Wednesday, July 8, 2015
“For more than 17 months, women, men and children have been senselessly suffering through an entirely man-made catastrophe,” the United Nations high commissioner for human rights, Zeid Ra’ad al-Hussein, said in late May.
Corruption, shortsightedness and greed have been on my mind lately. America has certainly been the site of some exciting news lately. The Supreme Court's decision to legalize same-sex marriage here in the United States has been an immense recent highlight. But there are some dark clouds of chaos and instability looming in many parts of the world. I have recently had a lot of free time on my hands as I wait for my AmeriCorps position to begin at the end of July. To pass the time I have been reading a number of stories from the New York Times lately. Prominent current events include the following:
The Greece financial crisis - It appears the Greece financial crisis (which first began several years ago after the 'Great Recession' began) never really was resolved. A collapse of the Greek economy could unfold in the coming weeks. The crisis has escalated since the results of a referendum this past Sunday indicated a majority of Greeks said 'no' to the demands of its international creditors.
There is plenty of responsibility for the mess that is now consuming the attention of Europe. The culture of Greece certainly has played an important role in the unfolding misfortune. The fiscal sustainability of Greece is made more difficult by endemic issues such as tax evasion as well as a retirement age that many in the developed nations of the world could easily envy. Honestly, I am not familiar with any other developed nations where people can realistically expect to retire in their early 50s. Who could possibly afford that? It also doesn't help that new Finance Minister Euclid Tsakalotos failed to offer a detailed plan for consideration by finance ministers attending a meeting just yesterday.
And yet for all the compelling arguments that may be made about Greece's responsibility for its current mess it would be inaccurate and irresponsible to not also highlight other involved parties who play an influential role. Though I have not looked at financial data (that I would likely only be able to access were I an employee of the International Monetary Fund or the German government) relevant to the issue of Greece's fiscal reality it seems to me the assertion that the austerity policies required of Greece the last several years have made a bad situation much worse. I do not have a degree in economics but I can recall some of the important principles from coursework I did take in the subject matter. When a nation's economy is suffering a recession or depression an austerity policy may only hasten the unraveling of that state's economy. Investment must often be increased in poor economic times so the engine of a nation's economy can improve. This means that borrowing during hard times is more advisable than during times of prosperity. And yet the borrowing must be done within reasonable limits. It doesn't seem to be a realistic expectation to expect the Greek people to adhere to the sort of fiscal rectitude and conservatism typical of German culture.
I see a number of valid arguments as to why it would be wise for Germany and its allies to make some concessions of their own. These are the following:
The financial argument - The Greek economy is simply too weak to tolerate more rigorous austerity policies. I believe Prime Minister Alexis Tsipras was correct to describe Greece as 'an austerity laboratory'. The real GDP of Greece has shrunk some 26% since 2008. Gikas Hardouvelis, former finance minister of Greece (June 2014 to January 2015), believes a December 2014 assessment made by the I.M.F. and the European Central Bank that Greece had not done enough to merit continued funding support was a mistake. Had the IMF as well as the government of Mr. Tsipras made different decisions in the last six months Greece might have found itself in a very different position today. High rates of unemployment as well as an economy that is not especially diversified also will hinder economic recovery. Simply put, squeezing Greece even tighter to extract more payments on their debt seems likely to cause more harm than good.
The political argument - A Greece exit (Grexit) from the euro may ultimately lead to economic collapse in Greece. The consequences of such a collapse could include a humanitarian crisis whose cost could ultimately prove greater than the costs of somehow allowing Greece to remain a part of the euro currency union.
The historical argument - I think forgetting the broader geopolitical history of Europe would be a mistake. There was a time when Germany was a very weak state. These were the years immediately after World War II. After Germany was partitioned into a capitalist West and communist East the victorious Allied powers helped restore the (West) German economy through the implementation of the Marshall Plan. Insurmountable war reparations from World War I and a profound sense of national humiliation resulting from the Treaty of Versailles ultimately led to depression and hyperinflation within Germany. And these conditions served to catalyze the eventual rise of Hitler. Europe might have ultimately been spared the horror of World War II if Germany had been treated differently after World War I.
There is something to be said for offering compassion and assistance when a state is on the verge of becoming a failed state. I think the German people and leadership would be wise to remember this historical epoch when considering how to proceed with Greece. Greece has certainly not managed its finances well. It should thus bear some significant responsibility in whatever resolution of the crisis is ultimately chosen. But Germany can be a leader by putting people ahead of money.
So what would be a suite of suitable concessions? First and most important would be a deep write-down of Greece's debt. This is a response advocated by the article I quoted above that explores the historical issue. It seems the processes and standards that frame the work of organizations such as the International Monetary Fund should also be reviewed. If lending practices frequently cause more harm than good it seems very reasonable to insist upon a comprehensive review of related programs offered by groups such as the I.M.F.
