foolhardiness is that the party has decided to bet everything on its one “last chance.”….Grim though the long-term demography may be, it became apparent to Republicans almost immediately after Obama took office that political fate had handed them an impossibly lucky opportunity. Democrats had come to power almost concurrently with the deepest economic crisis in 80 years, and Republicans quickly seized the tactical advantage, in an effort to leverage the crisis to rewrite their own political fortunes.

    ….During the last midterm elections, the strategy succeeded brilliantly….In the long run, though, the GOP has done nothing at all to rehabilitate its deep unpopularity with the public as a whole, and has only further poisoned its standing with Hispanics. But by forswearing compromise, it opened the door to a single shot. The Republicans have gained the House and stand poised to win control of the Senate. If they can claw out a presidential win and hold on to Congress, they will have a glorious two-year window to restore the America they knew and loved, to lock in transformational change, or at least to wrench the status quo so far rightward that it will take Democrats a generation to wrench it back. The cost of any foregone legislative compromises on health care or the deficit would be trivial compared to the enormous gains available to a party in control of all three federal branches.

    [more]

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  • 60th Street February 29, 2012 3:59 pm

    @toniD: Very cool! Thanks!!

    So much work this week! #rage

    ReplyReply
  • toniD February 29, 2012 4:26 pm

    Davy Jones in the Brady Bunch Movie:

    Davy Jones jams

    ReplyReply
  • toniD February 29, 2012 7:42 pm

    Sam’s on with TYT on current right now!

    ReplyReply
  • toniD February 29, 2012 7:59 pm

    New Open Thread

    Leap Year Explained

    ReplyReply

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