Wednesday, May 19, 2010

An American View of Greece

Recently, my father traveled to Greece. He's an extensive world traveler who has visited every continent except Antarctica. There are many countries he loves to visit, but probably his favorite place to travel to is Greece. He has been on multiple occasions, usually to visit his Orthodox friends on Mount Athos. I wanted to talk with him regarding the recent protests that have engulfed Greece in the wake of their economic debt crisis that has lead to strikes and riots.

"They go on strike for just about any reason over there", Dad remarked regarding the recent May Day strike. "This time was the worst". Dad had a friend who invited him to take a side trip over to Macedonia to see some of the churches there, then he planned on returning to Greece May 1. He fell in love with Macedonian culture, enjoying their festival of parades and picnics which contrasted starkly with the chaos in Greece, where buses and trains were on strike. Getting back to Greece required paying a taxi 50 euros to travel 75 kilometers just to get across the border to the town of Thessaloniki. But the real killing came within Greece where he had to get another taxi in Thessaloniki to get near Mount Athos, which cost 130 euros to travel half of the previous distance!

Why does he think they're having such problems in Greece? My Dad read an article he thought gave a simple explanation. I believe the writer made some good points about the unsustainability of the extensive social safety net for Greece and other poorer countries within the EU like Spain and Portugal. But I disagree with him about the cause; they have had poor economic growth, but you can't blame it on slow population growth. Greece actually had negative population growth from 1992 to 2001, yet didn't experience nearly as much turbulence as they do now. The elephant in the room is slow resource growth, or as Richard Heinberg would say, Peak Everything.

I do agree with the writer's concern about the EU keeping Greece and other poorer countries on board and resorting to hyperinflation in a futile attempt to bail them out. Our debt situation really doesn't compare to the EU as far as health care and college tuition because, as the writer hints at but doesn't quite grasp, we have a "strong central government", which is code for the almighty Federal Reserve. Obama HCR won't kill the Federal Reserve. VAT won't kill the Federal Reserve. Higher education costs won't kill the Federal Reserve. But hyperinflation might. We really don't have inflation in this country that has reached the level of economic constriction that we saw during the Ford and Carter administrations. But if the EU resorts to inflationary measures (which is what the 750 billion euro assistance fund is the start of) and Greece or others default, this could spread globally and then our All-American Fast Driving Buy Now Pay Never Society funded under the fiat printing arm of the Federal Reserve really could be in jeopardy of extinction. Which ultimately, in the face of permanent resource contraction within an Infinite Growth Paradigm, is not necessarily a bad thing.

"They went overboard and overextended themselves", Dad observed regarding the EU. "They're doing a lot of things wrong, they expect too much but they can't afford it". I asked him what he thought about the possibility that James Howard Kunstler floated recently on his blog that Greece might resort to communism. "As far as I'm concerned, they're really close to it, they're crazy over there", Dad lamented.

I believe these BBC photos document that craziness:

In pictures: Greece protests

Protester throwing rock
A protester throws a traffic sign at riot police in front of Greece's parliament building in Athens, 5 May, 2010
Bricks, rocks, broken bits of marble and even petrol bombs were used as missiles against the police.


Tanya @ TeenAutism said...

As another lover of Greece, this is such disappointing news. I appreciate your insight in this post.

Robert Paulsen said...

It is sad and scary. I've never been to Greece myself, but I am afraid for them.