Thursday, May 13, 2010

Thw Greece Trap

The We're-Not-Europe Party
The bill comes due for a life of fairness at the expense of growth.


Dan Henniger's WSJ article "The We're-Not-Europe Party" set me to thinking.  I bet that very few of us understand why Greece's financial collapse is important to us, or what caused it?   I've cobbled together a rudimentary package that will answer these questions in less than 20 minutes time.  (Note: As I grow older I am convinced that anything more than rudimentary becomes someone's self-serving excuse, so KISS is good). Let's begin, as did I,  with the video of Henniger's article


(print edition is here).
II
The Greek Economy Explained
Greece Hates Business

If you want to understand the reason, as good a source as any is the annual World Bank "Doing Business" survey for 2010. The spark for this financial crisis has been decades of overspending and cooking of the public books, but the survey reveals the underlying causes of the Greek disease.

In terms of overall ease of doing business, Greece comes in 109 out of 183 countries around the world. It is dead last among the 27 members of the European Union as well as the advanced economies in the OECD. You have to go up 30 slots to find the next worst EU performer, Italy. The U.S. ranks fourth and Singapore is first.

Note: The way we're headed, California's "We're # 1" will become a national cry.

III

IV
We Don't

While we root for Europe’s success, because a strong European economy benefits America, it’s worth nothing that the EU was created to be an economic competitor to the United States. Therefore, while it may be appropriate for the EU to pay for these bailouts, the same logic doesn't apply to America. President Obama should extricate the U.S. from the gathering storm of European bailouts which will only delay the fiscal reforms that are necessary for long-term recovery.

Even at this late hour, the Obama administration has considerable power to stop the U.S. from going down this ruinous road. Under current IMF rules, the United States needs only one other IMF member to oppose the bailout to defeat it. Therefore, we are calling on President Obama to publicly oppose the $145 billion Greek bailout, and refuse to participate in any larger European bailout which may be forthcoming. [continue]

Quiz Tomorrow


2 comments:

DougM said...

"Ameria is not Europe
and hasn't been since 1776.
That's the whole friggin' point of America."
—DougM
(Turing word: inonionv, where we've been since 11/08 for the fifth time)

tom said...

The only point in helping the Greek economy, with any sort of bailout, is to make sure that the rest of the Euro-based countries can still buy our products. Period.
If Greece was allowed to tank the Euro, where would we sell any of our stuff? China? There could be a world-wide recession, worse than currently exists. Cod-liver oil for you, Greece. Take your medicine.
That is simplification, but the general idea.
OTOH, the Euro is in competition with the dollar as the worldwide recognized standard of value[ain't that a joke!], and as such, BBLs of oil would be priced in Euros rather than dollars, along with other worldwide commodities.

[I just hope the lame duck Congrefs does not take the opportunity to enact self-destructive legislation as their going away present.]
Come on November!!!!!!!!!
tomw

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