Guardian: Exxon knew of climate change in 1981, email says – but it funded deniers for 27 more years
Thursday, July 9, 2015
Wednesday, July 8, 2015
Jeb Bush: "People need to work longer hours."
Dubya's dumber brother.
"My aspiration for the country and I believe we can achieve it, is 4 percent growth as far as the eye can see. Which means we have to be a lot more productive, workforce participation has to rise from its all-time modern lows. It means that people need to work longer hours and, through their productivity, gain more income for their families. That's the only way we're going to get out of this rut that we're in."How many more hours? Let's put this in perspective.
The Jeb Bush household's declared income in 2013 was $7.3 million.
The median U.S. household income in 2013 was $52,250.
The median hourly wage for May 2013 was estimated by the BLS at $16.87 and hour.
If the median income household earned a median hourly wage, they would need to work a total of 2942 hours a year, assuming 155 hours a year (5%) vacation and holiday pay.
The Bush household had 140 times as much income in 2013 as the median U.S. household.
To earn as much income as the Bush household, the median household would have to work an additional 8,600 hours -- night and day for a whole year -- each week.
Tuesday, July 7, 2015
I Said, THE FUNDAMENTALS ARE SOUND!
Isn't anyone listening?
The CSI300 index slumped more than 7% at the open and was down 4.8% at 3,739.18 points by 2.08am GMT.
The Shanghai Composite Index dropped 8% and was down 4.7% at 3,551.13 points by mid-morning.
China stock futures pointed to further losses.
Losses on the mainland also weighed heavily on Hong Kong shares, with the Hang Seng Index down 3.3% and shares of Chinese companies listed in the city falling 4.2%.
As the markets opened, only 11% of companies on the two key mainland markets were still trading.
Christopher Balding, a professor of economics at Peking University said that while it was not possible to know exactly why so many companies had suspended trading, a large number were doing so because they had used their own stock as collateral for loans and they want to “lock in the value for the collateral”.
“Today is all about China, with Greece in the background now that it’s been given a new deadline,” said Ayako Sera, a senior market economist at Sumitomo Mitsui Trust Bank in Tokyo.
“Shanghai’s early losses were like a cliff-dive, which had a huge impact on investor sentiment.”What fundamentals?
Imperial Panorama: A Tour of German Inflation
Walter Benjamin (1925-6):
“1. In the stock of phraseology that lays bare the amalgam of stupidity and cowardice constituting the mode of life of the German bourgeois, the locution referring to the impending catastrophe — that “things can’t go on like this” — is particularly noteworthy. The helpless fixation on notions of security and property deriving from past decades keeps the average citizen from perceiving the quite remarkable stabilities of an entirely new kind that underlie the present situation….”
“14. The earliest customs of peoples seem to send us a warning that in accepting what we receive so abundantly from nature we should guard against a gesture of avarice. For we are able to make Mother Earth no gift of our own. It is therefore fitting to show respect in taking, by returning a part of all we receive before laying hands on our share. This respect is expressed in the ancient custom of the libation. Indeed, it is perhaps this immemorial practice that has survived, transformed, in the prohibition on gathering forgotten ears of corn or fallen grapes, these reverting to the soil or to the ancestral dispensers of blessings. An Athenian custom forbade the picking up of crumbs at the table, since they belonged to the heroes. If society has so degenerated through necessity and greed that it can now receive the gifts of nature only rapaciously, that it snatches the fruit unripe from the trees in order to sell it most profitably, and is compelled to empty each dish in its determination to have enough, the earth will be impoverished and the land yield bad harvests”
“1. In the stock of phraseology that lays bare the amalgam of stupidity and cowardice constituting the mode of life of the German bourgeois, the locution referring to the impending catastrophe — that “things can’t go on like this” — is particularly noteworthy. The helpless fixation on notions of security and property deriving from past decades keeps the average citizen from perceiving the quite remarkable stabilities of an entirely new kind that underlie the present situation….”
