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A while back I was offered the golden opportunity to invest in a Sushi Bar in Hollywood.  There were celebrities involved and for a mere $15,000, I would buy my way in to a rock-solid investment that would pay me back in both cash and prestige.  Most of us have been in the situation at some point or another.  A wealthier friend offers us an opportunity to do something that richer people do and lays out a panoply of reasons why we should join them.  They can be very convincing.

Each times this happens to me, I go through the same internal struggle where the rational part of me understands that I'd have to be an idiot to participate while another, stronger, part of me, a part of me that has had a controlling interest in my psyche since pre-school, says: "The cool kids want you to be like them!"

What I consistently fail to realize in these situations is that, really, I'm not that cool and if they want me to join them, it's often because they need me for something.  This is always true when they offer to lend me the money, explaining that I can pay them back afterwards.

I've lost a lot of money that way.  Then again, I'm Greek, so maybe I'll chalk it up to national character.

In essence, this is the story that everybody's calling the "Greek Debt Crisis" and it isn't the first time the Greeks have been talked into poor financial decisions -- it's been happening for thousands of years ever since Pericles convinced the Athenians to spend the war treasury rebuilding the Parthenon.  There's something in our cultural subconscious that allows us Greeks to lose all sight of rationality when somebody talks pretty.

And it always seems to end with the crumbling of a Greek government and with the Greek people paying the highest price.

But this time the poor decision to join the Euro has also been used to bundle a whole batch of annoying Northern European stereotypes of their more swarthy Mediterranean neighbors into one big tangle of cuphineous allegations and accusations.

First of all it's not a Greek Debt Crisis.  In reality, it's a German, French, and American Bank Crisis.  The reality, which bears no resemblance to the media coverage, is that the Billions of Euros that are being "given" to Greece are not going to go to Greece.  They are going to go to Duetchebank and other institutions who lent the Greek Government money.  Calling it the Greek Debt Crisis is akin to saying that the TARP was used to bail out homeowners.  In our dreams, maybe, but completely not related to reality.

And just as the right wing in our country keeps pointing frantically at brown people who bought houses and tanked the economy, the establishment economists and politicians of Europe are all pointing at the lazy, ouzo-swilling, tax-avoiding, tavli-playing, coffee-slurping Greeks and saying, "Just look at them!  If they won't work hard like a good German, then they don't deserve our help."

Ok, the ouzo and coffee and tavli are all pretty much true but who can blame the Greeks for that?  They had 5000 years to develop good booze, good games, and good times.  

But the Greeks are also the 2nd hardest working country in the world behind South Korea.  The average Greek puts in 2,052 hours of work each year, which makes them a good 250 hours per year more industrious (or overworked) than us here in the USA.  

Part of the issue is that since the Euro, it takes more than one job to make ends meet.  Prices have tripled for the average Greek in the last 10 years and the Greeks tend to have more than one job to compensate.  It isn't uncommon for the average Greek to have two or three jobs that, together, add up to more than 40 hours per week.

And as far as taxes are concerned?  Sure, the Greeks hate taxes more than most, but until they joined the EU there wasn't a problem.   Seriously.  The Greek economy plugged along just fine between 1974 and 1999 even with almost half of the Greek citizenry secreting their stashes of Drachmas into off-shore companies and Swiss bank accounts.  The Greek Ministry of Finance and the Greek tax rates were built to accommodate the fact that they were dealing with Greeks.  

In short, Greeks had no problem being Greeks until the Great White North made them an offer they couldn't refuse.

"C'mon, Greece, you're European and you invented democracy," the cool kids said, "We know you don't have the economy or the currency situation or the infrastructure to be able to be successful in the Euro-zone, but we'll lend you the money until you get there -- it won't be any fun without you!"

Greece had been one of the original 10 members of the EEC, the European Economic Community, which was the free-trade zone that predated the transition to the EU.  Unlike Sweden or England, who joined the EU without adopting the Euro, Greece was not able to do so.  Greece's option was either to not join the EU (which would have been an embarrassing admission of 2nd-class status) or to join the EU and adopt the Euro.  So they entered and adopted the Euro.

