Back to Greek tragedy began with credit
October 15, 2011
Thanks to Rosie DiManno for the excellent articles on the Greek crisis. The current financial problem facing Greece, and poised to spread to the rest of the world, had its genesis in the advent and proliferation of the credit card. We are now into the third generation of consumers convinced that they should have today what they are sure that some day they will be able to afford.
Prior to 1950, it was common practice to save in order to one day achieve a goal — be it a dream vacation, or more likely a decent suit of clothes. Merchants carried their own in-store credit system. I recall my father paying $2 every pay day to a local clothing merchant so that he could receive a pair of pants once the full $14 was paid. The emphasis was on getting the money first and then receiving the reward.
Today, the reward comes first and getting the money is something that you intend to do some day. Since most retail businesses work on rather narrow profit margins, they would much sooner have the customer owe them money at or above 20 per cent interest. At these rates the return is much greater than it would be if the customer paid cash even after considering any defaults.
All large retailers offer their own credit cards and give enticing bonuses for their use even when used to purchase goods and services not offered by the issuing merchant. They don’t want your business as much as they want your debt. The real problem is that this enormous debt supports a huge labour force and eliminating it eliminates jobs. It’s a hole we’ve dug and continue to dig but we’ve run out of places to throw the dirt.
Tom Sullivan, Toronto
The sad reality is Greece should have been left to default long ago, as was Argentina, the bond holders made to take the loss for their “reckless gamble,” and that money given to prop up Italian and Spanish banks. Now they can’t part with the trillion or so dollars required. This is all about bailing out more bankers at the expense of the working class.
Richard Kadziewicz, Scarborough
Why abet the crimes of Greece. France and Germany should walk away.
Markus Humby, Burlington
My wife and I returned from Greece on Oct 6 after an awesome 2-week vacation in Athens and 3 islands, Mykonos, Paros and Santorini. It was probably our best vacation in 30 years.
All the Greek people we met were friendly and polite. The weather was perfect. Wherever we walked (and we walked lots) we felt safer than in Toronto. The country deserves its ranking as a top destination for tourists. So please continue to visit Greece to help the country through its financial crisis.
Most Greeks deplore the political system that has caused the mess and support needed changes even though some measures are harsh and will lower living standards. While protest demonstrations have been taking place almost daily around Syntagma Square in Athens they are mainly peaceful.
On the odd occasion a few protestors turn violent but the police move in quickly to exert control. From what we saw these demonstrations are a joke compared with the hooliganism and destruction that happened in Toronto, Montreal and Vancouver earlier this year. Our police need some lessons from the Athens police.
We would go to Greece again in a heartbeat! In fact, the most inconvenience we suffered was on return to Toronto when on the Thursday evening before Thanksgiving it took us 45 minutes in a lineup to clear immigration at Pearson International Airport. The arrivals hall was jammed full and many booths weren’t staffed by immigration officers.
So far as Greek debt goes, if the country needs practical assistance in this regard it might consider selling some of its huge and valuable collections of archaeological artificats on the world market. Such an initiative would rake in millions, if not billions of dollars, even though many Greeks would probably see it as sacrilege.
Greece has so many archeological wonders. Therefore, distributing a few of the less valued artifacts around the world shouldn’t be seen as a problem. Besides, it would generate international goodwill towards Greece. Unfortunately it is the ordinary Greeks with low incomes who will suffer most in any collapse of tourism, not so much the rich or government employees with inflated salaries who have done so much to milk the system and too often skipped out of paying taxes.
Brian Dexter, Georgetown
Will Greek crisis end in ruin? Oct.8
Rosie DiManno asserts that the Greek public sector is “a bloated behemoth, accounting for about 40 per cent of the country’s total economy.” I guess the bigger the public sector, the greater the behemoth and, by implication, the more of a millstone on the economy. According to World Bank statistics, Denmark has a public sector that accounts for 43 per cent of its economy. How come Denmark isn’t going cap in hand to its creditors?
On the other hand, the lean, capitalist U.S.’s public sector figure is 26 per cent. No behemoth there. But its economy is not exactly in stellar shape. And no chance of an “overly generous nanny state” (DiManno’s phrase) developing there.
Their banks and corporations have seen to it that they are catered to by a peculiar form of nanny state where the needs of Big Business are put before those of ordinary folk.
Tim Heffernan, Scarborough
There is no doubt Greece Inc. has been living far beyond its means for many years indulging in a (SSDB) spend spree/debt binge. Public spending of trusted funds has recklessly soared in the “past decade” and the avaricious “public wages” sector has unreasonably doubled during the same period with “no value added” to the country.
These decisive politicians with easy money, and cajoled citizens have been seduced with the euphoria of consumerism incited by “cheap money” coming into the country without the “users” forethought of how to pay for it in the future; giving life to an ancient Greek term “anomie,” which I discuss further on, and the ancient Roman term “ Addictus” which, in Roman law, meant “a debtor awarded as a slave to his creditor.”
Both the government and the private citizens were disastrously mirthful about the haunting of credit as if the day of reckoning would never arrive, only now to realize the graveness of their folly.
Their reckless debaucher fuelled the existence of this economic living corpse which the ancient Greek historically termed “Anomie” to which I referred previously; a social instability caused by a break down of social bonds between an individual and their community ties ; a fragmentation of social identity and rejection of self-regulator, a mistrust between state and citizens, nurturing an apathetic despair that corrodes social covenants giving rise to anything or anyone against or outside the law, or a condition where the current laws are perceived to not be historically or presently applied, resulting in a state of illegitimacy or lawlessness in governance and constituents activities.
In retrospect this was caused by politicians in Greece covertly embracing a Certain Style of economic dogma; an overly generous “nanny state” ; which in time could never be sustained, and succeed, and benefits the major minority, at the detriment of the massive mass, and always collapses like any poorly managed entity facing bankruptcy; failing to functioning with currency to generate a “real value” by way of service or product.
German tabloids now creatively design Rehab by proposing the taking in possession a Greek island or two in lieu of unpaid loan payments as the proper rehabilitation steps to take to teach the “Addictus” accountability.
A distraught Greek citizen in the DiManno article stated “its as if Greece is an experiment for the world”. How far can they go with these “austerity measures”. What more can they demand. How close to the truth she spoke. Perhaps its an economic rehabilitation or “dress rehearsal” for the world, and as for demands, much more to come it appears for Greece needs to be cured.
Interestingly, the article stated that 40% of the Greece economy is funding the government expenditures. My reading indicates that Canadian governance is 50 per cent of the GNP. Should we be worrying now for what is to come in the next decade. Greece didn’t. I do.
Adam Ridolfi, Toronto