“14. The earliest customs of peoples seem to send us a warning that in accepting what we receive so abundantly from nature we should guard against a gesture of avarice. For we are able to make Mother Earth no gift of our own. It is therefore fitting to show respect in taking, by returning a part of all we receive before laying hands on our share. This respect is expressed in the ancient custom of the libation. Indeed, it is perhaps this immemorial practice that has survived, transformed, in the prohibition on gathering forgotten ears of corn or fallen grapes, these reverting to the soil or to the ancestral dispensers of blessings. An Athenian custom forbade the picking up of crumbs at the table, since they belonged to the heroes. If society has so degenerated through necessity and greed that it can now receive the gifts of nature only rapaciously, that it snatches the fruit unripe from the trees in order to sell it most profitably, and is compelled to empty each dish in its determination to have enough, the earth will be impoverished and the land yield bad harvests”
Austerity vs. Stimulus: Ignoring the Inherent Contradictions of "Growth"
Jennifer Hinton at the Guardian:
The issue of austerity versus stimulus is often framed as the entire debate – if you don’t support one, you must support the other, because there are no alternatives. This is the same binary debate that has been going on for more than 100 years between the state versus the market. Yet, these dichotomies distract people from thinking about what’s really important – the goal of these policies, which is to grow the economy.
No analysis I’ve read thus far has questioned the damaging role that the endless quest for economic growth plays. Neither austerity nor government stimulus will ever be able to address the debt crises and recessions of the twenty-first century because what we’re dealing with here is an inherent contradiction of capitalism.
Monday, July 6, 2015
Has The Syriza Government Been Fiscally Irresponsible?
According to commentator after commentator, especially on lots of blogs, that is certainlhy the case. Those nasty, lazy, corrupt, good-for-nothing Greeks just want to have it all as shown in the horrible irrational and irresponsible No vote on their referendum, having been doing nothing but running primary budget deficits and demanding bailouts from their troika creditors, who have been offering them highly reasonable deals that they should just shut up and accept or else have their government step down and be replaced by an appropriatedly kowtowing responsible one. Among those pushing the line that they have been running nothing but primary budget deficits has been Tyler Cowen at Marginal Revolution, most recently posting a link to a Ricardo Hausmann Faecbook post that states "It has been running primary deficits..." with no modification, with Tyler, having made such a claim earlier and being told that he was misrepresenting things thinking that this post would somehow vindicate his inaccurate position.
So, of course there is a lot of confusion and we cannot know for sure what is going on, but in fact official data is in on the budgetary situation of Greece during the first quarter of 2015 during which the Syriza government was in power, supposedly irresponsibly running massive primary deficits and otherwise showing why they should be removed from power, the awful commies. But, whoooops! if one looks at the official data, it turns out that not only did the government run a primary surplus during the first quarter, but that this surplus increased from about 770 million euros in the last quarter of 2014 to about 1.19 billion euros in the first quarter of 2015, a more than 400 million euro increase in that supposedly nonexistent primary surplus, as reported by phantis just yesterday, (actually April 2) although there have been earlier reports coming in with roughly similar numbers, with little of this getting much media or other attention anywhere.
Now it must be admitted that this outcome includes some one-off elements unlikely to continue. There is also the unfortunate fact that the Greek economy has fallen back into a recession, which is likely to worsen in the near future. So, tax revenuse are likely to fall, and it may be as Tyler Cowen stated in an earlier post that "the primary surplus is gone." But at least one report I found made a projection for the second quarter (actual numbers not in yet for that quarter just ended) that showed a primary surplus still holding in the second quarter and even into June, although much reduced from the first quarter. I would note that one item people have pointed to has been an incentives program the government put in place to encourage those in arrears on paying past taxes to come in out of the cold, a one-shot deal. Best estimate I saw of that amount for first quarter was 147 million euros, helplful, but less than half of the increase in the primary deficit from the previous quarter, with reduced spending responsible for more of it, despite all the caterwauling to the contrary by so many very self-righteouss outside critics. As it is, while those making those tax arrears payments not returning to do so again, the incentives program remains in place, so there may still be more arreared taxpayers coming in from the cold in the future.
