Monday, June 18, 2012

Greek Elections ... What They Mean

Greece voted on their future in the euro zone yesterday. Then they woke up today and found themselves facing the exact same problems they have failed to deal with for several years now --- borrowing and spending beyond their means.

A Greek Reprieve says this in part:

"Europeans—at least the non-Germans—breathed a sigh of relief Sunday as a plurality of Greek voters took a step back from jumping out of the euro zone. Now we'll see what Europe's leaders can do with their latest reprieve.

Tallies as we went to press Sunday indicated the center-right New Democracy party won some 29.5% of the vote, up from its 18.8% showing last month. New Democracy told voters it wants to remain in the euro zone while claiming it would be better able to renegotiate the terms of the Greek bailout provided by the rest of the Europe.

Trailing New Democracy was the hard-left Syriza coalition with 27.1%—up substantially from its count from last time. The center-left Pasok, which dominated Greek politics for a generation and won the 2009 elections, was slated to take a mere 12.3%. Pasok polled only slightly more votes than the combined tally for the Communists and the neo-Nazi Golden Dawn. . . .

As for Syriza, it may be just as happy losing this round, figuring it can pick up the pieces if the center-right fails again. Its tub-thumping leader, 37-year-old Alexis Tsipras, has been the great beneficiary of Greek rage at an economic program, misleadingly dubbed "austerity," that has managed to avoid neither recession nor default.

But the apparent plurality vote for New Democracy also suggests that Greeks aren't eager to follow Mr. Tsipras off the socialist cliff, especially if it means daring the rest of Europe to stop writing bailout checks. Perhaps more Greeks are coming to understand that German Chancellor Angela Merkel might have preferred a Syriza victory as an excuse to cut Greece out of the euro zone. The Germans are beginning to conclude that Greece may be unreformable. A Syriza victory would have been seen as Greece pulling the plug on its own euro membership. . . .

 The tragedy of Greece, and much of the rest of Europe, is that it overborrowed during the euro's first decade to finance a higher standard of living than it could afford. Now the debtors have to adjust.

The best way to do so is with supply-side reforms in taxes, pensions and labor markets that will lure investment and make Europe's economies more competitive. They need austerity for government but growth for the private economy. Without that, the Greek reprieve will be merely another opportunity lost."

My Take on The Greek Election

Countries that spend too much, produce too little and take on too much debt over a long period of time, for whatever reason, end up in a heap of trouble. And it will take a very long period of time to remove themselves from the deep hole they've dug.

While some of their problems are economic in nature, most are behavioral and habitual.

It's the same thing with people as well.

Greece is not France, France is not Spain, Spain is not Germany, Germany is not Russia and so forth. And the U.S. is much different than any and all of them.

Just as person A is not person B, B is not C, C is not D and so forth.

The countries of Europe face dismal futures because they're overly dependent on their governments for security. That's how they became such economic basket cases in the first place.

Apparently "free lunches" were provided to the people by government knows best officials in exchange for votes.

The people were trading economic freedom, including the right to fail, in exchange for economic security, or so they thought.

Well, here's what General Douglas MacArthur had to say about security: "There is no such thing as security on this earth; there is only opportunity."

Governments can't provide economic security; only the actions of people can do that.

Greece and its people were in economic trouble yesterday, and they're in economic trouble today.

Today the spotlight has moved from Greece to Spain. Italy, France and others are "on deck," if not yet in the batter's box.

As for the U.S., We the People will determine our own future in America, as we always have, and always will.

Thanks. Bob.

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