“If a bank were guaranteed to get its money back, plus interest, no matter what it did, the whole system wouldn’t work. Imagine I were to walk into the nearest branch of the Royal Bank of Scotland and say ‘You know, I just got a really great tip on the horses. Think you could lend me a couple million quid?’ Obviously they’d just laugh at me. But that’s just because they know if my horse didn’t come in, there’d be no way for them to get the money back. But, imagine there was some law that said they were guaranteed to get their money back no matter what happens, even if that meant, I don’t know, selling my daughter into slavery or harvesting my organs or something. Well, in that case, why not?
Why bother waiting for someone to walk in who has a viable plan to set up a laundromat or some such? Basically, that’s the situation the IMF created on a global level— which is how you could have all those banks willing to fork over billions of dollars to a bunch of obvious crooks in the first place.”
Debt: The First Five Thousand Years by David Graeber
Now I’ve heard a lot of complaints about the fact that Greece is full of Greeks who apart from being responsible for a lot of myths, do nothing but sit round drinking coffee and playing dominoes. And I’ve also heard a lot of nonsense about how Greece took the money and the fact that they don’t want to pay it back just shows how childish and irresponsible they are.
Well, I could spend a lot of time trying to explain how the Greek myths don’t just end with Achilles and that there’s more than a couple being invented about the events of the past ten years, but I think that we’d be here a long time and I’d have to get very technical. Far more technical than you’d understand. In fact, I’d have to get even more technical than I’d understand because I haven’t read enough about how the IMF works to fully explain the whole Greek situation.
However, I thought, given that a lack of expertise hasn’t stopped people writing letters to the paper telling us such useful things as the Greeks have always been lazy because they left the Acropolis unfinished. Neither has it stopped opinion writers working on the theory that because they have a column, then what they say must be worth listening to even if they think that the banks in Greece will run out of money by the end of the week, as opposed to cash. Why will they run out of cash? Well, because people keep withdrawing it and nobody wants to deposit it, because they’re worried that the banks’ll run out of cash. God, why don’t the Greek government make watching “It’s A Wonderful Life” with Jimmy Stewart compulsory viewing at this point.
Anyway, I thought that I should put in my two cents worth at this point. Well, I know it’s only two cents but every little bit helps in an emergency, and now that the Budget Emergency seems to have passed in Australia, I figure we should all help out.
Tonight I started reading “Debt: The First Five Thousand Years” by David Graeber. I didn’t quite know what to expect because I only bought it because I thought the title was something to do with me paying off my mortgage. However, in the first chapter, he made the point that suggestions we should pay off debt have nothing to do with economics, they were more to do with morality. Which is exactly the point I made when I wrote about Greece earlier this week. And whenever I find anyone who agrees with me, I immediately decide that they’re a genius, so I’m looking forward to reading the rest of the book just to see if he stays as clever as me for the whole book. (Before you judge me too harshly, just remember Tony Abbott became Prime Minister with logic like that… Mm… On second thoughts, judge away!)
So, let’s just not go down the path of morality. Let’s just accept the idea that some are peddling that Greece and the Greeks are irresponsible, shiftless children who shouldn’t be allowed to make their own decisions.
Ok, for the purpose of simplicity and because to generalise about all Greeks is to be racist, I’m just going to imagine that the Greeks are one person – let’s call her Helen – and I’m going to write the rest of this about Helen, so I don’t get taken to court by any of the Greek Treasurers because we all know how sensitive treasurers can be to criticism.
The Story of Helen
Helen went to the bank a few years ago and said that she wanted to move into the exclusive Euro Estate. The bank said that even though she was only working part-time with very few assets that should be fine. Everyone in the Euro Estate would benefit from the rising real estate prices.
Unfortunately, in 2007, prices stopped rising and Helen was getting less work which meant that the bank grew concerned about Helen’s ability to repay her loan, so they worked out a plan where Helen would stay home and let the interest bill grow, but every week or so, she’d have to go to the bank and tell all the other people how sorry she was and shine the shoes of the bankers.
One day, Helen announced that she wasn’t going to do any more shoe shining and that she’d like to actually have a real job. The bankers grew very, very angry and said that everyone needed to pay their debts. But Helen was resolute. She was about to point out that many of the bankers themselves hadn’t paid their debts. And that there was a thing called bankruptcy and if you declared yourself bankrupt, then the joke was on the person who’d lent you the money. And she was going to ask if the bankers thought so little of her, why did they lend her the money in the first place. But at this point one of the bankers interrupted to tell her that if she didn’t want to shine shoes then she’d have to move back to where she was before she borrowed all the money…
Ok, this story has a few holes in it as an allegory, but it’s a whole lot closer to the truth than most of the guff you’re reading at the moment. And yes, it doesn’t have a satisfactory ending.
Well, I was going to end with Helen getting married and living happily ever after. But then I thought about it.
Anyone been to a Greek wedding? They keep smashing the plates. Which would just make some people concerned about China!