## Friday, 31 July 2015

### Landsburg's imbecility is envy-free.

Steve Landsburg has a remarkable record of consistency when it comes to saying the stupidest thing possible about any given economic concept.
Yet, he is a happy camper. He shows no envy of less imbecilic Professors. How has he attained this blissful felicity?

But first, why not sample the nitwit's sublime silliness for yourself?

Suppose you’ve got 1000 students to assign to two schools, each with 500 slots available. Everyone prefers the Good School to the Bad School. Which of the following is a fair way to decide who goes where?
Method A: Give each student a coin to flip and count on the Law of Large Numbers to insure that just about exactly 500 will flip heads. Those students go to the Good School.
Method B: Randomly assign each student to one of two groups. Then flip a single coin to determine which group goes to the Good School.
Method C: After taking note of the fact that, coincidentally, exactly half the students are white and half are black, flip a single coin to determine which race goes to the Good School.
Method D: Assign all the white students to the Good School.
....Economists often interpret fairness to mean that the mechanism should be envy-free, meaning that at some stage in the process, no student wishes he could trade positions with another. Certainly that’s true of Method A, where everyone gets a fair coin and there’s no reason to prefer your neighbor’s coin to your own. And certainly it’s true of Method B, where we’re assigned to our random groups and all await the outcome of the same coin flip. And certainly it’s true of Method C, where the groups are race-based but once again, we’re all awaiting the outcome of the same coin flip. On the other hand, it seems to be quite untrue of Method D, where all of the black students believe (correctly) that they’d be treated better if they were white.
Do economists really believe that I won't envy you for getting a Maserati while I get mugged just because a coin-toss determined that outcome? Does a gambler who loses not feel jealous of the one who wins?
No. Of course not. That would be silly. Wikipedia says 'An envy-free division is a division of a resource among several partners such that every partner feels that his allocated share is at least as good as any other share.'
As I say in my comment on his blog-‘the mechanism should be envy-free, meaning that at some stage in the process, no student wishes he could trade positions with another’
That’s not what envy-free means. The stages don’t matter. Only the final allocation. Thus so long as one School is better than the other, no allocation is envy-free. Resources need to be concentrated on equalizing the Schools for envy-freedom to obtain. Alternatively, the cost- whether monetary or in terms of acquiring relevant entry qualifications or in terms of staying the course- has to be differentiated.
Landsburg, assuming I'm illiterate and can't look up Wikipedia immediately replies-
Steve Landsburg
@Vivek (#39): I think you’ll find that if you look at the paper I linked to, and related literature, the phrase “envy-free” is used as I described
My mild rejoinder, of course, will never be approved on his blog, so I quote it here- 'I found mention of ‘justified envy’ being traded off with efficiency in the context of TCC, in the paper you referred to.
Wikipedia defines envy free in the traditional cake cutting context or Baumol ‘super fairness’ literature I am familiar with.
Perhaps you are referring to a specialist literature that has arisen recently in which envy freedom is a function of a stage rather than the final outcome of an allocation process.
Such a literature would be ab ovo absurd. I play poker with you. You take all my money. I am envious of you even though the game was fair.
Envy freedom or Superfairness can only arise in the context of heterogenous outcomes if there is an underlying preference diversity or information asymmetry of a certain type.
In this case, it is irrelevant how you were chosen for a particular School. All that matters is whether no agent wants to change outcomes with anyone else after completing School.
Why not speak of ‘resentment’ rather than use the term ‘envy free’ (which in fact is not used in the paper you link to)?
I appreciate this is an emotive subject and one full of re-switching type paradoxes as Thomas Sowell discovered, still for the sake of students of Economics reading this it might be as well to stick to conventional usage.'
(That last sentence in my first comment re. Regret Minimization and Envy Freedom needs to be qualified and I will do so in my next post.)

Landsburg thinks tossing a coin is enough to make any outcome whatsoever proof against envy. But if you accept his notion of envy freedom there is no need for any coin toss.

Define Good School as that which has alumni who suffer a sense of shame when they say stupid things and who envy those of their peers who say sensible things. Define Bad School as that which has alumni who are happy imbeciles. Landsburg belongs to the latter school. Far from envying his sensible colleagues he happily hurls his feces at them in the belief that he is scoring a great intellectual victory. Yet, no one tossed a coin to send Landsburg to the Bad School. If final outcomes don't matter, envy is meaningless.

## Thursday, 30 July 2015

### Varoufakis's 'treason',

Three years ago, some Eurozone finance minister prepared contingency plans for returning to their original currency if the Euro became untenable. Why should Varoufakis be charged with treason for his 'Chatham House rule' off the record, private, broadcast reference to a cloak and dagger 'Plan B' involving hacking the Greek Income Tax (which is an independent agency like Britain's) confidential database?

The obvious answer is that an action is treasonous if it is both illegal AND damaging to one's country. Varoufakis is being singled out because his actions as Finance Minister appear to have hurt his country while the evidence he has himself provided (albeit saying he would deny saying what he was being recorded as saying!) served only to burnish his own reputation, at least to his own mind, while damaging that of his country at a crucial time.

As a Member of Parliament he enjoys immunity unless this is cancelled by his colleagues. It seems unlikely that they will turn on one of their own but Greek politics, in these troubled times, has thrown up more than one surprise. Perhaps Varoufakis will be made the 'pharmakos'- the ritual scapegoat- whose ceremonial slaying purges a collective malaise. Pity and Terror will be awakened in our breast as this great Game Theoretician whose hamartia- or tragic flaw- was that he loved his country too well to play the Stoic hand he'd been dealt, is pilloried in the agora and pushed off the steep crag of the Acropolis.
I'm kidding.
Varoufakis is a character out of Aristophanes not Aeschylus.
He has turned Greece's tragedy into a farce about one peacocking ex-Professor.

He is accused of harming his country.
His reply amounts to the assertion that he hasn't harmed himself-  & that's all that matters.
Yet, he has done both.
This is his response to the treason charge. My comments are in bold.

