Friday, February 6, 2015

Arguably, Greece was a mess before joining the euro, and only got in due to the hubris of the euro-federalists, desperate to build a European superstate (for various reasons, although breaking the hegemony of the Anglo-Saxon power base was probably one of the leading motivators from the then-powerful Gaullists). 

Once Greece made their real 8.3% deficit vanish into a mere 1.5% one, through accounting sleight of hand with the help of Goldman Sachs, they were welcomed into the Euro.  At that point they were flooded with cheap money and felt no further need for restructuring of their baroque economy, full as it was with anachronisms and vested interests.  Wind the clock further forward and their deficits ballooned wildly as old habits persisted.  

Once the shoe dropped about Greece’s serious sovereign debt situation, the European powers realized just how exposed their banks were to a Greek default.  It became essential to unwind the situation and give banks a chance to deleverage.  Only public money could achieve this without significant (supposed disastrous) haircuts on private funds - deemed to have the potential of devastating the world (or at least the western) economy.  Consequently, public funds were funnelled into Greece, but not as a bail-out per se, mostly merely as loans with aggressive requirements for Greece to restructure internally in order to create a modern and more productive economy possible of producing a primary surplus.  These 'austerity conditions' have been applied and policed by external agencies - exerting draconian control over the domestic politics of Greece and its people. 

The problem with this medicine has been foreshadowed by the effects of the Versailles Treaty on Germany after WWI.  Versailles was a disaster in the long-term because it let the leaders off scot-free, while punishing the ordinary people with measures that created extreme economic hardship.  Contrast this with WWII, where the allies punished the leaders and let the people off free.  Is it any surprise that history is repeating itself in terms of the rise of nationalistic, even extreme nazi parties in Greece?  Banking, big business and the political leaders who created a calamity are once again protected, even rewarded, while the people suffer the ignomies of a heavy financial yoke: loss of jobs, loss of social support, loss of dignity.  

People can bear extreme oppression and hardship when they believe there is something good to fight for (consider the Blitz sprit in London), but fighting to protect the global banking system and Greek oligarchs is far from that.  Once again the optics are terrible.  Where is the justice?  How can the people who screwed up so badly still be in charge and telling the general populace that they will have to pay the price of the grievous mistakes made by the leadership and elite?  Of course, you can argue that there is collective responsibility (e.g. if people vote to have enormous pensions at a retirement age of 58, there is a large cost involved), yet it is surely a responsibility of political leaders to present hard-truths, be wise and take critical action before disaster is banging down the front door.  At the very least, our leaders (and the most wealthy) enjoy tremendous privileges most of the time, why should they be immune from the consequences of their poor judgement?  While you would think natural law would require that leaders don’t enjoy benefits after gross mistakes, it is a travesty how much this actually happens.  Still, the fortunes of most countries are such that leaders can ultimately be swept away (if not exactly punished) for their incompetence and perhaps the populace can at least believe that new leaders might show better judgement - at least for a time.  However, there are times when societies are driven to such extremes that these things really matter - when people are pushed down Maslow’s hierarchy - dignity is lost, injustices are glaring.  This is when people, in desperation, look to form new allegiances, new social pacts and contracts that they can believe in at least, to sweep away the pain that they are enduring.

The only defence possible for the actions of the powers-that-be in the Greek situation, is that they were attempting to prevent an even more catastrophic and calamitous outcome on many, many more economies around the world through a deep depression caused by the twin shocks of the subprime credit crunch and a Greek default.  In a sense, they didn’t want their own poor decisions (to invest in an already profligate and bankrupt Greece) to come home to roost.  They were prepared to kick the can down the road, by using public funds and funds borrowed against the still good credit of other countries, in order to prevent the effects of incipient failure in their own private banking systems.  As we can now see quite clearly, this has merely bought just a little time.  The bomb is still primed to go off, they just hope that they’ve erected enough of a firewall around Greece to deflect the primary force of the explosion back onto its own people.  The only thing we don’t really know yet is the nature and composition of the explosion: political, social, financial.  Explosions are by their very nature chaos in rapid motion.  Things that could not be rearranged in an orderly fashion will now find new configurations quickly, and the new configurations will not necessarily be ones that anyone planned in the events leading up to the event - the law of unintended consequences will be in full force.  What humanity has completely failed to learn is that the law of cause and effect is truly immutable and you cannot hide the liabilities you create (whether these are financial or social).  Our leaders are predisposed to putting off paying down mistakes and taking the consequences as long as possible, but that just means that the compound interest will be due on those consequences.  Evidently we all learn how to do 'dodgy accounting' at a young age: lies, cover-ups, misdirection and that scales up our largest social, economic and political systems.  The more our leaders are able to veil truths from the people, the more they will be able to build up such gross distortions and use them to their own ends.  We must find a way to let real light into these situations and to hold our leaders to account much more quickly and effectively - that implies changes to the fourth estate and to democracy as a whole.

Where's the humanity?

The modern world has 'advanced' in many ways since we lived in villages, surviving by dividing up the tasks of finding food, making shelter and protecting our families and friends.

Technology has changed the nature of most of our activities and economics have created opportunities, diversification and choice; but as a side-effect funnelling almost everything we do into dollar terms and the inevitable race to get more - both at a community and individual level.

The effects of all this are many and varied, but in aggregate it's pretty clear that we are losing certain long-established norms in how we behave in society - specifically, how we relate to each other.

People have many levels of connection, from completely informal encounters (literally perhaps walking past someone on the street), to our most intimate and most significant interpersonal relationships.  Clearly the individual impact of each connection varies, but they are also cumulative.  The impact of many similar limited interactions on Facebook may be more that a single chat in a queue at a coffee shop.  Moreover, some of the choices we make in communication are more likely to be impactful in the way they persist, or echo, in communities (our places or work, or our online presence).

In many ways, we have never been so connected to other humanity, but commensurately we seem to never have lived in such a dissatisfied society.  People get irritated and angry with others whether driving or waiting in line.  People post inflammatory, derogatory and obscene remarks online.  People are driven ever harder to work for their living, dealing with pressure, stress, long commutes and round-the-clock responsibilities.  In all of this, it seems, we are increasingly losing our ability to have empathy and treat those around us with humanity.

Perhaps we'd all like a "kinder, gentler" society, but are we prepared to pay for it in terms of time, and a different model of values that isn't focused on productivity?  In any case, is it even possible to feel exponential growth (of population, of consumption, of production, of GDP) much longer before the whole edifice collapses when such growth expectations are suddenly arrested by physical limitations?  Shouldn't we be rebalancing our societies now, to adjust for the practical limits of the ecology (at least) to continue supporting such growth?

Are we doomed to live ever closer physically but ever further apart in the way we interact?  Is this solely a problem of scale and our limited ability to process connections?  Is this a problem with the way in which society motivates and drives us through our lives?  Are we actively trained to behave this way?  Should a measure of one's control over dollars be the sole value in society?  Are we losing culture and richness in our lives by not pursuing grander ideas and continued education in human affairs, but rather being desensitized to all but our individual quests for health, wealth and happiness?

This blog will attempt to survey this problem a little and ask "Is there an alternative?".