Passing bull 5 : Schizophrenia over Greece

The late Arthur Miller was hauled up before McCarthy’s HUAC.  The failure of due process before the HUAC takes your breath away, but it got worse before the courts.  When people were charged with contempt for refusing to answer, the trials did not take long.  The prosecution called expert evidence.  They called an ‘expert on Communism’ to testify that the accused had been under ‘communist discipline’.  When Miller’s counsel announced he was going to call his expert to say that Miller had not been under discipline of the Communist Party, Miller noticed ‘that from then on a negative electricity began flowing toward me from the bench and the government table.’  Miller thought that his expert was good, ‘but obviously the tracks were laid and the train was going to its appointed station no matter what.’

We all know what that is like.  Too many start out on an inquiry that they already have the answer to.  Good judges avoid this; sensible ones hide it.  We are all guilty of prejudice and intolerant of doubt or qualification, or even shading, once we have made up our minds.  The trap is to think that things must be black or white – because grey is just too much trouble.  You rarely see this failing as starkly as in the difference of views of two respected columnists of the Financial Times, which many think is the best newspaper in the world, about the Greek Euro deal reached on Monday morning.  (It appeared in today’s AFR.)  Just watch the way that these two trains leave one station for the next but different stations.  First, Wolfgang Munchau.

A few things that many of us took for granted, and that some of us believed in, ended in a single weekend.  By forcing Alexis Tsipras into a humiliating defeat, Greece’s creditors have done a lot more than bring about regime change in Greece or endanger its relations with the Eurozone.  They have destroyed the Eurozone as we know it and demolished the idea of a monetary union as a step towards a democratic political union……The best thing that can be said of the weekend is the brutal honesty of those perpetrating this regime change.

But it was not just the brutality that stood out, nor even the total capitulation of Greece. The material shift is that Germany has formally proposed an exit mechanism.  On Saturday, Wolfgang Schauble, finance minister, insisted on a time-limited exit – a ‘timeout’ as he called it.

I have heard quite a few crazy proposals in my time, and this one is right up there.  A member state pushed for the expulsion of another.  This was the real coup at the weekend: not only regime change in Greece, but also regime change in the Eurozone.

Is that clear enough?  Here is Gideon Rachman (who could I think pull rank).

Europe woke up on Monday to a lot of headlines about the humiliation of Greece, the triumph of an all-powerful Germany and the subversion of democracy in Europe.

What nonsense.  If anybody has capitulated, it is Germany.  The German government has just agreed in principle to another multi-billion dollar bail-out of Greece – the third so far.  In return it has received promises of economic reform from a Greek government that makes it clear that it profoundly disagrees with everything that it has just agreed to.  The Syriza government will clearly do all it can to thwart the deal it has just signed.  If that is a German victory, I would hate to see a defeat.

As for this stuff about the trashing of democracy in Greece – that too is nonsense.  The Greek referendum…was in essence a vote that the rest of the Eurozone should continue to lend Greece billions – but on conditions determined in Athens.  That was never realistic.  The real constraint on Greece’s freedom of actions is not the undemocratic nature of the EU.  It is the fact that Greece is bust…..Of course the dilemna of ordinary Greek people is horrible.  I was in Athens last week and felt very sorry for many of the individuals I met, who fear for their jobs savings and future.  But the notion that all this is the fault of cruel Europeans, who have mindlessly imposed austerity on the otherwise healthy country, is a neo-leftist fancy.  Greece has been badly governed for decades and was living well beyond its means.

I shall say something more of this later – a triumph of both freedom of speech and bullshit – but I leave you for now with the beginning of the piece by Alan Mitchell, the AFR’s economics editor, that touches on a proposal that one FT commentator thought was brutal and crazy.

Hold on to this thought: What the world saw as Germany’s hardline ultimatum might yet offer an amicable separation of Greece and the Eurozone.  It was the option of a five-year suspension of Greece’s membership…..

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