Why Greece Should Have Voted 'No' - 1 July 2011

The Greeks would be better off calling Europe's bluff...

YOU KNOW what Greece should do? They should tell the bankers to drop dead, says Bill Bonner in his Daily Reckoning.

The governor of Greece's central bank said the Greeks will be committing financial suicide if their politician didn't say 'Yes' in Thursday's austerity vote (they did, by the way).

We're not so sure. From what we've been able to make out of the rescue plan, they'd have been better off rejecting it. 

Not that we're in favor of people who don't play fair. But this deck was always stacked. And the dealer had a few aces up his sleeve at the get go. The way we figure it, the politicians, the banks – notably Goldman Sachs, as well as the big French banks – were in on the whole thing right from the start. 

It would be considered rude to mention it, for example at a champagne-swilling reception hosted by Christine Lagarde, but the whole deal was always corrupt. Goldman Sachs helped the Greeks disguise their debt so they could get in the EU system. Then, more or less the same bankers, advising pension funds, the IMF and the European Central Bank, urged them to buy Greek debt. 

And then, when the debt went bad, they organized a rescue – which spared the lenders any losses. And then, when the rescue went bad, they set to work figuring out the terms of a new rescue...and warning the Greek people that if they don't go along, they'll have to face Armageddon.

The Greeks would be better off calling their bluff.

Then, they could go broke with some dignity. They wouldn't get any more credit. But more credit is the last thing they need. Besides, each time they are rescued, they end up in worse shape, with more debt to pay...and higher interest rates to pay on it.

So tell the bankers to 'drop dead.'

Of course, the Greeks themselves were as corrupt as the bankers. They took their opportunities, too, as they came along. If they could get paid for not working, they didn't work. If they could get a subsidy and not have to compete in the real world economy, they took the subsidy. If they could retire early, or get something for nothing, or hoodwink investors with some nonsense figures...of course, they did it.

So, there's a pot. And there's a skillet. Both are as black as a tax collector's heart. And now they are both colluding to make sure neither has to reckon with his greed and errors.

Trouble is, that's not the way it works. Debt doesn't go away just because a knave and a fool decide they don't want it. It's still there. Like grinning death., it knows it will have its way...

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