Waiting For The Deus Ex Machina

Megan McArdle ponders the growing, ongoing Euro-debacle and warns that she is "having a hard time seeing how any of this ends well".

Hmm - I have a hard time seeing any of this ending.  Italy has had problems with its tax collections and public finance for my adult lifetime (their demographic challenge is a relatively new wrinkle, since that has only emerged in the last few decades.)  And Greece?  Tom Friedman delivers (yet another) howler, in a column with a title that is both question and answer:

Can Greeks Become Germans?

...It will take a cultural revolution. And that can happen only if Greece’s two major parties come together, hold hands, and collectively force through a radical change in the governing culture from the top down. Without that, Greece will never be able to pay back its loans.

Is that all it will take?  Then the suspense is over, because it won't be happening.

Germany was a pre-eminent industrial power before Kaiser Wilhelm and Hitler, and rebuilt to become one again afterwards.  Following WWII the Allies had some issues about the wisdom of allowing Germany to re-industrialize but none doubted their ablity to do so.  Recent Greek history is much less reassuring.

So what happens? High Euro-drama ending with a can kicked down the road would be my guess.  This is the Neverending Story... until it ends, of course.

Comments

[Pen Pal.]

Odyseus sit
Peninsulated, laden.
Blow winds, ill or well.
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[Minimalist Poster]

wasn't it really pretty much all over for the Greeks when the Romans came in?

[Captain Hate]

A house of cards collapses? Who'd a thunk?

[Cervajaria Centenario.]

Peninsular tongues
Wash the cask of Oporto;
Lisbo Adeus.
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[Clarice]

Germany's nuts to keep bailing them out.

[Emeralds, piled to the heavens.]

Erehwonowhere,
Eire we hardly knew you when,
Cobh hove to, harbor.
=========

[Ignatz]

--Germany's nuts to keep bailing them out.--

Isn't Germany bailing itself out; ie its banks.
Much like the radical community organizer in chief needed $350 billion to bail out BofA, Citi and AIG while railing against the fat cats?

[Cicero cries.]

Romulus, Remus
Carthage, so near a neighbor
Auger into dirt.
=============

[Orange, ain't it?]

If this is the last day, this must be Belgium.
======================

[Captain Hate]

Germany's always been the patsy in recent international economic deals. Remember the link of the Deutschmark and the franc? Yet they still do well.

[Ignatz]

A good post mortem and a bi partisan one, on Keynesianism.

[Ya see, they'd always had kultur. As for me, it's the same ol' Samos.]

MP, one Greek rhetorician thought is was over for Greece when he heard Cicero.
=======================

[fdcol63]

Friedman's top-down approach won't work. The cultural rot is too deeply ingrained in the Greeks. This rot is socialist in nature, where the Greeks and their unions have such a sense of entitlement that they strike whenever they have a minor dispute about wages or benefits, thus crippling their economy every time they strike. Sapping consumer and public confidence in almost every sector and making it a nightmare for tourism and other industries who rely on this confidence.

The Greek culture as a whole needs to change, which is the only thing that will effect long-term beneficial changes in their "governing culture".

[glasater]

Instead of looking to the book of Revelation for any help understanding the times we're living in--perhaps we should be looking to the book of Daniel in the OT.

[Minimalist Poster]

I see a photograph, something quintessentially, unmistakably Greek, yet everyone looks remarkably like Thomas Friedman. They’re all chanting, in unison, in harmony, “Greece needs to be more like China!”

[Sus]

FDCOL63: you are absolutely correct. I honeymooned in Greece back in 1992 and during one week, there was a taxi strike, a postal strike, a telephone strike and an airline strike. My husband and I joked at the time that it seemed that if the workers wanted time off, they just went on strike.

[Danube of Thought]

I was last in Athens in 1971 and it was a third-world country.

[pagar]

"Germany has always been the patsy."

Looks to me like the US gets identified pretty much the same way.

http://online.wsj.com/article/SB10001424052748704866204575224421086866944.html

[fdcol63]

Sus, my wife and I had similar experience on our honeymoon in Greece in 2001. My wife's parents came from Greece in the late '50's, from a small island in the Dodecanese near Kos and Turkey, and we had decided to go there and visit some of her family. But during our trip, they had a ferry strike, a trash strike, a telephone strike, and a hotel worker strike. LOL

[peter]

I was in agreement with everything that James Capretta says at the NRO Corner about the Gang of Six deal, until I got to the line where he uses the word, "small" and "$500 billion" in the same sentence. Is that where we are? Is half a trillion now small? Scary. I fear we are already done for. Where do we get our wheelbarrows for the scrip we will need to buy our loaves of bread.

[Porchlight]

So what happens? High Euro-drama ending with a can kicked down the road would be my guess. This is the Neverending Story... until it ends, of course.

Given Europe's history, how can it end without war? (Serious question.)

[Melinda Romanoff]

Porch-

Given the demographics, who will invade whom first, and, more importantly, how will they invade?

[MarkO]

But when does basketball start?

Contessa Brewer doesn't have a law degree. So perhaps the MSNBC host was unaware of the old cross-examination adage: never ask a question to which you don't know the answer.

Arguing with Rep. Mo Brooks today over raising the debt ceiling, Brewer attempted to discredit the Tea Party Republican freshman Member of Congress from Alabama by asking "do you have a degree in economics?"

