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“Nonsense Economics” and the Deepening Greek Crisis

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Real News Network has a sobering interview with Costas Lapavitsas,a professor at the University of London School of Oriental and African Studies, who gives an update on the political and economic situation in Greece. The country is already prostrate yet the European creditor nations seem to believe they can extract more by demanding further, draconian budget cuts, when all that will do is shrink the Greek economy further, increasing social dislocation and rebellion. Lapavitsas gives some ideas as to how this ugly scenario might play out.


More at The Real News

You can read the transcript here.

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19 comments

  1. Trader

    Spending what you bring in in taxes is not austerity; It’s called a balanced budget.

    The underlying problem is one of corruption, whether it is in the Greek government in this instance, or in the German Landesbanks which the German government is still trying to prop up.

    1. YankeeFrank

      Balanced budgets are over-rated for a nation-state. In fact, they are death for a nation-state. Its not a moral issue, its math.

      1. Joe

        Problem’s got a name: Globalism.

        And Globalism’s no bast*rd child either, its parents’ are, in particular, the US financial elite. Welcome home, bubba!

    2. The Dork of Cork

      @Trader.
      You can only tax the money supply … any real state can produce the money.
      If the banks control the money supply and are reducing loans which function as the money supply then the tax take must collapse.

      We need to define austerity – this is not about saving real resourses – its about saving the banks wasteful credit money system.

      In Nimes France SNCF subsidised train tikets at 1 Euro a piece – there was a overwhelming demand with some social tension.
      Not much real resourses were burned as transport systems were working at full and indeed beyond full capacity.
      Any goverment thats really a goverment can provide debt or near debt free money in a intelligent manner to reduce real resourse inputs without throwing people off a monetary cliff.
      The Euro system wants the Remaining Greeks that survive this onslaught to buy German cars via bank consumer credit and burn a epic amount of resourses rather then it becoming a national economy again.

      You must remember Germany France and indeed the UK wants the Euro periphery to remain a conduit for the cores capital flows rather then drawing on their own capital base in a intelligent manner,
      The Greeks , Irish etc are not citizens of anything – they are mere conduits.
      Cannon fodder for the Industrial machine ,indeed its not unlike the dynamics of 1914.

      1. The Dork of Cork

        PS – If Greece was running a national economy again the Athens Tram would be free or nearly so – why ? – its one of the most effiecent transport systems in the city.

        The roads should be nearly empty of cars with people hanging out the doors of public transport.
        But its not.
        Why ?
        Europe is the most extreme market state on the planet.
        A expression of pure evil.

        http://www.youtube.com/watch?v=wBkay9GwF5Q

    3. calabi

      If there’s some kind of natural disaster or even made made disaster like war which causes tax reciepts to be reduced by fifty percent. How do you balance the budget then?

      Do you say we cant afford all those Nurses and Police anymore?

      When they were at the required size for a society of that size. A society of a certain size requires a certain number of these things for it too function. Not enough tax men you dont get enough tax. Not enough Policemen, you get increased outlays and not enough tax.

      Do you just sit back and watch and say “Well at least your balancing the budget” when your country falls apart, and then say we havent got enough of this paper, not enough of this digital money to go around.

      But even then it doesnt work as indicated clearly by Greece(and several hundred times before it).

      How is the evidence of their own eyes and they cant even see.

  2. Nicholas Shaxson

    I prefer the term ‘horseshit economics’ which combines the notion of ‘nonsense’ with Galbraith’s horse-and-sparrow economics: “If you feed the horse enough oats, some will pass through to the road for the sparrows.”

  3. Max424

    I don’t know, man, 25% unemployment? I think Greece would be better off with TOTAL unemployment, because that would mean their traitorous politicians were out of work and on the streets.

    It would at least give the people of the once great nation something focus on, like, how many jobless MP’s can you swing from a single lamp post.

    1. Joe

      Wow, sounds like you have things worked out, why don’t you try it out where you live and get back to us on how things play out?

