"Mercy Now" - Mary Gauthier
I am actually on the road, driving up I-95 yet again, but stopped to get a little caffeine and shake the white line fever.
The discussions of Greece and, in particular, suggestions that the United States is "the next Greece" drive me a little crazy.
Greece is actually the first foreign country I ever visited -- well, okay Canada really was, but we don't count that -- back in 1985 after the bar exam. It was the perfect place for a law student with very little money to his name to go -- sunny, cheap, and overrun by scantily clad tourists. And let me repeat -- it was cheap.
And it was cheap because it was a poor country by European standards, the kind of place that you could get lodging, meals, and quite a few drinks for about $50 a day (if you really wanted to rough it, for cheaper than that). It was not really a first world country at that time and certainly not comparable in terms of economic development to either the U.S. or northern European countries.
Greece is small, with a population of about 11 million people, it has had an extremely turbulent political history, having been invaded in World War II by Italy and then ultimately occupied by Nazi German, riven by civil war following the end of World War II, plagued by political instability resulting in a military coup in 1967 and a military dictatorship for seven years, and prolonged military tensions with Turkey. It is a country that has had a thriving tourist industry and been a major player in shipping, but otherwise lacks in natural resources and significant economic advantages. It has a terrible time collecting taxes and has substantial corruption issues.
It has experienced substantial debt-aided growth since joining the European Union in 1981 and the Eurozone in 2001, but that has now resulted in an economy where the government lacks the ability to set its own monetary policy, cannot devalue its own currency, engage in fiscal stimulus, or lower interest rates. The Greeks are in a truly hideous place at the moment.
The United States, on the other hand, has more economic advantages than any country on earth, has full autonomy over its currency and fiscal policies, and continues to be able to borrow money at incredibly low interest rates. In a word, we are not Greece. The United States mainly suffers from the existence of a political party dominated by crazy people. If we could consign the Republicans to the rubber room in which they belong, we could weather this current crisis with relative ease.
So slap the next person you hear claiming that the U.S. is the next Greece.
Alright, time to get back on the road -- tell me what's been going on in my absence.
Revising and extending my remarks a bit -- it occurs to me that in many respects the Euro is the ultimate neo-liberal policy venture. Well intentioned, market oriented, and internationalist in scope, it is deeply technocratic by its nature, with policies around it largely set by unaccountable "experts." It is also extremely ant-democratic with the voters in individual participating countries having very little opportunity to have any impact on monetary policy. Yes, our own Federal Reserve is not exactly the epitome of transparency or accountability, but at least its members are presidential appointees and, as such, have some responsibility to the president. I think that it would make sense for Greece, Spain, and Ireland to leave the Euro, reestablish their own sovereign currency, default on their debt, try expansionary policies to stimulate recovery, and see how this works. Embracing externally-imposed austerity while suffering unemployment rates like Spain, for instance, is experiencing is madness.
