good afternoon and welcome to capital account i'm lauren lyster here in washington d.c. here are your headlines for tuesday june nineteenth two thousand and twelve with global leaders and some in the mainstream media to be sure expressing relief that the greek election results brought about the best case scenario or at least averted a more difficult one the g twenty has reportedly called on euro zone nations to work closely with the next greek government to keep it in the single currency but what does that entail exactly what's missing is an accurate analysis of the internal dynamics at play in greece now as greek politicians work to form a government will fill in the gaps with the micro picture that affects so majorly

the macro picture and will european leaders allow greece to renegotiate its bailout terms will different officials are saying different things but we'll talk about how that could work when it comes to wast parity you know that blanket term austerity well it involves actually any number of measures and some are better than others when it comes to helping or hurting growth will break down the hierarchy and look who is using the eurozone to deflect. but europe is a significant event forward but your opinion about this treaty a position. that was jamie dimon back on the hill today before what with out it was a tougher committee we'll show you the best of and talk about what was missing let's get to today's capital account.

with the greek elections taking place this past weekend and europe the focus of the g. twenty going on now we decided to devote a bit more time to the subject of europe's debt crisis and specifically the case of greece then other financial woes have and this is in large part because we feel for one the mainstream media produces well let's just say a lot of nonsense on the subject. the next greece is to build a governing coalition something that will probably take over the next few days the greek general election looking kind of that. given the expectations if you don't understand parliamentary democracy don't worry about it just know that we believe somebody might actually be running this country before the end of the week

. we feel it our duty to clarify some of what's going on on this show for those who do care how it actually works beyond just you know some blanket statements you know don't worry about parliamentary dip democracy or how it works we care it is true that in part greece's problems are reflective of a wider crisis that touches not just its european neighbors but the entire world there's a crisis of debt a crisis of overspending and of malinvestment going on in the world today this economic crisis has fueled a political one in countries throughout the world to europe stands as the poster child for this crisis in the developed world but the united states with its tremendous trade and current account deficits and its burgeoning public and private debt is not far behind but every country is unique as is every household and every individual the crisis in europe has simply acted as a catalytic agent exacerbating and bringing to light the weakness of the member

countries in greece these weaknesses stretch back generations but in many ways their historical roots remain in living memory as greeks seem caught in a cycle of reliving past moments of national and social import the dictatorship of the late sixties and early seventies is only one of those periods there are many others greece of course is also burdened by a gargantuan public sector and a patronage system that is used elections as a bidding platform for the perks of a government that resembles more a piggy bank than an organ of social progress viewed from this perspective the low voter. now we saw on sunday is not just about disillusionment but also a breakdown in the system of government itself as parties can no longer offer promises of more carrots but rather of less sticks but understanding the unique case that is greece its government and its people is more than just an academic exercise it represents

a case of study of what happens when government becomes the mechanism for the redistribution not just of wealth but also privilege in a society whose people are arguably anarchic at their core it is an exercise in bad governance at its worst and it has cost to society and in particular its youngest citizens greatly those who never had the opportunity to participate in the patronage system who never had the chance of taking a whack at the public opinion that's a broader trend we see a broader problem that can apply in other countries too as i sit in the u.s. now earlier i spoke with emanuel skeezers policy advisor for aca which is a u.k. based firm which represents accountants he's also an author of greece which is an economic blog and here is what he sees as the bigger picture message from all of those dynamics i just described in the last few minutes that have impacted greeks greece's electorate and its latest election results. well you see you know

as as governments big get they get in a way the only way that the only sustainable way of growing the size of government is obviously you know some countries do manage with very large public sectors but the only sustainable way to do it is by making sure the public sector remains the fisher no matter what. the point is that there are a number of ways in which you know inefficient public sectors. start losing support you know on the on the one hand you know i mean efficient public sector will be lose revenue this is something that's happened to greece quite a bit so you know with substantial amounts of corruption have to play a more out hence the fall so your revenues become on the mining obviously missed the rest of it probably there's less public investment more sumption which in a way in the long term reduces growth of roads and again on the fines revenues so

that there are several ways in there and then there's obviously just you know overspending in excess. of you know excessive the hazards so there are many ways in which an inefficient one of saving undermines itself but in the gaze of groups i guess we have we have a situation where the state was trying to be everything to all men who were away and and so we would like for instance both plant regulation of the labor market and at the same time. inspection of them so you were the worst of both worlds in a way. and so this baby had a group that had many. into. an ideological framework at heart and you know another trend that we've seen reflected in greece is that as . things have deteriorated for countries in the eurozone we've seen

a rise in fringe or extreme parties to the right especially and france we've seen growth and support for the national front the extreme right marine le pen came in third in the presidential elections and in the parliamentary elections they just had they got two seats in parliament which is the most they've had since eighty eight in greece we've seen that in the rise of the golden dawn neo nazi party which for the first time has received enough votes to have seats in parliament so where do you think this support for neo nazis has come from in greece. ok well first of all it's like it's a good thing you drop this mention because you know that golden dawn is not your run of the mill. right they are actually properly. you know is it is a massive source of you know the shame and anger and this is the ingres now with regard to where they get their support obviously you know not all of their own. you

know what's the get over. a lot of them are obviously national is that will power and the immigration has been. exploited on all sides of the political spectrum as in a way he said it. really doesn't help because the and the immigrants they. meant kind of with that even though it was a bit of positions that changed but also you know there has been the current the national as in in the country that the. major parties use two basic ways of accommodating with their rants so i run through the years. well years ago from the year in survey of values and there was a two thousand and eight. look at the you know if you think of.