Greece may well have gone into primary budget deficit territory by now (or shortly will do so), but those claiming that it has been just running primary deficits all along are misinformed and misinforming when they repeat this falsehood. They should all go check the actual data before repeating this drivel further agains.
Barkley Rosser
So, of course there is a lot of confusion and we cannot know for sure what is going on, but in fact official data is in on the budgetary situation of Greece during the first quarter of 2015 during which the Syriza government was in power, supposedly irresponsibly running massive primary deficits and otherwise showing why they should be removed from power, the awful commies. But, whoooops! if one looks at the official data, it turns out that not only did the government run a primary surplus during the first quarter, but that this surplus increased from about 770 million euros in the last quarter of 2014 to about 1.19 billion euros in the first quarter of 2015, a more than 400 million euro increase in that supposedly nonexistent primary surplus, as reported by phantis just yesterday, (actually April 2) although there have been earlier reports coming in with roughly similar numbers, with little of this getting much media or other attention anywhere.
Now it must be admitted that this outcome includes some one-off elements unlikely to continue. There is also the unfortunate fact that the Greek economy has fallen back into a recession, which is likely to worsen in the near future. So, tax revenuse are likely to fall, and it may be as Tyler Cowen stated in an earlier post that "the primary surplus is gone." But at least one report I found made a projection for the second quarter (actual numbers not in yet for that quarter just ended) that showed a primary surplus still holding in the second quarter and even into June, although much reduced from the first quarter. I would note that one item people have pointed to has been an incentives program the government put in place to encourage those in arrears on paying past taxes to come in out of the cold, a one-shot deal. Best estimate I saw of that amount for first quarter was 147 million euros, helplful, but less than half of the increase in the primary deficit from the previous quarter, with reduced spending responsible for more of it, despite all the caterwauling to the contrary by so many very self-righteouss outside critics. As it is, while those making those tax arrears payments not returning to do so again, the incentives program remains in place, so there may still be more arreared taxpayers coming in from the cold in the future.
Greece may well have gone into primary budget deficit territory by now (or shortly will do so), but those claiming that it has been just running primary deficits all along are misinformed and misinforming when they repeat this falsehood. They should all go check the actual data before repeating this drivel further agains.
Barkley Rosser
Sunday, July 5, 2015
Thursday, July 2, 2015
Next Up in Greece: Regime Change
It was clear all along that Greece had no defense against the troika’s doomsday weapon, a credit cutoff by the ECB. As “negotiations” dragged on, the dispenser of euros publicly warned of a Greek banking failure, actually provoking the sort of run that central banks normally do all they can to prevent. Finally, in retribution for Tsipras’ final act of defiance, calling a referendum scheduled several days after the termination of the loan program, the ECB fired away in force, freezing support and essentially telling Greek depositors, pull your money out now or never see it again. With capital controls in place, banks shuttered, and the government unable to find euros to fulfill its core obligations, Greece is prostrate.
That’s Act I, which has culminated with Tsipras folding and giving in to the same demands he rejected five months earlier.
Now begins Act II. The creditors will offer Greece a further deal, with more loans (and indebtedness) and more austerity, but enough support to allow Greece to have a financial system again. This offer will not be made to Syriza, however. It will be presented on the condition that Tsipras resign, and that a new government, led by New Democracy, the center-right party that Syriza replaced, take over. This appears to be the thinking behind the recent statements by Merkel and Dijsselbloem that no further discussions can be held until after Sunday’s referendum: the expectation is that “Yes” will win big, and that this will lead not only to a new government but athe collapse of Syriza as a coherent political entity. That’s Plan A. If a Plan B is required, the obvious strategy for the creditors is to exact even more suffering on the Greeks—for instance, keeping the euro spigot closed even as food imports dry up and starvation sets in. But that increases the likelihood of a violent regime change, presumably led by the military. My assumption is that “liberal, reasonable” Europe would prefer to see Syriza deposed in a civilized manner, without tanks and prisons, but one way or another the political goal has to be fulfilled.