"Yes, ma'am, I do. Highest honors," [from Duke] answered the courtly congressman

Read more: http://newsbusters.org/#ixzz1SfWTbrHN

[fdcol63]

Melinda,

They're already being invaded. By unassimilating Muslims, helped by multi-culti fetishists. That's the future of Europe.

It'll just be a slow seizure, not a quick invasion.

[Porchlight]

I don't know, Mel. Them folks is crazee.

[Captain Hate]

There was a C*ntessa Brewer thread at AoS yesterday; it's always fun to periodically rhetorically smack that cute little dimwit with an oversized caboose around. Kind of like taking batting practice.

[MarkO]

Apropos the thread title, deus Obama has just suggested that his genius leadership manifests itself in NOT presenting a plan for the deficit. Seriously, folks. I can’t wait to watch CBS run with this idea. Following this idea along, then, he could save the country by resigning.

Doom.

[jimmyk]

Italy has had problems with its tax collections and public finance for my adult lifetime

Italy is almost certainly on the wrong side of the Laffer curve, given that the culture there is to simply ignore taxes and laugh at people who actually pay them. If they cut the rates and stepped up enforcement a bit they would likely increase revenue.

[WarEagle]

So all you gotta do is bring instant change to an ancient culture.

What could possibly go wrong...

[matt]

Greece became a backwater sometime in the 2nd century B.C. by my estimate. They hit their high point at Thermopylae and it's downhill from there. By the time the Romans conquered them it was sort of like America visiting Europe and seeing how quaint it all was back in the longago times.

The issue is not just Greece, but the second division of the Europe League if you will. Greece are the 1962 Mets and their government is the metaphorical equivalent of Casey Stengel. But the Irish, Belgians, Spaniards, Italians, Portuguese, and Icelanders are right there with them now. My guess is that if one goes they all go.

In the meantime Sarkozy was in Berlin yesterday trying to craft some sort of deal with Merkel, but the Germans are getting seriously pissed off. At some point they will run out of money as well financing their shiftless co-Europeans.

Tomorrow is the day the central bankers are supposed to meet to work out a plan, so we'll see.Friday could be bloody in the markets.

[Melinda Romanoff]

matt-

Whoever leaves the EU first, wins.

[Ugly stuff over Peter B's way.]

Everyone who leaves the Euro wins. Except Great Britain, still stumbling foolishly down the Green Brick Road. The News of the World scandal even effects ClimateGate. A bigwheel in Outside Organization advised the University of East Anglia for damage control after the email leak, and may have been the source of the Russian disinformation.
==========

[Chubby]

Melinda

((matt-

Whoever leaves the EU first, wins.
))

That primarily means taking back control over their own money, does it not?

I tend to think that once they do that, there will be less anger in the streets. Problems yes, but possibly more resolve and willingness to solve them effectively.

[Janet]

-perhaps we should be looking to the book of Daniel in the OT.

Yeah!!, glasater

[Melinda Romanoff]

kim-

UK not in EU, only Ireland.

PL-

Yes, but bond holders might view that as a strategic default.

Whom ever decides to take the financial hit first will get the least of it, IMO.

[Ignatz]

--Instead of looking to the book of Revelation for any help understanding the times we're living in--perhaps we should be looking to the book of Daniel in the OT.--

Most Christian denominations I'm aware of consider many of Daniel's prophecies references to the same prophecies recorded in Revelation and Revelation makes many references to what Daniel says.

That primarily means taking back control over their own money, does it not?

--I tend to think that once they do that, there will be less anger in the streets. Problems yes, but possibly more resolve and willingness to solve them effectively.--

Once they have their own money they still won't have nearly enough of it to pay for what they've promised AND they won't be able to blame the EU or France or Germany for their problems anymore so there may very well be more anger.

[Chubby]

Ignatz

I see Greece dropping out of the EU as almost equivalent to people deep into negative equity in real estate doing jingle mail. Declaring bankruptcy often lets individuals start over. Greece may have had problems before joining the EU, but it seems their real problems happened when they were part of the EU. I haven't yet figured out how they will sell bonds if they miff current bondholders by what Melinda called "strategic defaults." Yes, I realize their sense of entitlement is a large part of their problem, but I think they would be more receptive to austerity if they were sailing their own ship.

[Ignatz]

--I see Greece dropping out of the EU as almost equivalent to people deep into negative equity in real estate doing jingle mail.--

Yeah, Chubby, but walking away from a mortgage only harms your credit rating, not necessarily your standard of living, especially if you still have your job.
It's hard for me to see how Greece gets out of this without a ruinous devaluation, whether de jure or de facto, and most of the jobs and benefits Greeks have were dependent on access to credit they will no longer have for quite some time.
A better analogy seems to me to be, not personal bankruptcy but fraud.
Greece told everyone they all had PhDs and they gave each other high paying jobs based on that lie. Then they got loans based on the salaries they were paying each other to continue paying each other and were living like the Vanderbilts on the funds borrowed on the original lies.
Now, not only are they going to go through a bankruptcy they're going to have to admit that, far from being doctors of 2500 year old dead philosophies, they dropped out of grade school and are only qualified to be herding goats and making cheese and will have the commensurate standard of living.

[glasater]

Thanks Janet:)

Ignatz-

I'm going back to dust off my annotated Book of Daniel:)