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Posted by on Feb 21, 2012 in Economy, International | 2 comments

My Big Fat Greek Economic Crisis


Have you ever been to Greece? If you have, then you know what has happened to that deeply historic, incredibly beautiful and once vibrant country is heartbreaking. And that its ills are self inflicted.

The economic crisis in Greece has caused a devolution that is shocking by Western standards. Some 25 percent of all Greek companies have gone out of business since 2009, half of all small businesses are unable to meet payroll, nearly half of the population under 25 is unemployed, and the suicide rate increased by 40 percent in the first half of 2011. A barter economy has sprung up, as people try to work around a broken financial system. Oh, and the government is powerless.

Among the consequences is that a barter economy has sprung up as people take money out of failing banks and burying it in their yards, many people are leaving cities for the countryside or trying to emigrate to Australia, which has a substantial Greek population.

How did all of this come to pass?

Russell Shorto argues in a terrific New York Times Magazine piece that in buying into the euro, Greece foolishly tried to mimic other countries and in so doing shifted away from its natural advantages and way of life.

As one Greek told Shorto, “Working in offices is good in countries where there is lots of rain. Greeks don’t need to be in offices. Athens has doubled in size in a couple of decades — it’s now half the population of the country! Two-hour traffic jams, man! After we joined the euro, the mentality totally changed. Suddenly it was like if you still live in the small village where you were born, you must be retarded. So Greeks left their islands and their villages and moved to the city, and they became maniacs. They started expecting loans and handouts.”

The modern Greek mentality has become a hyped-up version of debt-ridden American consumerism and to suggest that the European community looted Greece is ludicrous. The Greeks looted themselves.

“Greek people would take out a loan to buy a luxury car so they could say, ‘I have money,’ ” the man said. “Crazy! I would run into someone I used to know, and suddenly he’s talking to me about the stock exchange. I say: ‘Come on, man! What do you know about the stock exchange? Let’s talk about apples and olives!’ ”

The are other factors, as well, that Shorto alludes to or does not address, chief among them that Greece has been run by political parties for decades that are more like organized crime families, more affluent people routinely underestimate their tax burdens, the reaction to austerity measure has not been to hunker down but to riot, and the once vibrant agricultural sector is on its knees because of exhausted land and Greece — which has 300 days of sunshine a year — must import food.

Ahem. Greece led the world in civilization and now may be leading the way to civilizational collapse.