From where I sit, it was obvious from the outset that a Syriza government in Greece was viewed as unacceptable by the rest of the EU. (I’m referring of course to member governments.) It was always understood that resolving the dispute meant removing Syriza as a disputant. It is likely that future releases of diplomatic communications will verify this. In the meantime, I wonder whether this was recognized in Athens and, if so, what their strategy was to prevent it.
That’s Act I, which has culminated with Tsipras folding and giving in to the same demands he rejected five months earlier.
Now begins Act II. The creditors will offer Greece a further deal, with more loans (and indebtedness) and more austerity, but enough support to allow Greece to have a financial system again. This offer will not be made to Syriza, however. It will be presented on the condition that Tsipras resign, and that a new government, led by New Democracy, the center-right party that Syriza replaced, take over. This appears to be the thinking behind the recent statements by Merkel and Dijsselbloem that no further discussions can be held until after Sunday’s referendum: the expectation is that “Yes” will win big, and that this will lead not only to a new government but athe collapse of Syriza as a coherent political entity. That’s Plan A. If a Plan B is required, the obvious strategy for the creditors is to exact even more suffering on the Greeks—for instance, keeping the euro spigot closed even as food imports dry up and starvation sets in. But that increases the likelihood of a violent regime change, presumably led by the military. My assumption is that “liberal, reasonable” Europe would prefer to see Syriza deposed in a civilized manner, without tanks and prisons, but one way or another the political goal has to be fulfilled.
From where I sit, it was obvious from the outset that a Syriza government in Greece was viewed as unacceptable by the rest of the EU. (I’m referring of course to member governments.) It was always understood that resolving the dispute meant removing Syriza as a disputant. It is likely that future releases of diplomatic communications will verify this. In the meantime, I wonder whether this was recognized in Athens and, if so, what their strategy was to prevent it.
Wednesday, July 1, 2015
The Cover-up is Alway Worse Than the Crime
The crime:
Nobel laureate [Stiglitz] tells TIME that the institutions and countries that have enforced cost-cutting on Greece "have criminal responsibility"The cover-up:
"Greece is in a difficult situation, but purely because of the behaviour of the Greek government ... Seeking the blame outside Greece might be helpful in Greece, but it has nothing to do with reality," said Schäuble. "The Greek government is not doing its people any favours at all if it keeps making completely false statements. Nobody else is to blame for their situation. It’s all very sad. We’re in a much harder situation than before. It was always difficult. But it has just kept getting more and more difficult since January."Follow the money and it is clear that Schäuble is lying. He knows he's lying and he knows we know he's lying. The bluster is meant to paralyze criticism with its audacity.
Tuesday, June 30, 2015
Who Are The Very Serious People (Greece Edition)?
There has long been a meme in the econoblogosphere about Very Serious People (VSPs) in Washington who have been consistently hysterical without reason about budget deficits, with this group having a particularly strong and weird obsession with the US Social Security system, calling repeatedly for cuts in future benefits now because if this is not done, future benefits might have to be cut in the future (or, maybe, there might have to be a fica tax increase, but that is, of course, unacceptable to the VSPs, beyond the realm of possible Serious consideration). Probably Paul Krugman has spread this term more widely than anybody else, whoever coined it, but many of us have used it a lot in regard to this group, especially about those running the editorial page of the Washington Post, led by its editor, Fred Hiatt, along with his columnists such as Robert J. Samuelson, Ruth Marcus, and others, with others scattered across various think tanks in Washington.
