Zorba the Debtor
[courtesy Google Images]
I admired the Greeks’ stand against the bankers.
• But, today, I see an article in MarketWatch.com entitled “Greece asks for 3rd bailout in last-minute diplomatic push” which significantly diminished my former respect for Greece.
According to that article,
“Greece on Tuesday asked for a new bailout amid a last-minute diplomatic push to seal some kind of agreement before the country’s current rescue deal expires and it defaults on a payment to the International Monetary Fund.”
I get the feeling that the Greek government didn’t “ask” for a new bailout so much as “beg” for a new bailout. I don’t admire professional beggars.
“The Greek government submitted a proposal for a two-year agreement with the eurozone bailout fund in order to cover its financing needs and restructure its debt, according to a statement issued by Prime Minister Alexis Tsipras’s office.”
By “restructure its debt,” they mean persuade the creditors to “voluntarily” cut the amount of money owed by Greece. If the creditors “voluntarily” agree to reduce the amount owed, then it will be presumed that Greece didn’t actually default on its debt obligation. That’s a lie, of course
The dreaded “default” will only occur if the creditors insist on being paid in full for the remaining debt.
The creditors—who already agreed two or three years ago, to cut the Greek debt by 53%—are not enthusiastic. They know that, despite illusions to the contrary, Greece has been insolvent for five years and isn’t likely to repay most of its existing debts or any new debts incurred over the next few years. Giving money to Greece is like giving money to a crack addict. Don’t expect to get it back anytime soon.
“While European officials have said that a new aid program would be possible, it would require Tsipras to accept the policy overhauls and budget cuts he has so far rejected. Many officials also don’t trust Tsipras and his government to implement these measures.”
Does anyone seriously believe that Greek Prime Minister Tsipras is doing anything other than trying to string the creditors along in order to get more money? Does anyone believe that the Greek people (who voted the previous government out for arguing that the Greeks should pay their debts) won’t eject Tsipras if he dares to impose more austerity on the Greeks to pay the bills?
Of course, Tsipras can’t be trusted to do much more than grab the money (if he can) and not pay the resulting debts.
• I’m losing whatever respect I had for the Greek government. The Greek Minister of Finance Varoufakis is said to be a master of “game theory” and apparently thought they could “out-game” their creditors.
Well, money is no game. Neither is politics. Neither is economics. The current Greek government has been playing games for five months. The Greek people have been playing games for five years. It was great fun while it lasted. But, now, they’re out of time, the “game” is over, and, apparently, their mastery of “game theory” hasn’t helped them get more loans or avoid a default.
So, now, they’re asking, “pretty please, give us some more money.”
One of the reasons why they’re asking (begging?) the IMF and ECB for more money is probably that Russia is not inclined or able to deliver as much foreign aid as Greece had expected. So they’re back at the IMF’s door, hat in hand, begging for a few more years of free lunches.
In doing so, the Greek government and people are showing themselves to be parasites and institutionalized welfare-recipients who believe they’re entitled to another free lunch, another welfare check, another subsidy, and should never have to work hard enough to pay their bills. They’re fools.
The Greeks overplayed their hand. I don’t criticize them for doing so. But I do criticize them for “playing” their creditors and the world for five months, and now, at the last minute, trying to play us all one more time.
Greece has been broke for years. It’s been playing “extend and pretend” for years. Now, barring the unforeseen, the Greeks will have to stop playing. Now, they’ll have to accept responsibility and pay the price—economic depression—that all bankrupts must finally pay.
The Greek people are going to learn that if you want something, you must work hard enough to earn it—that you can’t spend your life waiting on yet another handout from the government, the IMF, the ECB, etc.
If you’re going to play the welfare game, you need to accept the fact that welfare and government subsidies are Ponzi schemes that must inevitably collapse. Sooner or later, there’ll be more non-productive people collecting government checks than there are productive people able to fund those checks. When that happens, welfare- and subsidy-recipient will learn they either have to earn enough to pay for their “free lunches” or accept austerity go hungry.
Most of the welfare schemes, early pensions, and free lunches that the Greek people have voted for are about to disappear. The Greeks are about to learn that they are personally responsible for their economic fate. They won’t like the lesson. The pain will be intense.
But, once they realize that the only way out of their predicament is their own hard work, once they abandon their welfare government, they’ll be OK. It’ll take a few years, but they will (mostly) survive.
In the meantime, Greece has played the fool. Now it will pay the fool’s price: poverty.
• I could respect Greece if it accepted its fate with some dignity. It’s like going out and getting stinking drunk on Thursday night and then complaining all day Friday about the lousy whisky causing your hangover. Look, the whiskey didn’t cause that hangover. You earned your hangover fair and square by choosing to get drunk. You should suffer through your hangover with a modicum of dignity.
Greece is about to suffer an economic hangover. Like whiskey, the creditors played a role in getting Greece drunk. But in the end, all Greece had to do was “just say no” to taking more loans. However, they took the “easy money” that’s “easy” to take but hard to repay. And now they’re going to suffer an hangover. To me, they should suffer with a little more dignity and learn, rather than reject, their lesson.
Instead, they’re back begging for a hair of the banker that bit them. They’re back at the IMF’s door with their tin cup, begging for just one more shot of monetary handouts.
• When the Greeks stood up and challenged their creditors, I admired their courage.
Now they’re back begging.
They inspire my contempt.
• The lessons in the Greek crisis aren’t merely about borrowing more than you can repay. They’re not even about creditors being dumb enough to lend to people who can’t and won’t repay. Fundamentally, the Greek debt crisis is about big governments that grow to irrational sizes by making promises (“unfunded liabilities”) to voters that can’t possibly be kept.
Ultimately, the big loser in the Greek debt crisis will be big government, the left, socialists and communists. They are all going to be shown to be incapable of keeping their promises—not only to foreign creditors but also to domestic pensioners and welfare- and subsidy-recipients.
When it’s finally undeniable that the left can’t deliver the promised supply of endless free lunches, the Greek people will turn on the left, reject communism, and quite possibly run to fascism. That “run” could be bloody.
It could also be instructive.
For example, America’s big government is more deeply indebted than the Greeks’. By some estimates, the US government owes over $200 trillion in “unfunded liabilities” that can’t be paid and won’t be paid. When American welfare-recipients, subsidy-recipients and retirees find out that—Surprise! You’re not going to get the money and pensions that were promised to by our big government!—they’ll riot.
Therefore, there’s a high probability that we should watch Greece carefully for the next year or so. Whatever happens in Greece, will probably also happen here. We could learn from the Greeks’ mistake.
Or, we could get drunk, dance like Zorba, break some plates and holler, “Hoopa!”