Richard Dawkins

[Sectionfive]

I don't understand how we get from there to person B's government being responsible for the whole thing.

Probably because it wasn't Person B running up unsustainable private debt but rather their government up to all sorts of chicanery for years including cooking the books to get them into the euro in first place. Only after 2008 (or so we're told) did it become clear the extent to which the Greek government had mislead the markets and hid their borrowing and here we are.


On the fighter jets too, they obviously have their own reasons and politics for that but it's probably worth checking out who's selling. I know France is involved but I wouldn't be surprised there was a big overlap between creditors and arms suppliers. Some contracts and budgets are non-negotiable let alone debatable as we've seen else where. Wouldn't be surprised if honouring those deals was a condition of 'aid' tbh

 

[vimothy]

Sectionfive,

Do you know how the national accounts are set out?

 

[Sectionfive]

To a certain degree

 

[vimothy]

Okay, so what does the Greek govt cooking its books have to do with Greece's balance of payments?

 

[padraig (u.s.)]

tradition of electing brass necked chancers and ignoring their corruption as long as they go to enough funerals

this reminded me of The Last Hurrah, the roman a clef about James Michael Curley, the Boston political boss who epitomized the charismatic, wake-attending Irish politician. he was mayor 4 times, governor twice, + was sent to prison 3 times for fraud. his last term as mayor he was elected while in prison, Bobby Sands style.

 

[baboon2004]

OK, fair cop, it was probably a bit silly to throw in Ireland just because it's traditionally Catholic. It's just funny that, as usual, baboon has made me feel like I'm an apologist for the moustache-twirling neoliberal Illuminati while vimothy has made me feel like a Bolshevik. And baboon was saying "Protestantism = hard work" while vim was saying "liberalism = Protestantism - God"...I dunno, can anything coherent be made out of this? Maybe not.

So baboon, if you don't think Protestants work harder than non-Protestants, why do you associate Protestantism with the Cult of Work?

I'm not altogether sure about the link between Protestantism and the work cult, tbh; more my point was that the attitude towards work in modern day Western society is religious to all intents and purpose in that it forms such a deep, unquestionable part of the worldview of the majority of people. Why the fuck are most people in incredibly rich countries working five days a week in 2012?

i dont' think people work harder in certain countries than other countries; rather that there is a higher degree of piety/evangelism around work in some (generally richer) countries.

 

[Mr. Tea]

i dont' think people work harder in certain countries than other countriescountries.

You sure? What about Japan? I bet they think Europeans (of any culture) are a bunch of slackers.

Edit: from what I can find, working hours in Japan are only slightly higher than in most European countries - I guess the stereotype of the Japanese workaholic probably applies more to the executive classes, but I'm sure much the same could be said of a lot of City types in the UK or probably most countries with a large financial sector. This compares working hours for most major developed countries - S Koreans work more than 60% longer than the Dutch - I seem to have landed in a country that does the whole work-life balance thing pretty well.

Very difficult to find figures for China for some reason...wouldn't be surprised if they take the top spot globally, though.

 

[Bangpuss]

Australia has a higher average than the UK. That either means the stereotype of Aussies spending all their time having barbecues and sunbathing is untrue, or those stats are wrong. The latter, obviously. It's only a stereotype because it's true! But really, the Australians I have known in the UK have been fairly evangelical about work -- they've always had full-time jobs and never once moaned about it. The thing about them being 'bred for bar work' is kinda true in a sense, though, since most of them have worked in bars.

 

[Mr. Tea]

I think the point there is that Aussies generally get a reliable summer that makes BBQs, sunbathing etc. worthwhile when it is officially the summer and people are on holiday. Whereas in Britain you're more likely to get that kind of weather in either April or September when adults are at work and kids are at school.

 

[Bangpuss]

In most of Australia it's either warm or roasting all year round, so they can have a barbie pretty much whenever they like. I personally have never understood the appeal of the BBQ. It's just cooking outside, isn't it? You may as well grill some meat in the kitchen then take it outside to eat if the weather is nice.

 

[Mr. Tea]

Sure, but you're limited to barbeques at the weekend if you're working during the week, is what I mean. Whereas if you're on your summer hols and it's hot and sunny continuously, you can have one whenever you want.

 

[Sectionfive]

Okay, so what does the Greek govt cooking its books have to do with Greece's balance of payments?

Well who is being bailed out?

The Greeks (citizens) or their creditors?

 

[vimothy]

I'm afraid that I don't understand the question.

 

[Sectionfive]

Think we're at a loss here but surely you see the valid reasons for separating Government actions from their respective countries.

Even where I am no one is attacking the 'the germans' for what's happening.

 

[vimothy]

Isn't that what I'm doing?

 

[IdleRich]

Isn't that what I'm doing?

If you're attacking the Germans you're doing it very obliquely.

But can you answer my question - why can't Greece meet the payments on its debt?

 

[vimothy]

Not attacking Germans--separating governments' actions from their respective countries.

What debt are we talking about again?

 

[IdleRich]

"Not attacking Germans--separating governments' actions from their respective countries."

Yeah, sorry, I was being silly.

"What debt are we talking about again?"

You said this

"Here's an idea: someone could explain why the fact that Greece is unable to fund its external deficit is the fault of its government."

I'm asking where this external deficit comes from and why they can't pay for the debt it creates and whose fault it is?

 

[luka]

vimothy if you have a take on this which differs significantly from those of the economic journalists of various media outlets i would like to hear what it is. just tell the story. you are the only one here with some knowledge of economics so its up to you to share that knowledge. we will all benefit thankk you.

 

[vimothy]

Well, lemme see what I can do. I don't know if this is significantly different from what other people are saying. I suspect not, but you tell me.

The external deficit is the difference between imports and exports plus some other stuff like net factor income from abroad.

Basically there are a set of accounts that describe all the transactions that go on in a country at a macroeconomic level called the national accounts or the national income and product accounts.

Transactions with the outside world go in the current and capital accounts. Trade and current income payments get recorded in the current account. When there is an excess of payments over receipts in this account, that's known as a current account deficit.

The upshot of a current account deficit is that the rest of the world is lending you money. (Think about it). They're not lending your government money, although they might well be doing that too. These are private transactions between private agents, for the most part--lots and lots of 'em.

To make things simpler, you can think of the current account deficit as just a trade deficit. In order to maintain a level of imports greater than your exports, the rest of the world must be willing to acquire claims against you--in other words, people must be willing to finance the deficit.

All of the European countries that are in trouble now were running current account deficits, and have found it increasingly difficult to finance these deficits. So it's the current account deficits that links them and not the alleged profligacy of their governments.

As to why would someone not want to accumulate claims against Greece, well, that's an open, big question, isn't it? Why would someone want to accumulate claims against Greece? There could be thousands of answers.

In general, pre-GFC there was a different attitude to risk across the board. Today, people no longer feel that Greece and Germany (for e.g.) represent the same or similar credit risk, and people are not willing to lend at very low rates to risky borrowers. They don't want to hold deposits at Greek banks.