So somehow Tyler Cowen at Marginal Revolution has decided to use this term non-ironically in connection with the Syriza-led government in Greece, with him using the term "Not Very Serious People" in repeated posts starting from when they first began demanding changes in their agreements with the troika, even recently applying this when the "Greferendum" was announced (somehow this referendum is also not taken seriously by the VSPs of Washington, with Catherine Rampell on the WaPo ed page today referring to it as a "referendum," yes, in quotes, as if it will not be a real referendum). What is sort of weird about all this is that the usually cool-as-a-cucumber Tyler seems to be really upset about the Syriza bunch, not just thinking they are bad to be demanding to get out of paying debts or daring to question the authority of wheelchair-bound German Finance Minister, Wolfgang Schauble, who thinks he should be German Chancellor rather than Angela Merkel. No, from the beginning he seems to have been really rattled that self-proclaimed Trotskyists and Maoists are in the government, even though the actual domestic policy proposals by Syriza have been boringly center left. These are dangerous people who must not be allowed to remain in power. They seriously must be removed from power, possibly even by any means, with many of his commenters calling for a military coup with nary a whisper of questioning from Tyler of this argument.
Now it turns out that there is a curious link between the unhappiness over those Greek Not Very Serious People and the good old Washington VSPs, although I do not think Tyler Cowen has quite put this together, with his concerns apparently more along Road to Serfdom grounds, not traditional VSP issues. But in today's WaPo, good old Fred Hiatt weighed in on the Greek situation in an unsigned main editorial, "Say 'no' to defiance: Greece should try to reach agreement with its creditors." Unsurprisingly, what Hiatt thinks they should do is simply accept the most recent troika offer, period, despite him recognizing that they have "already paid for austerity measures," although he does not spell out how severe those payments have been (25% decline of GDP with a 25% unemployment with a youth unemployment rate exceeding 50%). But, the bottom line is no criticism of the troika while "Mr. Tsirpas's defiant course is both unwarranted and unrealistic." He does not say he is "Not Very Serious," but he is accused of "play[ing] games with the fate of Europe and the world economy." Oooh, it is all his fault, none of that embittered old man's in the wheelchair or stuck-in-their-egos bureaucrats at the IMF who do not pay attention to their chief economist.
So, unsurprisingly, when it really gets down to it what has Hiatt worked up it is the refusal of the Greeks to cut their pension spending further. As Matt O'Brien reported in yesterday's WaPo, there is in fact very little that separates the two sides at this point. The Greeks have already substantially caved on austerity, basically agreeing to something very close to the primary surplus amount that the troika is demanding (ooops, they are now supposed to be called "the institutions"). The Greeks have proposed a number of further spending cuts, including for defense, and a bunch of increases in contributions to healthcare and pension funds and various taxes. But this is not good enough. Even though Greek pensions have been cut 40% since 2010 (something Hiatt fails to note, of course), they must cut pensions more, even though not doing this was an explicit campaign promise by Syriza and has been loudly announced as a "red line" by them, with precisely a threat to hold a referendum if they were pushed on this (but, hey, who would believe them, given that they are Not Very Serious People?). Frankly, I do not see why the troika simply cannot go along with this to help Syriza save face given that they have already largely given away the store. Maybe it is like Tyler Cowen, they really want to bring this government down because they just do not like them.
Of course, once he gets going on it, Hiatt just goes hog wild with his usual ranting and raving about the pensions. He has failed to get his way on Social Security in the US, but, ah ha! here is his chance with Greece. Make those Not Very Serious People cut their pension spending! After all, it is "unsustainable," likely to be "unpaid" if they go forward with their demands, these being "extreme demands," (which might lead to a "state-run economy [with a]...geopolitical tilt toward Moscow"). On the other hand, the proposals coming from the troika are "financing on reasonable terms." So, these worthless Greeks are just being Not Very Serious People. Shame on them. They need to get on with more cutting of pensions, and then they might become real VSPs, worthy of Hiatt's praise.
