In article , Ed Huntress
wrote:

On Fri, 27 Mar 2015 10:53:26 -0400, Joe Gwinn
wrote:

In article , Ed Huntress
wrote:

On Wed, 25 Mar 2015 10:20:39 -0400, Joe Gwinn
wrote:

In article , Ed Huntress
wrote:

On Tue, 24 Mar 2015 06:55:39 -0700, Rudy Canoza
wrote:

On 3/23/2015 10:33 AM, dpb wrote:
On 03/23/2015 10:25 AM, Ed Huntress wrote:
On Mon, 23 Mar 2015 09:22:37 -0500, wrote:
...

Them was tough folks...

I'll say they were tough. We have plenty of Depression-era stories
in
my family, but combining it with the Dust Bowl must have made them
epic.

It hardened people in different ways, some became so concerned even
after the era was over they never did recover. I know of an old
fellow
only slightly older than grandfather down in the OK panhandle about
40
mi on W from us who never got over the feeling of needing to miser
everything--he never bought any newer or larger equipment nor other
improvements so when there were better years he couldn't take
advantage
of them owing to simply being so outdated couldn't do more than just
get
by.

The idea that it was a universally searing, wrenching experience is BS
-
a political myth. At its depth, 25% of the workforce was unemployed.
That's terrible, but it means 75% of the workforce was still working,
and life for them and their families went on more or less normally.

Greece has had unemployment in excess of 25% for over three years.
Their definition approximates ours: not working but seeking work. I
doubt if their depression is portrayed as ours was.

Greece's situation is not portrayed as ours was for good reason.
Greece has safety nets. In the early years of the Depression, the US
did not.

No Social Security or other safety nets. By 1932 alone, 273,000
American families were evicted from their homes. There were roughly 2
million homeless people in the US during the Depression.

And then there were the bank failures. No FDIC. By 1933, depositors
lost $140 billion through bank failures. 11,000 of the country's
25,000 banks collapsed. Lending almost stopped.

These things had cascading effects that disrupted life 'way beyond the
mere unemployment numbers.

There is a lot more to it than that, Ed. Greece is not a good parallel.

I agree. Ball's comparison is not a good one.


Greece's problems are caused by gross mismanagement, and Germany is not
willing to subsidize this.

Greece didn't belong in the Euro zone to begin with. It's a different
culture. Trying to shoehorn them into a northern European business and
financial culture was never a good idea.


Data point: something like one half of employed people in Greece work
for the government. How can this work? (I read it in the WSJ, but
don't recall where. When I asked a Greek coworker, he would not answer
the question, always changed the subject.)

This is not correct. The percentage who work for the government itself
is very low (7.9%). But add in those employed by public corporations,
and Greece (GRC in the chart) is still lower, at 20.7%, than many
other countries:

http://tinyurl.com/p6bxrb6

Countries with higher percentages include Norway, Denmark, France, and
the Netherlands.

And many others are in the same neighborhood:

Canada is 18.8%
The UK is 18.6%
The US is 14.6%
Switzerland is 14.5%

So percentages in that range can work. It's partly a matter of
culture, and largely a matter of how well they're run. It's difficult
to make a country with 20% or more competitive in global terms, but it
can produce a very nice life.

I'm not sure I buy this, no matter what the published statistics claim.
The Greeks clearly lied to gain admission to the Euro.

Those are OECD figures, based on the System of National Accounts. If
there are biases, the same biases apply to every country in the
system.

Given the reliability of Greek statistics, how would OECD really know?


The big money is most likely in pensions.

Very likely.


If (when, probably) Germany declines to subsidize the Greek govt, it
will go bankrupt. This is actually a good thing, as it will force
housecleaning in Greece.

When you say "housecleaning," you're assuming that the desired result
is something like the northern European countries. The Greeks may not
agree. They may prefer to leave the euro and to have more flexibility.

Well, I don't expect the Greeks to become German anytime soon. Or vice
versa, for that matter.

But without the easy loans that were possible in the Eurozone, the
Greek govt would have been forced to get a good bit closer to economic
reality many years ago and would not have been able to dig themselves
in so deep.

I think the Greeks want to stay in if they can get more "loans", but I
don't think that the decision is really theirs to make.

The Germans seem unimpressed with Greek claims that if they leave, the
Euro will collapse. Quite the contrary, ejection of Greece would make
a good example for Italy and Spain to ponder.


But that's international finance on a level that's 'way over my head.

This part isn't all that complex - the Greeks are spendthrifts. The
rest are details.

I wonder if there is a form of spendthrift trust one can use on a
sovereign. Other than simply cutting the money off and waiting for the
noise to stop.


Nor do Greeks pay taxes. The Italians are the same in this, but with a
better economy. But they may be the next to go blooie.

They're both marginally functional under the present world economic
order.

I'd hazard that the Italian people may not really care if their
national govt goes bankrupt - nobody except for some unfortunate
foreign bankers would notice. Well, people might miss the latest
Berlusconi dramas.


Another data point: Probably fifteen years ago, I did a lot of
2nd-shift integration work, and got to know the owner of the local
pizza joint well. He was Greek, and had emigrated to the US with his
new wife and 2yo son ten or fifteen years before, speaking no English,
and started out washing dishes in a local pizzeria. Long story short,
he now owned the pizzeria, and his BMW was proudly parked out front.
His English was still very rough, but with effort workable.

Eventually, I asked the obvious question: Why didn't you do all this
back in Greece? He answered "Impossible!", because one could not get a
business loan unless one were very well connected, and because it took
forever (and many bribes) to get all the many necessary licenses.
Here, the licenses took about a month in total, and he was easily able
to get the needed loans. He now owned a string of pizzerias, and over
time had brought his entire village over one-by-one to man the
pizzerias. And there they were, standing behind him and listening to
the story - these were mostly adults, not the usual collection of
pimply-faced surly teenagers. And the pizza was good.

If you ask the righties here, that is, of course, impossible. g They
say that the red tape and regulations in the US make it so.

However, we know that they're full of crap, as they demonstrate every
week. They can't be bothered to check their facts.

Well, depends on the righty in question.

And, while it's true that the US is relatively free of such nonsense,
this isn't automatic - governments and legal systems tend to become
encrusted and blindingly complex over time, and this tendency needs to
fought every step of the way, forever.

Often in history, it took a shooting revolution to fix the problem.

The main US example of encrustation and blindingly complex is the US
Tax Code.


Europe also has very restrictive labor laws, to the point that it's far
easier to divorce a spouse than to fire an incompetent worker. This
has the obvious effect of making companies *very* reluctant to hire,
leading directly to Europe's "structural unemployment". Germany
somewhat relaxed these laws, to good effect, and France is talking
about it. Sarkozy was going to do it, but lost the election. But he
may be back, and Hollande has been making noises.


The two data points are connected - Greece has far more government than
is healthy or affordable.

As we can see from the figures above, that's obviously not the issue.
You should have stopped with "Greece's problems are caused by gross
mismanagement." g

So why does the Greek government need to be propped up?

Again -- mismanagement. That is, in terms of the euro zone.

I certainly agree, so now we need to list the top five areas of
mismanagement that led to the present crises.

Overly generous pensions seem to be a large item, but there has to be
more to it than that. One assumes that there are many more
entitlements than Greece can afford.


Joe Gwinn