Greece's financial crissis

[John Cuthber]

What on earth has that got to do with trades becoming redundant following emergence of new techniques? Because that was context of my riposte.

 

The context of your comment was

"The question is that on a global scale, governments are asked to reduce their impact. More an more privatizations, lower budgets, less employees, less army, etc."

from michel123456

 

What on earth has that got to do with trades becoming redundant following emergence of new techniques?

[Delbert]

 

Then how do you account for the existence of a large criminal class of wealthy people bankrupting the government by evading taxes? Are you claiming these people are unrelated to the criminal ruling elites of the fascist era, that ended a mere 25 or 30 years ago?

Again, this is missing the point. Dealing with criminal activity is a matter of law and its enforcement. The law is drawn up by politicians followed by assent to statute. And as for evading taxes a similar situation applies. If the politicians aren't undertaking such, then the people have made the wrong choice at the polling station. It's called democracy.

 

We can come up with all sorts of excuses, like big corporations, dodgy banks or whatever. But all these things are a result of the system they operate under, which is set by the politicians.

 

I seem to recall the last UK PM eulogising about a particular bank when opening a new branch (I think he was still chancellor at the time, I have the statement somewhere in my files, but can't find it). Even intimating that he would like to be able to run the UK economy like they run their bank! And what happened? That bank when bust and nearly brought the world economy down!! And that political party was elected into government three times!!

More an more privatizations, lower budgets, less employees, less army, etc."

 

Less employees, less army and the like occasioned by changing techniques, was the context of my riposte. And as for privatization, I've seen and experienced what goes on in public departments. I've seen from close quarters blatant fraud and sabotage, with nothing done for the clear reason of publicity should it go to court. Sorry, but I can't take comments about the wonders of public ownership. And from what I saw they embraced privatization to get rid of troublesome departments.

Edited October 1, 2013 by Delbert

[John Cuthber]

Sorry, can you clarify something there.

When you say " I've seen from close quarters blatant fraud and sabotage, with nothing done for the clear reason of publicity should it go to court."

do you mean in the public or private sectors- because there are plenty of examples of both. If you are looking for current evidence of sabotage by public employees I think the refuals to agree a budget proposed by the elected president might count.

 

"Sorry, but I can't take comments about the wonders of public ownership. "
Not much to do with Greece I know, but, compare and contrast healthcare spending in the US vs UK then compare the mean lifespans, the infant mortality...

 

"I seem to recall the last UK PM eulogising about a particular bank when opening a new branch (I think he was still chancellor at the time, I have the statement somewhere in my files, but can't find it). Even intimating that he would like to be able to run the UK economy like they run their bank! And what happened? That bank when bust and nearly brought the world economy down!! And that political party was elected into government three times!!"

Please look it up, it sounds interesting.

At the moment we have a Prime minister who just sold a bank back to the private sector.

It had to be taken into public ownership because the private sector messed it up.

Under public sector ownership, it made a profit.

So now he has sold it back to his rich friends.

That's the sort of mechanism they use for "risk management" They privatise the profits, but the public takes the risk for any losses.

Nice work if you can get it.

http://www.bbc.co.uk/news/business-24117531

[overtone]

 

 

We can come up with all sorts of excuses, like big corporations, dodgy banks or whatever. But all these things are a result of the system they operate under, which is set by the politicians.

In Greece, they were hangovers, the results of the previous system - one that they were accustomed to controllling. They were simply too powerful, too well supported, too wealthy, for the new rookie government to handle. There was a power struggle, and the bad guys won - it happens.

 

The point is this: the Greek people did not dig themselves into this hole by being irresponsible and lazy and greedy and voting themselves free money or something. They were robbed, conned, and cheated by the rich and powerful of their country supported by the international financiers and the rich and powerful of other countries. And if you can't imagine how that could happen to honest hardworking people recently liberated from fascistic governance, look around - they are far from the first and only.

[Delbert]

Sorry, can you clarify something there.

When you say " I've seen from close quarters blatant fraud and sabotage, with nothing done for the clear reason of publicity should it go to court."

do you mean in the public or private sectors- because there are plenty of examples of both. If you are looking for current evidence of sabotage by public employees I think the refuals to agree a budget proposed by the elected president might count.

Well known form of local public organisation. As said, the fraud was blatant and involved a police raid. The sabotage was also blatant, the individual was caught on one occasion, but nothing was done. And I forgot to mention the thievery, again was blatant, on one occasion I had to make representations (company property was stolen), the thief was even observed doing it, but again nothing was done.

 

If you're implying similar things occur in private organisations, I doubt very much if it would be so blatant and also known to the bosses - who do nothing. Such local organisations live in a different world than the rest of society. If private business is inefficient it goes bust, if public organisations are inefficient they just increase their budgets and put the bills up. And they always make sure they spend all their budgets plus a bit more (we always knew when to offer new equipment!), so that they can justify an increase the following year. The normal rules of life don't apply to them.

 

 

"I seem to recall the last UK PM eulogising about a particular bank when opening a new branch (I think he was still chancellor at the time, I have the statement somewhere in my files, but can't find it). Even intimating that he would like to be able to run the UK economy like they run their bank! And what happened? That bank when bust and nearly brought the world economy down!! And that political party was elected into government three times!!"

