NOTE FROM JOHN: Today we welcome a new writer to AMERICAblog, someone who has been a longtime reader and commenter, and who will be writing for us under his longtime pen name Gaius Publius. I always find Gaius' writing thoughtful and thought-provoking. We hope you agree.
_________________
Cui bono? As in, who benefits?
I think it's finally dawning what the Greek economic crisis, and all this German intransigence, is about. One lens through which to view the story is national and moral -- as in, who's been bad, and who's holding the bad guys' feet to the fire? The answer is that the Greeks and their enablers (*cough* Goldman Sachs *cough*) have been very bad indeed. And the Germans, strict disciplinarians and moralists that they are, have been holding Greek feet to the fire.
Yet even though that's been the mainstream story, from Krugman on down, it almost turns drama into melodrama, with the Germans cast as mustache-twirling Puritans. So let's look further. According to this Jeff Kaye piece at FireDogLake, there's another way to see our Greek redemption: Who's the predator? Who's the prey?
Viewed through that lens, a simpler, more believable story emerges. Kaye's conclusion:
The people of Greece seem determined they will not pay for the orgy of corruption and double-dealing that has left their economy in tatters. Whether it was Goldman Sachs playing funny with derivatives to help the Greek government to hide its debt, or German companies rushing to buy up newly privatized industries, or the wide-spread corruption of Greek politicians, they are saying something that American workers and middle class might be thinking, and that has some people afraid: “‘let the plutocracy pay’…’Why should we, the little man, pay for this crisis?’” [my emphasis]About that privatization, Kaye quotes a Gerson Lehrman analysis on where the money for this (German-driven) austerity will come from. Among the options:
Given that Greek debt is expected to continue to rise before it peaks at 140-160% of GDP over the next 5 years (ceteris paribus), a very significant retrenchment of the activities of the state and its influence over the economy should be expected:So what do we have, if this analyst is right? Not melodrama, with large cartoonish national groups, but that old familiar combo — predators and prey:
The government will accelerate privatizations (€ 2.5 bill. budgeted for 2010) and may change its mind regarding majority ownership by strategic (foreign/EU) investors of types of assets / industries that have been protected under the existing social /political model, including utility/infrastructure, transport or special state (monopoly) assets. Examples might include the railway company, water distribution companies, the electricity grid or the power company (PPC), as well as the soccer betting company (OPAP), gambling Casinos and the remaining stake in Hellenic Telecom (OTE), which will probably be sold to Deutsche Telekom. Other interesting candidates for privatization might include airports and seaports and enhanced PPP/PFI models will be considered for infrastructure investments. [again, my emphasis]
- Cash-rich big business eager to buy up public goods for pennies
- Cash-starved governments in crisis
- Easily corrupted pols
But the near-term reason may be this — that the German big-business types whispering into Chancellor Angela Merkel's shell-like ear (and through her ear to Brussels) will make out like bandits if Greece has to sell itself off to survive.
"Welcome to the Athens-Peiraios Causeway, brought to you by Deutsche Telekom. €4.00 please."
I can't guarantee this analysis; there's some "might" and "maybe" in the Gerson Lehrman piece. But keep it in mind as the Greek drama unfolds. Cui bono? The vultures, if they can pull it off. And keep it in mind as well for our other states in crisis. Portugal could well be next; then Spain. Can, ahem, California be that far behind?
"Welcome to I-12 west, brought to you by Goldman Sachs. $5.00 please."
I remain,
Your interested correspondent,
GP
