Down To The Wire?
Already aging, Europe is making its problems worse by reducing opportunities for its younger generation. In fact, the demographics in Europe are not encouraging and Mark Steyn wrote about this in his excellent book: America Alone.
The Greek bailout is just one chapter in a larger social-economic unwinding that is taking place in Europe.
In the near term, we watch Greece as it is embroiled in heated debate over its economic and fiscal degeneration. If Greece fails, there is larger concern with other weak players in Europe -- especially Spain.
The situation in Greece is very fluid and changes by the hour. Where the debt/austerity vote goes is not clear right now. According to Ekathimerini.com, a vote to approve the austerity plan -- even assuming that it would work -- is not a slam dunk.
The citizens of Greece are definitely not cooperating, and there have been wide scale protests, with more scheduled today. Some politicians are beginning to have second thoughts, as the general tone of the population itself is so ill disposed to the entire agreement. Many expect some 11th hour agreement -- over the vigorous objections of the population. After all, that is in the best interests of the banking cartel.
In some ways, the line of reasoning over the Greek situation is similar to Hank "tanks in the street" Paulson back in 2008. Threats and scare tactics have abounded if the banks are not paid. Somehow, the idea of transferring private debt and private risk over to the public is still in vogue. We did it here in the US and look how well it worked out.
Sensing a loss of momentum, some European diplomats are discussing a plan B if Greece votes no on the austerity plan. Many investors here in the US are making plans for a Greek default.
In the long run, it may make little difference. The best guess is that over time, despite the bailouts and austerity measures, some of the weaker economies are going to leave the euro; it will just be a matter of timing and circumstance.
A final note, the young in Europe are not getting jobs. Der Spiegel ran a piece last week about the loss of direction, meaning and productivity that is running through Europe. I strongly recommend that everyone read this missive. Not because the article is entirely correct -- it is laced with the politically correct doctrines of the left -- a perspective that helped to bring about the mess to begin with. But it does tell of the plight of the younger generation.
What stands out is how the article skirts around the reasons Europe reached this predicament. That is a discussion for another time, but it largely centers on socialism. Socialism enlarges the state at the expense of its citizens, erodes the political control of its citizens over their own government, and it harms the culture that binds them together. Loss of cultural vitality is crippling Europe and has lead to many issues such as declining birth rates, centralized over regulation, and loss of control of the political process to unelected bureaucrats. Bureaucrats who are more answerable to international business interests, than their own citizens.
Where does this lead besides insolvency and lack of opportunity?
It should not surprise the reader to see many of the young begin to leave and look for work elsewhere. Already aging too rapidly, another youthful talent and brain drain is not what Europe needs. It will make a severe problem much worse.
Thomas Lifson adds:
Victor Davis Hanson has an excellent essay today at Pajamas Media, on the subject of what socialism really is, in which Greece plays a prominent role:
Greece is the locus classicus. Why are the Greeks protesting? Against whom? They obtained long ago the promised bloated sector and high taxes that all schemed to avoid. Their alma mater EU is hardly a demonic capitalist-run plutocracy, but a kindred socialist state. Is Greece an oil producer, industrial powerhouse, high-tech innovator - anything that might explain the sort of upscale life, modern infrastructure, legions of Mercedeses, and plush second homes that one began to see in Greece after 1985?
In truth, socialist Greeks are furious that they have impoverished themselves and demand that private money and far harder-working Germans bail them out - but why so, when socialism should not need outside capitalist-generated dollars? Could not the Greeks, Soviet style, set up a Cuban collective, and adjust their lifestyles (there goes Kolonaki culture) to their means, living in an opportunity of result utopia with a huge public sector, more siestas, high but ignored taxes - with a collective good riddance to those awful intrusive German bankers? (snip)
So what is socialism? It is a sort of modern version of Louis XV's "Après moi, le déluge" - an unsustainable Ponzi scheme in which elite overseers, for the duration of their own lives, enjoy power, influence, and gratuities by implementing a system that destroys the sort of wealth for others that they depend upon for themselves.
Once the individual develops a dependency on food stamps, free medical care, subsidized housing, all sorts of disability or unemployment compensation, education credits, grants, and zero-interest loans - the entire American version of the European socialist breadbasket - then expectations for far more always keep rising, with a commensurate plethora of new justifications, usually in the realm of someone else having more than the recipient, always unjustly so. The endangered aid recipient is always seen as being pushed off a cliff in a wheel chair - therefore, "they" can afford to give "me" more; things are not "fair"; there is no "equality."
Cutting back $2,500 a month in combined benefits and subsidies to $2300 a month is always seen as far more heartless and cruel than not in the first place giving someone without subsidies a mere $200 a month. For every dollar taken, two are demanded. And that creates a powerful constituency for whom the shrillest rhetoric of oppression is, well, never too shrill. Revolutions are not fueled by the very poor seeking their daily bread, but by those on entitlements that revolt at the thought of less to come. A rioting Greek today is far better off than his parents in 1973 when I first arrived in the country; and he would remain far better off even under an "austerity" plan. But his expectations have soared geometrically with each euro received, and he now has convinced himself that not to have more is to have nothing.