The bizarre attempt to have me indicted me on… treason charges, allegedly for conspiring to push Greece out of the Eurozone, reflects something much broader. You were caught on tape saying you and Schnauble want Greece out of the Eurozone. You knew you were being recorded (thus negating any denial you might later issue) yet stated that you had set in motion a conspiracy, in a cloak and dagger fashion, with the aim of changing your country's currency from the Euro to the Drachma 'at the push of a button.' This is not just an allegation but an admission of the charge you speak of as being treasonous. What is this 'broader' thing you refer to which lies behind the charge to which your own recorded statement is an indefeasible admission of guilt?
It reflects a determined effort to de-legitimise our five-month long (25th January to 5thJuly 2015) negotiation with a troika incensed that we had the audacity to dispute the wisdom and efficacy of its failed program for Greece. Newsflash! Your negotiation with the troika was de-legitimised by a complete and utter defeat. What further 'determined effort' is needed? Only you are being singled out for a treason charge- no one else. But then this whole crisis has only been about you all along hasn't it? No one else matters.
The aim of my self-styled persecutors is to characterise our defiant negotiating stance as an aberration, an error or, even better from the perspective of Greece’s troika-friendly oligarchic establishment, as a ‘crime’ against Greece’s national interest. You negotiated with the Troika in a self-aggrandizing manner, raising your own profile but costing your country dear. If you did indeed, as you proudly boast to Norman Lamont and some stock-broker type and his merchant banker pals, do something illegal (thus glamorous in your eyes, you over-grown adolescent) then you are guilty of treason. A 'defiant negotiating stance' is an aberration, it is an error, if its result is having to settle for worse terms than were originally offered and, what is more, having to do it in a meek and chastened spirit. Yet, that is what happened. Has Greece's 'national interest' been damaged? Yes, by you. Your actions increased avoidable pain for Greeks and damaged your country's reputation in the worst possible way at a crucial time. Suppose you were an unemployed fishermen newly elected to Parliament. Then you would have a viable excuse for what you did. You could say 'i didn't know, I didn't understand, I'm new at this. For God's sake do as you like with me- send me to jail, shoot me- but help my people!' and Greece's reputation would be restored. Bankers will say to themselves- 'well, the Greeks made a mistake. Now they have wised up. They are good people at bottom. We can work with them to build trust and understanding.'
The problem, Yannis, was that you presented yourself as a smart guy- a Professor of Economics. You blustered and bragged and turned everything into a personal duel in which you were bound to win because you were just so much cleverer than the Machine Politician mediocrities whom, in your imagination, you were crossing swords with.
My dastardly ‘crime’ was that, expressing the collective will of our government, I personified the sins of:
• Demonstrating that one can be a committed Europeanist, strive to keep one’s nation in the Eurozone, and, at the very same time, reject Eurogroup policies which damage Europe, deconstruct the euro and, crucially, trap one’s country in austerity-driven debt-bondage So a committed Europeanist is someone who believes Europe should forgive one's debts while lending yet more money so as to increase imports and thus produce a trade deficit requiring yet more borrowing! In that case, Mugabe is a very good Europeanist! He will be happy to take European money on those terms! But, I forget, you were President of the 'Black Students' alliance' at the University of Essex in 1978. When people pointed out that you were self-evidently white, you said 'The Irish and the Greeks are the blacks of Europe'. Ireland has swallowed bitter medicine and mended its ways. Cyprus was always more responsible but unlucky in its exposure to Greece and its funny little ways. Ireland's credibility as a Knowledge Industry and Financial Services hub has been restored. Cyprus is no basket case. No one questions either countries 'Europeanist' credentials. They do question yours, Yannis because your policy to the Eurozone is one that has landed your country in the select company of Sudan, Somalia and Zimbabwe as an IMF defaulter. No doubt this makes you very proud. But is Mugabe really ready to admit you to the Greater Zimbawean Union? Will you finally get the last laugh on those who nagged at you saying 'Yannis, you simply are not Black. People in Essex may think Greece is located in sub-Saharan Africa and that you are exceptionally fair-skinned for a Greek, but people in Essex are notoriously stupid. What's next? Will you become President of the Chinese Students' Federation? Will you put on a wig and proclaim yourself Matriarch of the Lesbian Society? Come off it Yannis, paidi mou. Accept you are just another White nerd, not a heroic Zulu warrior.'
• Planning for contingencies that leading Eurogroup colleagues, and high ranking troika officials, were threatening me with in face-to-face discussions Plan by all means. But keep those plans secret because bragging about them can damage your country's National interest.
• Unveiling how previous Greek governments turned crucial government departments, such as the General Secretariat of Public Revenues and the Hellenic Statistical Office, into departments effectively controlled by the troika and reliably pressed into the service of undermining the elected government. What unveiling are you talking about? Were Troika officials disguised as Zorba the Greek or Melina Mercouri? What did you do- snatch away their zithers or pull off their blonde wigs? Mina Andreeva says you are a liar. Why haven't you proved her wrong by now? With all this unveiling you have been doing, you must have a truckload full of documents evidencing illegal and ultra vires actions by the troika. Or, paidi mou, was all the unveiling just going on inside your head?
It is amply clear that the Greek government has a duty to recover national and democratic sovereignty over all departments of state, and in particular those of the Finance Ministry. If it does not, it will continue to forfeit the instruments of policy making that voters expect it to utilise in pursuit of the mandate they bestowed upon it. Okay! So your party is guilty of treason because it failed in its duty to 'recover national and democratic sovereignty'. But you were a Minister in your Party's Administration. You are equally guilty. You did not say 'I have resigned because I could not fulfill my constitutional duty to 'recover national sovereignty'. Let us look at what you did say-  Soon after the announcement of the referendum results, I was made aware of a certain preference by some Eurogroup participants, and assorted “partners”, for my … “absence” from its meetings; an idea that the prime minister judged to be potentially helpful to him in reaching an agreement. For this reason I am leaving the ministry of finance today.- in other words, instead of doing your duty, you ran away and sulked because those horrible usurping Nazis may have had a 'preference' for your 'absence' and you are such a sensitive little flower that you couldn't face them anymore.
In my ministerial endeavours, my team and I devised innovative methods for developing the Finance Ministry’s tools to deal efficiently with the troika-induced liquidity crunch while recouping executive powers previously usurped by the troika with the consent of previous governments. You did not devise anything. As you yourself said, in a taped conversation with Norman Black Wednesday Lamont you only spoke to 5 people whereas 1000 people would have had to be involved for such 'tools' to be effective. What was your Plan B? Wasn't it that, instead of pre-paying taxes in Euro, people could do so more cheaply through a secondary market in debt instruments? How would that have improved matters for any but the super-rich?
Instead of indicting, and persecuting, those who, to this day, function within the public sector as the troika’s minions and lieutenants (while receiving their substantial salaries from the long-suffering Greek taxpayers), politicians and parties whom the electorate condemned for their efforts to turn Greece into a protectorate are now persecuting me, aided and abetted by the oligarchs’ media. I wear their accusations as badges of honour.Because of you- who received a salary from the Greek tax payer- the Troika has imposed stiffer terms on Greece. Suppose you had resigned saying- 'Greece is a Protectorate. National Sovereignty has been lost. I can't, in good conscience, continue receiving a salary as a Govt. Minister because the Govt. has illegally abdicated National Sovereignty.' In that case, there might be some logic to what you are saying now. But, you yourself said that you only resigned because maybe some foreigner had some 'preference' for your 'absence' and one must always please the foreigner because that is the meaning of being a Greek Minister.
As for treason, that charge fails because, coprophagous clown, you lack mental competence. The truth is, if you ever actually spoke to that childhood chum of yours, the I.T Prof from Columbia, you'd have known that a laptop plugged into the Tax database couldn't bring back the drachma 'at the push of a button'. It would take years of reprogramming mainframes in COBOL to achieve that.