The Horror in South Sudan - Having been affected by corruption in my own childhood I can empathize with those whose lives have been adversely impacted by the poor or illegal behavior of others. But what happens when you are a child growing up in a weak state riddled by corruption? What can your prospects possibly be when you are confronted with such circumstances from an early age? I was reflecting on such topics as I read about South Sudan.
South Sudan became a new nation only a few years ago. A June 2015 New York Times article describes most every type of hardship and inhumanity of man against man conceivable. At least as sobering is one of the primary sources of the conflict that is ravaging the nation...a personal political struggle between President Salva Kiir and his former vice president Riek Machar. Add to that the fact that the nation is highly dependent on its oil wealth and you have a potential recipe for geopolitical disaster.
Disinvestment in the United States - Here in the country of my birth there is a veritable daily deluge of news that would make even the strongest of us feel an urge to have a stiff drink. Most sobering for me was an editorial I read in the Star Tribune from this morning. As I have recently noted here in my writing I will be serving in AmeriCorps beginning later this month. The editorial notes that "Committees in both the U.S. House and Senate approved deep funding cuts that would shrink AmeriCorps in this (Minnesota) and every other state." Seventy-five thousand Americans are serving in AmeriCorps this year. From what I know of the program I believe the work I will do as a member of this cohort of people will prove to be quite a good investment.
An element of American culture I have long found perplexing is the apparent lack of significant positive correlation between how valuable a job may be to the sustainability of a community and its quality of life and the monetary compensation such a job provides. In other words why do some of the most important professions (such as teaching) often provide such minimal incentive to commit a lifetime to?
So what do the Greek financial crisis, the South Sudan conflict and disinvestment in the United States have in common? I believe they are all examples of what can unfold when we, either individually or as a collective, live according to unsustainable priorities. What is an unsustainable priority? I believe you could define such a priority as one that is inherently antithetical to basic human values such as safety, stability, kindness and compassion.
Sometimes I think the world is very much caught up in a spasm of ego-centrism. When I read the news selfishness and political division seems to be more the norm than the exception these days. And I think that is tragic. Some tragedies are truly traumatizing. Some are not. While I do not feel traumatized by what I have recounted above I do find it quite disheartening.
I'll repeat something I said back in 2013 when I first began this blog:
"Where are all the adults?"
“For more than 17 months, women, men and children have been senselessly suffering through an entirely man-made catastrophe,” the United Nations high commissioner for human rights, Zeid Ra’ad al-Hussein, said in late May.
Corruption, shortsightedness and greed have been on my mind lately. America has certainly been the site of some exciting news lately. The Supreme Court's decision to legalize same-sex marriage here in the United States has been an immense recent highlight. But there are some dark clouds of chaos and instability looming in many parts of the world. I have recently had a lot of free time on my hands as I wait for my AmeriCorps position to begin at the end of July. To pass the time I have been reading a number of stories from the New York Times lately. Prominent current events include the following:
The Greece financial crisis - It appears the Greece financial crisis (which first began several years ago after the 'Great Recession' began) never really was resolved. A collapse of the Greek economy could unfold in the coming weeks. The crisis has escalated since the results of a referendum this past Sunday indicated a majority of Greeks said 'no' to the demands of its international creditors.
There is plenty of responsibility for the mess that is now consuming the attention of Europe. The culture of Greece certainly has played an important role in the unfolding misfortune. The fiscal sustainability of Greece is made more difficult by endemic issues such as tax evasion as well as a retirement age that many in the developed nations of the world could easily envy. Honestly, I am not familiar with any other developed nations where people can realistically expect to retire in their early 50s. Who could possibly afford that? It also doesn't help that new Finance Minister Euclid Tsakalotos failed to offer a detailed plan for consideration by finance ministers attending a meeting just yesterday.
And yet for all the compelling arguments that may be made about Greece's responsibility for its current mess it would be inaccurate and irresponsible to not also highlight other involved parties who play an influential role. Though I have not looked at financial data (that I would likely only be able to access were I an employee of the International Monetary Fund or the German government) relevant to the issue of Greece's fiscal reality it seems to me the assertion that the austerity policies required of Greece the last several years have made a bad situation much worse. I do not have a degree in economics but I can recall some of the important principles from coursework I did take in the subject matter. When a nation's economy is suffering a recession or depression an austerity policy may only hasten the unraveling of that state's economy. Investment must often be increased in poor economic times so the engine of a nation's economy can improve. This means that borrowing during hard times is more advisable than during times of prosperity. And yet the borrowing must be done within reasonable limits. It doesn't seem to be a realistic expectation to expect the Greek people to adhere to the sort of fiscal rectitude and conservatism typical of German culture.
