Why Is Greece Making The World Markets Volatile?

The Fabianism thing was a good try though. It demonstrated a lot more "reading" than the usual illiterate sap that posts such drivel.

 

Not true. The new right in America does not like Smith because he argues that the State has a duty to regulate the market against monopoly and oligopolistic cabals. The new Right are essentially anarchists who reject even classical liberalism.

It's the same with taxation. Smith was not against taxes and argued for progressive taxation. Taxation is an essential underpinning of a (classical) liberal democracy in that by linking representation with taxation it embodies the key demand of the American Revolutionists (which was FOR representation not against taxation). Taxation gives the citizen a stake in government. Thus the citizenry will be active in holding the government to account. So when China as it has recently done takes millions out of taxation and leaves only 10% of the population paying income taxes, and relies on consumption taxes instead, this removes the essential connection between government and the citizen and helps to perpetuate tyranny. Yet this is something that the new American Right would approve of.

Even with health. European healthcare models such as those in France and Germany are both privately run and regulated by the State as the people have judged, through elections, that healthcare as a private monopoly is both inefficient and ineffective. The oligopoly that is American healthcare - exacerbated it is true by a litigious culture - proves that regulation of this market is necessary, according to classical liberal principles. This position, which I make here, is at least arguable. Especially as study after study cites France and Germany as having the best healthcare in the world at a much lower cost than in the US (this cost effectiveness is rightly the litmus test of capitalism, not some ideological dogma held by the American Right). But the new Right in America would prefer to term me, France and Germany as communist naxi tyrannies than have a serious discussion about this. And that is the level of debate in America, from the great and the good as well. Europe is a communist/nazi tyranny and thank God Stephen Hawking is American, and not subject to those awful European healthcare systems, otherwise such a great mind would have been lost to the world... you couldn't make it up, the ignorance and bigotry of the new Right...

The Right in America is bordering on fascism, particularly because the old discussions about freedom of opportunity versus freedom of outcome, or other such old debates between classical liberals and socialists, no longer apply. The new right wants "no government", apart from a military asserting American prestige by bombing foreigners (some of them disagree with this, it is fair and don't want a big military either). They want isolationism - and must be pretty upset by the fact that a failing Greece and a Europe crisis clearly is impacting the USA: they constantly refuse to see the interconnectness of the world, so this is a slap in the face for them.

But when the new Right attacks "liberals" (like me - who strongly believe in democratic capitalism and argue with Marxists all the time to this end) it is attacking classical liberals - from the neo-fascist fringe. Which is growing.

 

If you really need to know the answer it goes like this. Greece borrowed from German, French, US, English banks among others. With this loans came CDS (Credit Default Swaps) and other nasty betting on if a country could or couldn't pay it back.

It simply works like this... Bank A bought $5 billion in Greek Debt. Bank B bet that Greece couldn't pay it back while Bank A took the bet from Bank B. So now Bank A has a total of $10 billion riding on Greece paying back that loan. If Greece defaults Bank A loses the payments on the loan and has to payout to Bank B.

For example the ECB (Euro Central Bank) has about 50 billion euros. As of right now European Banks would need 200 billion euros to stay solvent if Greece failed. With the US it's more like $500 billion due to underwriting and swaps. So basically Tarp 2.0.

This doesn't even include the cascading effect it would have on the other PIIGS who would have to pay higher interest rates in future borrowing despite a ECB lending window. So this could lead to defaults not just with in Greece, but Ireland, Italy, Portugal, Spain. If Italy or Spain become at risk then you will see a situation of France, UK, Germany becoming targets, along with the US.

It's gonna be ugly either way but money is global not local.

 

I think that by the time that happens the US will have figured out a way to shield much of our economy from the collapse. It will hurt but I don't think we'll slip into depression or anything. Just continue stagnating for longer than we normally would. But this could be good for the US, we might see a resurgence of the times like just after world war II when Europe was in shambles giving the US a significant economic advantage just in time to face down the Chinese Hive Mind.

