I've done my share of analysis of Greece in the last few weeks. I consider if nothing else it a good thing that this is going to a vote so I have no idea why Tripas is so criticized for this. For some reason euro pundits are criticizing the timing-right action wrong time.
The harshness of this mere procedural criticism makes me think they're hiding behind process when their differences with him are more fundamental than they admit.
Nick also seems to do 2 interesting things at once.
1. He agrees with what many-Sumner, Milton Friedman back in the late 90s-and another Market Monetarist, David Beckworth that the euro was a bad idea from the start.
2. Yet he takes issue with the way Greece is leaving the euro-even if by his own anti euro premise he should laud it.
"The Euro was a mistake. I hoped (and still hope) to see the Euro dissolved. But the Euro is now stronger than before. With enemies like Syriza, the Euro does not need friends. The government of Greece made a bad situation (that was maybe slowly improving a little) worse. And it will get much worse in the future, regardless of the vote in the referendum. If this is what an exit from the Euro looks like, who would want to follow Greece in exiting the Euro? And the perceived willingness of the ECB to do open market operations was probably what nullified the Greek threat to destroy the Euro unless it got what it wanted."
http://worthwhile.typepad.com/worthwhile_canadian_initi/2015/07/thoughts-on-the-news-from-greece.html#more
To be sure, even if the euro was a bad idea leaving it can still be very risky as the adjustment period for a new currency could be very painful indeed.
The harshness of this mere procedural criticism makes me think they're hiding behind process when their differences with him are more fundamental than they admit.
Nick also seems to do 2 interesting things at once.
1. He agrees with what many-Sumner, Milton Friedman back in the late 90s-and another Market Monetarist, David Beckworth that the euro was a bad idea from the start.
2. Yet he takes issue with the way Greece is leaving the euro-even if by his own anti euro premise he should laud it.
"The Euro was a mistake. I hoped (and still hope) to see the Euro dissolved. But the Euro is now stronger than before. With enemies like Syriza, the Euro does not need friends. The government of Greece made a bad situation (that was maybe slowly improving a little) worse. And it will get much worse in the future, regardless of the vote in the referendum. If this is what an exit from the Euro looks like, who would want to follow Greece in exiting the Euro? And the perceived willingness of the ECB to do open market operations was probably what nullified the Greek threat to destroy the Euro unless it got what it wanted."
http://worthwhile.typepad.com/worthwhile_canadian_initi/2015/07/thoughts-on-the-news-from-greece.html#more
To be sure, even if the euro was a bad idea leaving it can still be very risky as the adjustment period for a new currency could be very painful indeed.
Actually what I might ask Nick for starters is whether he read the very good work of his fellow MMers Marcus Nunes and David Beckworth? I would ask him how much of this does he agree or disagree with? Here Marcus quotes from a Fortune article from a reporter way back in 2011-but the attitudes have hardly changed:
"They were slightly irritated by the pessimism I’d expressed earlier in the day. “Don’t you realize,” one of them said, “that the cost to us (Germany) of bailing out Greece is far less than it cost us to reintegrate East Germany after the wall came down in 1989?”
"I almost choked on my croissant. Yes, I replied, I am aware of that. I lived and worked in Berlin as a journalist in the mid 1990s, when that very painful (economically speaking) process was taking place in Germany. But doesn’t that, I said politely, rather beg the question: Germany integrating their brethren, who’d been isolated and impoverished during the cold war, was a dream come true, whatever the cost. Germans, on the other hand paying to bail out Greece is, to average German, rather the opposite of a dream come true, is it not?"
"He waved me off. No no, he said, it will be taken care of. The Germans, he said, understood how beneficial to them membership in the euro zone has been. Without it, the gentleman said, the value of the Deutschemark would be 50% or 75% higher than it is under the euro. “German industry would be wiped off the map.”
http://diaryofarepublicanhater.blogspot.com/2015/07/germany-and-greece-cowhos-parasite.html
"Here was my ‘choking on my croissant’ moment number two. Most economists would agree with what my friend at the meeting had said; but he seemed either oblivious (not likely) or simply unconcerned (more likely) with the flip side of what he had just uttered. Italy, to take the third-largest economy in Europe, one with a sizeable and modern industrial base, is stuck with a currency — the euro — which is stronger than the old lira would be under current circumstances. But membership in the euro zone means Italy can’t devalue to bring some relief to its exporters."
"I pushed back politely. Look, I said, it’s not Greece I’m worried about. It’s Italy. Third-biggest bond market in the world. Bond spreads this morning again heading over 7%(before the ECB intervened this to push them back down again.) Too big to fail, too big to save. Is the government, even one under a new Prime Minister, going to push through sufficient austerity to avoid a default?"
You can argue that the reason Greece hasn't left the euro is because Germany will never let them-as the euro soars if Greek leaves.
