In continuing to read about the Greek debt crisis, I came across this post regarding Germany's attitude towards the Greeks.
A short item, which takes the breath way, on how the problems of countries like Greece has encouraged the German government to insist that unless these countries are as economically "fit" as Germany is or claims to be, they cannot participate in EU decisions.The post and the comments below it are filled with the sage nodding of heads and the general agreement that those pushy Germans are at it again, trying to lord their position over the smaller countries. This is just economic bullying, they say. That attitude is not confined to this site, it's common to all of the blog posts I've read on the subject.
Well, I guess such a comment makes it explicit that as far as Germany is concerned, the strong states rule, and the weaker ones should shut up and do as they are told.
It's also indicative of the societal problems that lead to the debt crisis in the first place.
Greece has been reduced to crawling on all fours, begging for handouts because they blew their money on garbage, borrowed more, blew that, borrowed more, blew that and so on until they had racked up such a mountain of debt that there was no way they could make the payments. In well-run families and businesses, debt is used to acquire things that will provide a long-term payoff such a real estate or new plants and equipment. In poorly-run families and businesses, debt is used to meet immediate needs.
Greece has borrowed for years to meet immediate needs. If their borrowed money had been invested wisely, their GDP would have risen to the point where they'd be making a profit and they would have paid back their debts and gone on to create a surplus to cushion future crises. Instead, they just blew the money.
Now that they're slithering up to everyone's door, asking for handouts, the sympathy in the comments of these posts is ... with the profligate Greeks and not the shrewd Germans.
And that's how we got here.
debt is used to meet immediate needs
ReplyDeleteI have compassion for people that have to resort to debt for needs. I have less for people that resort to debt for immediate wants.
BTW, the Greeks are always going on about the Germans, because they invaded during WWII. Kind of opportunistic, because it was actually the Italians who invaded Greece. Hitler had to bail the Italians out because they couldn't handle the Greek army. Guess there's about as much point in askig the Italians for money as for military expertise.
Jeff, I can understand having to borrow when you're in serious trouble, but to make a regular habit of borrowing to meet normal payments is a sure path to catastrophe.
ReplyDeleteAbsent some unexpected crisis like the loss of a job or illness, having to borrow to meet needs is a symptom of having turned wants into manufactured "needs" through excessive consumption.
ReplyDeleteBut I also have compassion for folks with real needs who can't meet the monthly mortgage or grocery bill, and what with the current unemployment levels, there are a lot of those around.
The Greeks, however, are a sovereign version of the state government of California, for whom I have zero sympathy.