Feb 042015
 February 4, 2015  Posted by at 8:24 pm Finance Tagged with: , , , , , ,

DPC Jai alai hall, Havana, Cuba 1904

What, Greece again? Sorry!! But I see a lot of things flash by that make me want to say something. Today it’s the alleged 180 that Syriza made on debt reduction, before that it was their alleged kow-towing to Brussels on Russia sanctions, and tomorrow it’ll be something else again. It’s all media formatted bite-size and pre-chewed chunks, but the Greece-Troika stand-off is anything but.

I have a ton and a half of respect for David Stockman, who earlier this week wrote: ‘Greek Finance Minister Yanis Varoufakis has the weight of history on his shoulders’, but I’m sorry, I can’t agree with that, Dave. Yanis, who I only know through the occasional recent email exchange, if he has any weight on his shoulders, it’s that of the Greek people. And it’s the weight of their future, not their history.

Stockman also hints that Greece should leave the euro, and perhaps that is true, I would certainly tend to agree, but that doesn’t mean, even if Syriza agrees too, that today is the day they should go public with it. A Grexit may even be their endgame, but focusing on it now could well backfire. After all, a Grexit could come in many different shapes.

I have confidence that Varoufakis and his people have thought this through, and thoroughly, and that they have a – longer term – strategy that not many people will be able to comprehend. A quality all good strategies have. And the other side has no such strategy: they have never entertained the idea that they could lose, so why strategize? Goliath never figured he needed one either.

There are many good willing and smart people who tend to see Syriza as the executioner of what they themselves have long felt needs to be done, and there’s nothing wrong with that. But that doesn’t make it real. Syriza’s first priority is to drag their own, Greek, people, out of their misery. And that is easier said – and written – than done.

So heaping more pressure on them beyond their first goal of alleviating the poverty of the Greek people is perhaps not very wise, not if you want them to succeed. I already said a while ago that this is not Syriza vs Europe, it’s Syriza against Wall Street. That’s a big fight. And who else is actually fighting it, other than in words? Not many. Don’t underestimate the extent to which Syriza’s success – for their own people – also depends on support from outside Greece.

So my take is tone it down a tad on your opinions – after 10 days – of what Yanis and Alexis should or should not do. See, I don’t see Yanis Varoufakis as someone who would come unprepared. I think for one thing the fact that he doesn’t come all dressed up to the nines for meetings with Osborne et al says he did prepare. You can just feel the likes of Osborne go: how come HE doesn’t have to wear the stiff stuff?

Varoufakis shows that he’s not a politician, but an academic. Which is good. Because EU politicians have all sold out their people, and the Greek people in particular, and they can’t be trusted to come up with the solution, any solution. They’ll just continue to ignore the problem, and eventually the bodies in the street, as long as they can. Re: Eurogroup chair Dijsselbloem and his ‘much progress has been made’. They have no ideas, they just have religion. And very little conscience.

And I think the Syriza crew has been preparing for this day for a long time. For most people it may look like they were born yesterday, but they were not. Still, after a little over a week, everyone has an opinion based on what has been achieved. Whereas, when you think about it, it should be clear that this thing was always going to take a long time.

And for long-term battles, strategy is pivotal. I see Syriza sowing confusion through seemingly contradictory statements (debt reduction vs no debt reduction, Russia sanctions vs none), I see good cop bad cop (in those same statements), and most of all I see game theory, Prisoners Dilemma and Colonel Blotto. These things are valid. And they’re not surprising given Varoufakis’ game theory background.

And Yanis is of course right when he says that they made no U-turn on the debt, there are simply more ways than one to get what you want. In politics, when push comes to shove, it all comes down to semantics: ‘Can I sell this to my voters’?

The ‘other side’ went into this convinced they would be able to dictate all the terms all the way. They’re less certain now, though still bustling with brute force hubris, so confusing them is a great tactic. Temporary till they figure it out, but good every time you do it again. Never let ’em know where you are or what you think. Texas hold ’em on the big stage.

This is especially important because the battle will be long, with many protracted skirmishes. And Syriza knows that. One of the first things they said when elected is that they wouldn’t talk to the Troika inspectors. Instead, they want to talk to EU, the CB and the IMF separately. Today they suggested bringing in the OECD as well.

Varoufakis and Tsipras are on separate tours of Europe, talking to leaders and finance ministers in Italy, France, Britain, soon Berlin, and probably other nations. And Varoufakis visited Draghi in Frankfurt today. Justin Fox:

In Colonel Blotto, adversaries allocate troops across multiple fronts. Whoever has the most troops on a particular front wins that battle, and whoever wins the most battles wins the war. If each side goes to war with the same number of troops, Colonel Blotto is a frustrating game that no one can reliably win. If one side has more resources than the other, though, things get interesting. It turns out the weaker side has a clear interest in increasing the number of fronts.

