As Greece and the Euro begin their long slide into fiscal bankruptcy, all eyes turn to Goldman. Even Bernanke can't resist. As Greece doubled the pay of its public employees in the last few years and dramatically increased its retirement and health care benefits, the fiscal deficit moved to nearly 14 percent of GDP. It turns out, this is all Goldman's fault. Yes!
Here's how. In 2001, Goldman arranged a $ 2.2 billion swap, which was essentially equivalent to debt financing. This amounted to 1/10th of one percent of GDP for 2001. Yes! 1/10 of one percent of GDP for the 2001 fiscal year. That transaction, according to Ben Bernanke and the Greek government is the villain. Gee, if Goldman hadn't done that, all would be well in Greece.
Sound familiar? This was the excuse given for the housing bubble -- the evil lender! Never at fault is the borrower, who takes the money, indulge themselves and then fail to pay back the money. The borrower is always innocent in these scenarios. It is the always the evil lender. As for the borrower, "the devil made them do it."
Poor Greece, I guess they didn't understand that full retirements at 58, free health care for everyone, having over 50 percent of the labor force working (?) for the government -- those things were A-okay.
You wonder why Greece is going bankrupt. After all, Goldman hasn't arranged a swap for them since 2001. Must be some other predatory lender, that's it!