This is Yves Smith, from Naked Capitalism, talking to Pando-

Q: One of the core intractable problems you have been beating the drum on lately is essentially this: No matter what Greece does, they’re screwed. Austerity is destroying Greece, but a Grexit would be far worse, utterly catastrophic. Why is that? Is there any way out?
It's the IT!
Most commentators, including economists and financial analysts who haven't looked at the practical issues, argue that Greece should leave the Eurozone and go back to the drachma. Yet even after the brutal show of power by the European central bank in forcing a two-week Greek bank holiday, which did tremendous damage to the economy, an overwhelming majority of Greeks still poll as preferring to stay in the Eurozone. And do not forget that the government isn't willing to Grexit either.
These foreign pundits fail to appreciate that the Greeks have a better grip on what the issues are than they do.
Most outsiders mistakenly treat a Grexit as being like a currency depreciation — like what took place in Argentina in the early 2000s when it abandoned a dollar peg. When that happened, Argentina suffered about six to eight months of severe stress and dislocation, including at least a couple of months of real violence. But after that, it showed a good recovery, The reason large currency depreciations are initially very painful is that the price of imports goes up immediately, while it takes a while for potential buyers of the country's suddenly bargain-priced exports to rearrange their purchases and start placing orders in the cheap, devalued-currency country.
A Grexit entails a ton more. First, it entails resolving Greece's entire banking sector. Greece's banks are massively insolvent and are on ECB life support. If Greece leaves the Eurozone, it loses that aid. When Iceland had its (admittedly larger relative to GDP) banking system collapse, it took \$5 billion of foreign support for its bank resolutions. Iceland has all of 330,000 people. Greece has 11 million.
Second, unlike Iceland, Greece would have to reintroduce its currency. It took eight years of planning and three years of execution for the introduction of the Euro to go smoothly. Commerce is even more dependent on electronic payments now than it was then. In Iraq, even with the logistical capabilities of the US military and three printing presses running full time, it took over a year to get its new currency distributed. The ATM component is far more burdensome than you'd imagine.
The payment system side is even more complicated. Even though it is 15 years after the Euro was launched, major banks still have mainframes as their big transaction processing engines. And they are still running the same legacy code. And any changes to it are a highly labor intensive process. As one reader explained:
What many of you "it's easy" people fail to understand is that mainframe programming is nothing like today's coding. COBOL, PL/I etc. do not support modern concepts like objects, polymorphism or anything else. Think assembly language with nicer mnemonics. XML ? Hah, there is virtually no such thing for the mainframe. There's no git, no mercurial etc. Virtually none of the tools that exist for Wintel/Linux are available to mainframers. In large organizations there are hugely cumbersome change management processes. Where I am, a simple code change might take a minimum of eight weeks to deploy, and we only have a dozen systems. Actual application changes like envisioned here would take at least six to twelve months for coding and testing, and then another four months for deployment. For large banks, I would expect the timeframes to be even longer because the systems are so critical.
Similarly, those ATMs and point-of-sale terminals? Those are run by fragmented providers. Those networks have grown up over a 40-year period. Even if Greece moves quickly, they depend on parties outside their control to make changes in a coordinated manner.
One expert who has lots of big bank mainframe experience estimates that it would take three years to convert to drachma processing. We've spoken to people who are in—or have been in—senior IT roles at TBTF [Too Big To Fail] banks and they agree with this reading. Greece's new drachma payment system will need to be up to international standards before it would be permitted to connect to existing international payment systems. Countries that have not made the grade, like the Vatican, do not get waivers. So even if Greece can kluge together some sort of domestic system in six months or a year, that does not solve its international payments problems.
18% of Greece's economy is tourism. You can pretty much kiss that goodbye with no ability to use ATMs to get cash and no ability to use credit cards in Greece. Greece is not self-sufficient in food, petroleum, or pharmaceuticals. No working payments system means no imports, unless Greek importers take their drachma across the border, dump them in bank accounts (assuming those banks will even accept drachma to open accounts — recall that they have to make systems changes to accommodate taking drachma) and do transfers from there, or take cash to the offices of suppliers. That was actually occurring during the bank holiday. Some large importers were flying to London to pay suppliers in cash.
It would be tacky for Greece to have a famine, so the Eurocrats would probably arrange for humanitarian aid. But how independent is Greece if it needs food aid? It will have only traded one form of dependency for another, and at huge cost.
Thus the most likely outcome of a Grexit is that Greece becomes a failed state.
Q: Your political sympathies lie with Syriza or at least Syriza’s end of the spectrum, but you’ve been highly critical — merciless, brutally honest — of how they’ve governed. Explain why. What has Syriza done wrong, and what could they have done better? (Related: Syriza promised it could reverse austerity but remain in the Eurozone. Did they betray voters? Did voters betray themselves with Syriza as enablers? Or is it something else?)
Syriza promised contradictory things: ending austerity, and staying in the Eurozone. Eurozone policies, particularly in the post-crisis era, are about squeezing labor.
It's hardly unusual for politicians to lie, but they normally don't tell such big lies on matters of paramount importance to voters. Admittedly, Syriza's leaders were all novices, and they appear to have genuinely believed that they could persuade Europe's leaders to change course. But as members of both right and left wing factions in Syriza recognized by the end of February, after a month of negotiating to reach an interim deal to extend the bailout, the Troika and Eurozone countries were unreceptive to Greece's "look, austerity won't work and you'll just lose more money if you keep it up" pitch. Yet [Prime Minister] Tsipras and [Finance Minister] Varoufakis refused to change course. They exhibited the Einstein definition of insanity: continuing to do the same thing, and expecting different results.
Moreover, Syriza has not lived up to its populist, anti-oligarch branding. It passed a 200 million euro humanitarian aid bill in March, yet as of May was still taking applications and has yet to disburse all the funds. Yet favored interests like the union for the state electricity utility, DEO, still has its pensions getting a subsidy of 600 million euros while other pensions are being cut. Despite massive tax evasion, Syriza has not brought any new criminal tax evasion cases. What it has done is change the members of the panels that hear those cases from judges to union reps. Similarly, during its election campaign, Syriza promised to go after oligarchs and identified an obvious target: owners of media licenses. Yet it failed to take action once it took office.

