The new big trick: capitalism at no risk

The Greek debt is gradually moving from the private to the public domain. Private banks, funds, etc, after giving out money for so many years to a series of incredible Greek administrations, will, at the end, suffer no cost at all for these very wrong and risky decisions. EU, IMF, etc. are making sure their trash paper (Greek bonds, etc.) is bought by the EU and, to a lesser extent, the US citizen.

Just as the big guys in the US were bailed out by the government there a few years ago, shielding them from the losses of their greedy and ultra wrong decisions in the realty business and violating the very basic rule of capitalism, just the same is happening in the case of the lenders of Greece. Instead of penalising them for the huge risk they have been taking by handing out huge amounts of money to crippled administrations in Greece in the last 30 years, they have been granted both time and instruments to offload their now rapidly deteriorating in value papers.

The private sector (banks, etc.) is bailed out by the EU taxpayer. The status quo is preserved and the clear losers are the EU taxpayer and the small part of the Greek economy that fights to be competitive and is not glued on a huge, corrupt, profligate and incompetent “entrepreneurial” public sector. This part is almost illegal all these years and still remains so. With the grand exception of the maritime business that is global No. 1 exactly because it has been globalised since many years and can fortunately not be reached by the death touch of the Greek administrations.

Is all this to save Greece, Portugal, etc.. and with them the pride of the Eurozone and all that goes with it? That's the official scenario. A noble one indeed. However, for such a goal more than money is required. Just giving money to those who created the problem, will never solve it. A different mindset is required and different people, carriers of this new mindset. Not the case unfortunately for Greece. Not 1% has changed in terms of mindset or people.

As a net result, everything is again working for the interests of the greedy investors of our times. Huge profits when they do right, no loss when they do wrong. Few well known people shout at this ugly practice; Joseph Stiglitz, for example, in his excellent book “Freefall”. But there is a way to go to really throw the lights on these bandits, especially as they enjoy the support of their administrations, who should have public interest as their priority instead of constantly shielding these guys from the results of their own greed.

2 σχόλια:

  1. very correct!

    I agree that a haircut is required; not because banks, etc., are capitalists, as suggested by the Debtocracy documentary, but because they are BAD capitalists. And BAD capitalists must pay for their failures.

  2. ...bad capitalists and corrupt governments I would say; they should also pay and so they will. It is a matter of time before the political landscape in Greece is turned upside down. Only issue is what damage they will have done by then.

    As to debtocracy this is typical populist art. The dictators of Greece who sat on our neck are put on an equal foot with the IMF who we gloriously invited.

    Leftist nonsense has been and still is dominant in Greece.