Discussing the Global-European-cum-Greek-cum-Global Crisis at the Brecht Forum, NY. Tonight at 19.30

Tonight, I shall have the pleasure of being an invitee of Professor Rick Wolff. If you are in Manhattan, please join us.

Rick (the author of Capitalism Hits the Fan: The global economic meltdown and what to do about it, Northampton, Mass.: Olive Branch Press, 2010) presents a monthly series at the Brecht Forum (see below for directions) on the subject of  Global Capitalism. When he found out that I shall be in town tonight, he graciously invited me to appear  ‘on stage’ with him to offer a wrap up re. the recent developments on the Global Crisis front, with special emphasis (naturally) on the European debacle.

The Brecht Forum is on “Manhattan’s Left Bank” in West Greenwich Village. Address: 451 West Street (that’s the West Side Highway) between Bank & Bethune Streets NYC 10014. Tel. (212) 242-4201

Click here for more.


  • Very sophisticated articles and blog posts are being published every day about technical solutions to the Greek and European debt problem. They range from Eurobonds to EFSF-leveraging to Modest Proposals, etc. etc. There are undoubtedly brilliant minds at work.

    Here is an appeal to all those brilliant minds: the Greek debt is not going to go away regardless how smart the technical solutions are. On the contrary, the foreign debt of Greece is going to rise going forward; it cannot decline (unless the discussed haircut comes through but even that will be but a drop on a hot stone). So why devote so much brainpower to something which has no near-term solution instead of applying it to specific proposals as to how the Greek economy could become strong? The stronger the Greek economy becomes, the greater the likelihood that more Greek debt can eventually be repaid (or rather: refinanced in capital markets).

    The appeal is: come up with proposals how the Greek economy can be transformed into a value-generating, competitive market economy, and grow! One such proposal is here (http://klauskastner.blogspot.com/2011/09/endgame-for-greece.html). Come up with many more!

    One could argue that no growth plans for the economy can be implemented before the debt problem is solved. True. But keep it simple!

    My suggestion: commit to the holders of Greece’s sovereign debt that, say, 10% of government expenditures will be allocated to interest payments over the next 10 years. And then let financial engineers work out combinations of amounts/tenors/interest which can be supported by that amount of interest payments.

    Growth is the answer to most debt problems!

  • Here is an appeal to all those brilliant minds: the Greek debt is not going to go away regardless how smart the technical solutions are.

    Exactly. So let’s not pretend otherwise. The creditors should be punished — punished severely. The loans were reckless. The creditors knew there was no chance in hell they would ever be paid back. I mean, that’s a classic example of fraud.

    Klaus, these reckless banksters have made it impossible for me here in Canada to buy a house debt-free. With all these 5-10-15% down payment mortgages, house prices are insane. I make a decent living, can’t complain. But to buy a “decent” house, debt-free, I am looking at spending around 15x gross eanrnings! If I save 10% of my net income per year, how long before I will be able to afford to buy house a debt-free? …lol

    You see what I mean by reckless lenders? (They are all the same, btw.) And now they demand that Greece sells its public assets (for pennies on the dollar, for souvlaki’s sake)? The public assets are the patrimony of the Greek nation. Ιf they dare … “come and get them!”

    So why devote so much brainpower to something which has no near-term solution …

    Actually, no near-term solution and … no long-term solution other than an outright default Again, why pretend?

    … instead of applying it to specific proposals as to how the Greek economy could become strong?

    Yes, but how about some austerity for the Greeks, too? What’s good for the reckless banksters is good for the reckless borrowers. The Greeks must start living withing their means. Nothing crazy about that. Don’t spend on things you can’t afford. (Btw, this goes for everyone else, not just the Greeks.) Nor make promises that are — mathematically! — impossible to keep like … pensions at age 50!, to give an extreme example

    And I don’t know where to start with the tax evasion, corruption, and a military budget that is on a per capita basis equivalent to that of a superpower. (On military budget, I don’t blame the Greeks. If the Rule of Law was enforced …)

    Anyway … what was you your point? 😉

    Growth is the answer to most debt problems!

