Tuesday, January 24, 2012

Too Greek to Fail

The Greek Debt Conundrum, conundrum being a better word than crisis, has now become what can be described only as Chancellor Merkel's Toy.

The Analysis

Have we been following Chancellor Merkel's Lead?  Yes.
Have things gotten better? No.
Have things gotten worse? Yes.
Conclusion:  Don't do that!

In addition I've described what has been happening in terms that I'd hoped would help people see beyond the balance sheet.  Why?  Because that is where the problem lies.

Merkelism:  An Economic System based on the fear that someone, somewhere is earning a living.  That somewhere is Greece. That someone is the Greek Bus Driver.

Merkelomics has been the strategy.  However, you cannot cut wages, fire people, raise property taxes, and call it a solution.

Only now are people starting to become restive.


It should be pointed out that Greece predates Europe. The Romans brought the Graeco-Roman culture to western Europe. From Egypt to England--perhaps not it the most gracious of manner--government, law, politics, trade, shipping, and so forth was propagated. (by the way, we all know what eventually happened.)

Santayana: "Those who forget history are doomed to repeat it."

Slim Fairview: "Those who never learned history are doomed--period.

Perhaps the Arab Spring is too recent.  Perhaps the Russian Spring is too current.

For the French: Bastille Day, Robespierre, The Committee for Public Safety.  However, as I've often said, "I learned more about management from novels than from textbooks,"  we have Danton's Death by Georg B├╝chner.  

The Lessons of the Revolution:  "They are suspect, we are suspect, all are suspect."

For those who forget what happened between 1917 and 1939 we have Dr. Borisz de Balla's Diary of Europe in Conflict (1939-1946).  In some interpretations, Eastern Europe did not embrace the Germans, they feared the Soviet Union.  Now, the chickens have come home to roost.  M. Hollande is criticising the economics of M. Sarkozy.  It is not M. Sarkozy's economics that are the problem. M Sarkozy's diplomacy is the problem.  He went to Berlin one too many times.  I admonished him. "Have the next meeting in Paris." The compromise?  The next meeting was held in Strasbourg. (Merkel wins again.)

The problem in the distressed nations is not capitalism. It is the dalliances with socialism.  In short, M. Hollande is not the solution.

"The Rise or Fall of the Middle Class is a leading indicator of a countries future well being." -- Slim Fairview

China: Rising middle class, rising economy.
India: Rising middle class, rising economy.
Soviet Union:  No middle class, no more Soviet Union.
U.S.  Declining middle class--follow the path of the trajectory.

However, the matter is more than money.  For those who are not familiar with American Television, in the early days, William Bendix played in a television series called, "The Life of Riley."  He was a blue collar worker complete with zip-jacket and lunch pail.  A few decades later, Carroll O'Connor played in a television series called, "All in the Family." He played Archie Bunker, a blue collar worker complete with zip jacket and lunch pail.

The former was a touching look at a man working to support his family, his friends, his community.  The latter was a brutalisation of the blue collar--middle class--worker.  The character, Archie Bunker, was portrayed as ignorant, opinionated, bigoted, and abusive.  This was supposed to accomplish a noble goal. What it accomplished was not noble.  It transformed America into a land where people got ahead to a land where people had to drag others down.  Why mention it?   Why indeed!

Look at the solution for Greece.   Keep cutting debt to make the GDP appear larger.  The economy cannot grown, the country cannot grow, the people cannot grown.  Soon, they won't be able to live.  The Middle Class is declining.  Follow the path of the trajectory!

"Those who forget history are doomed to repeat it."  -- Santayana

"Those who never learned history are doomed--period!" -- Slim Fairview

Ours was not a revolution of the Sans Culottes.  Ours was a revolution led by those who read Latin and Greek.  Who read the writings of the Greek and Roman philosophers.  Europe went on to produce more philosophers.  We went on to criticise them and laud Mark Twain who wrote Huck Finn (a racist tract) and Pudd'nhead Wilson--a new world ripoff of The Prince and the Pauper.

