I was delighted when I read the article Beware of Greeks Bearing Bonds. All the quotes below come from it. While the author thinks the Greeks suffer from a unique moral disease. I think they’re simply farther along the road to collapse than us.
Greek government bonds are rated as junk bonds. This isn’t a problem for Greece, because it can still borrow money from other governments. Greece is now a ward of other states.
Here’s what a senior IMF official said about Greece, “Our people went in and couldn’t believe what they found. The way they were keeping track of their finances—they knew how much they had agreed to spend, but no one was keeping track of what he had actually spent. It wasn’t even what you would call an emerging economy. It was a Third World country.”
That reminds me of Enron. This kind of thing is much more common than you think and getting worse. It’s only the rare case that you hear about. The economy is like Swiss cheese. Mostly empty space, when everyone thinks it’s solid.
“In addition to its roughly $400 billion (and growing) of outstanding government debt, the Greek number crunchers had just figured out that their government owed another $800 billion or more in pensions. Add it all up and you got about $1.2 trillion, or more than a quarter-million dollars for every working Greek. Against $1.2 trillion in debts, a $145 billion bailout was clearly more of a gesture than a solution. And those were just the official numbers; the truth is surely worse.”
Reminds me of our bailout in America. If you’re going to try to have the government stimulate the economy through deficit spending then spend enough so it matters. If you’re not going to do that there’s no point.
“The average government job pays almost three times the average private-sector job.” Also a trend in America. Especially, as the average pay of private sector jobs sink. Never mind the additional benefits of not having to work hard and of being almost impossible to fire.
“The Greek public-school system is the site of breathtaking inefficiency: one of the lowest-ranked systems in Europe, it nonetheless employs four times as many teachers per pupil as the highest-ranked, Finland’s.” We keep spending more and more money on the schools in America and the results are worse and worse.
“The retirement age for Greek jobs classified as “arduous” is as early as 55 for men and 50 for women. As this is also the moment when the state begins to shovel out generous pensions, more than 600 Greek professions somehow managed to get themselves classified as arduous: hairdressers, radio announcers, waiters, musicians, and on and on and on.” This is exactly like government worker retirement in America, especially California where their pay in the last couple years is artificially inflated so as to receive a higher pension.
The state railroad system runs at a huge deficit. “Twenty years ago a successful businessman turned minister of finance named Stefanos Manos pointed out that it would be cheaper to put all Greece’s rail passengers into taxicabs: it’s still true.” This is true of so many services in America. Private schools would be better and cheaper than public schools.
“Where waste ends and theft begins almost doesn’t matter; the one masks and thus enables the other.” I just love this statement.
“Oddly enough, the financiers in Greece remain more or less beyond reproach. They never ceased to be anything but sleepy old commercial bankers. Virtually alone among Europe’s bankers, they did not buy U.S. subprime-backed bonds, or leverage themselves to the hilt, or pay themselves huge sums of money. The biggest problem the banks had was that they had lent roughly 30 billion euros to the Greek government—where it was stolen or squandered. In Greece the banks didn’t sink the country. The country sank the banks.” This is hilarious.
When the new finance minister came in the estimated budget went from 7 billion euros to over 30 billion in a week. Rather than being shocking it’s quite understandable. If you’re only worried about the short term and simply fabricate whatever numbers are necessary there’s no need to keep track of such things.
“The party in power simply gins up whatever numbers it likes, for its own purposes.”
“The first thing a government does in an election year is to pull the tax collectors off the streets.” This is just the next step to promises made by politicians. Every election they promise and don’t deliver. Obama promised to fill the country with magical rainbows. He didn’t deliver.
“The Greek people never learned to pay their taxes. And they never did because no one is punished. No one has ever been punished. It’s a cavalier offense—like a gentleman not opening a door for a lady.”
This is the same as America applied to the small scale. The big guys get away with whatever, while only the small guys get nailed. In Greece no one gets nailed.
