2. Greece's Legal Lesson
From the folks who brought the world democracy, check out the latest lesson in good governance from our friends in Greece.
Greek prosecutors indicted the head of the country's statistics agency this week for allegedly inflating Greece's 2009 deficit for political purposes. Andreas Georgiou and two other members were charged with "felony violations for dereliction of duty and making false statements that damaged the Greek state," according to a Greek official.
The allegations first popped up in September 2011, when a former board member of the government agency publicly accused Georgiou of using overly conservative accounting methods in calculating Greece's 2009 deficit in order to justify harsh austerity measures that were a precondition for the country's bailout package. Georgiou replied to those allegations by saying that Greece's statistical standards were simply brought in line with the demands of Eurostat, the European statistical agency.Greece's 2009 deficit was originally projected to be 6% of gross domestic product, but was later jacked up to 13.6% after the Socialists swept into power in October of that year. That number was later upped to over 15% of GDP. Greece received its $146 billion bailout from the EU and IMF in May 2010 based on those final figures. Imagine that. A Greek government economist is being criminally charged for totally missing the boat. Deliberately or not, Georgiou could end up in jail for blowing the figures. Hmmm. Perhaps if members of Congress had a few hard years staring them in the face for every dumb decision they made, then maybe those bozos would govern the country with far greater care. On that note, Atlanta Federal Reserve President Dennis Lockhart sure is lucky that's not the case here following his totally incorrect read of the banking system prior to the financial crisis. Based on Fed transcripts from August 2007 released last Friday, his goose would have been cooked if we were in Greece. "I believe that the correct policy posture is to let the markets work through the changes in risk appetite and pricing that are under way, but the market observations of one of my more strident conversational counterparts -- and that is not Jim Cramer [laughter] -- are worth sharing," said Lockhart. So what do you think, Jim? Should we use the Grecian formula and lock Lockhart up for being so boneheaded back then? Nah. They may be nuts. And they may know nothing. But that's still a bit harsh.
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