races who would they vote for and in the end of the vote not unlike the rest of the electorate you know with the exception but none of them. were the lead but you know they're actually in the vote in the majority for the socialists at that time so they're right the few. people who you wouldn't expect that that kind of sentiment that were previously internalized by the system and have now finally been. been marginalized in this. the. you know. whatever the reason for it. you know. the. far right of his roots and holes iow you throw some. very much. right and you bring up

a good point too in your answer which is that while we have broad trends that maybe you can apply to the euro zone each country is a unique country and i feel that what we've seen in the reaction to these election results is that european leaders have kind of said ok for you this is done with these are the results we wanted also you see you see news reports applied to the euro european leaders or euro zone solutions as kind of monolithic not taking into account that these are individual countries that have their own unique political situations their own unique histories so i'm not no when you're looking and talking about greece you say that there are kind of a few major historical things that have happened and that really have impacted greece politically can you kind of give us a real brief overview of what those are what i mean you know there's four of them used. to be. you know essentially civil

war. you know all of that seven years ago. there is the show. about the years ago and the actually. and then there's what we what we call that change which is basically. the coming into power of the socialist the first time around in ninety one when i could be a problem. which you know these three events up until you know two or three years ago were the major milestones in. the model or the. really little history at least in people's living memory. and then of course add to that that you have now the bailout and member. but in the point is you know a lot of this stuff still influences the days and i remember i remember being

boring where. in the student election account basically the student elections in that athens is law school you would have two rival lended factions kind of taunting each other with. with chants about the disarmament of the guerrillas after the civil war and we lose the look even then when the you know a lot of the a lot of the rhetoric and a lot of the bad blood. actually to a whole. but more with the manual after the break also still ahead jamie diamond goes to washington again mr diamond was on the hill today will give you our three cents on what came about this time around but first your closing market numbers.

what drives the world the fear mongering used by politicians who makes decisions to break through it's already been made can you trust no one who is you know view with the global machinery to see where are we heading state controlled capitalism is called sessions when nobody dares to ask what we do r t a question more. you know sometimes you see a story and it seems so you think you understand it and then you glimpse something else you sure see some other part of it and realize everything. you don't. charge is a big. story

when you. look in the alona so you'll get a real headline with none of the most of the problem with the mainstream media today is that they're completely disconnected from the viewers and for what actually matters to those viewers and so that's why young people don't watch t.v. anymore if they want news they go online and read it but we're trying to take those stories that people actually care about and transfer them back to t.v. . welcome back given the historical significance of a few major events in greece that inform politics in the electorate today that our guest was talking about before the break i asked him emmanuel ski's us about the debate going on on whether series that which is been dubbed the radical left party that came in second in the elections on sunday is trying to recreate that dynamic

of change that the country saw in one thousand nine hundred one here's what he said . well that's what a lot of the detractors claim and you know it's true that they have a trial a lot of the of the same profile against the both the blogs the socialist likening the one and you know the kind of. dilemma that they see. in many ways. the way that you know the foundation of the privileged classes change for the present and i guess. they have a kind of power into a truly similar trend so the fact that there is a large. precisely that feels disenfranchised being logged out of the labor market being logged out of let's say aspirational. creational

ever so you know there are some anomalies and obviously that thing and. whether they are doing so intentionally. is very hard to say. you know if the trend is that interesting and there is a divide to when you just kind of alluded to it often in countries between young and old it's something that brings to mind for me the arab spring where you that kind of think of it in terms of young egyptians hitting the streets to protest for a change largely at least that beginning in that movement at how does this inform the dynamic in greece with the electorate and the results of these elections. well i'll start with the withering. of the logical no there because you know what counts those young and old in different countries can vary quite a bit at. very recently your. attitudes towards

aging that the average age at which greenfield at the present season the old is fifty and a half. which is a fantastic kind of a fantastic tour is that you know where would you rather go zooming goblets. big thing you're older than thirty eight the place of people think you're old at fifty but you know the point is that yes you're right you know if your let's say if your if you don't get an in in greece. you know you had nothing to do with bringing you know the two major you probably had nothing to do with the building of. the intelligence networks and i mean that they relied on you were too young to be part of them but you know by the looks of it you were a moderately good looking mostly regulated out of the of the labor market

essentially. so you know he is it is hard to understand adding to that the fact that you know all the voters are worried about an exit from the bureau. or in the fall and terms of whether their savings will be saved. or whether you know their jobs will be secure young people don't have jobs they don't know how to save him and obviously that create a name that is going to set the priorities for them in terms of. in terms of their vote and that's where you get the dilemma between what of the limit really. hold and here. agree. yeah that's interesting and also you know one thing that that of course is

coming out is different reports about whether or not european leaders will renegotiate with greece some of the terms of the memorandum it's something that political leaders and greece said that they believe will happen it something that merkel says no greece needs to stick to austerity the austerity that we've purse cried some other officials have made it sound like greece might have some wiggle room at least with time real quickly where do you stand with that and then i want to follow up with a with a fair question. well i think it would be foolish lives with the you know with the minimum level of. credit this could or. you know they could always say and some of the shows have said that. you know. anything maybe measures if they want as long as the big school result of these measures is the same. and there's give us some leeway even in the eyes of you know all.

