The New York Times Solution to Greece’s Problems–Default

 

https://grantcoulson.files.wordpress.com/2014/04/incentiveseverywherepicturecorrect1.jpg?w=444&h=288

   Do not think about, write about or deal with  human behavior without determining the effects of incentives. It’s not their money, of course they’ll waste it.

    Hollywood and the rest of the media are always pointing out the heartlessness and inefficiency of government while demanding more of it.

     At least he’s mentioning the inevitable–default.

   Just when Greeks thought the good life, financed by borrowing, would last forever, this happens. If they couldn’t see this coming, something’s really wrong.

A Grass-Roots Pitch in Greece Could Pay Off

By SUZANNE DALEYJAN. 17, 2015

ATHENS — Alexis Tsipras, the left-wing candidate who may well become prime minister of Greece next weekend, was taking questions from the public the other night on Twitter. Someone asked if he would eliminate the country’s hefty value-added taxes on basic necessities.

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     Left-wing, just the thing Greeks need.

No, he said, he was “not going to promise things we can’t do.”

But the promises he has made are enough to suggest that Greece under his leadership would take a sharp turn from its direction of the past five years, when it has grudgingly adhered to European insistence on deep budget cutting in return for the financial assistance necessary to keep it afloat.

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    Note the assumption that they have a choice.

Mr. Tsipras, boyishly handsome at 40, leads the Syriza Party, which polls suggest is likely to control the next government after elections next Sunday. He has emerged as a more polished figure than he was in 2012, when he first rose to prominence.

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   And polish is what counts in politics. You must seem to be reasonable.

    A Eurobank branch in central Athens. It and Alpha Bank are said to have asked for 5 billion euros in “preventive” funding.

Back then, he was usually described as a left-wing “firebrand” who posed a potentially lethal challenge to the euro, the European Union and even the global economy, if he followed through on his threats to let Greece default on its debts or leave the eurozone — or both.

Today, he sits atop a newly organized party that is still unabashedly left-wing but has softened its rhetoric and reached out to leaders across the world, even those with differing viewpoints. These days, Mr. Tsipras is more likely to talk of negotiation and the need to create a “modern European state” free of corruption than to applaud default.

But after years in which ordinary Greeks have felt little if any benefit from harsh austerity policies, and with the government still unable to perform basic tasks like tax collection, he is offering voters a populist vision in which they come first.

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    The “benefits” came before, austerity is just paying the piper. They had no choice and have no choice. First comes default, then pretending it didn’t happen, then blaming someone else, then saying it’ll never happen again, then it will happen again, then they’ll pretend it didn’t happen……

He has pledged that on his first day in office, he will begin restoring electricity to poor households that have been cut off and provide food stamps to the growing number of destitute families. He and his lieutenants have also declared open season on the oligarchs who have dominated Greece economically and politically for decades.

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    Most folks don’t realize that when a country is this screwed up, the government  must be to blame.

Mr. Tsipras makes clear that he expects Europe in general and Germany in particular to make concessions on Greece’s crushing debt. In an interview in his starkly modern office at Syriza’s modest headquarters recently, he waved aside the perception that he would threaten default, saying it was in everyone’s best interest to negotiate a deal.

“Let’s assume I owe you a million dollars,” he said. “You know you have two options: a) to give me the chance to have some income so I can pay you back, even 50 percent of it, or, b) let me lose everything, go bankrupt, and you get nothing back. What would you choose?”

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    Listen to me or get nothing.

At a time when Italy and France, among other countries, are also questioning the German-led austerity orthodoxy, Mr. Tsipras could play a vital role in shaping the European debate. He is being watched carefully across Europe for signs of whether he really has moderated, or is just toning down his language to avoid scaring middle-of-the-road voters.

His views — his promises to restore the minimum wage gradually and to undo reforms that made the labor market more flexible — along with his Communist past, have prompted some European officials to warn that a Tsipras victory could usher in a period of dangerous instability. German officials have announced that they have no intention of renegotiating Greece’s huge debt and hinted that if Athens were forced to exit the European Union, it would be of little consequence.

Such talk does not seem to trouble Mr. Tsipras, who believes it is all part of a negotiation process already underway. While such “scaremongering” might have worried voters two years ago, he said, with a quarter of the country unemployed and receiving no benefits whatsoever, it now “just makes Greeks angry.”

Mr. Tsipras used to have a picture of Che Guevara in his office. But today, his renovated space has only one boldly colored painting on the wall: two bulls facing off. Mr. Tsipras said it captured the aggressive tension that exists in Europe.

