the victory in greece

Daniel at Crooked Timber has penned the ultimate City kissoff to the victory of Syriza in Greece. In the course of patronizing the poor thieving Greeks, he also strikes back at the idea that the EU policymakers are stupid - like, they don't know that Greece can never pay back its debt. They know!

Stupidity is always armed with good reasons. The stupidity that plunged the U.S. into Iraq was full of people who said, at the time, the WMD and then later said, nobody believed there was WMD, obviously we were going in for x, y or z reason. Similarly, letting Lehman default was defended at the time as a wonderful warning to the banking system, and afterwards as who knew the international financial system was a ponzi scheme? One of the great stupidities of the EU is the idea that more is better – hence, the acceptance of players who are little more than medium size cities in the real scheme of things, like Latvia. This produces the ultimately stupid organization: too big to fail and too big to manage. We leave the realms of stupid groupthink, here, and enter the realm of truly badly constructed institutional structures. If it were simply a matter of Greece, I’d say that the EU had an overwhelming hand. But it isn’t simply a matter of Greece. If the EU lowers the boom, I don’t think this will say, to the voters in Italy and Spain and Portugal, oh oh, better do as the boss says. I think it will say, we are fucked either way, so why not fuck them back? The Anglo prejudice that all people everywhere will muddle through and settle on the lower rung lifestyle so that the EU project of banks first can keep marching gloriously onward seems to me a misjudgment on every level – here, as always, politics is not separable from economics. Thomas Friedman’s “golden straightjacket” theory, which seems to be what Daniel is endorsing, will, I think not work, and not just cause I don’t want it to work. It won’t work because it doesn’t involve the gradual diminishment of the lifestyle of the vast majority – as in the US – but the sudden and catastrophic diminishment, with no outlet except, as in Latvia, mass migration.