That is why I brought up a bit of history and culture.  Because I am writing this for European readers. European readers, not leaders!

Marketing Chancellor Merkel recently witnessed S&P (The Black Angels of Merkeldorf) fly through Europe spreading an evil spell:  The Downgrade.

If the ratings remained the same, Merkel could have claimed to have stemmed the tide.
If the ratings had gone up, Merkel could have claimed that her plan is working.

However, the fact that the ratings went down shows that conditions are getting worse.  What is a politician to do?  Claim that this proves that her plan is needed now more than ever.  "The medicine made the patient's condition worse. That is why the patient needs more of the medication."

Still, The Chancellor presses on.

I wrote, Merkel's Trojan Plan--Destroy Greece.  Sneak in under the cover of Bailout, then in the middle of the night, Greece's blackest moment, crush the economy, the people, the country.

Now, things are worse.

I had described one solution as a Ponzi Scheme: Go to China for a bailout. Go to the Middle East for a bailout.  Go to Brazil for a bailout.  Sound familiar? 

Then, Sarkozy's was Merkel's Artful Dodger.  Now, however, that the Artful Sarkozy failed to gather alms for the poor, Madame Christine Lagarde has been pressed into service as "Christina Twist"  Where Sarkozy failed to pick the pockets of the richer nations, Merkel has sent Madame Lagarde out in rags to beg for coppers.  This is not the first time that Madame has seized the opportunity to display both great humility and dignity.  Madame Lagarde handles herself well:  with dignity, grace, perseverance, and a commitment to duty.  And, we may presume, her duty to France, Europe, and the rest of the world.

Still, the problem remains.   The problem lies in the fact that everything seems to revolve around a growing web of Bureaucracies:  The ECB, the IMF, the EFSF, and the EMS. Each, no doubt, (perhaps) vital in its own right, together are far from "greater than the sum of their parts." More bureaucracy, more expense, more regulations, and--dare I say it--more lawyers. (Notice, I did not even touch on the subject of more politicians.)

Follow the Path of the Trajectory: Empires fall. Byzantine, Rome and, before Ronald Reagan declared the Soviet Union the Evil Empire, Russia had an empire under Ivan Grozny.  The Polish Empire, The Austro-Hungarian Empire, The Sun Never Sets on the British Empire, and so on.  However, things are much too interconnected today.  People are much closer. And, there is a new twist--The Internet.  There is now a new social order--a world without borders: Will it become Netopian or a Distopian world?  That remains to be seen.  None-the-less, the IMF declared a slowing of growth.  That is a Global call to arms.

My modest proposal--The Lender of First Resort--was intended to do two things.  Bring the world's economies closer through capital investment--not unlike China's capital investment in Portugal and Argentina--and empower the people of Greece, Portugal, Spain, Italy, et. al. by reminding people that privatisation is not a dirty word when the Greek bus driver owns stock in the company.  (I believe it is called an IPO.)

Greece need not fail. Greece need not collapse.  However, Europe needs to rethink the way it rethinks the solution. For this, we need to remember the strength of the European people lies with their unity.  With the rich traditions of literature, law, commerce, industry, culture, and pursuit, Europe cannot fail if the Europeans muster their resolve.  With no pursuit of Economic Development and Growth, not unlike that which I've been blogging about for almost a year, the end will draw closer, faster until there is no undoing the damage.  Merkel's solutions are the dripping faucet. Soon, the erosion will be irreparable.

My Mother taught me, "nothing for nothing."  It is no longer a question of Greece leaving the Union or Greece going broke.  Now it is a time to realise that perhaps the European people can no longer afford Germany.  That, or that they can no longer afford to follow Merkel's lead. 

Bon Chance.



Copyright (c) 2012 Slim Fairview. All rights reserved.