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PostForgive Greece's Debt? (Randy Black, USA, 02/03/15 6:16 am)
Once again, there are those among us who complain that the banks are the problem for offering loans to less than deserving borrowers. This is akin to Rosie O'Donnell blaming the Hershey Chocolate Co. because she's fat.
As a result, we are advised that the only fair way to sweep such a matter aside is to forgive and forget the money. See Massoud Malek, 2 February.
Once again, we are told that the crook is not the borrower but the lender.
Is there a point in time where someone might offer, "No one held a gun to the heads of hundreds of thousands of home loan borrowers in the US during the 1980s and 1990s and forced them to buy a house with a mortgage load that the home buyer knew up front that they could not afford or were not entitled to from a credit worthiness view."
Ditto Greece and Goldman Sachs.
Even the writer of The New York Times article that Massoud cited said, "'Wall Street did not create Europe's debt problem...If a government wants to cheat, it can cheat,' said Garry Schinasi, a veteran of the International Monetary Fund's capital markets surveillance unit."
The leaders of the Greek nation without doubt knew that a global bank was in the business of helping customers arrange financing for nearly any reason. The Greek government had a need and they had a willing lender that may or may not have known that the Greeks had no ability or intent of repaying the loans in order to get into the "club," aka the European Union.
The Greeks knew that the bank in question was in the business of earning money off a financial arrangement. To claim otherwise is simply foolish and meant to obfuscate the issues that leads directly to a nation and its leaders.
By the way, Massoud further confuses the truth by concluding that the Greeks were "impoverished." The facts overlooked is that the Greeks have a long and proud history of faking their wealth, or lack thereof, in order to avoid taxes. In 2010, Yannis Kapeleris (a Greek financial crimes authority) said, "Greece is a poor state with rich people." (He heads the recently revived financial crimes unit, SDOE.) Source:
I wrote here a five years ago about the nationwide practice of tax avoidance in Greece. I recall writing about the tens of thousands of Greek citizens who avoided their property asset tax on their private swimming pools.
It was only when Google Earth came along and helped the tax collectors to "discover" the tens of thousands of private swimming pools in the backyards of the homes in and around Athens that things began to change. From the same Guardian article: "Using Google Earth, the unit (in 2010) announced it had discovered some 50,000 'undeclared' swimming pools as well as tracing the owners of an estimated 2,500 state-of-the-art pleasure boats moored in marinas around the capital. Politicians with power cruisers costing as much as €1.5m, but which have never appeared on tax returns, have been outed.
"We have opened bank accounts in Liechtenstein and plan to open others in Switzerland and the City of London," Kapeleris said. "We have discovered deposits that make the mind boggle, huge amounts that simply do not correspond to professed professional activity.
"Luxury villas on far-flung islands--some belonging to Britons and other foreign nationals--that were rented without ever being declared had similarly been unearthed. We have been in touch with tax authorities in the UK and other EU states," he said. "Some of these villas are rented for tens of thousands of euros a month.
"In a country where the black market economy has been estimated to account for nearly 30% of GDP, an estimated €30bn goes untaxed annually."
JE comments: A poor country with (many) rich people--how many nations could we apply this to? For Latin America, I'd say every one of them. Randy Black convincingly documents the disease: corruption. But now, what about the cure? If Grandpa has lung cancer, do we reprimand him for a lifetime of smoking and let him die, or do we try to help?