Before the Greeks say goodbye to the great European experiment, both Athens and the EU need to gird themselves for the mother of all economic fall-outs.
Is Greece ready to go it alone?
That's become the guessing game du jour after anti-austerity parties captured a shocking share of the vote in the latest Greek elections. But don't expect the drachma to return any time soon.
It won't be easy for either Greece or Europe to prepare for a divorce. If it was, they'd have already done so. Greece needs to get its budget ready, and Europe needs to get its firewall ready. The politics are terrible for both.
THE BUDGET AND THE FIREWALL
Right now, Greece is running a primary deficit. That means the Greek government would still need to borrow money even if it didn't have any interest payments to make. A euro exit and default wouldn't solve its austerity problem. A euro exit and default would create an even worse austerity problem -- or an inflation one. Remember: Greece is getting piles of cash from Europe as part of its bailout. Greece would lose that money if it defaults. And they wouldn't be able to replace it. Nobody wants to lend to them now and likely won't for a long, long time. Greece would have to either cut spending and raise taxes much more, or print the difference. It's a choice between hyperausterity and hyperinflation.
A premature Greek exit wouldn't be much better for Europe. It would set off a potentially euro-ending bank run. Depositors in Ireland, Portugal, Spain and Italy would pull their money out of local banks and move it to "safe" countries like Germany. The logic is simple: If countries can leave the euro zone, then not all euros are created equal. Euros in Italian banks might turn into cheaper lira overnight. Euros in German banks would stay euros -- or maybe even turn into stronger deutsche marks overnight. Investors would see this and bet on a breakup. Borrowing costs would soar.
There would only be one way to prevent a meltdown: Throw money at it. It would be the mother-of-all-bailouts to deal with the mother-of-all-bank runs. (A firewall is just a bailout fund that you haven't used yet). The ECB would have to buy bonds directly from troubled governments. And the Germans would have to give bonds to troubled governments -- a joint eurobond. It would take such a complete show of financial support to convince markets that Europe was determined to save itself at any cost.
But just as there is an unbalance of payments between Greece and Europe, there is also an unbalance of challenges. Greece's primary balance is more of an economic problem than a political hurdle. Europe's firewall is more of a political hurdle than an economic problem. That makes this a dangerous game.
NO DRACHMA (YET)
Neither side is ready for a split. Greece doesn't have a primary surplus and Europe doesn't have a genuine firewall. That gives both every incentive to kick the can a bit more. So that's exactly what we should expect -- for now.
The problem is that people eventually get tired of kicking the can -- and convince themselves that they might not need to.
As Greece gets closer and closer to a primary surplus, it will ask for more and more from Europe. That's basically what far-left leader Alexis Tsipras wants to do now. But Europe doesn't want to give in too much. Besides, Europe could just bailout everybody after a default, like the U.S. did with TARP. It would be messy -- and far worse than setting up a firewall in advance. But the world wouldn't end. So both sides might think that they have more leverage than they actually do. That's how you lose a game of chicken.
The safest strategy is simply to stop playing the game. Europe should create a firewall, kick Greece out of the euro, but then provide bridge loans to the troubled country.
Why Nixon's former lawyer John Dean worries Trump could be one of the most corrupt presidents ever—and get away with it
Sometime early last fall, John Dean says he began having nightmares about a Trump presidency. He would wake in the middle of the night, agitated and alarmed, struggling to calm his nerves. “I’m not somebody who remembers the details of dreams,” he told me in a recent phone call from his home in Los Angeles. “I just know that they were so bad that I’d force myself awake and out of bed just to get away from them.”
Few people are more intimately acquainted than Dean with the consequences of an American presidency gone awry. As White House counsel under President Richard Nixon from 1970 to 1973, he was a key figure in the Watergate saga—participating in, and then helping to expose, the most iconic political scandal in modern U.S. history. In the decades since then, Dean has parlayed that resume line into something of a franchise, penning several books and countless columns on the theme of presidential abuses of power.
A history of the first African American White House—and of what came next
In the waning days of President Barack Obama’s administration, he and his wife, Michelle, hosted a farewell party, the full import of which no one could then grasp. It was late October, Friday the 21st, and the president had spent many of the previous weeks, as he would spend the two subsequent weeks, campaigning for the Democratic presidential nominee, Hillary Clinton. Things were looking up. Polls in the crucial states of Virginia and Pennsylvania showed Clinton with solid advantages. The formidable GOP strongholds of Georgia and Texas were said to be under threat. The moment seemed to buoy Obama. He had been light on his feet in these last few weeks, cracking jokes at the expense of Republican opponents and laughing off hecklers. At a rally in Orlando on October 28, he greeted a student who would be introducing him by dancing toward her and then noting that the song playing over the loudspeakers—the Gap Band’s “Outstanding”—was older than she was.
The Michigan billionaire’s confirmation hearing was heavy on partisanship and light on substance.
Donald Trump advocated on the campaign trail for a $20 billion federal school-voucher program. But during her confirmation hearing on Tuesday evening, Betsy DeVos, the president-elect’s choice to lead the U.S. Education Department, said school choice should be a state decision. She framed school choice as a right for students and families. And she said during the hearing that she was committed to strengthening public education for all students.
While the Michigan billionaire has backed charter schools and vouchers, which let families use public money to pay for private schools, DeVos would not, she said, try to force states to embrace school choice. But a number of organizations, largely Democratic, that had raised questions about DeVos’s commitment to expanding charters and vouchers and about her family’s financial holdings and religious causes were unlikely to find much more of the hearing reassuring.
Betsy DeVos, the nominee for education secretary, and Ryan Zinke, the nominee for interior secretary, will testify on Capitol Hill Tuesday.
Senate confirmation hearings continue this week, as Donald Trump’s inauguration approaches.