 

This is a nightmarish desscription of capitalism which is wholly unfair. Investing in bonds is the safest risk free investment as governments are seen as sovereign. Of course that risk, though small, is different by country. But the process is wholly legitimate. The creation then of derivatives which trade on the riskiness of these bonds, is also normal as it enables, as with all derivatives, capital holders to balance risk by buying these instruments.

Quite simply this underlies the trillions of transactions that keep the world economy afloat. If you support capitalism you need to support this, perhaps with a little regulation thrown in to stop any excess or abuse. the real problem here is that Greece lied about its financial viability. Company Directors go to prison when they do this. Additionally the ECB did not play a strong role as a regulator to ensure that national economies within the Euro did not over extend themsleves, as Greece did.

If you don't agree with this system, you have to come up with another one. There's not much detail about the alternative.

 

corporatism and privilege my dear, not capitalism.

the problem is that the lenders also knew it was a lie when they made the bad business deals.

but nobody connected to the central banking power structures will

and they never will

what system, the system of allowing fraud on a massive scale to take place, then placing the losses onto the backs of the citizens ?

Tell me again how this is capitalism ?

 

My post is clear. What exactly is your point? Say what you think and don't play juvenile question and answer games. It's very boring.

 

You understand my point perfectly.

The fraud was committed by both parties, and the state regulators failed to snuff it out, despite having the ability. The state then pushed the bankers losses onto the backs of the people, another reprehensible action of the state. The state has no desire to regulate the banking elite.

Call it what it is, corporatism, not capitalism.

 

I don't understand. For me to understand I have to understand your prescription. Is that no regulation? Give me the big picture. I'm not going to deal with half baked arguments.

 

if greece leaves the euro it would weaken a major currency, it would be like one state leaving the United States

 

corporatism is the pinnacle of capitalism, unregulated capitalism ultimately leads to monopolies and oligopolies

government is the answer, capitalism is the problem

 

I don't disagree with action if you directly hold the bonds. I disagree with the ability of betting against a competitor with no risk. There should be no reason for a third party to bet.

Again, I don't disagree but 20-30 years ago there was no third party involved and that's the biggest issue when it comes to defaults as it requires payments to those with no risk. Now Greece did lie but lied with the help of those very derivatives via their national lottery. They sold future income for upfront payments.

The ECB's role is not regulate national economics but the EURO. Now if you are arguing for extending the ECB power then I will disagree as the EURO bond is a transfer of wealth to places like Greece and Ireland on the backs of the Germans and French.

I love capitalism. I hate crony capitalism which this is. I want people who own the derivatives to actually own the risk. I have to own stocks or buy them on a short to make money.

 

LOL... MF Global was a result of EU risk.

 

uh, no. But this is typical of a liberal assuming if you devolve power it's a weakening position.

 

we have regulation. Nobody enforced it.

 

yawn, you made that up.
Corporatism arises from any system when human greed can legislate itself riches and power.

government privilege creates monopolies.
The government turned a blind eye despite having the ability to stop the big banks. Then the government gave them your money to cover their losses.
Your "answer" performed admirably. Three cheers.

 

Why would it weaken it ?

 

Obviously, the left wing media spin is working. Read the US constitution, regulating against monopoly and cabals is what government is supposed to do.

Try reading the US tax code. It gives some a much larger stake in government, gives some almost none at all.

Many in the right react to that, not realizing a VAT can be socially engineer with the righ "donations" from special interests.

 

capitalism is all about who has the most money, government is the only way the people can pick winners and losers in the free market

for instance what sort of innovation is pepsi? it is sugar and water the only reason they are a oligopoly with coke is because they were there first and have enough money to saturate the market with their product

this is seen with the oil industry but that is more dangerous because it causes wars and harms the environment, we MUST allow government to pick winners and losers like solyndra etc...so that the market moves morally

 

?!? You mean buying products from winners and not buying them from losers isn't enough?

There are a lot of colas out there, most are cheaper. Pepsi and Coke are market leaders because the cola buyer is willing to pay buy their product.

How is Solyndra moral? The government tried to make a winner out of a clear loser because their technology was too expensive. If they wanted to support solar, they should have backed Evergreen - oh, wait they did, and even Evergreen realized building conventional solar panels in the US was too expensive.