Barkley Rosser
So somehow Tyler Cowen at Marginal Revolution has decided to use this term non-ironically in connection with the Syriza-led government in Greece, with him using the term "Not Very Serious People" in repeated posts starting from when they first began demanding changes in their agreements with the troika, even recently applying this when the "Greferendum" was announced (somehow this referendum is also not taken seriously by the VSPs of Washington, with Catherine Rampell on the WaPo ed page today referring to it as a "referendum," yes, in quotes, as if it will not be a real referendum). What is sort of weird about all this is that the usually cool-as-a-cucumber Tyler seems to be really upset about the Syriza bunch, not just thinking they are bad to be demanding to get out of paying debts or daring to question the authority of wheelchair-bound German Finance Minister, Wolfgang Schauble, who thinks he should be German Chancellor rather than Angela Merkel. No, from the beginning he seems to have been really rattled that self-proclaimed Trotskyists and Maoists are in the government, even though the actual domestic policy proposals by Syriza have been boringly center left. These are dangerous people who must not be allowed to remain in power. They seriously must be removed from power, possibly even by any means, with many of his commenters calling for a military coup with nary a whisper of questioning from Tyler of this argument.
Now it turns out that there is a curious link between the unhappiness over those Greek Not Very Serious People and the good old Washington VSPs, although I do not think Tyler Cowen has quite put this together, with his concerns apparently more along Road to Serfdom grounds, not traditional VSP issues. But in today's WaPo, good old Fred Hiatt weighed in on the Greek situation in an unsigned main editorial, "Say 'no' to defiance: Greece should try to reach agreement with its creditors." Unsurprisingly, what Hiatt thinks they should do is simply accept the most recent troika offer, period, despite him recognizing that they have "already paid for austerity measures," although he does not spell out how severe those payments have been (25% decline of GDP with a 25% unemployment with a youth unemployment rate exceeding 50%). But, the bottom line is no criticism of the troika while "Mr. Tsirpas's defiant course is both unwarranted and unrealistic." He does not say he is "Not Very Serious," but he is accused of "play[ing] games with the fate of Europe and the world economy." Oooh, it is all his fault, none of that embittered old man's in the wheelchair or stuck-in-their-egos bureaucrats at the IMF who do not pay attention to their chief economist.
So, unsurprisingly, when it really gets down to it what has Hiatt worked up it is the refusal of the Greeks to cut their pension spending further. As Matt O'Brien reported in yesterday's WaPo, there is in fact very little that separates the two sides at this point. The Greeks have already substantially caved on austerity, basically agreeing to something very close to the primary surplus amount that the troika is demanding (ooops, they are now supposed to be called "the institutions"). The Greeks have proposed a number of further spending cuts, including for defense, and a bunch of increases in contributions to healthcare and pension funds and various taxes. But this is not good enough. Even though Greek pensions have been cut 40% since 2010 (something Hiatt fails to note, of course), they must cut pensions more, even though not doing this was an explicit campaign promise by Syriza and has been loudly announced as a "red line" by them, with precisely a threat to hold a referendum if they were pushed on this (but, hey, who would believe them, given that they are Not Very Serious People?). Frankly, I do not see why the troika simply cannot go along with this to help Syriza save face given that they have already largely given away the store. Maybe it is like Tyler Cowen, they really want to bring this government down because they just do not like them.
Of course, once he gets going on it, Hiatt just goes hog wild with his usual ranting and raving about the pensions. He has failed to get his way on Social Security in the US, but, ah ha! here is his chance with Greece. Make those Not Very Serious People cut their pension spending! After all, it is "unsustainable," likely to be "unpaid" if they go forward with their demands, these being "extreme demands," (which might lead to a "state-run economy [with a]...geopolitical tilt toward Moscow"). On the other hand, the proposals coming from the troika are "financing on reasonable terms." So, these worthless Greeks are just being Not Very Serious People. Shame on them. They need to get on with more cutting of pensions, and then they might become real VSPs, worthy of Hiatt's praise.
Barkley Rosser
Monday, June 29, 2015
JOE!
