Friday, July 3, 2015

A 'No' Vote for the Greeks May Just Be a 'Free Good'

     This is a concept of the economists. For instance if you work for an unfair boss who doesn't like you then mouthing off to him is actually the best-really you're only response. Instead of being submissive-which won''t work in his case because he's unfair.

     I think this is something like what's going on with Greece. The EU pundits talk about Tsipras' 'childish antics' as if they occur in a vacuum. Maybe they're in response to his objecting to these pompous EU honchos treating him and his nation like a child. 

    I mean a lot of the talk about him is just blatant paternalism if you ever don't want to see it. Check out this post-that Sumner of course recommended as understanding well the crisis.

    The whole tone is that the Greeks are naughty children who can't be allowed desert until they apologize. 

    I know Sumner bitterly doesn''t want to be one of Krugman''s Very Serious People but what do you expect when the only thing you can say about Tsipras is that 'He's not serious; I can't take him seriously'-this is what all the EU pundits are saying-and as criticisms go it's pretty vague. What it really means is that he is disobeying his masters at the EU and IMF. 

   And much as it may shock Chris Giles-the author of the link above-it seems that the response of Tsipras' naughtiness of not paying the IMF on Tuesday has been 'rewarded.'

   Meanwhile Tyler Cowen represents the Greek fight as being about big government. 

   "Many Greeks are sick and tired of the bloated public sector and its corruption, inefficiency and waste. In this frame, the Greek story is not fundamentally about Greeks versus Germans it’s about the Greek people versus their government–the Germans have simply been the vehicle that has brought the Greeks to their kairotic moment.  The Greeks want normalcy, as the Poles did after communism. If the Yes vote wins on Sunday it will be the Greeks voting not just against the current administration but against the entire state apparatus.

    - See more at:"

    Yes, there's a shock for you: Tyler Cowen thinks the only problem is big government. What he fails to get here is that the Greek people elected Tsipras and Syrzia just this year-it wasn't a Leninist coup that brought them to power. 

    In this vein I have to agree with Market Monetarists David Beckworth and Marcus Nunes rather than Cowen. What's killing Greece isn't big government but rather a terrible monetary union.

   I can agree with Sumner-maybe the Greeks should never have joined-but I don't agree with what he's saying now: that Tsipras is their real problem. All the Tsipras bashers act as if things were going great in Greece before he was elected. 

  "Greece has achieved much since receiving the bailout loans, reducing budget deficit from 15 per cent of national income in 2009 to 3 per cent in 2014. It has implemented many necessary economic reforms; and the programme began to work, with Greek output growth topping the eurozone league table in the third quarter 2014. This progress was made despite Greece persistently failing to implement fully the reforms to which it had agreed."

   If thins were going well why'd the Greeks elect Syrzia? Again, he wasn't elected in a coup and his campaign promised to do exactly what he's doing. None of this is a surprise. What was a surprise was previous Greek governments that promised relief and then broke their promises and went along with team austerity. What did they get for their trouble? They were voted out of office. 

  That's what this is about now: the EU wants Tsipras and his party gone. I think that if the Greeks vote now that's a real mistake. You give up the control you now enjoy. Tsipras has figured out the truth: defying the EU is a free good. 

   Not only is there no benefit to compliance-the EU doesn't reward it-but there actually is a benefit to noncompliance-after their default on an IMF payment on Tuesday, the IMF has urged the EU hotshots to give the Greeks some debt relief-probably figuring that's the only way the IMF is going to get any money back. 

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