But Greece's main source of income has always been tourism and one of the things that a tourist country relies on is being affordable enough for people to go there.  When we went in 1999, we could afford to go for 5 weeks and the average hotel room cost $30 per night.  When we went in 2007, we could only afford to stay for 10 days and the average hotel room cost $120 per night.  Food, transportation, and entertainment all rose commensurately.

It was hard on tourism, but it was even harder on the average Greek who suddenly became more interested in holding on to their meager wages rather than coughing up to pay taxes.

And since  Greece did not control its own currency anymore, they couldn't revalue it to save themselves.

And so here we are and this time instead of a Parthenon which will stand for the ages as the economy and government collapse, the Greeks have a few more highways, set prices in restaurants, and a crapload of cheaply built vacation homes that very few Greeks can afford to buy (before the EU, only citizens could buy property, but with the EU, Northerners turned the Greek islands into Europe's Florida) to show for it.

So what now?

If you're an average Greek, the answer's pretty simple:  default.  Leave the Euro. Take the hit and then take control of your currency.  Sure, there won't be any borrowing for a long time, but there will be tourism, autonomy, and Greek goods sold in the stores instead of Belgian ones.  

And there won't be four straight stages of imposed pro-bank and anti-worker austerity.

Much like in our own country, arguing that average people need to suffer to save banks from their own poor decisions is a loser's position.  Arguing that the wealthy shouldn't lose because the system they created has bit them in the balls shouldn't get much sympathy.  

If a friend offers to lend you $5.00 with interest so you can pay them back the $5.00 you owe them, they aren't a friend.

And default won't be a permanent scar on the face of Greece.  Argentinashows us that investors will return -- money goes where there is money to be made.

I took a bath on that restaurant, but I recovered and was better off as soon as I got out from under it and the same will be true for the Greeks.  

Bring back the Drachma:

Crossposted from my personal blog
Poll

Should the Greeks Default?

71%25 votes
22%8 votes
2%1 votes
0%0 votes
0%0 votes
2%1 votes

| 35 votes | Vote | Results

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Comment Preferences

  •  Tip Jar (15+ / 0-)

    Credulant (adj): Something that is not fully credible because it is unsourced but it sounds true so it is accepted without argument.

    by xajaxsingerx on Mon Nov 14, 2011 at 06:01:36 PM PST

  •  nice diary (2+ / 0-)
    Recommended by:
    Pluto, daveygodigaditch

    I feel smarter than before I read it

  •  Excellent. (1+ / 0-)
    Recommended by:
    daveygodigaditch

    Thanks for a fascinating perspective.

  •  Honestly, when I watch Bloomberg TV, (2+ / 0-)
    Recommended by:
    G2geek, phonegery

    I'm kinda astonished at the venal attitudes towards Greece, and now, Italy by both Americans and the Northern Europeans. Financial "analysts" speaking about these two countries as if they were filled with stupid, worthless peasants who should be grateful to called Europeans.

    Yes, keep EUROPE together - at any price. Austerity under the "technocrats" will probably destroy both countries for a long time but hey, - they get the priviledge of being in the club called EUROPE.

    I agree 100% they need to default as of yesterday,

    •  "they need to default" (0+ / 0-)

      Italy can pay her debts, which are mainly owed to her own people.

      In Greece, on the other hand, the national debt has gotten out of hand.

      Greece can never repay the loans and probably not even make her lenders whole over 20 years even at 2% interest.

      Greece should be able to decide among the bad choices she has what she wants to do, but I felt that she should have defaulted months ago, and that was probably months too late.

  •  I've spent literally months (1+ / 0-)
    Recommended by:
    SingleVoter

    reading about the Greek Debt crisis. This brief diary helped me understand more than all that previous reading.

    music- the universal language

    by daveygodigaditch on Mon Nov 14, 2011 at 07:39:44 PM PST

  •  Greece and Europe need to make (0+ / 0-)

    it possible for Greece and Greeks to live with the Euro.

