So the ECB and the EU (read: Germany) are wondering how to stave off a Greek default. They're debating a new aid package for the Greeks who, for years, have borrowed and spent and partied. The Greek government is trying to pitch in and has plans to cut civil service payrolls and pay as well as sell off parts of their bloated government*.
The Greeks themselves are going bonkers in the streets.
The German government is having an increasingly difficult time selling these bailouts to the German public. Now put yourself in the position of a German citizen and consider that video. What do you feel about the Greeks?
How long before you want to cut them loose and use the bailout money to save the German banks who made the bad loans, assuming you want to do anything at all?
It doesn't seem like the Greeks have any concept whatsoever about the source of wealth**. Right now, their future hinges on the rest of Europe sucking it up in a big way and sending them tens of billions of Euros so they don't end up bankrupt and growing vegetables on their apartment patios to survive.
Seen from a distant view, their behavior seems crazy. It's like they never learned anything practical about economics in their schools.
* - In a completely unrelated development, the US under Bush and Obama has gone in the opposite direction, taking over the mortgage, car and health care industries to one extent or another. There is nothing the US can learn from Greece. Nothing. It's a totally different situation, so don't draw any conclusions at all here. Really.
** - Hmmm. No idea about where wealth comes from. Who does that remind you of?
The problem with the Greek economy is simple and obvious: too many ATMs and airport ticketing kiosks:
ReplyDelete"[T]here are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers.
You see it when you go to a bank and you use an ATM. You don't go to a bank teller. Or you go to the airport and you're using a kiosk instead of checking in at the gate."
-- B. Obama
If we could just go back to the 18th Century... sigh
It occurs to me that one problem Greece has, is that they are a sovereign country. Which means that when they lay people off from government jobs, and there are not enough private-sector jobs, those people have to jump through the emigration/immigration hoops to go somewhere else. So their unemployment rate goes through the roof.
ReplyDeleteMeanwhile, in the US, when (for example) the Michigan economy goes down, the unemployed people can relatively easily pack up and go to Texas, or California, or even North Dakota if that's where the jobs are. I personally think that that has been one of the great historical strengths of the US - the freedom to go where you want, when you want, and to get employed wherever anyone wants to pay you. Which not only makes it easier for people who want to work to do so, but also evens out all the little local perturbations that would be major disasters in a small nation like Greece.