Please look it up, it sounds interesting.

I'm surprised. I recall it was quite a well publicised occasion. Shown on TV and all that. You know, the one that quoted 'neo classical endogenous growth theory'!

 

 

At the moment we have a Prime minister who just sold a bank back to the private sector.

It had to be taken into public ownership because the private sector messed it up.

 

You forgot: operated under a government that relaxed the regulation and changed the regulation authority - and wanted to run the country like a similar bank that also went bust for the same reason.

[michel123456]

Then your statement is even farther from accuracy.

 

 

Of course. But the degree matters - in Greece, the entire financial industry was being run by the leftover power and wealth hierarchy from the fascist regime. As if the financial and corporate elites of Las Vegas or Daley's Chicago - or Texas - were running the US.

 

It's like friction in a car engine - it's unavoidable, may even help smooth things out in small amounts, but too much and your engine breaks down altogether.

 

 

 

That's perfectly reasonable, if they are providing the services paid for - the US runs about 9-10% public sector employment, and the US does a lot of private contracting for government services. Most modern industrial countries run higher percentages than that.

 

 

 

Then how do you account for the existence of a large criminal class of wealthy people bankrupting the government by evading taxes? Are you claiming these people are unrelated to the criminal ruling elites of the fascist era, that ended a mere 25 or 30 years ago?

Out of curiosity, I checked up and found this: http://www.becker-posner-blog.com/2011/09/too-many-government-workersposner.html The guy seems to have a fairly loose definition of "public employee", which may be an issue, but one presumes his analysis is consistent across countries - he puts the US in the middle of the pack:

Don't trust these numbers. When Troika came to Greece ans asked the government "how many public employees do you have" the simple answer was "we don't know". It took some months to discover the real number (and agree on what a "public employee is".

In this official paper from the European Union Presidency 2010, the public employees are* (see page 7 of the link)

 

*

Public Administration: public employees (without differentiation on what basis the employment takes places, weather the

workers are appointed or working with a contract) that is staff employed by the central government institution (Ministries,

Agencies, Inspectorates, civil workers in law enforcement agencies, police, civil workers in army,

staff employed in foreign service) and Constitutional institutions but excluding medical staff, teachers and academics.

 

In Greece, when you add medical staff, teachers, academics and also all employees from local administrations (counties etc.) you must multiply the number by three.

Instead of the 371 thousands mentioned in the survey (page 7), the public sector is (was) above a million.

When you have about 10% of the population (not % of the workforce) I assure you that in the western world you have a problem.

In fact the politic of the Socialist Party in the 80's and afterwards was to put as much as possible people in the public sector, giving secure work* and getting votes in return, while using the "stupid" capitalistic system that allows to get loans indefinitely.

*the Constitution forbids to dismiss a public employee.

-----------------------------------------

In fact, the capitalistic system was not stupid at all.

When a bank gives a loan, the money does not exist. The money is accounted as a negative sum because someone took it and must pay back with interests of course. So in fact every time someone gets a loan, money is created.

When the loan is payed back of course, with interests, the money is real.

The money is then the result of some work. At this moment the Greek people are asked to pay back (with hard work) money created from thin air by bankers. And as time goes by, the money gets more and more because of the mathematical exponential curve (see previous post).

 

This game is played all over the world. There are today some "miracle-countries" where investments are huge, where big loans are given with great facility.

Wait and see.

[John Cuthber]

 

 

 

(1) If you're implying similar things occur in private organisations, I doubt very much if it would be so blatant and also known to the bosses - who do nothing.

 

(2) Such local organisations live in a different world than the rest of society. If private business is inefficient it goes bust, if public organisations are inefficient they just increase their budgets and put the bills up. And they always make sure they spend all their budgets plus a bit more (we always knew when to offer new equipment!), so that they can justify an increase the following year.

The normal rules of life don't apply to them.

 

 

You forgot: operated under a government that relaxed the regulation and changed the regulation authority - and wanted to run the country like a similar bank that also went bust for the same reason.

(1) The biggest crooks are the bosses so it's hardly likely that they will do anything to stop themselves.

(2) It's true that the treasury for many years had a very stupid policy of penalising anyone who didn't spend the whole of the budget. There's a reason for it involving the public sector borrowing requirement.

Unfortunately, they forgot to take proper account of human behaviour when they came up with that policy. It is no longer in force where I work and I think it has been largely abandoned for some time now.

 

(3) it is true that the government has reintroduced measures to stop the banks misbehaving in the way that caused the problem.

What a pity they didn't realise that deregulating the banks in the first place was a bad idea.

[overtone]

 

 

Don't trust these numbers. - - -

- - - -

Instead of the 371 thousands mentioned in the survey (page 7), the public sector is (was) above a million.

- - - -

 

When you have about 10% of the population (not % of the workforce) I assure you that in the western world you have a problem.

 

Your numbers there agree perfectly with my link numbers - several Western countries have higher percentages without Greece's problems.

They don't have Greece's level of tax evasion and corruption, is all. Their governments are strong enough to collect taxes from even the wealthy and powerful, so their budgets are not piles of growing debt.

Edited October 3, 2013 by overtone