Not treason then. Just the same old clientistic rousfetia. But others were content to rob the State. You had to go and revenge porn that battered old ho bag like she was Britney Spears and it added to your rep except that's exactly what she was and so the stunt has backfired on you, paidi mou, and yours and yours alone is a now endless walk of shame.

## Saturday, 25 July 2015

### Pyrrho's indalmoi

Recalling her bridal gift of lustrous cloak, lapidary clasp
Odysseus burns under a beggar's name
Pyrrho, indalmoi are a hind in a hound's grasp
Penelope weeps both are tame.

## Monday, 20 July 2015

### To a Po-Co Enoch Soames

Now every Hungryalist Zulieka has wrought a Po-Co Enoch Soames
& Globally gazumped, 'plain Preston men' have re-bought unknot homes
To my rue, I must close my correspondence with you
Having heard nothing kind, nothing clever, nothing true.

## Saturday, 18 July 2015

### Bankers are poets playing possum

Carl Melchior, a frail little Jewboy, and Keynes, a thick lipped Cambridge sodomite; had cast a disturbing shadow over International Finance, over Economics's project of achieving pure ergodicity, over Enlightenment's project of turning its various National Bildungsburgertums into brokerages simply; at a time when, a respectably married, strapping, over six foot tall, Oxford man, Thomas Stearns Eliot- of sound Brahmin stock- was a couple of years into his Banking career.

Thus he wrote this-  (my, purely interpretative ,comments being given in bold)
'FEW critics have even admitted that Hamlet the play is the primary problem, and Hamlet the character only secondary. And Hamlet the character has had an especial temptation for that most dangerous type of critic: the critic with a mind which is naturally of the creative order, but which through some weakness in creative power exercises itself in criticism instead.'

Frail little Jews, who fall off their horse and are invalided out of the Regiment, are barred from Creativity; cogitations raging amongst those rootless Cosmopolitans can at best be 'Criticism'- i.e. such agitation is that of the arbitrageur merely, arbitrarily discounting things of the Blood, the Soil, and that blood Christ on the Cross shed upon the soil of the King-Emperor's new Protectorate in Palestine; thus Ruth is redeemed, Soil freed from Abrahamic bondage, and neither a pituitarily disordered & too heavily bleeding Womb, nor a hydrocephalic Trench War's anonymous for too teeming Tomb, need any longer carry a Pharaisacal and Meretricious burden of resistance to aesthetic univocity such that certain combinations of words can't cash out as wergild thus undermining a privileged Catholicism of moral fungibility.

These minds often find in Hamlet a vicarious existence for their own artistic realization. Such a mind had Goethe, who made of Hamlet a Werther; and such had Coleridge, who made of Hamlet a Coleridge; and probably neither of these men in writing about Hamlet remembered that his first business was to study a work of art. The kind of criticism that Goethe and Coleridge produced, in writing of Hamlet, is the most misleading kind possible. For they both possessed unquestionable critical insight, and both make their critical aberrations the more plausible by the substitution—of their own Hamlet for Shakespeare’s—which their creative gift effects. We should be thankful that Walter Pater did not fix his attention on this play.
Eliot elegantly, for by elision, pays tribute to, his distinguished compatriot, Santayana's bit of Anti-Boche War Work- the latter's essay on Hamlet- but only so as to contemn Pater's, actually Hemsturhuisian not Cyrenaic, yet nevertheless bestial, for Cantabrigian, Apostles amongst whose number Keynes stood forth most vulgar and unabashed.
Pater, as Harold Bloom points out, did treat of Hamlet as rising above the mere Pharaisaical arbitrage of the Law's virtuously severed head and Libertinage's' more and more madly violated, for for aye maiden bed, to deal with the exceptional- that which defeats Carl Schmitt's lame Hecuba defence of his own traitorous misprision- by reason of incarnating Agrippa's trilemma, the impossible Trinity of Father, Son and an Unholy Ghost.

Fuck.
It occurs to me I'm writing sophomore Eng Clit type shite.
Me!
I'm 52 and got serious drinking to do!
I'd better just cut to the chase-

What Wine, now, can my Vision impair?
Bees in black tho' in red the blossom
Bankers are poets playing possum

## Friday, 17 July 2015

### Varoufakis on Schauble

This is Varoufakis on Schable- my comments are in bold.

The reason five months of negotiations between Greece and Europe led to impasse is that Dr SchÃ¤uble was determined that they would. You said he was determined to get Greece out of the Euro. Clearly, if that was his intention, he failed miserably. Negotiations between Greece and Europe did not end in an impasse. You lost.
By the time I attended my first Brussels meetings in early February, a powerful majority within the Eurogroup had already formed. Revolving around the earnest figure of Germany’s Minister of Finance, its mission was to block any deal building on the common ground between our freshly elected government and the rest of the Eurozone.[1] A deal was built. It was based on your side's abject surrender.
Thus five months of intense negotiations never had a chance. Condemned to lead to impasse, their purpose was to pave the ground for what Dr SchÃ¤uble had decided was ‘optimal’ well before our government was even elected: That Greece should be eased out of the Eurozone in order to discipline member-states resisting his very specific plan for re-structuring the Eurozone. This is no theory of mine. How do I know Grexit is an important part of Dr SchÃ¤uble’s plan for Europe? Because he told me so! Okay, Schauble is a shrewd s.o.b. He played you by saying- 'I'm gonna get you out of the Euro'. You blab this to Tsipras. He throws in the towel. All you have proved you are shit at negotiation.
I am writing this not as a Greek politician critical of the German press’ denigration of our sensible (sic!) proposals, of Berlin’s refusal seriously to consider our moderate debt re-profiling plan, of the European Central Bank’s highly political decision to asphyxiate our government, of the Eurogroup’s decision to give the ECB the green light to shut down our banks. I am writing this as a European observing the unfolding of a particular Plan for Europe – Dr SchÃ¤uble’s Plan. And I am asking a simple question of Die Zeit’s informed readers:
Is this a Plan that you approve of? Is this Plan good for Europe?