I see a number of valid arguments as to why it would be wise for Germany and its allies to make some concessions of their own. These are the following:
The financial argument - The Greek economy is simply too weak to tolerate more rigorous austerity policies. I believe Prime Minister Alexis Tsipras was correct to describe Greece as 'an austerity laboratory'. The real GDP of Greece has shrunk some 26% since 2008. Gikas Hardouvelis, former finance minister of Greece (June 2014 to January 2015), believes a December 2014 assessment made by the I.M.F. and the European Central Bank that Greece had not done enough to merit continued funding support was a mistake. Had the IMF as well as the government of Mr. Tsipras made different decisions in the last six months Greece might have found itself in a very different position today. High rates of unemployment as well as an economy that is not especially diversified also will hinder economic recovery. Simply put, squeezing Greece even tighter to extract more payments on their debt seems likely to cause more harm than good.
The political argument - A Greece exit (Grexit) from the euro may ultimately lead to economic collapse in Greece. The consequences of such a collapse could include a humanitarian crisis whose cost could ultimately prove greater than the costs of somehow allowing Greece to remain a part of the euro currency union.
The historical argument - I think forgetting the broader geopolitical history of Europe would be a mistake. There was a time when Germany was a very weak state. These were the years immediately after World War II. After Germany was partitioned into a capitalist West and communist East the victorious Allied powers helped restore the (West) German economy through the implementation of the Marshall Plan. Insurmountable war reparations from World War I and a profound sense of national humiliation resulting from the Treaty of Versailles ultimately led to depression and hyperinflation within Germany. And these conditions served to catalyze the eventual rise of Hitler. Europe might have ultimately been spared the horror of World War II if Germany had been treated differently after World War I.
There is something to be said for offering compassion and assistance when a state is on the verge of becoming a failed state. I think the German people and leadership would be wise to remember this historical epoch when considering how to proceed with Greece. Greece has certainly not managed its finances well. It should thus bear some significant responsibility in whatever resolution of the crisis is ultimately chosen. But Germany can be a leader by putting people ahead of money.
So what would be a suite of suitable concessions? First and most important would be a deep write-down of Greece's debt. This is a response advocated by the article I quoted above that explores the historical issue. It seems the processes and standards that frame the work of organizations such as the International Monetary Fund should also be reviewed. If lending practices frequently cause more harm than good it seems very reasonable to insist upon a comprehensive review of related programs offered by groups such as the I.M.F.
The Horror in South Sudan - Having been affected by corruption in my own childhood I can empathize with those whose lives have been adversely impacted by the poor or illegal behavior of others. But what happens when you are a child growing up in a weak state riddled by corruption? What can your prospects possibly be when you are confronted with such circumstances from an early age? I was reflecting on such topics as I read about South Sudan.
South Sudan became a new nation only a few years ago. A June 2015 New York Times article describes most every type of hardship and inhumanity of man against man conceivable. At least as sobering is one of the primary sources of the conflict that is ravaging the nation...a personal political struggle between President Salva Kiir and his former vice president Riek Machar. Add to that the fact that the nation is highly dependent on its oil wealth and you have a potential recipe for geopolitical disaster.
Disinvestment in the United States - Here in the country of my birth there is a veritable daily deluge of news that would make even the strongest of us feel an urge to have a stiff drink. Most sobering for me was an editorial I read in the Star Tribune from this morning. As I have recently noted here in my writing I will be serving in AmeriCorps beginning later this month. The editorial notes that "Committees in both the U.S. House and Senate approved deep funding cuts that would shrink AmeriCorps in this (Minnesota) and every other state." Seventy-five thousand Americans are serving in AmeriCorps this year. From what I know of the program I believe the work I will do as a member of this cohort of people will prove to be quite a good investment.
An element of American culture I have long found perplexing is the apparent lack of significant positive correlation between how valuable a job may be to the sustainability of a community and its quality of life and the monetary compensation such a job provides. In other words why do some of the most important professions (such as teaching) often provide such minimal incentive to commit a lifetime to?
So what do the Greek financial crisis, the South Sudan conflict and disinvestment in the United States have in common? I believe they are all examples of what can unfold when we, either individually or as a collective, live according to unsustainable priorities. What is an unsustainable priority? I believe you could define such a priority as one that is inherently antithetical to basic human values such as safety, stability, kindness and compassion.
Sometimes I think the world is very much caught up in a spasm of ego-centrism. When I read the news selfishness and political division seems to be more the norm than the exception these days. And I think that is tragic. Some tragedies are truly traumatizing. Some are not. While I do not feel traumatized by what I have recounted above I do find it quite disheartening.
I'll repeat something I said back in 2013 when I first began this blog:
"Where are all the adults?"
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