of this so you look at one of the reserves the i.m.f. has that. it's very clear in the mind of their researchers at the know what that. their research is a very clear on the part that some of us there they are better than others well i don't want to stop you right there for a second because i think that's a really interesting point you know especially in the media austerity is branded as just this one blanket term without acknowledging that there are different types of measures that constitute austerity and some may be better or worse when it comes to allowing growth or stymieing pro so what would be the kind of better austerity measures that that a country could adopt or that greece should renegotiate and try to. swap and i guess for others. yes there's two major the vibes along along which we can. we can start thinking the first one has to do with consumption versus investment so

right now if you look at greece's public investment program it's actually been legally knows that it's been it's been cut out of existence there's no reason that that actually you know the public investment that you know that it's called multiplier or it's much higher than so. so regardless of where you sit on the political spectrum you can always swore cause to public investment but for equivalent cuts of meat consumption the result of growth is actually because it is and you grow those are secure that you know the result of them is at least neutral similarly there is and the difference between us there is a super x. the difference between those there will be. pursued through spending cuts it almost always delivers lower levels of growth but within my section strategies. for instance on in the road axes and how much more

a negative effect on growth than relying on direct cuts so there are there are ways of recombining or. changing the priority in the weight of the adjustment program. and menu wealthy there's debugging the monolithic usage of austerity as a blanket term we'll see how that plays out for the case of greece his analysis there he's author of the l a well greased a lot. let's have a bit loose change dimitri shana and stop your dancing you were doing during the bumper and tell me what you think of this jamie diamond was on the hill today again

remember he was there last week before the senate today he was before the house financial services committee they were doing the question asking let's see a little of how it went. you know we're not too big to fail we believe but i think should be bankrupt a bill. that when a bank fails the claw back should be invoked as that doesn't mean you should they're going to call back the people responsible because your compensation in the part that's going to be considered for that but also so that would be solve the problem this quarter the roles of the earth it's not the question is it under please don't filibuster where you gamble and i would you lose the house ones. in my experience wouldn't this. take that congress men so my take on this was last week was a complete and utter failure where just everyone seemed to be lavishing praise on jamie dimon a few detractors but just kind of fake detractors the way they came off in my view

this was just one of generally less of the ass kissing we saw last week barney frank being one of the kind of main highlights of giving jamie dimon a little more trouble now he wasn't just to the barney franks a job he wasn't asked to sing part of frank is the king ask his or what i thought was really funny though was where jimmy dunn was like the house always wins. the house me down so morgan i win yeah there's a suckers for being investors guess what my job is to steal your money i would kleptocrats my job sorry see you later. yeah well i mean it stands in contrast to his claim that too big to fail doesn't exist that there is no too big to fail well he's so big that he can say that this is ridiculous is a joke we're going to burn for it's a joke it is going to go through another party in georgetown i've heard of as big parties norbit the war barney you want to buy me a further a lot of fun if you do have more by the governor show we don't work that way who

said that. i was just making a joke but. you know three shannon bringing some order into this conversation the only thing is that jamie dimon where the presidential conflicts that i see interesting things he would like the house always wins but the so i think your money. presidential couplings back on. let's move on because we have the solution for jamie diamond we have the answer to the easy treatment he gets on the hill check out our youtube friend r.g.b. anarchies latest video here it is look at that is it's lloyd blankfein jamie diamond's friend and to me cheery bringing in someone else with the big guns who is none other than zeus ok so some greek throwbacks here and zeus really socks that to lloyd blankfein one and for all so dimitri doing his part.

i'm really proud to divide against the bankers i'm proud to been involved the takedown of jamie dimon and also later the video they take of paul krugman the aliens take him out because he thought that the aliens were going to actually save us with this whole like plan of our you know if they're going to do some crazy you know spending policy well they took up paul krugman they took out his crazy ideas so i want to know when i want to when i'm going to take out someone. dimitri you can't thinking about al gore i just offered to salt i'm too soft or soft the reality it's not actually i don't have something we don't you go ahead shannon learned you may think that once you soft but you have to have seized up and don't have to have suzanne that's what i did i let my pit bull do the talking no you know i love that i was now off the leash to do your dirty work for the difference if i can be sure he loves it wouldn't be human it would be that means your daughter for a member what are not. being the show right when i said last time it doesn't move the end of the show ok you have those do your bidding that's where we'll leave you thank you so much for watching and do not forget to come back tomorrow in the

meantime you can follow me on twitter at war and lester give us feedback on their show or any you mad at you tube dot com slash capital account thanks for watching and have a great night. thank .

you you to . just. say ah.