## Dr SchÃ¤uble’s Plan for the Eurozone

The avalanche of toxic bailouts that followed the Eurozone’s first financial crisis offers ample proof that the non-credible ‘no bailout clause’ was a terrible substitute for political union. Wolfgang SchÃ¤uble knows this and has made clear his plan to forge a closer union. “Ideally, Europe would be a political union”, he wrote in a joint article with Karl Lamers, the CDU’s former foreign affairs chief (Financial Times, 1st September 2014).
Dr SchÃ¤uble is right to advocate institutional changes that might provide the Eurozone with its missing political mechanisms. Not only because it is impossible otherwise to address the Eurozone’s current crisis but also for the purpose of preparing our monetary union for the next crisis. The question is: Is his specific plan a good one? Is it one that Europeans should want? How do its authors propose that it be implemented?
The SchÃ¤uble-Lamers Plan rests on two ideas: “Why not have a European budget commissioner” asked SchÃ¤uble and Lamers “with powers to reject national budgets if they do not correspond to the rules we jointly agreed?” “We also favour”, they added “a ‘Eurozone parliament’ comprising the MEPs of Eurozone countries to strengthen the democratic legitimacy of decisions affecting the single currency bloc.”
The first point to raise about the SchÃ¤uble-Lamers Plan is that it is at odds with any notion of democratic federalism. A federal democracy, like Germany, the United States or Australia, is founded on the sovereignty of its citizens as reflected in the positive power of their representatives to legislate what must be done on the sovereign people’s behalf. That positive power is subject to judicial review. A Local Authority can't set an illegal rate, a Govt. can't levy an illegal tax. A sovereign country can bind itself by Treaty not to set illegal taxes or provide illegal subsidies. E.C countries already are barred from setting import taxes or providing export bounties for inter-European trade. It is no great stretch for National Budgets to be brought under the purview of a European body. Greece would have benefited if this had happened 15 years ago.
In sharp contrast, the SchÃ¤uble-Lamers Plan envisages only negative powers: A Eurozonal budget overlord (possibly a glorified version of the Eurogroup’s President) equipped solely with negative, or veto, powers over national Parliaments. The problem with this is twofold.
1) First, it would not help sufficiently to safeguard the Eurozone’s macro-economy.
2) Secondly, it would violate basic principles of Western liberal democracy.

1)  No political arrangement can safeguard any Macro-economy whatsoever. Otherwise, there'd be no subject called Macroeconomics. Instead, under that heading you'd have a notice saying see 'optimal political arrangement for safeguarding the Macro-economy.'
2) If Western Liberal Democracy has 'basic principles' then other truths can be derived from them. If what is proposed violates one or more such basic principle, it follows that it must violate one or more derived ratio such that an illegal action has occurred. Hence the proposal would be struck down as unconstitutional.
The Judiciary acts as countervailing power on the Executive in a negative manner- preventing it from doing certain things. It can also direct the Executive to do certain things under threat of punishment. It can't, however, take the place of the Executive and do those things itself. This does not represent some great scandal for Liberal Democracy. Rather, it is necessary to its existence.

Consider events both prior to the eruption of the euro crisis, in 2010, and afterwards. Before the crisis, had Dr SchÃ¤uble’s fiscal overlord existed, she or he might have been able to veto the Greek government’s profligacy but would be in no position to do anything regarding the tsunami of loans flowing from the private banks of Frankfurt and Paris to the Periphery’s private banks.[2]  Why would money flow from Frankfurt to Paris if the fiscal overlord has ordered a fiscal contraction in Greece? Suppose Bankers be crazy, what is to stop the Chairman of the ECB from going on TV and saying so? Those capital outflows underpinned unsustainable debt that, unavoidably, got transferred back onto the public’s shoulders the moment financial markets imploded. Unavoidably, you cretin? Just because you, personally, fucked up as an advisor doesn't mean such stupidity was unavoidable. Post-crisis, Dr SchÃ¤uble’s budget Leviathan would also be powerless, in the face of potential insolvency of several states caused by their bailing out (directly or indirectly) the private banks. How fucking stupid are you? Don't you get that bailing out Banks, like regulating them, is the Central Bank's job?
In short, the new high office envisioned by the SchÃ¤uble-Lamers Plan would have been impotent to prevent the causes of the crisis and to deal with its repercussions. Moreover, every time it did act, by vetoing a national budget, the new high office would be annulling the sovereignty of a European people without having replaced it by a higher-order sovereignty at a federal or supra-national level. We KNOW the current system can be improved by addressing issues the Plan raises. We don't know it would be impotent but do know that the reasons you have given are utterly specious. Sovereignty is not annulled every time the Executive is barred from an illegal act. Judges don't suddenly turn into Chief Magistrate's of the Republic, taking over from elected officials. Instead, the Executive's menu of choice is constrained in a useful way and so they make better decisions.
Dr SchÃ¤uble has been impressively consistent in his espousal of a political union that runs contrary to the basic principles of a democratic federation in your worthless opinion. In an article in Die Weltpublished on 15th June 1995, he dismissed the “academic debate” over whether Europe should be “…a federation or an alliance of states”. Was he right that there is no difference between a federation and an ‘alliance of states’? I submit that a failure to distinguish between the two constitutes a major threat to European democracy.

