Tiny, tiny people

[koganbot]

This long post by Steve Randy Waldman has been getting attention in the econ blogosphere and is a slamming bit of writing that's also clear and coherent and seems to explain a lot.

http://www.interfluidity.com/v2/5965.html

The two money quotes, so to speak:

With respect to

Comments

Re: My perspective (responding mainly to the original Renzi query):

[koganbot]

Tsipras says the agreement* includes "the restructuring of debt and funding for the medium term," and said that there's also a growth package for 35 billion euro (in NY Times words). But he also called the deal "recessionary." Reuters says (citing Merkel) that 12.5 billion euros will go for "investment in Greece" (Reuters words). Those numbers don't mean anything to me one way or another. My question is: by what path does the Greek economy actually grow under this deal?

[UPDATE: I found Tsipras's actual statement. An excerpt: "The measures include those that Parliament has voted on. Measures that will inevitably create recessionary trends. However, I am hopeful that the growth package of 35 billion euro that we achieved, debt restructuring, as well as securing funding for the next three years will create market confidence, so that investors realize that fears of a Grexit are a thing of the past-thereby fueling investment, which will offset any recessionary trends."]

Meanwhile, our friend Matteo Renzi has been heard from, crediting himself with helping to ensure that the trust fund that the Germans demanded (and got) would be located in Greece, not Luxembourg:

I was pretty insistent in saying that if you have to set up a fund with Greek assets, you cannot even think about putting it in Luxembourg. For me, that would be a humiliation. I was the first to intervene on that, in strong terms.
*"Agreement" should probably be put in quotes; a "deal" (NY Times word) has been officially reached, and presumably the Greek parliament will acquiesce, but I'm reading that continuing negotiations are required even before there's the "bailout," much less "debt restructuring." Those last two phrases in quotation marks are my scare quotes, meaning I don't see how a new loan, most of which doesn't actually end up in Greece, amounts to a "bailout," or what "restructuring" actually means here. NY Times is finding a lot of pessimism for the long-term among financial experts, and further reference to can-kicking, the poor can seemingly unable to kick the bucket.