      I suspect that just killing a few people isn’t going to fix anything. We all need to get back to a real economy and a real politics. This ridiculous notion of, whatever you want, you shall have, has got to end. Anyway, it’s so childish. Doesn’t it just show how childlish our whole culture has become? What about solving some real problems, you know, hard ones, like mortgage forclosures? That’s not going to change the world, and maybe even that’s too big for us to tackle in our current situation…

      Are we going to let ourselves be reduced to this? Honestly? Are we oing to limit our concept of what the future can be to photo oppertunities and other puublic relations exercsises? You know, we can’t solve crime, but we can start another don’t litter campaign? And it’ll only cost 30mill. Why have we all let ourselves come to this situation where we all expect so little from each other and our communities?

      America used to have a great grass-roots political tradition. What happenned to that?

      This has not much to do with Greece, I realise, but I don’t think that this is about Greece.

  4. WI Quarterback

    At the end of the day, when the ponzi unravels, the question becomes which promises will the governments break? The promises of pensions, medical care, and social infrastructure? Or promises to be the “lender of last resort” to make whole the gamblers that structured the “Heads, I win. Tails, you lose” train wreck in the first place?

    EVENTUALLY, the truth will always come out, that the “deficit spending” is vastly tied to paying off the bad bets of the powerful, who promise back some small vig if the governments will just let them play another hand until they win big.

  5. The Dork of Cork

    The non rational destruction withen Greece is simply because the Euro is a collateral based currency … a pure bankers currency.
    It does not recognize the power of domestic Fiat and wishes to have nothing to do with the concept of nation , borders or monetary sovereignty via the production of unbacked fiat.

    In truth the Euro is a waste based currency – it can only grow via the production of waste or the destruction of people.

    This from wiki
    Mainline, passenger and freight train services on OSE lines are operated and provided by TrainOSE S.A., a former OSE subsidiary which is now an independent state-owned company.

    TrainOSE also operates the suburban and commuter rail services of Greece (called Proastiakos), on a modernised network around the cities of Athens, Thessaloniki and Patras. Proastiakos was founded as a separate company, which became later part of TrainOSE.

    Due to the financial problems of Greece TrainOSE has come to suspend regional services on following lines:

    Athens – Alexandroupolis (although the connection Thessaloniki – Alexandroupolis remains in service)
    Edessa – Florina
    Patras – Pyrgos – Kalamata
    Kalamata – Messene
    Corinth – Nafplio – Tripoli
    Since 13th February 2011, due to the Greek financial crisis and subsequent budget cuts by the Greek government, all international services have been suspended,[9] as outlined below.

    Thessaloniki – Skopje – Belgrade
    Thessaloniki – Sofia – Bucharest
    Thessaloniki – Istanbul (Dostluk/Filia Express)
    Athens – Sofia

    Dork – these actions do not save real real resourses – it merely pushes people over monetary and physical cliffs so the national resourses can be transfered to the core so that they can waste them and call this waste “Growth”

    The Greeks have recently bought the top of the line Swiss Stadler GTW 2/6s yet they appear empty of passengers in the video.
    http://www.youtube.com/watch?v=z9ZS5RPq1wg
    http://www.youtube.com/watch?v=8ovuKjLBc2w

    These same Stadlers were bought by Austin & Denton Texas recently.
    We are witnessing both a epic waste of people and surprisingly the more rational capital investments.

    One can only conclude this is a form of all out warfare by the core to steal those very valuable capital and commons investments – as when the money supply increases again they will become very valuable private fiefdoms farming the people.

    1. psychohistorian

      Nice to see such a good understanding of and characterization of part of our world, thanks.

      Dork of Cork….grin….didn’t we go to different high schools together?….

  6. Warsaw Pact syndrome

    The government of Greece deserves everything it gets if it’s too stupid to exit NATO. An Article 13 denunciation would give the allies a year to decide just how important austerity is to them. Money is tight and Greece has to choose between NATO and Europe – so which is it going to be?

    1. Brooklin Bridge

      The problem is, many of us are simply too stupid. I’m a “f**cking retard”, for example, so there is no way I would know how to vote for the lesser of two evils. They look utterly identical. Greece may have a similar problem. Full of miserable f**king retards.

    2. Brooklin Bridge

      Sorry, scratch that (I seem to be having a hard time lately). I thought you said, “the people of Greece…”

      Nonetheless, the problem with “the government deserving everything it gets” is that it is the people who end up suffering, not the corrupt ass holes who are running the show at their constituent’s expense.

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