## Forgotten prerequisites for a liberal democratic, multinational political union

One often forgotten fact about liberal democracies is that the legitimacy of its laws and constitution is determined not by its legal content but by politics. To claim, as Dr SchÃ¤uble did in 1995, and implied again in 2014, that it makes no difference whether the Eurozone is an alliance of sovereign states or a federal state is purposely to ignore that the latter can create political authority whereas the former cannot. Says who? If Churchill had been killed, who would have succeeded him as head of the Imperial War Cabinet? Atlee? No- Jan Smuts, a South African. Switzerland is a Federal State. The British Commonwealth was an Alliance. Who would have had greater authority within their respective territories, Smuts or the Swiss President? Varoufakis knows shit, talks shit and when called to negotiate for his country in their hour of need, he puts his hands down his pants and pulls out fistfuls of shit which he then proceeds to eat claiming it to be chocolate pudding.
An ‘alliance of states’ can, of course, come to mutually beneficial arrangements against a common aggressor (e.g. in the context of a defensive military alliance), or in agreeing to common industry standards, or even effect a free trade zone. But, such an alliance of sovereign states can never legitimately create an overlord with the right to strike down a states’ sovereignty, since there is no collective, alliance-wide sovereignty from which to draw the necessary political authority to do so. How fucking metal are you? Fuck you think happened in Germany in 1866 and 1870? The Prussian King was the head of an alliance. He became not the Emperor of Germany but German Emperor with perfect legitimacy.
This is why the difference between a federation and an ‘alliance of states’ matters hugely only to you, you ignorant fuckwit. For while a federation replaces the sovereignty forfeited at the national or state level with a new-fangled sovereignty at the unitary, federal level, centralising power within an ‘alliance of states’ is, by definition, illegitimate, and lacks any sovereign body politic that can anoint it. Rubbish. The German Emperor was perfectly legitimate. Too much so, for the good of the Germans. Nor can any Euro Chamber of the European Parliament, itself lacking the power to legislate at will, legitimise the Budget Commissioner’s veto power over national Parliaments. Now you're just making things up.
To put it slightly differently, small sovereign nations, e.g. Iceland, have choices to make within the broader constraints created for them by nature and by the rest of humanity. However limited these choices, Iceland’s body politic retains absolute authority to hold their elected officials accountable for the decisions they have reached within the nation’s exogenous constraints and to strike down every piece of legislation that it has decided upon in the past. Really? Iceland is not a 'Rule of Law' country? Anyway, it has just 300,000 people.  In juxtaposition, the Eurozone’s finance ministers often return from Eurogroup meetings decrying the decisions that they have just signed up to, using the standard excuse that “it was the best we could negotiate within the Eurogroup”. Unlike M.Ps returning from Westminster who bring back Hospitals and Factories and flying Unicorns for their constituents coz. the UK aint in the Eurogroup so everybody can have anything they want without any need for tiresome negotiations.
The euro crisis has expanded this lacuna at the centre of Europe hideously. An informal body, the Eurogroup, that keeps no minutes, abides by no written rules, and is answerable to precisely no one, is running the world’s largest macro-economy, with a Central Bank struggling to stay within vague rules that it creates as it goes along, and no body politic to provide the necessary bedrock of political legitimacy on which fiscal and monetary decisions may rest. Which is why you guys are desperate to stay in the Eurozone. The alternative is talking monkeys like you shitting on everything in Parliament.
Will Dr SchÃ¤uble’s Plan remedy this indefensible system of governance? If anything, it would dress up the Eurogroup’s present ineffective macro-governance and political authoritarianism in a cloak of pseudo-legitimacy. Legitimacy is a good thing, especially if it is 'pseudo' from the p.o.v of a loony toons like you- okay, maybe this kraut aint so bad. The malignancies of the present ‘Alliance of States’ would be cast in stone and the dream of a democratic European federation would be pushed further into an uncertain future. You are stupid, your dreams are toxic. Their being pushed into the future is a good thing.

## Dr SchÃ¤uble’s perilous strategy for implementing the SchÃ¤uble-Lamers Plan

Back in May, in the sidelines of yet another Eurogroup meeting, I had had the privilege of a fascinating conversation with Dr SchÃ¤uble. We talked extensively both about Greece and regarding the future of the Eurozone. Later on that day, the Eurogroup meeting’s agenda included an item on future institutional changes to bolster the Eurozone. In that conversation, it was abundantly clear that Dr SchÃ¤uble’s Plan was the axis around which the majority of finance ministers were revolving.
Though Grexit was not referred to directly in that Eurogroup meeting of nineteen ministers, plus the institutions’ leaders, veiled references were most certainly made to it. I heard a colleague say that member-states that cannot meet their commitments should not count on the Eurozone’s indivisibility, since reinforced discipline was of the essence. Some mentioned the importance of bestowing upon a permanent Eurogroup President the power to veto national budgets. Others discussed the need to convene a Euro Chamber of Parliamentarians to legitimise her or his authority. Echoes of Dr SchÃ¤uble’s Plan reverberated throughout the room.
Judging from that Eurogroup conversation, and from my discussions with Germany’s Finance Minister, Grexit features in Dr SchÃ¤uble’s Plan as a crucial move that would kickstart the process of its implementation. A controlled escalation of the long suffering Greeks’ pains, intensified by shut banks while ameliorated by some humanitarian aid, was foreshadowed as the harbinger of the New Eurozone. On the one hand, the fate of the prodigal Greeks would act as a morality tale for governments toying with the idea of challenging the existing ‘rules’ (e.g. Italy), or of resisting the transfer of national sovereignty over budgets to the Eurogroup (e.g. France). On the other hand, the prospect of (limited) fiscal transfers (e.g. a closer banking union and a common unemployment benefit pool) would offer the requisite carrot (that smaller nations craved).
Setting aside any moral or philosophical objections to the idea of forging a better union through controlled boosts in the suffering of a constituent member-state, several broader questions pose themselves urgently:
• Are the means fit for the ends? Yes, because those means got shot off you.
• Is the abrogation of the Eurozone’s constitutional indivisibility a safe means of securing its future as a realm of shared prosperity? You're just babbling nonsense here.
• Will the ritual sacrifice of a member-state help bring Europeans closer together? Yup. That and a barbecue with lots of beer.
• Does the argument that elections cannot change anything in indebted member-states inspire trust in Europe’s institutions? Yes! It eliminates political risk.
• Or might it have the precise opposite effect, as fear and loathing become established parts of Europe’s intercourse? Fear and loathing, for you, we will always have with us.

## What conclusion can we draw from Whatthefuckis's cri de coeur? This Schauble guy- an Accountant of some sort- got the measure of Whatthefuckis and played him like a hillbilly banjo. The result- Greece can stay in the Euro, if it grows up. Otherwise it can leave and no one will shed a tear.

Final Score
Boring Accountants- 1 , 'Brilliant' Economists- 0
So, no change there then.

Comment by Yorick's bones-
I understand that times are troubled and discussions get heated. I am in principle not interested in the heat, but in the arguments that (should) drive discussions. You seem to have some, and I would like to ask you some questions about them:

(1) Do you think Varoufakis is wrong, or that he is lying? Not necessarily pertinent, but interesting.

(2) Do you also think all the nobel laureate economists (I can think of a couple) who have supported him are wrong? Or lying?

(3) Do you think that SchÃ¤uble, whose interests are at least as vested as those of Varoufakis (being more than the latter a man of politics), is being more truthful, or just more economically savvy?

(4) Or do you think that the Americans' interests in the case of the Greek crisis are as vested as the Germans' or the Greeks', if less obvious? Then what would you say they are?

(5) The way I see it, many economists have been saying that the measures that have been proposed in the current deal have historically been proven to be inefficient, if not ineffectual, in their task of cleansing and repairing the Greek economy.* Do you think the measures proposed will actually help the Greek economy recover?

* (6) I am taking the cleansing and repair of the Greek economy to be the aim of these measures, because a healthy and functional economy is a requisite for the servicing of a debt, which in turn is the creditors' alleged goal in this whole affair. Is that not so?

REPLY to a comment by Yorick's bones-
I appreciate the distinctions you make. We visualize Econ Policy as facing a menu of feasible choices. A particular pick may be advocated for many different reasons- some specious, some normative purely, some 'strategic' (i.e. disingenuous), some purely alethic. Furthermore, the advocate of a particular pick may have a compelling 'white box' theory- i.e. the guy saying pick x, has a convincing explanation of why picking x will set off a series of plausible events such that the objective y is achieved- whereas an opponent of x may only have a 'black box' theory backed by empirical evidence of a regularity. Finally, Econ (to Yannis's disgust) can't do interpersonal comparisons. There is no way to know whether Bill Gates getting richer is better for billions of people than a patent troll attorney engaged in a nuisance value legal case against him.

