Togetherness By Trevor Plumbly
On the slide in Greece
The recent financial problems in Greece highlight the dangers we all face by giving free reign to money movers. It seems to me that money simply isn’t real anymore. Greece, under its own steam seemed to be a relatively stable place to live until it become part of the European Union, which instead of strengthening its social structure, exposed its vulnerability. Along with Ireland, Portugal and Spain, Greece produces little in terms of exportable product its main source of income is tourism. This if managed well can provide an adequate internal economy for a small country, but certainly not an industry capable of absorbing the financial impact of belonging to the EU.
Putting small countries in the same ring as France, Germany and the UK does them no long term favours, they are simply not equipped to cope with the intricacies of subsidised production or capable of generating the income to repay massive loans.
United we stand
And they do – up till now that is – Greece, along with other smaller countries are carrying a debt structure that their size and population make impossible to redress. Greece has few options, bankruptcy or continued internal stringency, which in effect will drive out the very people their future relies on.
Cynically I can’t see the major partners continuing to throw good money after bad for too much longer, like any corporation in trouble, they’ll trim off the dead wood first. I’d like to think that a loyalty factor might play a part, but enforced austerity, especially when viewed as a result of foreign mismanagement, doesn’t make that sound too promising given the history of the major players.
Dollars and sense
It seems, we’ve carefully been weaned off actual money by financial powerhouses and of course our own governments. On a personal level employees rarely get paid as such, wages and salaries are now ‘transferred’, spending is also once removed by way of credit cards, online payments and online shopping. This supposedly makes things easier for us, and of course revenue agencies to keep track. But electronic cash has provided the money movers with an unhealthy form of leverage in international affairs. A bit of buying and selling can distort any countries currency, especially the smaller ones. Nobody actually touches this new money, and it’s just numbers and percentage points moved around by a chosen few with broader powers than most dictators. Millions don’t have any place these days for finance ministers and conglomerate representatives, for any transaction to have credibility it must be in trillions. These huge sums aren’t real, just created, nobody has actually earned them. They’re impossible to present in solid form, let alone transportable for loan purposes, which makes their paper counterpart open to manipulation and, in the case of Greece, potentially worthless. When pieces of paper carry that sort of power it should tell us that we’ve gone too far and need to ask serious questions about just how healthy is the current worldwide attitude to economic practice? Maybe there is something we can borrow from communism? Just think, if the powers that be were to forgive Greece its debt, nobody would really be any worse off, except of course on paper.
Wise words Plum, but the most worrisome aspect of our wonderful new globalised economy is the fact that nobody, least of all those encharged with cleaning up the monstrous financial mess of 2008, has any clear notion of what they’re actually doing; indeed, they’ve no idea how it’s all going to end up. Here’s William White, Chairman of the Economic Development and Review Committee at the OECD, three years ago commenting on current monetary policy and the game-plan of the big hitters calling the shots: Central banks “have embarked upon one of the greatest economic experiments of all time.”