"They were slightly irritated by the pessimism I’d expressed earlier in the day. “Don’t you realize,” one of them said, “that the cost to us (Germany) of bailing out Greece is far less than it cost us to reintegrate East Germany after the wall came down in 1989?”
"I almost choked on my croissant. Yes, I replied, I am aware of that. I lived and worked in Berlin as a journalist in the mid 1990s, when that very painful (economically speaking) process was taking place in Germany. But doesn’t that, I said politely, rather beg the question: Germany integrating their brethren, who’d been isolated and impoverished during the cold war, was a dream come true, whatever the cost. Germans, on the other hand paying to bail out Greece is, to average German, rather the opposite of a dream come true, is it not?"
"He waved me off. No no, he said, it will be taken care of. The Germans, he said, understood how beneficial to them membership in the euro zone has been. Without it, the gentleman said, the value of the Deutschemark would be 50% or 75% higher than it is under the euro. “German industry would be wiped off the map.”
http://diaryofarepublicanhater.blogspot.com/2015/07/germany-and-greece-cowhos-parasite.html
I don't see how if you agree with the gist of this you can take such an censorious view of the Greeks. There's this presumption that Greece has done nothing but take and the Germans have done nothing but give that isn't borne out.
"Here was my ‘choking on my croissant’ moment number two. Most economists would agree with what my friend at the meeting had said; but he seemed either oblivious (not likely) or simply unconcerned (more likely) with the flip side of what he had just uttered. Italy, to take the third-largest economy in Europe, one with a sizeable and modern industrial base, is stuck with a currency — the euro — which is stronger than the old lira would be under current circumstances. But membership in the euro zone means Italy can’t devalue to bring some relief to its exporters."
"I pushed back politely. Look, I said, it’s not Greece I’m worried about. It’s Italy. Third-biggest bond market in the world. Bond spreads this morning again heading over 7%(before the ECB intervened this to push them back down again.) Too big to fail, too big to save. Is the government, even one under a new Prime Minister, going to push through sufficient austerity to avoid a default?"
You can argue that the reason Greece hasn't left the euro is because Germany will never let them-as the euro soars if Greek leaves.
http://diaryofarepublicanhater.blogspot.com/2015/07/germany-will-never-let-greeks-leave-euro.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+DiaryOfARepublicanHater+%28Diary+of+a+Republican+Hater%29
Even the criticism of the Greek's 'artificial boom' prior to 2009 forgets that so much of the business they did was complement of the German exports to their country.
Even the criticism of the Greek's 'artificial boom' prior to 2009 forgets that so much of the business they did was complement of the German exports to their country.
"I do not know whether Greece will now stay in the Euro or leave the Euro. The most likely outcome is a situation so messy that it can best be described as "neither". Network externalities make it hard to introduce a new money, even for a competent government that has the trust of its people. But with tax receipts falling even further, I think the government will be forced to issue scrip to cover basic expenditures, and that scrip may circulate as a medium of exchange, to some extent, alongside the Euro notes. And the banks won't be able to issue Euros any time soon, regardless of the vote in the referendum."
Well no one knows for sure and the vote is very close. The Greeks want to seemingly contradictory things
1. To stay in the euro
2. But push the brakes on the painful austerity
I've argued that this is only seems like a contradiction. If Tsipras' assumption is correct then this is not really a vote over staying or leaving the euro but rather over whether to accept the latest harsh deal of the EU or have a better deal.
The fact that the IMF is now demanding that the EU give the Greeks debt forgiveness may suggest that Tsipras is not as out of his depth as his many detractors assume.
http://diaryofarepublicanhater.blogspot.com/2015/07/the-imf-undercuts-whole-anti-tsipras.html
I think the right vote tomorrow is no-but even a yes vote is a positive step in that the Greek people have finally gotten to decide.
This chart on Fortune-which nobody has claimed as their own-shows that no matter what the vote is tomorrow what happens next will hardly be simple:
http://fortune.com/2015/07/03/greeces-vote-is-germanys-pyrrhic-victory/
If this is your chart let us know as you deserve a lot of credit. This shows that even a yes vote likely will return us to this same Grexit impasse again in a few steps.
This is what I think Nick misses here:
"The government of Greece made a bad situation (that was maybe slowly improving a little) worse."
This is the sentiment of the EU as well-that the Greeks should vote yes and return us to the previous status quo under Tsipras's predecessor. This status-quo wasn't stable which is why the Greeks voted Syrzia in.
http://www.economist.com/news/europe/21637395-prime-minister-looks-likely-lose-snap-greek-election-later-month-it-not
As much as Tsipras' haters revile him they can't admit that he was democratically elected-this is not the October Revolution of Lenin.
http://www.economist.com/news/europe/21637395-prime-minister-looks-likely-lose-snap-greek-election-later-month-it-not
As much as Tsipras' haters revile him they can't admit that he was democratically elected-this is not the October Revolution of Lenin.
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