- Greek politicians, like most other progressive politicians the world over, want to purchase political power and support by handing out entitlements to their constituencies. These entitlements can be benefits, subsidies, or advantageous work rules. They also side with the special interests, big donors and unions, that can provide campaign funding, voter support, and hidden benefits to the politicians and their friends.
- Greek citizens, like most citizens in over-taxed counties, work off the books, engage in tax evasion and avoidance schemes, and care little about paying their fair share. Like progressives they are takers rather than producers.
- Simply put, Greek politicians borrowed money to keep their economy and entitlement structure afloat. In return for this money, European bankers extracted exorbitant terms commensurate with the risk in the belief that when push came to shove, the Greek politicians could cover their interest and principal payments by raising taxes or curtailing entitlement benefits. Like any other financial wager – there is the possibility that the debtor will not pay their debt and the investment will be lost.
- Where the fecal matter hits the rotary ventilator is that these European lenders securitized the debt and sold securities that were backed by these dodgy Greek loans to a wider group of investors – thus magnifying and spreading the financial impact of a default as if it were a contagious virus. Exactly what the Americans did with mortgage-backed securities that lead to the mortgage meltdown and then to the broader near collapse of our economic system.
- What the Greeks want is a bailout that insulates them from the consequences of their progressive socialist political system and allows the politicians to retain office without a massive political revolt. This can be accomplished by throwing bad money after good money by pumping more money into a failing economic system with corrupt politicians; forgiving a portion of the debt which eases cash outflows; or by pretending to reschedule the debt over a longer period of time – in essence extending the day of reckoning by lowering the payments by extending the maturity times.
- The affected countries and the lenders knew before hand the financial condition of Greece and chose to go ahead for their own political and profit motives. Having assumed the risk, they are now attempting to avoid the consequences of their decisions – hoping the world will chip in with a bailout – also known as forced progressive wealth redistribution.
- Like most corrupt situations, one needs only to look behind the scenes to see the political machinations that are demanded by lobbyists. How may people may realize that the original debt was owned by private investors like Goldman Sachs who used their political connections to transfer the debt to the IMF (International Monetary Fund) and the ECB (European Central Bank) thus privatizing the profits and publicizing the losses. A pattern which was seen repeated a number of times in the United States with the Federal Reserve Bank’s ZIRP (Zero Interest Rate Policy).
Bottom line …
With the exception of the relative sizes of their respective economies and growth rates, there is little difference between Greece and Germany. Except that the Germans, who have large-scale unionization, are more efficient at collecting taxes.
Instead of letting Goldman Sachs and the other private banks to book a loss – paid for by their shareholders – the debt has been converted from a crisis to a catastrophe in the media, with the sole objective of covering up the corruption and special dealing.
This is not a knock on the Greek people, but definitely a knock on special interests in the financial sector and their bought-and-paid-for corrupt politicians.
A reminder …
And it could happen here if we allow the progressive socialist democrats, the corrupt special interests and unions, and corrupt politicians to ascend to leadership positions.
"The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius