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Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]

Samizdata quote(s) of the day

The $146 billion bailout package approved this weekend for Greece is advertised as a move to “stop the worst crisis in the [euro]’s 11-year history,” but it is having exactly the opposite effect.

So you have politicians defying the will of the voters to pour more water into a leaky bucket; transnational economic planners destroying a currency in order to save it; markets responding to those actions with predictable horror; and the few recipients of all the largesse too dumb to say “Thank you.” This is apparently what EU stability looks like.

- The start and the finish (I recommend the stuff in between as well) of a piece by Tim Cavanaugh about the Greek Bailout

9 comments to Samizdata quote(s) of the day

  • Laird

    Great article (of course). Parenthetically, any Samizdatista who doesn’t subscribe to Reason (or at least receive its free e-mail updates) is making a big mistake.

  • How would bankruptcy court deal with Greece?

  • Sunfish

    How would bankruptcy court deal with Greece?

    Break it up and sell it? I bet Turkey wouldn’t mind fire-sale prices…

  • drscroogemcduck

    the main beneficiary of the bailout isn’t greece the country but rather all the holders of greek debt. however, i’m guessing this would include lots of greek banks. these bailouts always help irresponsible lenders more than irresponsible debtors.

  • Eric

    I still don’t see how this hurts the Euro. At some point France and Germany will refuse to participate in more bailouts and some of the smaller countries will default on their debt. Why would that negatively affect the currency? Normally you worry about the currency because desperate governments will devalue in an effort to stiff their creditors.

    But in this case I don’t see that happening.

  • Eric, it hurts the Euro, because it hurts European banks. Normally, as you say, sovereign debt is held by private investors (usually mostly domestic). Not here: the bulk of PIIGS debt is held by other European banks. They are stuffed to their eyeballs, and when that debt becomes junk, they have to be recapitalized or fail. When I say recapitalized, we’re talking an exercise of the scope of the Fed’s buying of $ trillions in toxic debt… and the ECB does not have that right, and may not get it, if the Germans have their say. The Germans might well choose to bail out only their own banks, and then every asset denominated in Euros becomes… “suspect” is a polite way to phrase it.

    If this scenario unfolds… well, I am not a big fan of Simon Johnson, whose solution to most issues is more regulation, but check this for a gloomy, but not implausible scenario.

  • Nuke Gray

    Gosh! How bad would Britain’s economy be, if you had converted to the Euro? You’d be taking a pounding now! A good thing you saw cents early on, and escaped the dollardrums!

  • BFFB

    the main beneficiary of the bailout isn’t greece the country but rather all the holders of greek debt. however, i’m guessing this would include lots of greek banks. these bailouts always help irresponsible lenders more than irresponsible debtors.

    Alot of exposure to Greek debt in the German banks, which explains the bailout.

  • Paul Marks

    A lot of the AIG bailour money went to European banks – and some of the Greek bailout will be IMF (i.e. American taxpayer) funded.

    People should not really need Glenn Beck to tell them this – but he reaches MILLIONS of more people than the rest of us (including Reason magazine) do, so he is a “good thing”.

    As for most of the bailout money – the money comming from German and other taxpayers.

    Brian is correct.

    How does giving the Greek government money help the Portugese government and the Spanish government pay their bills?

    It is not even “muddled headed thinking” it is demented.