    I respectfully disagree, Klaus. The anwser, simply enough, is living within your means: Don’t spend more than you earn!

    • lastgreek

      A short clarification on „growth“ – if by that is meant the debt-driven consumption growth which Greece enjoyed since the Euro, forget it! What I mean is equity-driven growth into value-generating projects which create returns (and jobs, and income taxes!) on a sustained basis. Is that possible in Greece? If not, someone would have to explain to me why not!

      Living within one’s means? Of course! But one should better say “living within one’s potential means”. Think of what the standard of living of Greeks would be today if over the last decades there had been no guest-worker remittances, no EU grants and no cheap Euro-loans? That would be “living within Greece’s current means”. If Greece utilized her potential, the means would expand significantly (and they have to expand if Greece wants to maintain some decent form of living standard!).

      The problem is that Greece cannot finance on her own the necessary growth because she doesn’t generate sufficient domestic savings. Thus, Greece will – for many years to come – need the savings of other countries if she wants growth (sustained growth, that is). And since Greece already has enough foreign debt as it is, much of that foreign funding must come as equity.

      What can Greece do to make that foreign equity flow to Greece (voluntarily, that is!)? Just create an economic framework which makes it easy and attractive to do business in Greece. Where does Greece stand today? Well, according to the World Bank/IFC’s “Doing Business 2012 Report”, Greece ranks at position 100. Greece’s most favorite neighbors to the North (FYROM) moved up to position 22 (from 24). Mind you, only Greeks themselves (not Merkel or Sarkozy) can make Greece a place where it is easy and attractive to do business!

  • Papandreou, le grecque, hier le 8 novembre 2011-11-10
    Berlusconi, l’italien, le lendemain
    Sarkozy, le français, demain ?
    et puis d’autres…l’espagnole, le portugais…
    La « valse trébuche » des présidents et ministres des pays membres de l’Union européenne a commencée.
    L’Euro scellera la désunion européenne.
    Ils ont œuvré pour une Union européenne du fric, de vache à traire qui donne pour lait, nos impôts et taxes. Ils n’ont pas œuvré pour une Union européenne des peuples.
    Les citoyens européens ont été oubliés, trahis, mentis, usurpés, floués, ruinés, abandonnés, laissés pour compte.
    Esprit européen, vertu bafouée ! Vertu ignorée des politiciens sans vertu, corrompus, hypocrites, faussaires d’une Union européenne.
    Grande illusion des peuples européens qui ont cru en une union sans frontière, fraternelle, pacifiste, solidaire, de rapprochement, et d’entente réciproque, d’intérêts communs, de partage et d’égalité.
    Seule des États-Unis d’Europe, sur le model des USA, pourrait
    garantir le bien être à tous les citoyens européens, et œuvrer dans leur intérêt commun.
    Mais de cela, les chefs de gouvernements nationaux ne veulent rien savoir. Ils perdraient leur agissement incontrôlable et les moyens de faire leurs magouilles, en dehors de toute loi et de toute justice.
    Intérêt national ! Affaires d’État ! Secrets d’État ! Agents secrets ! Immunité personnelle ! Cela ne peut pas marcher dans une Union européenne suprême. C’est cela, le frein et le dé traqueur d’une constitution européenne
    . Pauvre Union européenne. Grande désillusion pour les pionniers d’une Union européenne.
    Peuples européens réveillez-vous ! Rappelez-vous des malheurs et des misères que vos parents et grands-parents avaient à supporter à cause des chefs d’États, qui dans leur obstination aveugle, les ont éconduits et entraînés dans la tourmente et la mort. 1870, 1914/18, 1939/45, ne vous suffisent donc pas et ne vous servent donc pas de leçon ? Rappel qui devrait stimuler votre détermination, de ne donner votre voix d’électeur qu’à des représentants d’une Union fédérale européenne. C’est le seul moyen de sauver l’Union des peuples européens et de nantir l’avenir de vos enfants et petits enfants, de bases confraternelles salutaires.