    New drachmas will fall in value like a rock and Greeks paid in drachmas will yearn for the days of austerity and 500 Euros a month.

    Greek hotel prices must be made competitive with hotel prices in Spain and Italy and a country I won't name.

    Some sort of balance trade agreements like the American/Canadian balanced auto-trade agreements need to be put in place.

    Greece might import two billion Euros of cars and make two billion Euros worth of car parts annually.

  •  Read about life in post-default (2+ / 0-)
    Recommended by:
    G2geek, phonegery

    Argentina:

    http://www.silverbearcafe.com/...

    I would hope it would never get so bad in Greece.

    •  The fast inevitable, or the slow inevitable. (0+ / 0-)

      "Austerity" is just another word for the shit hitting the fan by slow degrees.  

      When it happens fast, people pay attention and deal with it, usually by immediately reverting to tribalism as a darwinian advantage.  

      When it happens on the slow plan, they go down like cats fighting in a sack: the war of each against each, all against all.

      Try telling your kid "No you can't have that computer game because we don't have as much money as we did last year," vs. telling them "No you can't have it because there's a tornado bearing down on the house right this moment and we have to head to the storm cellar."  

      "Minus one vote for the Democrat" equals "plus one vote for the Republican." Arithmetic doesn't care about your feelings.

      by G2geek on Tue Nov 15, 2011 at 03:02:47 AM PST

      [ Parent ]

  •  Not every hour of work is equal (0+ / 0-)

    A German auto executive might easily work 2,600 hours a year, but a German auto assembly line worker might go home dead tired just about every day he works in a 1,750 hour work year.

  •  I give them some sympathy, but not too much. (0+ / 0-)

    Just like when they blew the mortgage payment on the way overspent Olympic Games (I heard instead of $6Billion, actually >$20Billion was blown), much of the money now owed was skimmed off by the Greek 1%'ers, and never did much for the average Greek anyway.
    It is a democracy, it's up to the voters to educate themselves and make much better choices, not that we are doing any better.

    "Double, double, toile and trouble; Fire burne, and Cauldron bubble... By the pricking of my Thumbes, Something wicked this way comes": Republicans Willkommen auf das Vierte Reich! Sie Angelegenheit nicht mehr.

    by Bluefin on Tue Nov 15, 2011 at 12:26:13 AM PST

  •  A row of dominoes that need to fall. (0+ / 0-)

    The single best way to stop this globalized, inside-out bank heist --- where the banks victimize themselves and leave it to the rest of us to serve as both criminal and prosecutor --- is to bring the whole Medici-centric thing down.  Greece is in the perfect place, and has reached the perfect moment, to be the "first domino" in the long line that could make it finally happen: Freedom from the profiteers.

    A long time ago, I remember an article concerning the USSR, in which a similar set of conditions existed. The theory proposed at that time was that Moscow faced a choice between two paths, the first being a "stay-the-course" mentality that would lead to the eventual collapse of the Union and the rise of a corrupt, Mafia-like monied class, and the second being a single-strike assault on the entire West by simply instituting a new currency --- the "Red Ruble" --- and setting its initial value at several hundred times the exchange value of the then-current ruble, thus causing all of their foreign debt to evaporate in a heartbeat.

    As the West tried to recover from this initial shock, Moscow would go on a global spending spree, paying for everything under the sun with their new "hard currency" and, once well stocked with enough stuff to rebuild their infrastructure, allow the new ruble to crash back to its "pre-Red" value, thereby inticing an unbelievable-large influx of tourism currencies --- and then buying back all those once-inflated rubles for less than a penny on the dollar, so to speak.

    If you think it can't work, then think again --- because it's what the Godzilla-banks have been doing to the entire world since Reaganomics invented "trickle-down...."

    I count even the single grain of sand to be a higher life-form than the likes of Sarah Palin and her odious ilk.

    by Liberal Panzer on Tue Nov 15, 2011 at 02:26:54 AM PST

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