COMMENTARY: POLITICS and ECONOMICS
An analyst said on the Nightly Business Report this past week that Greece might collapse. He was talking about Greece's debt problem. "Collapse" was not a good metaphor. Empire's have fallen, or should we say disintegrated. Nation's have been devastated by war and states such as Somalia have disintegrated politically, but mark my words, Greece is not going to collapse. (And the euro will survive.)
This past week Greece had demonstrations in its streets. Four persons died. Greek anarchists spoke of a global conflagration, and Greece's Communist Party returned to their vision of the demise of capitalism. And there was anger over the government's austerity program and doubts about its success. But in Greece farmers will continue to grow food, some people will continue making things and performing services. There is the possibility that defaults on debts will create a banking crisis in Europe. Creditors will suffer. But countries have always survived banking crises and creditor pain.
The party is over in Greece for awhile. There will be an increase in unemployment and an increase in sharing, with inlaws and such. Lending to farmers will continue -- as it has for more than 2000 years. Lenders have survived millennia of ups and downs, and they have a way of surviving. Businesses will continue to offer buying things on credit. Research and science will continue. Ideas in technology will continue to find investors. And the arts flourish as they often do in hard times.
What makes Greece's problem different from countries having an economic crisis in eras past is it not having a currency independent of its neighbors. Greece's currency is the euro. The French, Germans and others do not want the euro to continue declining. If Greece had its own currency it could reduce its debt through inflation, paying back its creditors in less worthy money -- which has often happened. Instead, the Greeks are submitting to the demand for austerity.
