Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Thomas Piketty: “Germany has never repaid.”

medium.com

Post reply on HN
Print view View original

201–210 of 350 posts

Re: Thomas Piketty: “Germany has never repaid.”

#201

Post by mercurial »

afarrell wrote: post #128
TheCondor wrote: post #125

Earlier quoted context omitted.

West Germany did repay some of the defaulted WWI debt to help rebuild their reputation after they lost WWII. Also, there is another gigantic difference here, Germany lost a bloody war and we told them how it was going to be, we restructured their economy, wholesale, and they were in no position to disagree. About half the debt was forgiven because they did what we made them do. If Greece wants to put their sovereignt…

> the west wanted a strong Germany between them and the communists, what's Greece got to bring to that table? Continued loyalty to NATO and the EU? http://www.reuters.com/article/2015/07/03/eurozone-greece-ru...

Strangely enough, that's exactly what Piketty was talking about in a recent interview with the digital edition of Le Monde. "Let's just kick Greece out of the eurozone" people have no idea of what they're doing.

Re: Thomas Piketty: “Germany has never repaid.”

#202

Post by mercurial »

kungfooguru wrote: post #171
peterfirefly wrote: post #142

Earlier quoted context omitted.

> I think there should be a distinction between a country that kills and tortures millions and one that does not. Which reminds me... https://en.wikipedia.org/wiki/Greek_Civil_War 158,000 killed due to those bloody stupid Communists :(

You mean damn those Greeks wanting to run their own lives? Something that was violently crushed and kept through an oppressive military junta?

As a left-wing guy, I find that comment funny. Ask Poland or Hungary how much Warsaw Pact nations enjoyed "running their own lives". And the junta was not before the end of the sixties.

Re: Thomas Piketty: “Germany has never repaid.”

#203

Post by tjradcliffe »

Lecturing Germany on its own history is just about the most useless contribution to this debate possible.

Germany and everyone else who foolishly loaned Greece money in 2010--and before--wants to get paid. There is nothing wrong with that. Dredging up the irrelevant past? Not so much.

Or: if I owe someone money, it doesn't matter if they are a nice person or not. I still owe them money, and must suffer the legal consequences if I fail to pay. This is what the rule of law is all about. It protects everyone, even people who are not nice. Even people who are hyopcrites. Even people who are Germans.

This moralization is childish. By all means dismiss the German government's moralization as silly and irrelevant. But don't engage in far more silly and far less relevant moral hectoring of your own.

Re: Thomas Piketty: “Germany has never repaid.”

#204

Post by [deleted] »

chvid wrote: post #198
craigyk wrote: post #184

Earlier quoted context omitted.

No doubt you should be annoyed, but you should direct most of that ire at the troika than at Greece. The money that went to "bailout" Greece really made its way to EU lenders by way of Greece. A real bailout would have consisted of of policies and loans that went to rebuilding the Greek economy, not toward squeezing every last drop of tax revenue from the few Greeks who are still employed and pay taxes.

That is really not the right way to understand it. The buying and refinancing of bonds is a very direct support of the Greek economy as the bonds are used by the Greek banks as collateral when they go to the central bank to get cash euros to give to their customers. Greeks have taken out billions of fresh euro bank notes from their ATMs in the past few months. Without the Troikas support this would not have been poss…

[deleted]

Re: Thomas Piketty: “Germany has never repaid.”

#205

Post by tytso »

peterfirefly wrote: post #160
vegabook wrote: post #103

Earlier quoted context omitted.

Pikkety's case is essentially that debt is not sacrosanct, and that treating it as you are is counterproductive. Sometimes the creditor must share some of the pain, in order to save (even himself) more pain down the line.

They did. They took a hefty haircut of more than 50% (some sources say 70+%) in exchange for near certainty of getting paid, i.e. basically the rest of the EU taking over the remaining debt.

Private creditors took a haircut. Government owned entities, including the German and French national banks did not take any kind of haircut at all. And at that time, it was clear that the debt write down wasn't enough --- but for political reasons, the German and French national banks didn't take a writedown, but instead pushed the Troika to play a game of "extend and pretend". (i.e., let's pretend Greece will eventually be able to make the German and French banks whole, no matter what the cost to Greece.)

Re: Thomas Piketty: “Germany has never repaid.”

#206

Post by tjradcliffe »

TheOtherHobbes wrote: post #153
mnglkhn2 wrote: post #113

Earlier quoted context omitted.

There's an argument to be made that the debt forgiveness came after the realization that maybe the WW2 was also a result of the crushing debt imposed on Germany after WW1.