On Tuesday, Montana Representative Ryan Zinke, the nominee for interior secretary, will testify before the Senate Energy and Natural Resources Committee. And the Senate Health, Education, Labor, and Pensions Committee will hear from Betsy DeVos, Trump’s pick to head the Department of Education.
We’ll bring you the latest updates from Capitol Hill as events unfold. Also see our continuing coverage:
The president-elect has yet to name a secretary of agriculture, a delay that has caused controversy and illustrated the difficulties governing will pose.
Three days before Donald Trump is to be inaugurated as America’s new president, just one Cabinet agency lacks a nominee to lead it: the Department of Agriculture.
The pick has become mired in politics and drama, unsettling the agriculture industry and potentially imperiling Trump’s standing with some of his most ardent supporters—the residents of rural America. In the process, it has become a case study in the difficulty Trump will face as he begins to govern, as his sweeping promises and catchy slogans run up against competing interests.
Already, the delay in picking an agriculture secretary has caused alarm. “The lack of quick and decisive action on picking a new Secretary of Agriculture by the Trump administration has given rise to charges that agriculture is not a high priority for the incoming president,” columnist Gary Truitt wrote recently in Hoosier Ag Today. “While this may or may not be true, the fact that this was the last cabinet post to be filled has raised concerns and will produce some challenges for the new nominee.”
The first lady attacks Donald Trump by measuring him against the principles and ideals he fails to uphold.
It has become an unofficial anthem for the Clinton campaign: “When they go low, we go high.” The applause line originated with Michelle Obama, in the remarks she gave at the Democratic National Convention in July. Since then, Clinton has frequently invoked the phrase on the trail.
But what does it mean to “go high” in a campaign against a man like Donald Trump, whose xenophobic rhetoric and casual calls to violence represent a notable low-point in American politics?
“Going high” is how Clinton’s surrogates explained why she wasn’t nastier to Trump in the second presidential debate. While some pundits were puzzled that Clinton hadn’t delivered a death blow to her opponent, jumping on every opportunity to underscore his deficiencies and hypocrisies, her supporters had an explanation: She was focusing on actual issues and ideas. She was simply going high.
Is there room in the movement for people who morally object to abortion?
Updated on Monday, January 16 at 4:05 p.m.
Pro-life women are headed to D.C. Yes, they’ll turn out for the annual March for Life, which is coming up on January 27. But one week earlier, as many as a few hundred pro-lifers are planning to attend the Women’s March on Washington, which has been billed as feminist counterprogramming to the inauguration.
With organizations like Planned Parenthood and NARAL Pro-Choice America co-sponsoring the event, pro-life marchers have found themselves in a somewhat awkward position. What’s their place at an event that claims to speak for all women, but has aligned itself with pro-choice groups? With roughly a week to go before the march, organizers also released a set of “unity principles,” and one of them is “open access to safe, legal, affordable abortion and birth control for all people.”
In its fourth season the BBC show turned its main character into a superhero, and lost everything that made it special in the process.
This story contains spoilers through the most recent episode of Sherlock.
Christopher Nolan is a truly brilliant British creative talent, which makes it all the more ironic that his work seems to have (at least temporarily) unmoored two of that nation’s greatest fictional heroes. In dampening the palette and tone of superhero movies so spectacularly with his trilogy of Batman movies, Nolan created a domino effect that stretched all the way across the ocean, transforming James Bond from a louche, debonair intelligence agent into a tortured, self-medicating hitman, compelled by the death of his parents to hunt down a series of increasingly psychopathic villains. And, as “The Final Problem” revealed on Sunday, Nolan’s influence has similarly transformed Sherlock. A wry detective drama with a twist has turned into a superhero origin story, complete with agonizing childhood trauma, terrifying antagonists with improbable powers, and a final showdown in an ancestral home burned to the ground.
“Trump’s wall is already under construction,” Wole Soyinka says. “Walls are built in the mind.”
Wole Soyinka, the first African writer to be awarded the Nobel Prize in Literature, once fled to the United States from Nigeria. Now the fickle winds of politics are pushing him in the opposite direction.
Back in the 1960s, jailed for alleged associations with rebels amid the outbreak of the Nigerian Civil War, Soyinka composed protest poems on toilet paper in solitary confinement. “The man dies in all who keep silent in the face of tyranny,” Soyinka wrote in the collection of prison notes he later published. In the 1990s, the Nigerian strongman Sani Abacha confiscated Soyinka’s passport after the playwright urged Nigerians to stop paying taxes in defiance of military rule in the country. Soyinka managed to sneak out of his homeland and take refuge in the United States—a period he described to me as his “political sabbatical, because I never accepted, really, that I was in exile.”Abacha sentenced Soyinka to death in absentia. Soyinka’s crime was said to be treason.
Surfing the app on a trip back home can be a way of regressing, or imagining what life would be like if you never left.
My parents moved out of my hometown almost as soon as I left for college, and therefore I am obsessed with the idea of other people’s hometowns. Over any major holiday or break from a work schedule, hometowns become a sort of time travel, a way for people who have made adult lives elsewhere to return to their origin story.
Going home for the holidays can act as a kind of regression. Most of us know people, whether our friends, our partner, even our own parents, who suddenly turn into their teen or pre-teen self once they step foot in the house where they grew up. My mom used to say that whenever my dad got within 50 miles of his mom’s house, he suddenly became a teenage boy. Our hometowns become a kind of permission and hideaway, a place where we don’t have to be ourselves, where our actions don’t count and we get to be briefly less visible than we are in the adult homes we’ve made for ourselves elsewhere, the places where we expect ourselves to take action and achieve things and move upward through each day. For many of us, hometowns allow the luxury of a brief period of stasis, a rare few days of doing nothing.