Wednesday, July 1, 2015

Greece is the Word = Ed Deform Agenda, Krugman Endorses Leaving Euro, Why We Need Tsipras Party Running UFT

This is, and presumably was intended to be, an offer Alexis Tsipras, the Greek prime minister, can’t accept, because it would destroy his political reason for being. The purpose must therefore be to drive him from office, which will probably happen if Greek voters fear confrontation with the troika enough to vote yes next week.
Greece should vote “no,”[on July 5] and the Greek government should be ready, if necessary, to leave the euro.... Paul Krugman
This Krugman comment was surprising - understanding that a political, not just an economic game is being played to drive the left that defends the working class over the hedge funds out of office. But it makes sense even though today it looks like the squeeze play is working and the leftist government will probably be forced to capitulate. And never mistake that this is about the threat of having a government so far left and the intention to make it fall.

Did Greece live beyond its means?
...most — not all, but most — of what you’ve heard about Greek profligacy and irresponsibility is false. Yes, the Greek government was spending beyond its means in the late 2000s. But since then it has repeatedly slashed spending and raised taxes. Government employment has fallen more than 25 percent, and pensions (which were indeed much too generous) have been cut sharply. If you add up all the austerity measures, they have been more than enough to eliminate the original deficit and turn it into a large surplus.
So why didn’t this happen? Because the Greek economy collapsed, largely as a result of those very austerity measures, dragging revenues down with it.
And this collapse, in turn, had a lot to do with the euro, which trapped Greece in an economic straitjacket. Cases of successful austerity, in which countries rein in deficits without bringing on a depression, typically involve large currency devaluations that make their exports more competitive. This is what happened, for example, in Canada in the 1990s, and to an important extent it’s what happened in Iceland more recently. But Greece, without its own currency, didn’t have that option.
I see similarities in the European austerity assault on Greece and the ed deform austerity assault on public schools, both aimed with a destructive political agenda. And our union has played the role of the old Greek governments in capitulating to the ed deform demands -in actuality since the early 80s - am I making the case for a leftist Tsipras like party with a deep understanding of the game that is being played to run the UFT and resist? Hell, Yes.

Paul Krugman's June 29 column struck a note.
It has been obvious for some time that the creation of the euro was a terrible mistake. Europe never had the preconditions for a successful single currency — above all, the kind of fiscal and banking union that, for example, ensures that when a housing bubble in Florida bursts, Washington automatically protects seniors against any threat to their medical care or their bank deposits.
Leaving a currency union is, however, a much harder and more frightening decision than never entering in the first place, and until now even the Continent’s most troubled economies have repeatedly stepped back from the brink. Again and again, governments have submitted to creditors’ demands for harsh austerity, while the European Central Bank has managed to contain market panic. But the situation in Greece has now reached what looks like a point of no return. Banks are temporarily closed and the government has imposed capital controls — limits on the movement of funds out of the country. It seems highly likely that the government will soon have to start paying pensions and wages in scrip, in effect creating a parallel currency. And next week the country will hold a referendum on whether to accept the demands of the “troika” — the institutions representing creditor interests — for yet more austerity.

But they shouldn’t, for three reasons. First, we now know that ever-harsher austerity is a dead end: after five years Greece is in worse shape than ever. Second, much and perhaps most of the feared chaos from Grexit has already happened. With banks closed and capital controls imposed, there’s not that much more damage to be done.


  1. Is the Greece debacle foreshadowing the future of the Garden State economy? As revenues decline due to a refusal to raise taxes on the wealthy, pensions will be slashed and pensioners will be eating dog food.

    Abigail Shure

  2. This stuff is inherently complicated. But 'hedge funds' haven't had a thing to do with Greece since 2012, when the members of the Eurozone collectived private sector euro-debt, including hedge fund debt, onto their own balance sheets. They now refuse to reduce those debts to Greece for fear that their own citizens will have to foot the bill. Your comparison to hedge funds attacking public education and Greece once was accurate but hadn't been for three years. And Tsipras' call for a sudden referendum may turn out to be the biggest blunder in modern European political history.

    1. There was a big article in Monday's Financial section of The Times talking about massive hedge fund bets on Greece and how nervous they are - and I recognized some good old ed deform charter supporter names. So if not direct involvement they made their usual slimy hedge fund bets. And in Puerto Rico hedge funders are trying to take their pound of flesh. And then there was Argentina. They gamble on these countries and when they lose they want to be bailed out. Screw em all.

    2. Read my last post on Greece.
      You may not be a Krugman fan but when someone with his status says it is not a blunder and they should vote NO - that is a serious position for a major economist who has been proven right so often.

  3. I'm just saying that Tsiprias may have vastly miscalculated what will happen tomorrow. He may get a massive "yes" vote and be out of a job.

    In Puerto Rico, the hedge funds are in full control.


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