It's questionable how directly Versailles caused WW2. WW2 was caused in no small part by the Wall St Crash, which was a direct cause of hyperinflation in Germany, and by delusional industrialists who thought that financing Hitler would be a good way to avoid a revolution. At least one of them - Thyssen - ended up in a concentration camp. So that didn't work out so well for him. The others have never been held account…

> WW2 was caused in no small part by the Wall St Crash, which was a direct cause of hyperinflation in Germany

Could you please clarify how the Crash of '29 caused hyperinflation in Germany in the early 1920's?

Or do you mean the August 1919 to December 1920 slide? That doesn't suffer from violations of the law of causality, but nor is there any evidence that it caused the Weimar government to print ever increasing amounts of money in higher and higher denominations, which started in June 1921, six months after Wall Street had started to recover.

https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_R...

Re: Thomas Piketty: “Germany has never repaid.”

#207

Post by chrisseaton »

HSO wrote: post #59

At the risk of being a moralizing bore, may I remind everybody that "Germany", "Greece" etc. are not people, and that people are not countries? I am surprised by the national coloring, however faint, of some comments here and there https://news.ycombinator.com/item?id=9834721 . "I am a German" or "Greek here" should have no relevance to the ideas put forth. "Your money" and "your banks" are not really "my money" and…

As usual, some of the most frank moralistic discussion on this topic can be found in the Moral Maze on BBC Radio 4 http://www.bbc.co.uk/programmes/b0608nlb (I think that's available worldwide).

Re: Thomas Piketty: “Germany has never repaid.”

#208

Post by ChuckMcM »

tcbawo wrote: post #190
ChuckMcM wrote: post #170

I wonder if this will end up being "The Interview" in Piketty's career. I realize it was translated but even so it seems the most inartful discussion of a complex subject by someone considered an expert that I've seen in a long while. I reminds me a bit of Linus Pauling's interviews about vitamins where he goes off the rails.

Historical context aside, he does have a good point in the end. Greece's credit card is maxed out and it doesn't appear that any amount of restructuring will make it possible to repay in full.

We will certainly see. Given the rhetoric I expect Greece to simply disavow the debt, leave the Euro Zone, and let them figure it out. It isn't like you can repossess a country.

The interesting question then is what happens next. Either they recover their economy (at least briefly) because they aren't carrying any sort of debt costs and the rest of the EU does nothing? Look to see Spain and maybe Portugal jump ship as well. The EU freezes them out, basically letting the black market set the value of the drachma, and we see hyper inflation in Greece where the price of everything goes up several hundred percent a year (maybe even a month) like it did in Argentina. Or maybe we see the Russians bail them out and give them a favorable exchange rate to roubles which can then be converted into dollars or euros. That sort of "help" comes with some strings that perhaps the Greek people will put up with, perhaps not. No matter what we'll get to see what happens when a country does the equivalent of filing for bankruptcy.

My guess is that Greece will see economic turmoil like the various South American countries for the next 50 years, but its only a guess as I don't think we've been in this sort of situation in Europe since the end of WWII.

I think Piketty could have said that without insulting the Germans.

Re: Thomas Piketty: “Germany has never repaid.”

#209

Post by parasubvert »

tptacek wrote: post #131
alexqgb wrote: post #127

Earlier quoted context omitted.

Um, what? It will be forced into austerity? I'm sorry, but they have been. Past tense, like…years ago. That's why they're suffering a 25% unemployment rate and a contraction of GDP that exceeds what the U.S. saw in the Great Depression.

Yes, but wherever they are now (after troika-mediated austerity), it's going to be worse after they lose their funding, isn't it?

It would be bankruptcy rather than austerity - all businesses will likely go belly up in the coming weeks, including the government. Work will be on the honor system, barter, and IOUs.

So it's a rock and a hard place choice - austerity for 15-20 years or bankruptcy followed by maybe a new deal, betting that Europe won't let one of its own starve to death.

If they lose their funding they need to do both of:

1. negotiate a new deal with their creditors

2. Get emergency humanitarian funding to feed people and keep hospitals running

3. start paying people in IOUs (which could eventually turn into the new drachma if #1 doesn't work out).

Exiting the Euro completely would be disastrous for both Europe and Greece - there's a year or more of IT work required to introduce a new currency and one can't run an advanced economy on cash only. And Europe would have a €250 billion hole across the major powers that would need to be covered by its taxpayers if it can't get it from Greece. Legally by EU law they could sue Greece for its actions which then opens up questions about membership in the EU itself.

Re: Thomas Piketty: “Germany has never repaid.”

#210

Post by parasubvert »

csense wrote: post #155

According to this guy's argument, we have: - People and businesses who save money instead of spending it, get their wealth confiscated by the state indirectly through inflation or directly through the "special tax on private wealth" - People, businesses, and other countries who help the state out by loaning it money have those loans retroactively converted into outright gifts by debt relief measures. So the solution…

Economics isn't a morality play. Throughout history there has been debt relief and debtor jail... It depends on circumstance and power.
Post reply on HN