Tag: Greece

folly

Shocking Consequences

Greece Surprised, Greek, spending, crisis, debt, EU, collage, photomontage, Paul Jacob, http://cognitivebiasparade.prosite.com/, political, politics

Five years into (the latest phase of) the Greek debt crisis, a former bureaucrat who was unable to withdraw her money from an ATM when the government declared a bank holiday had this to say: “How can something like this happen without prior warning?”

It’s always a surprise — to some people — when blatant causes lead to blatant effects.

In the case of Greece, or any socialistic welfare state, it’s a surprise when the money finally runs out. So accustomed to binge behavior, enthusiasts for “what’s thine’s mine” and “spend now/pay later” politics are nonplused when there’s nobody left to temporarily rescue them from the worst wealth-destroying effects of all the productivity-destroying causes.

The woman’s question has a short-term answer and a long-term answer.

The first is: what did you expect? The point of suspending access to bank accounts without warning is to stop holders draining banks of the last of the euro cash, supply of which the Greek government cannot expand unilaterally. Warning would have made the suspension pointless.

The second answer is: what did you expect? That is, haven’t you been paying attention for the last several decades?

By the time you read these words, Greece and the European governments may have come up with another patchwork deal for a loan with another series of deadlines. Or maybe Greece will have left the EU or at least the euro and returned to a (now massively inflated) drachma. Greek account-holders may or may not get another rickety, temporary reprieve.

But what can’t go on forever, won’t.

So it won’t.

Count on it, ma’am.

This is Common Sense. I’m Paul Jacob.

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Tags debt, economics, Europe, European Union, Greece, socialism

free trade & free markets too much government

Greek Recipe for Disaster

Several years ago, Despina Antypa and her husband worked at a leading newspaper in Athens.

Then came the economic crisis.

The bad news was “just a whisper” at first. But when friends began losing work, she had the foresight and discipline to plan a new career. One unrestricted by language or country — just in case they ever had to leave Greece. She chose pastry, taking classes every weekday for two years, practicing techniques on weekends.

Sure enough, in 2011 the couple lost their own jobs. Despina threw herself into the task of confecting a signature delicacy good enough to sell; some 3,000 trials and errors (“mostly errors”) later, she was satisfied.

Then came the work of developing a website, packaging, selling.

Orders poured in. The labors were paying off. Except that—

The business was killed in its crib by bureaucrats.

The Greek government demanded a lot, including

advance taxes equal to “50 percent of estimated profit in the first two years” (money never to be returned were the business to fail);
minimum square footage for her shop much greater than necessary; and
a separate toilet for walk-in customers (although there would be no walk-in customers).

The arbitrary burdens proved too great. In 2013, her husband got a job offer that meant moving to Brussels. They jumped at the chance. There they forged the new life they could have forged in Greece — had they been allowed to.

It seems that the road to recovery is not helped by hobbling the runners.

This is Common Sense. I’m Paul Jacob.

Tags Greece, pastry, regulation

ideological culture

The Wild Punch

Who hasn’t wanted to punch a politician?

But a fracas in Athens, Greece, yesterday, demonstrates that punching people, not to mention threatening them with firearms, is a bad idea, and too often apt to harm the wrong people.

In this case, the pugilist, Giorgos Germenis, was himself something of a “wrong person.” He’s one of 18 lawmakers in the Greek parliament representing the Golden Dawn Party, which is often described as “neo-Nazi” for its ugly nationalist, anti-foreigner sentiment — and for an awfully suspicious party logo.

Germenis had been part of a charitable effort held in Syntagma Square to hand out free food … but only to Greek natives! The government shut down the giveaway, and the scuffle, hours later, was part of the fallout. Reportedly blocked from reaching for his gun by security, Germenis threw a punch at Athens’s mayor, Giorgos Kaminis.

He missed the mayor, but hit a young girl.

Bruised, but not seriously hurt, the 12-year old did manage to escape becoming the centerpiece of the showdown between the anti-foreigner activists and the Athens City government.

Greece’s troubles don’t really have much to do with foreigners. Greek troubles, instead, have everything to do with Greek politicians, and the sad, once politically attractive but now quite bankrupt (fiscally and morally) habit of trying to live at the expense of everyone else.

Blaming foreigners is the wrong way out. (Here in America, too.)

Germenis’s group should have been allowed to give only to natives, but a hallmark of civilization is the respect for strangers, traders, wanderers. The Golden Dawners don’t have their hearts in the right place.

Which is shown by the wild punch and who it hit. An innocent. As usual.

This Common Sense. I’m Paul Jacob.

Tags Athens, Giorgos Germenis, Golden Dawn, Greece

too much government

The Greek Misprize

Sometimes a great misunderestimation.

George W. Bush’s “misunderestimate” still has a jolly ring to it, in my ear, just as does the common barbarism “irregardless.” Yet I realize that, in both cases, the prefix adds no new meaning to the word it would seem to modify.

Regardless, underestimation is today’s theme.

Matthew Feeney, at Reason.com, notes the shock-without-awe of the Greek government’s 2013 budget, just released. “The budget is worse than the 2010 projections,” he notes. And that simple statement almost qualifies as understatement:

The IMF had been hoping that the Greeks would manage to get their debt to GDP down to 120 percent by 2020. Considering that the newest budget projects a debt to GDP rate of 184.9 percent in 2016 it is unlikely that this goal will be reached.

That 184.9 percent figure was revised up from previous estimates of 179.3 percent.

The amount of debt is now way beyond the country’s annual income, as measured by GDP. I’m not one to rely heavily on GDP figures, but we need some comparison, and a market/private sector income figure would not make the 2013 ratio look any better.

And this is not a new thing. The Greeks have been underestimating their debt-to-GDP ratio for years now, as a nifty graphic from Zerohedge shows.

When a country is as overladen with government workers and other tax consumers as Greece is, this is to be expected. Zerohedge was right in 2010, to note that “Greece just got bailed out so it can get into even more debt!” At some point, hope morphs into fantasy and misunderestimation of future insolvency becomes a way of life.

This is Common Sense. I’m Paul Jacob.

Tags debt-to-GDP, financial estimates, Greece, insolvency, sovereign default

national politics & policies responsibility

A Loan of Common Sense

If you give something that belongs to you, without expecting to get it back, that’s giving. You just hand over a gift and forget about it. Perhaps you would appreciate a “thank you.”

If you lend to someone, you expect to be repaid. Those who don’t repay are called deadbeats.

If you mug somebody on the street and grab his wallet, you are stealing. You are then a thief, a robber.

That’s all straightforward enough. This is not: Say that you steal from the productive citizens of one country or countries (Country or Countries A) and give the dough to the fiscally irresponsible government of another country (Country B), and you call it a loan. But when Country B can’t pay the installments, it is provided another loan originating in the wallets of the very same Country A citizens from whom was extracted the original loan.

What is this? You are not only stealing, you are shuffling IOUs instead of getting repaid. You are also misrepresenting the nature of the transactions, for it is clearly a gift of stolen money and not anything voluntary, like a loan.

Bill Wilson, President of Americans for Limited Government, goes into a bit more of the nitty and gritty of Greece’s tricky tranche of “repayment” on its “loan” from the European Union, and relates it to the similar finagling here in the United States … which all rests on credit expansion by the Federal Reserve. “The eggheads in Washington, D.C.,” he says, offer only one solution: “just keep digging.”

But how deep? At some point it gets too hot down there.

This is Common Sense. I’m Paul Jacob.