This means that any policy prescription can have some  sane honest advocate
Econ as a subject is aware that there is no objective method to 'mechanically' distinguish strategic from alethic responses. This problem of 'Preference Revelation' is why Politics can't be reduced to Economics. Rather there is a supervenience relationship characterized by multiple realizability.

I interpret your first sentence as equivalent to the above- and agree.
1) Varoufakis is a Game Theorist who tried to be a 'Conviction Politician' rather than a tactician. This means 'Kavka's toxin'  has salience. Varoufakis signals he is willing to take poison at time t and it is plausible to think that he is prepared to die by taking that poison even though he knows he won't have to take the poison and will get a million dollars as a result.
If Kavka's toxin, or Newcombe type problems predominate, then a general solution lies in the trade off we make between devoting cognitive resources to alethic investigation as opposed to imperative valency. Mahatma Gandhi faced a Kavka's toxin problem. He had to be a loyal seditionist otherwise he lost obligatory passage point status between the British and the Revolutionaries. He resolved the quandary by devoting a lot of resources to imperative gestures (spinning cotton, making salt) and none to alethic investigation (he could easily have found out that the cotton he was spinning was negative value added or that sea salt was more expensive than the taxed commodity). We can forgive Gandhi because maybe he lived at a time when Brown people believed the White Man was chosen by God to be his Master and thus bound to be superior.
What about Varoufakis? He is saying 'I am swallowing Kavka's toxin (i.e. my tactics are suicidal for my country) for the sake of a Democratic Politically United Europe which will make systematic transfers from Rich to Poor regions so as to equalize real incomes and Life Chances'.
If we give Gandhi the benefit of the doubt, why not Varoufakis?
The answer is Gandhi gave up Law, he condemned its practice, long before he did silly things like spin cotton and try to make salt. Varoufakis was an economic adviser to the Greek Govt. and still is a practicing Economist- i.e. he can't avail of Gandhi's way of winning the Kavka's toxin challenge. He can't adopt a hypo-mechanist, hyper-mentalist position since his profession commits him to hyper-mechanist, hypo-mentalist alethic investigation as opposed to mystic rapture.
Is Varoufakis 'lying' or deluding himself or just incompetent? To answer that question- which involves identifying the Muth rational demarcation procedures relevant to distinguishing 'lie' from 'self-delusion' and relating this to competence under cognitive trade-offs- we first need to establish whether Varoufakis is 'wrong'- i.e. is his 'dream' Muth Rational? Would all agents, having the same information set and possessing the correct theory, identify Varoufakis's claimed objective as a Rational Expectations Eqbm, robust to hysteresis?
No. Not at all. Varoufakis's 'democratic Political Union' isn't incentive compatible. It falls at the first hurdle to be the Muth Rational 'correct' theory. Varoufakis knows this. Ergo he is acting in bad faith to all.
2) Krugman & Stiglitz & so on don't believe in Varoufakis's supposedly morally prescriptive dream for Europeans, but they do believe in a specific 'bastard Keynesian' policy prescription and interpret everything in that light. Thus, if claiming Varoufakis is right causes the Eurozone to start printing money like crazy and if this causes aggregate demand to rise, then that's a good thing because all 'austerity' is simply the result of collective stupidity- the paradox of thrift. These people are wrong and sometimes they do tell lies but essentially they are commodities in themselves. Varoufakis isn't yet a commodity in himself. His income still mainly derives from actions as an agent, not a principal.
3) Schabule is an Accountant- not a good one and thus a run of the mill politician. He is associated with quite large scale transfers as well as the abject failure of Privatization type initiatives. His perceived ascendancy would tend to cause the Euro to depreciate- which is good for Germany because it increases sales to the rest of the World while paying less, as a proportion, to poorer members. Thus, in this round, the stupid Accountant won and the 'brilliant' Economist lost.
4) America is concerned that its own Corporate investments, supply chains, and intellectual property rights are protected and appreciate more than proportionately. It has shown it can bend the IMF to its will- so it is effectually  hegemonic and has indeed extended the Roosevelt Corollary to the Monroe Doctrine to Europe. America has always pretended to be a bailiff but actually told other countries to forgive debts owed to them by others- which is why there were no formal, as opposed to de facto, Second War Reparations- but made sure that any haircut for its Govt. was associated with a more than proportionate gain for its Corporations. Nothing in this current Crisis has changed that- which is why the Euro has fallen against the dollar despite low oil prices.
5) No measures have been suggested that will help the Greek economy to recover. However, if that economy shrinks enough, Greece has no alternative but to recover in much more dynamic form. Ulysses did much better once Proteus, the Old Man of the Sea, got off his back. If Schabule first got Tsipras drunk on power by tricking him and if Party Politics in Greece has truly been poisoned, then well and good.
6) Shrinking the Greek Economy as well as the expected Permanent Income of Creditors is the outcome, if not the stated aim, and that's feasible, indeed salutary, ceteris paribus given that, currently, no value adding incentive compatible model for Public Sector intervention obtains.

Like most ordinary people, I feel all Europeans should have a Social Minimum, on the basis of improved factor mobility and democratic subsidiarity- such that Tiebout manorial rents are equitably distributed- and this should be gradually extended to other countries once they undergo 'demographic transition'.

Varoufakis type 'zero-sum' long term  transfers can't become sustainable or significant on a continent wide scale unless 2 conditions are fulfilled
1) factors must be inelastic in supply in the 'rich' areas
2) no preference revelation or mechanism design type problem arises.
This is implausible unless the tax collectors come from the poor region and are completely honest and have access to a window of Momus and thus can see into the hearts of men.
As a matter of fact, you can have sustainable transfers where there is a countervailing benefit- for e.g. rich regions give some cash to poor regions in return for which their Investments appreciate- i.e. there is an Aumann type correlated equilibrium. Here monetary union or the gold standard (if credible) removes uncertainty and signal extraction type problems thus rendering the game positive sum.
Graciella Chichilnisky's work is relevant in this context. Normally preference diversity can't be too much or too little and so it looks as though super-states will be more fragile. However, 'limited arbitrage' is itself canalised, so to speak, provided (this is the ideal outcome under monetary union) there is increased local Public Good Tiebout model competition such that transfers are internalized under the rubric of subsidiarity. In other words, voting with one's feet replaces the farce of voting.