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    A worshipper of Che Guevera, ruthless killer. Good idol.

If true, it is a tension that sits easily with him. He has none of the strut that might fit his party’s tough talk. He speaks quietly and laughs a lot. He has not worn a tie since his required time in the military and does not intend to change his ways.

“I think that if there is something that people appreciate in Syriza and me, it is that we haven’t assumed this mentality of establishment parties, with specific ways to dress, to act,” he said. “We want to be ourselves, to believe in what we do.”

He says he is worried not so much about winning the election as about piling up a big enough majority to rule without having to form a coalition. Polls have consistently shown Syriza in the lead, with most numbers ranging from 28 to 31 percent. Prime Minister Antonis Samaras’s New Democracy Party usually polls from 23 to 28 percent. But experts say that when undeclared voters weigh in, Syriza’s lead is likely to rise even higher.

A Tsipras win would put an end to more than three decades of domination by the same two political parties, whose officials often emerge in the morning from mansions in Athens’ finest neighborhoods. Both of Greece’s last two elected prime ministers were educated at Amherst

In central Athens, a campaign billboard featuring an image of Alexis Tsipras and bearing the slogan, “The hope is coming.” Credit Angelos Tzortzinis for The New York Times

Mr. Tsipras, however, studied engineering at Athens University and still rents his home in a mixed neighborhood of aging buildings and narrow streets. He has greatly improved his English in the last few years.

He says that his party has ruled out any sort of partnership with the two traditional parties, Mr. Samaras’s New Democracy Party and former Prime Minister George Papandreou’s left-center party, Pasok.

“We cannot cooperate with the powers that brought Greece to the edge of the cliff,” he said. “We want to implement sweeping reform — in public administration, in how the state is run. We want to clash with this financial oligarchy that was ruling all these years in cooperation with the political establishment. We cannot do that if we form alliances with the political establishment that favored, and was favored by, the oligarchy. This is why we say that Syriza is a chance for Greece to become a normal, modern European country again.”

This part of his agenda would fit in well with the views of Greece’s international creditors.

But other parts of his agenda aim to roll back many cost-cutting measures, gradually restoring salaries and pensions and lowering the tax on heating oil to make it more affordable (which could actually bring in more revenue, some experts believe). These might be harder for the lenders to accept.

Critics fear that Mr. Tsipras and his advisers are sitting atop a still-young organization that pulled together supporters with divergent views, from Marxists to disgruntled members of Pasok, a mix that could prove hard to navigate.

Some in the business community are also concerned that the party has talked more about the humanitarian crisis in Greece than what needs to be done to stimulate growth.

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  Governments should be less concerned about stimulus and more concerned about doing things which inhibit growth.

 

“All the ideas in his program come from people who are not in touch with the real economy,” said Thanasis Mavridis, the managing editor of the financial newspaper and website Capital.gr.

Mr. Tsipras’s gift for political leadership emerged early. He first made headlines when he was a teenager, already a member of the youth wing of the Communist Party and leading student rallies against education reforms. He met his partner, Peristera Baziana, also a member of the party, in high school. They have two children.

Mr. Tsipras left the Communists and, after graduating, went into business as a civil engineer. In 2006, he ran for mayor of Athens, and after doing surprisingly well in the polls, he turned to politics full time.

Friends of Mr. Tsipras said that his ability to stay calm was uncanny. In 2009, a clownish Greek comedian, who was making his mark ambushing and humiliating politicians, took aim at Mr. Tsipras. But Mr. Tsipras greeted him with open arms, bantered, laughed and even had the last word.

“He is our nuclear weapon,” said Nikos Pappas, his chief of staff.

His political opponents are trying to paint him as a dangerous radical who would force Greece to leave the European Union. Mr. Tsipras has responded by ridiculing the critics, saying that he has now read that he would ban religious icons, block a proposal to build a football stadium and outlaw hunting. In one recent interview, he said he had been accused of doing everything except stealing other men’s women.

He said that after all they had read about him, European Union officials were always pleasantly surprised to find that he was a reasonable man who could discuss different ideas. “In some ways,” he said of the critics, “they did me a favor.”

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     Greece is going to be a disaster. If this guy wins, it will be a left-wing disaster. What were they thinking?

Government Job or Respect–Which’ll It Be?
Cheerio and ttfn,
Grant Coulson, Ph.D.
Author, “Days of Songs and Mirrors: A Jacobite in the ‘45.”
Cui Bono–Cherchez les Contingencies

 

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