To illustrate, consider a Colonel Blotto game where one side has 50 soldiers and the other 33. If there is only one front, the outcome is certain – 50 is more than 33. If fighting expands to three fronts, the stronger side can still achieve certain victory by allocating 17 soldiers to the first front, 17 to the second and 16 to the third. The weaker side can win one front, but then wouldn’t have enough troops left to win either of the other two.

Spread things out over five fronts, though, and this certainty vanishes. If the stronger side simply puts 10 soldiers on each front, the weaker one can win by allocating 11 troops to three fronts and none to the other two. Every other possible allocation by the stronger side can be beaten as well. Most of the time it won’t be – it’s still better to have 50 soldiers than 33 – but for the weaker side a hopeless effort has been transformed into one that can succeed.

I’d say, have a little faith. There’s not much else you can do for now anyway, since you’re not in their shoes. From where I’m sitting, Syriza ain’t doing half bad. They got more media attention over the past week and change than the Kardashians (well, not in Texas or West Virginia), which is necessarily a crucial element of their campaign. They need the European people’s good will, The Germans, Italians, everyone. They already have the US president’s.

Go Blotto!

Home Forums Have A Little Faith In Blotto

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    DPC Jai alai hall, Havana, Cuba 1904 What, Greece again? Sorry!! But I see a lot of things flash by that make me want to say something. Today it’s the
    [See the full post at: Have A Little Faith In Blotto]

    Ken Barrows

    Well written article. But where does Syriza want the Greek people to be? Lifting them out of misery would have almost unanimous agreement. However, I wonder if the new Greek government thinks Greece can enjoy the lifestyle its people did in 2007.


    I don’t see him (from this vast distance) as an academic. He’s something else; something a great deal more. I don’t know more than maybe one academic who would have the smarts and guts to keep coming to their gunfights – in shorts and a t shirt, so to speak, armed with a watermelon. That watermelon has them totally freaking out; and it looks like he both knows what he’s doing; and cares about it. All the pundits who want to advise and second guess him – are not in his league. Not even close. If he can stay alive; it’s going to be interesting. Speaking as someone whose US Senator was killed in an unexplained – and basically uninvestigated – plane crash.


    Syriza is bobbing, weaving and trying to open new fronts but that isn’t a strategy, it’s perhaps a good tactic to keep ’em guessing until the last moment while working behind the media glare to build a solution.

    One winning solution was In the old nursery rhyme where the smart pig builds his house out of bricks to stay safe from the wolf.

    It’s still valid with a bitta tweaking. Now its the 4 PIGS [Portugal, Italy, Greece and Spain] who should build their home’s using BRICS to keep them safe from the wolves of Wall St.

    John Day

    Hi Greenpa,
    Gotcha on the Paul Wellstone reference.
    It was determined to be another murder-suicide, wasn’t it? (Bad joke, but you know what I mean.)
    Varoufakis says he wants the best deal for all the citizens of Europe, and I believe him.
    Having a deep insight into game theory, he will see that the best overall solution for the majority is something which can be sold, will have good political appeal, and will be terribly prone to sabotage for parties seeking a little gain, at a huge loss for most others.
    He first has to sell it to exactly those parties who assume that they will get a gain, while others lose. Perhaps he has a plan which they look at and think, “that will sell well, and I see just how to turn it to my benefit”.
    Widespread debt jubilee is in the interests of all, and those who run the game would naturally expect to profit greatly from assymetries in debt forgiveness/repudiation.
    He may be 2 moves farther into this game than somebody like Osborne or Draghi.
    We may see what he has to offer. I hope he lives that long, lives to sell the new game to the current players, then survives the announcement of the trick which forces actual compliance.


    These guys, Yanis and Alexis, are doing a great job with the EU and their strategy.

    So who is home minding the store? That is where the improvements of life will happen. Re-hiring, higher wages, no barricades, rolling back austerity – they must have some good folks doing all that while they fight on 2 fronts in the EU. What other fronts are they working on? Diplomats to the BRICS? and?

    V. Arnold

    So my take is tone it down a tad on your opinions – after 10 days – of what Yanis and Alexis should or should not do. See, I don’t see Yanis Varoufakis as someone who would come unprepared. I think for one thing the fact that he doesn’t come all dressed up to the nines for meetings with Osborne et al says he did prepare. You can just feel the likes of Osborne go: how come HE doesn’t have to wear the stiff stuff?

    Excellent, agreed…


    Zorba the Greek. Don’t get no better’n that!

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