## Thursday, 16 July 2015

### Does the IMF care more about Greece than the Germans do?

No.
But that is the impression being created.
Germany is the cruel step-mother and IMF is the good fairy saying 'Poor old Cindy really can't do all the household chores as well as stitch beautiful ball-gowns for her ugly step-sisters.'
Nothing could be further from the truth.
The IMF is supposed to be a hard-ass which only lends when it can get its money back.
The World Bank is supposed to be the 'good cop' to its 'bad cop'.
But the IMF has to do what Washington tell it to. Since Greece is in NATO, America has ordered it to lend to Greece.
To get out of this jam, the IMF has to tell stupid lies.
First time round, it pretended Greece could dig itself out of its hole by carrying out sensible reforms.
Greece still defaulted because the Greeks went and voted for a bunch of jokers- some of whom had seemingly impressive Academic Credentials.
The IMF is now pretending that previous debt is what will prevent Greece defaulting on the loan Washington will force it to make. This is silly. Greece is a sovereign country. It can pick and choose who to pay. Unless its Govt. does a 180 degree turn- i.e. fulfills not just the Eurozone conditions but goes many steps further- it won't be able to repay any fresh loans except from even bigger loans which no one will provide.
The IMF has provided itself with a tiny fig-leaf but no one is fooled because it is just a giant a-hole being plowed by Washington's dick.

Still, surely writing off Greek debt at this time is a good thing no matter who suggests it or what their intentions are?
The answer, once again, is Oxi.

Suppose you owe me a £1000 and want to persuade me to take pennies on the pound.
What should you do? Well, that depends. Suppose you want to borrow more money- in fact are desperate to do so.
Should you
1) Claim to be utterly crap at making money
2) Say that even thinking about repaying debt to us will cause you to ring me in the middle of the night to rant and rave at me for having sexually abused you as a child, though I'm 20 years younger than you, and that you will get a Doctor's certificate to say I have to turn up for 'recovering from incest' sessions in his office where you can vent your anger at me and, if I tell you to fuck off, you will spread your lies about me all over the neighborhood.
The answer is no. What you need to do is say
1) Listen I've got a plan to turn my business around. I'm gonna use this money you're lending me to get a new machine which will make me the cheapest producer and so I'm gonna bag all the orders and in a few years time I'm gonna be on top. Tell you what, why don't I pay you back everything at that time?
2) Guys I owe money to a lot of you and that's keeping me up nights. I'm determined to repay all of you even though I did some stupid things with the money you lent me before. This is because I've turned over a new leaf.

Yannis Whatthefuckis takes a different approach.
This is from his blog-
For the first time, the IMF recognised that, in its fifth review assessment, there was a low probability that Greece’s public debt would prove sustainable.
Here is an extract from the IMF’s own report confessing that, to portray Greek public debt as sustainable (without substantial debt relief), its researchers had to make the assumption that “…Greece would go from having the lowest average total factor productivity (TFP) growth in the euro area since it joined the EU in 1981 to having among the highest TFP growth, and that it would go to the highest labor force participation rates and to German employment rates.” Pigs would, of course, sooner fly!
PIGS can raise TFP. Ireland was a PIGS country. It showed rapid TFP growth in the past and might well re-emerge as a Financial Services/Tech hub whose strength is directly linked to that of the Euro. Spain is a much bigger country but it's industrial woes won't last for ever. The Portuguese and the Spanish and the Irish aren't saying 'our people are lazy and stupid and will always be so. We will never work as many hours or as efficiently as the Germans. We are pigs. We can't fly.'  This is because they think their people are smart and can work harder than the Germans and that is why their living standards will converge and fiscal harmonization will seem natural. Greeks aren't stupider than Irish people. They may well be smarter than Germans. But electing Yannis Whatthefuckis was a dick move. He says Greeks are shit. He thinks some foreigners turned up in tanks in 1967 and conquered Greece and that the same thing is happening again except Greek banks are gonna start rumbling down the streets of Athens shooting at people coz some evil foreigners have worked bad mojo on them.

The IMF has been under pressure to lend to Greece coz its part of NATO. It did so once saying 'heck, the Greeks aint stupid. They will raise productivity and boost growth to get out of this jam.' This optimism proved embarrassing to them coz Greece elected fuckwits who said 'hey, we're Greek. Greeks are shit. Didn't you know?' and defaulted.
Still, the IMF is under renewed pressure from Washington to hand over more cash. Just as they once pretended that Greece might boost TFP by electing smart people not worthless fucktards, now they are pretending the new loan they will be forced to make could be sustainable provided the E.C.B takes a massive haircut.
The problem here is that Yannis has already told the world that Greece is a pig. It can't fly. It will need to borrow more and more just to carry on rolling in its own shit. In Real Estate jargon, there is no point playing the game of 'Extend and Pretend'. There's a fucking pig living in the McMansion. It smells like a sty, it looks like a sty, it is a fucking sty coz that's a fucking pig living in it.
Send your best realtor round with fresh baked cookies. It's not gonna help.
This isn't a desirable property- it is a pig sty.
Send in the bailiffs and you are no better off,
This pig has sovereign immunity.
What's more this pig blogs all its incontinent thoughts. It says 'Greece can't play 'Extend and pretend' because Greece smells like a pig, looks like a pig- it's a fucking pig and Greece is a pig sty. Trust me, they appointed me Finance Minister. It doesn't matter if the pig's creditors write off all its debts. It doesn't matter if they lend even more than they already have. Pigs don't return money lent to them. Sorry, IMF, America may force you to lend to us again. You won't get the money back. We are pigs. We can't fly.

Is Greece genuinely a pig, as opposed to a PIGS country, which is why it alone can't straighten up and fly right?
Nope.
There is only one Greek- or Greek-Australian- who likes eating his own shit and calling it chocolate cake- who is genuinely a pig. But he is no longer in the Govt. Hopefully, he soon won't be in Parliament.
If Greece shows it can repay future loans, then it can pay some small percentage of past loans. It is in no one's interests to write off those past debts because Greece has non Eurozone creditors. The IMF is worried lest its money ends up in the hands of private Vulture Funds. The way to prevent that is to increase not decrease Greece's liabilities.
If you come to me to ask me to take pennies on the 10,000 you owe me- it is better for you to say you owe other people 10 billion. If you say you owe nothing, I won't take a haircut.

Greeks are smart. Sooner or later they're going to fulfill their destiny as a financial/R&D hub for their Region. They're gonna want to show larger not smaller debts at that time (hopefully, by then, the U.S Supreme court would have quashed the Vulture Fund vs Argentina ruling which so terrifies the IMF) so as to get everybody to agree to the biggest possible hair-cut.

As for Whatthefuckis, send him to Donald Trump as an Economic Adviser. Those two deserve each other.