Guardian, Joseph Stiglitz: how I would vote in the Greek referendum
Nobel laureate tells TIME that the institutions and countries that have enforced cost-cutting on Greece "have criminal responsibility"
Nobel laureate tells TIME that the institutions and countries that have enforced cost-cutting on Greece "have criminal responsibility"
Sunday, June 28, 2015
M-I-Teee... Squeeze you next week! I-M-F... Why? Because we "F" you! M-O U-S-Eeee
To be plainer, sir, how to solder, how to stop a leak, how to keep the floating carcass of a crazy and diseased finance system, betwixt wind and water, swimming still upon her own dead lees, that now is the deep design of a chief economist!
Greece: A Referendum on What to Do Yesterday
I'm posting a response I've written to a private email that praises Tsipras' announcement of a referendum scheduled next Sunday (July 5). The email also asks why the IMF has been so obstructive over the past several months (and years). My response:
I think a referendum was appropriate, but perhaps a month ago, not now. (1) The creditors never negotiated; they never horse-traded compromises. That was obvious from the beginning, and glaringly obvious when they responded to Syriza's final offer, which tiptoed across some red lines, with even more demands. It was always take-it-or-leave-it. Tsipras and Varoufakis were not honest with the Greek people, in my opinion, by repeatedly making optimistic statements -- they should have said "we can't negotiate with these guys" and put it to a vote right away. (2) July 5 is past the critical deadlines. Default occurs on June 30, and the ECB is likely to terminate ELA as soon as that happens. They are also likely to impose their own financial solution on the Greek banks as they did with Cyprus. By the time the 5th rolls around, voting on whether to accept the final creditor "offer" from two weeks previously will be like refighting the battle of Waterloo.
Now everything is about how to manage the crisis. I hope, with months to prepare, that Syriza has a well-developed program for this. (And one that takes into account that they do not yet control the state apparatus.)
As for the IMF, it was no secret that there has been a lot of tension between the technical staff and the politicians at the top. They have a policy, established after the Argentine fiasco, of not lending to insolvent states, but instead requiring writedowns from the creditors. Ah, but the creditors in the Greek case are the banks and governments that installed the IMF directors, so the policy is being flagrantly violated. Personally, I'm disturbed there have been no high-profile resignations on the part of the IMF economists. It's not like Blanchard couldn't pick up another job somewhere, for instance. Years down the road there will be memoirs saying "I argued against this behind closed doors", but when has that ever really mattered?
At the moment, no one -- absolutely no one -- playing a role in this mess is looking good.
I think a referendum was appropriate, but perhaps a month ago, not now. (1) The creditors never negotiated; they never horse-traded compromises. That was obvious from the beginning, and glaringly obvious when they responded to Syriza's final offer, which tiptoed across some red lines, with even more demands. It was always take-it-or-leave-it. Tsipras and Varoufakis were not honest with the Greek people, in my opinion, by repeatedly making optimistic statements -- they should have said "we can't negotiate with these guys" and put it to a vote right away. (2) July 5 is past the critical deadlines. Default occurs on June 30, and the ECB is likely to terminate ELA as soon as that happens. They are also likely to impose their own financial solution on the Greek banks as they did with Cyprus. By the time the 5th rolls around, voting on whether to accept the final creditor "offer" from two weeks previously will be like refighting the battle of Waterloo.
Now everything is about how to manage the crisis. I hope, with months to prepare, that Syriza has a well-developed program for this. (And one that takes into account that they do not yet control the state apparatus.)
As for the IMF, it was no secret that there has been a lot of tension between the technical staff and the politicians at the top. They have a policy, established after the Argentine fiasco, of not lending to insolvent states, but instead requiring writedowns from the creditors. Ah, but the creditors in the Greek case are the banks and governments that installed the IMF directors, so the policy is being flagrantly violated. Personally, I'm disturbed there have been no high-profile resignations on the part of the IMF economists. It's not like Blanchard couldn't pick up another job somewhere, for instance. Years down the road there will be memoirs saying "I argued against this behind closed doors", but when has that ever really mattered?
At the moment, no one -- absolutely no one -- playing a role in this mess is looking good.
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