Oil (diesel and gasoline) is the best form of energy for transportation. Without it, most of the country would starve.

 

Now maybe you could think a little before posting knee jerk bollocks. I have no problem with the US constitution. But rightwingers who argue against regulating financial services obviously have their problems with Adam Smith. The whole opposition to global regulation of financial services and derivatives markets is coming from the USA.

I'm an accountant. I understand something about tax. Right now the US tax system generally gives most people who work some stake in government, which is a good thing. I'm not attacking that. I'm attacking people who want to have "no tax", ie the new American Right.

Uh? Need to express yourself more clearly here.

You are being obtuse again. Having a debate where European democracies which have healthcare systems that are objectively delivering more cost effective care than in the USA, are called Nazi/Communist tyrannies and the nation is whipped up into a state of righteous xenophobia, is bordering on fascism. So check with Hitler on that one.

Moderate republicans are silent. Extremists now rule the roost. I have debated on here with people who have rejected Adam Smith because he said government had a role.

I will at least concede that Europe should play a higher role in world affairs, which will impact their taxes adversely and if the USA is comfortable with that, US taxes favourably. The UN is an organization through which Europe and the USA should act to establish international law. This internatuonal law should be based on Euro-American values which are basically the same, from a jurisprudence piont of view. Where tyrannies hijack the UN institutions from time to time, the UN should be ignored. The UN only has legitimacy where it is dominated by democratic nations. There used to be a Western consensus on this until American extremists started calling European countries communist tyrannies.

Most people's. Elected governments. Social Contract. Independent Judiciary. Bill of Rights or common law system. Separation of Legislature and Executive. Free Market and Private Property Rights. Government Intervention and regulation determined by democratically elected institutions.

This is drivel. You can't even get your terminology right. Even in America "neo-liberals" are understood to be supporters of global free market capitalism. "Progressives" means nothing. Except to right wing extremists, "progressive" is seen as a positive adjective by everyone, from Thatcherite monetarists to Cold War communists.

Please try and up the quality of your reply by thinking a little about what I have posted. You're too caught up on rhetoric and slogans. We probably don't disagree that much.

 

All right wingers? All regulations? Who is knee jerking?

Roll back the Federal Government role to what is defined by the Constitution. Laws and regulations required to protect the country and to protect people, period.

The regulation process has devolved to protect the incumbants, who return a portion of their "windfall' profits go to the politicians and regulators.

What about those that get money from the government - employees, retirees (both government and those on SSI & Medicare), welfare recipients, unemployment....

With a $14T deficit, growing at better than $1T per year, what about the kids and grandkids that are being taxed to pay for the above?

Your government doesn't modify the tax code to achieve their desired results?

Did Obummercare address cost? Did anyone in the US Government even talk to the Europeans about how they were managing cost? Get past the talking points and look at the results.

I did have a substandial debate on health care costs, working out why the US was so much more expensive.

Why do you think US health care is so expensive?

That is because you have a lot of Koolaid drinkers on forums. Moderate Republicans, Independants, and Libetarians combined, far outnumber the extremists, and they vote. They thought the Democrats were more dangerous than the Tea Party and Republicans.

Do you agree the UN shold be taking a more active role in preventing genicide, in protecting legitimate protect, and reducing global instability?

Why only Euro-American values? Are other cultures less important? I have spent a lot of time in Asia, they are different, not wrong. Applying a Euro-American solution is suboptimal.

Many, so called Democracies are maintained by western "aid", which keeps the defacto dictators in power, and they do tend to bite the hand that feeds them.

The problems occur when government is bribed (legally or otherwise) by special interests. For that bribe to work, government needs enough power to act on that bribe. Once government has enough power, it can extort bribes from corporations that were minding their own business. Of course that bribe must result in enough extran income for the special interest - apid for by the tax payer and the consumer.

The only way to minimize that is to have government only big enough to maintain liberty. Intervention and regulation should focus protecting property rights, enforcing contracts, and protection of the "commons".

Neo - new, new liberal in contrast to the classical liberal which is closer to the US Libertarian. Progressive may not mean anything to you, but to me, it is a special group of elitist that know what is best for everyone else.

I react to people that paint with a broad brush.