Mark Blyth on the Greek Situation

Mark BlythIt’s not a question of Greek being blameless. Of course they’re blameful. But that doesn’t matter if people were giving them money. You can’t have over-borrowing without over-lending. Why is all the conversation about the terrible over-borrowers rather than the reckless over-lenders? …

Nobody gets called on their busted calls. The number of times I’ve seen, “Europe has turned the corner into growth,” and then it went straight back into recession. If you’re a bookie and you continually make bad bets, you go out of business. If you’re a doctor and you continually injure patients, they put you in jail. But if you’re a financial journalist or an institutional economist, then you can make bad call, bad bet, and bad policy time after time, and you get promoted. That’s what’s most annoying about it…

I just think that when you start to do things like replace governments, and have something called the Eurogroup, which decides that government shouldn’t be in power, that’s kind of dangerous. I don’t think that’s kind of leftist or rightist or whatever. And everything that I’ve said here is based on evidence — chapter and verse, real data, the whole thing. It’s not a set of, “I just made this up” opinions. What gets me is the faith-based reasoning on the other side, which is, “Well, the Greeks haven’t tried hard enough!” Well, I can show you evidence that they’ve actually done a heck of a lot of reform. “Yeah, that doesn’t count because they’re all lazy!” But, in fact, they work 800 hours more than the Germans. “Yeah, but they don’t pay taxes!” But neither do rich people in the United States. And you can go point after point after point, and it makes no difference. This is an article of faith.

—Mark Blyth
Interview with On the Media

2 thoughts on “Mark Blyth on the Greek Situation

  1. Very normal, how people in particular groups apply standards of behavior to people in other groups. Fiscal responsibility is a big one. Poor countries should be more responsible than rich ones. Pretty much every government benefit Europe wants Greece to slash is enjoyed by workers in rich European countries; no rich country is calling for its benefits to be cut so a fund can be pooled to bail our Greece’s debt. (Norway is sitting on such a huge slush fund they could pay Greece’s debt twice over and still have slush fund money left!)

    Just like fiscal ruin should be harsher for poor people than rich people (what disastrously wrong hedge-fund manager ever winds up on food stamps?) Poor people should be penalized more for minor crimes and neglecting to use birth control. It’s an incentive, you see.

    It’s odd that people in rich countries who support these things (penalizing poorer nations or social groups) don’t realize the goal is to eventually get rid of any government support for any person, anywhere (except large corporate “persons,” of course.) “The Economist” has been pimping for the removal of all social spending since I’ve been old enough to read, in their calm, witty way. By no means are the pensions of German or French or Scandinavian workers safe — it’s just politically difficult to go after them right now. But they’re a long-term goal for elimination, just as Social Security is here.

    The far right is playing a very, very, very long con. The super-rich and powerful can easily weather a decade or five of minor setbacks; it’s not too demoralizing when you’re winning on various fronts, and still rich. The left is always a natural underdog, here, since once you get some major victory (which is piddling nonsense from power’s perspective) that took ages of blood sweat to accomplish, it’s only natural to want to relax a little.

    I’m beginning to think the mindset of the super-rich (and their wanna-be acolytes like Brooks or Friedman) is somewhat cultish . . .

    • Absolutely. Moral hazard is something that must be applied to poor people and poor countries. That’s why the focus in this whole thing has been on Greek borrowers and not German lenders. And at the same time that all the moral outrage is focused on Greece, all the money is going to the lenders. If the Troika had been serious, it would have lowered Greece’s debt at the beginning and set up some program for Greece’s recovery. But instead, it just kicked the can down the road, as Greece suffered and racked up more debt. The one group in all of this that hasn’t been harmed are the bankers. As usual.

      You are absolutely right about getting people to oppose liberal policies in other countries as a way to eliminate them in all countries. I see the same thing here with labor unions. Now non-unionized people resent unions. And we’ve even seen where police and fire unions support anti-union candidates. It’s social cannibalism.

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