Screwing Greece
Yes, it was a bad idea. More than bad, it's led to several national crises putting great swathes of people out of work and ruining the lives of countless others. So, says Paul Krugman, let's double down. This is exactly what infuriates me about establishment "liberals." Greece got into the jam it's in because joining Europe made it sucker bait. Krugman at least, faintly, acknowledges that. But Krugman fails to consider the implications of what he's saying. Unless and until Europe and the U.S. can police international capital markets at least two things will happen, and not just in Greece. International banks will conspire to set up smaller Eurozone countries to fail. And then the banks will use those smaller countries as speculative piñatas.
Krugman dismisses out of hand the notion that Greece can (or should) exit the Eurozone. "A breakup of the Euro is very nearly unthinkable," he writes. But note that there's a huge difference between breaking up the Euro and having Greece and/or other small countries exit the Eurozone. From the Greek perspective, if Greeks don't want to be penurious debt-slaves to international banks for the next several decades it makes perfect sense to exit the Eurozone, tell the banks to fuck off, print money, kick-start their economy, and invite the tourists back at cheap rates. If Greek priorities are to put Greeks back to work in Greece, they should drop the Euro. The Eurozone would survive.
But the idea of national borders, national identity, protectionism, and possibly profoundly anti-capitalist development models are such anathema to "liberals" like Paul Krugman that they won't be part of the policy conversation. Not, that is, unless the Greeks make them so.
The other thing generally to keep in mind as we watch the Greek crisis play out is that a corrupted government in cahoots with insanely corrupt international banks will everywhere and always contrive to wreck its economy in terms of the interests of the vast majority of its citizens, while the rich get richer. True in Greece. Also true in the US of A.
Posted by George Kenney on February 15, 2010 5:17 AM 
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Comments
If there are any courageous politicians in Greece, they might think of contacting their opposites in Iceland. As the truth starts to leak out, though of course not in the mainstream media, more and more citizens will have fewer compunctions to giving the bankers and their ever-pliant and bought off political proxies the middle finger.
Posted by: Mike H | February 15, 2010 5:37 PM
I was quite bothered by Krugman's take here also. Just what did he mean, "before the continent was ready"? Exactly how do countries get "ready" to cede their sovereign right to issue their own currency? The entire idea was mindless from it's outset; premised upon the absurd neoliberal belief that the business cycle had been defeated. Well, Greece and Iceland now know it hasn't, and a bunch more of the Eurozone is about to find out because these sharks are ALWAYS hungry.
But I've seen (and been disappointed by) stuff like this a number of times from Krugman lately. Yes, the man is certainly smart, and yes, he does lean solidly left. Sadly, he is also an elitist.
P.S. Love the visual: "speculative piñatas." Couldn't have phrased it better.
[Thanks! g.]
Posted by: Benedict@Large | February 22, 2010 12:54 AM