“Anybody can become angry – that is easy, but to be angry with the right person and to the right degree and at the right time and for the right purpose, and in the right way – that is not within everybody’s power and is not easy” – Aristotle
Athens is burning again. The Greek government has just “approved” a new round of austerity measures needed to get yet another hopeless bailout and the Greek citizens are rioting and burning things. We’ve touched on the ongoing Greek saga before (consider “Greece Fire” or “Gus Portokalos is Going to be Pissed“) but things seem to finally be coming to a head. The tensions have risen to the point where the Greeks are saying “we aren’t going to take this anymore” and the European bailout providers are also saying “we aren’t going to take this anymore” … it really only takes one of them to feel that way, but if both are saying it then we could see a change soon.
The tale is rife with ironies, but first let’s consider the backstory. Greece is hardly a world-class economy, with a much lower per-capita GDP than European powerhouse Germany (IMF 2011 estimates put Greek GDP at just under $28,000 versus $44,500 for Germany … America is at $48,000, for comparison). Now, if country A has a 37% smaller per-capita GDP than country B, one might expect a 37% lower standard of living. Naturally this won’t do.
As we discussed back in “Freedom, Equality, Pride, and Envy“, in a world of pride, where earthly wealth is the measure of value, if you have more than me then you must have oppressed me to get it. (I’m the greatest, you see [pride], and if I’m not measured as the greatest [wealth] it can only be because you’re an oppressor.) Not to worry though, the Greeks have an out. With the instantiation of the Eurozone, the Greeks found themselves, for a moment, able to borrow at the same interest rates as Germany, and borrow they did. They built up massive promises and benefits to public sector workers (that’s a lot of people in Greece) and to the general population. The politicians used the money to buy votes, and the people didn’t care – they were getting great promises out of it all.
It was all a lie though. Eventually it had to unravel. People producing $28,000 a year cannot live like they produce $44,500, at least not forever (remember that, America). With the unravel, the conflicts, ironies, and self-interests abound.
First there are the Greeks. I’m honestly not sure what their demands are. I can think of some reasonable demands, or some reasonable courses of action, but those don’t appear to be on the collective minds of the Greeks. Greece is bankrupt. It cannot pay back the money it’s borrowed. It will default. The Eurozone countries have offered massive, massive bailout packages to Greece in order to stave off the default. In exchange, they have demanded “austerity” – budget cutting measures. They have said “we will pay your bills for you, if you will agree to stop the spending spree” – and the Greeks are pissed. “But I was promised this money, these benefits, these goodies” … as if the promises of a politician are of any value at all.
The irony of it is that austerity will come. If Greece accepts the bailout they will have to cut spending (or lie about cutting spending, take the money and run – which has it’s own risks, such as war). If they do not accept the bailout, they will default, leave the Eurozone, and be able to borrow zilch on the open market. Translation: immediate and forced balancing of the budget. Now that is austerity. So austerity will come Greece. Do you want it to come fast & furious or slow & painful? (Suggestion – choose fast & furious, tear off the band aid, and get on with your lives.)
The next awesome irony is the Eurozone itself, and the Germans in particular. They too are pissed. Why? Well, you see Greece has not lived within its means. It has spent more than it has made for some time. Now the bill is coming due and the Germans (among others) are being asked to foot the bill. Their response is reasonable: “why should we pay for the Greeks? We managed our budgets, we cut our spending, we lived within our means, now we have to pay for people who didn’t? We have to pay for people who produce less so they can have a higher standard of living, just because we produce more? That’s not fair!” Agreed – welcome to socialism. Does it hurt, Germany? Do you feel the sting? This is your philosophy of governance. You and the entire Eurozone have lived as nanny-state socialists for decades and now, just now, you are finally seeing the injustice of it all. The heart weeps.
So why the bailout? If it doesn’t change things for Greece (austerity is coming no matter what), and it is wildly unpopular with the non-Greek-Europeans, why do it? The answer is simple: the banks. Bankers have lent billions to Greece and will be wiped out if there is a default. You see, the bankers are private citizens operating in a free market … when it comes to profit. But, if they ever face the pain of their mal-investment, if they are ever threatened with losses from stupid loans, then they operate in the public trust and must be bailed out by taxpayer dollars. Do the Eurocrats cook up this crazy scheme to give money to the Greeks so they’ll give it to the banks; sort of a third party bailout. The money is going from European taxpayers to European banks, through the Greeks as a conduit.
It’s a great game when you think of it. The banks have successfully found a way to get a taxpayer bailout and point public anger toward the Greeks, not the banks. Not to worry though, that game is all but up. What’s the next bit of trickeration to bail out the banks? I don’t know, but I’m sure the ruling elites will come up with some way to stick each of us with the bill ( … “Those who follow in my bloodline shall be bound to its fate for I will risk no hurt to the Ring”).
As the situation in Greece and then the rest of Europe starts to unravel, remember that these problems are man-made. This isn’t a famine, or tsunami, or volcano. This is a banking crisis.
Lowborn men are but a breath,
the highborn are but a lie;
if weighed on a balance, they are nothing;
together they are only a breath.
Do not trust in extortion
or take pride in stolen goods;
though your riches increase,
do not set your heart on them.
One thing God has spoken,
two things have I heard:
that you, O God, are strong,
and that you, O Lord, are loving.
Surely you will reward each person
according to what he has done. – Psalm 62:9-12