The Greek “Haircut”; Watching How It’s Done


Pay attention to Greece.  It seems that the EU countries that have loaned billions to Greece, which continues to hemorrhage cash because of its rejection of “austerity” (austerity: not frittering away a THIRD infusion of someone else’s money on an unsustainable socialist paradise), have the temerity to ask for decent terms for payback of loans.  For the Greeks, that is absolutely unconscionable.

Faux outrage aside, what is of interest is that, in order to prevent a collapse of the banking system in Greece, a “bail-in” is being considered, similar to what happened in Cyprus a couple of years ago.  Where is the money going to come from?  Why, it will be confiscated from private citizens’ bank accounts.  Whereas in Cyprus, the accounts which were pinched were those over €100,000 (at the time nearly $130,000), Greece seems to be shooting for a much lower number.

The plans, which call for a “haircut” of at least 30 per cent on deposits above €8,000, sketch out an increasingly likely scenario for at least one bank, the sources said.

Why accounts so small?  Here’s why:

With few deposits over €100,000 left in the banks after six months of capital flight, “it makes sense for the banks to consider imposing a haircut on small depositors as part of a recapitalization. . . It could even be flagged as a one-off tax,” said one analyst.

Hmmm.  A tax.  That word should be worrisome to Americans.  Seeing as not long ago we have had “taxes” foisted upon us that were not intended to be taxes at all.  As if the Ninth Amendment simply doesn’t exist.

How Greece’s problems approximate ours is a bit easier to grasp if you think of Greece having one giant EBT card, instead of tens of millions of smaller ones.  Greece wants nobody to tell them what they can spend the EBT cash on, despite the fact that the money on the card is someone else’s.  Oh, and when the money on the EBT card runs out, Greece feels perfectly justified in asking for more.  In fact, if the creditors want to have anything to say about how Greece spends their money, or the terms of the next installment on the EBT card, why, it is terrorism.

Yanis Varoufakis, Greece’s finance minister, on Saturday accused the country’s creditors of trying to “terrorise” Greeks into accepting austerity.

“What they’re doing with Greece has a name: terrorism,” he told Spanish newspaper El Mundo. “Why have they forced us to close the banks? To frighten people.”

That smug sense of entitlement should ring familiar in the ears of middle-class Americans, who hear constantly about paying their “fair share” from the socialist-communist far Left that includes such luminaries as Hillary Clinton, Elizabeth Warren, Bernie Sanders, the Occupy nincompoops, and various Hollywood half-wits.  More troubling, though, is that you can bet the Obama Administration (and every leftist candidate for 2016) is watching how Greece plans and executes the out-and-out confiscation of private wealth for the purpose of continuing government largess, while keeping the socialist sheeple placated long enough to get away with it.

The United States is walking a parallel path to Greece, and eventually, the music will stop.  Then, debt will have to be paid, or loans defaulted.  (This, despite record tax revenues for the second year in a row, incidentally.)  When the reckoning comes, we will be subject to the same unfettered, oppressive, and draconian actions that the Greek government will enact (or allow) against its citizens in the current crisis.

We might see sudden limitations or “taxes” or “fees” on large cash transfers or withdrawals, followed by restrictions on ATM or debit cards.  Then, couched in the familiar language of class warfare, the seizure of private wealth from large accounts, the “haircut” we saw in Cyprus and will see in Greece.  When it is clear that such action cannot be prevented by the anger and outrage of the demonized wealthy class, the threshold for expropriation to feed the Great Society Welfare Furnace will be lowered by increments until the redistribution of private wealth by government fiat is completed to the satisfaction of the ardent socialists who so despise capitalism, and insist that prosperity comes from robbing the selected Peter, to pay the collective Paul.  

For those who would say that such actions to expropriate private wealth cannot happen here, because there are laws to prevent those actions, I would offer that much we once viewed as illegal activity by the government in this country is now quite permissible, provided it furthers the far-left agenda.  With a Supreme Court that acts as if the Constitution is a mere list of suggestions, don’t expect such actions as described above to face serious challenge.

So watch Greece, just as we watched Cyprus.  You can be sure this Administration and its potential successors are taking copious notes, for when it is our turn in the barber’s chair for our “haircut”.

10 thoughts on “The Greek “Haircut”; Watching How It’s Done”

  1. Unless, of course, you kill the barber. And his assistants. And the douchebag pretending to sweep the floor…

  2. Your EBT example reminds me of Mass., where trying to ban use of those cards in liquor stores, strip clubs, etc. meets strong resistance.

    As for “It can’t happen here”, see the Kelo decision, civil asset forfeiture, etc. And there is always the Federal Reserve to fall back on, with its “Quantitative Easing” and the old standby, inflation.

  3. (This, despite record tax revenues for the second year in a row, incidentally.)

    It should be noted that this record is in both dollar terms, and as a percentage of GDP, *and* is not inclusive of the further vast streams of revenue diverted from the economy to the states, counties, municipalities and plethora of other government bodies.

    That is to say, we certainly don’t have a tax problem, but only a spending problem.

    1. Puts paid to the BS when a FOGO opens his mouth to declare how we cannot “afford” the military we need.

  4. I am very curious about the fact that certain EU nations (such as Germany) have recently decided to be stubborn about wasting money on spend-thrifts like Greece. I wonder if this has anything to do with the fact that these same nations are quietly, but steadily, increasing their military spending in order to deal with a certain tyrant named Vladimir. Hard to justify wasting money on whiny Greek socialists when that same money is needed very badly for the tanks and aircraft that might be needed to defend fellow members of NATO in a year or two….

  5. Why would the politicians bear the political backlash of confiscating private accounts when they could simply monetize the debt? Greece’s #1 problem is that they don’t control their currency, so they cannot inflate their debt away (their #2 problem is an utter inability to live within their means).

    1. Jeff, you raise a great point about common currency. Though I would juxtapose your #1 and #2, the fact remains that they do not control their currency. I have flashes of one Margaret Thatcher warning of such foolishness in the House of Commons circa 1990.

      1. Not being able to control your currency is a bigger problem because if they could live within their means they wouldn’t need to control their currency.

  6. Thr “haircut” is only on cash money in bank accounts. Not the Safety Deposit Boxes or the art work or jewelry or the mansions or the stock certificates and bond certificates and other tangible signs of wealth that the super wealthy and “old money” collect.

    It is a tax on the good solid citizens (suckers?) that keep their money in banks for safety, and the working businesses that need the money to buy and sell their products.

    The super wealthy will not be affected.
    The middle classes will be devastated.

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