Wednesday, May 5, 2010

Sovereignty Doesn't Mean The Ability To Change Reality

The FLGs ran out of kosher salt last night, so FLG was sent to get some more.  His car radio was tuned to the classical station.  For those of you who don't know, there are two NPR stations here in the DC area.  There may be more, but FLG doesn't care about them.  One plays your standard NPR news.  The other plays classical.  However, the NewsHour is filmed at the classical station and so it runs the audio of the NewsHour during the broadcast.  Anyway....

As FLG was driving to the store, he caught a story about the Greece bailout.  A Greek man said the following:
The International Monetary Fund came to control us like a new dictator who, every three months, will be seeking to suck our blood.
You hear this type of thing a lot from people on the far left.  And by far left FLG means self-proclaimed communists, socialists, and diehard anti-globalization people, of which Greece has its fair share.

To a point FLG is sympathetic with this argument.  He doesn't like international financial organizations telling countries what to do.  But then again Greece doesn't have to listen to them.  It still retains its sovereignty.  Greece has another option -- default.

Greece is in trouble because it ran a poor fiscal house for decades.  Everybody held their nose and looked the other way when it joined the euro, hoping it would further the cause of political union.  When the euro offered Greece even lower interest rates with which to exacerbate their fiscal problems. 

FLG understands that at the moment of crisis, when the bond market, IMF, G8, and whomever else, is telling you that you need to do this or that it seems like you don't have any options.  And since the short-term and proximate causes are various foreign actors telling you to shrink your government spending, it would seem like a huge infringement upon sovereignty and maybe even a vast conspiracy to a far leftist.

But the pure fact.  The reality.  Is that there are finite resources in this world and everybody faces constraints.  Greece has been living beyond its means for years.  Certainly, this problem wouldn't have occurred right now if it weren't for the financial crisis and economic downturn, but it would've happened eventually.  As they say, it's only when the tide goes out that you learn who has been swimming naked.   The issue isn't what caused the tide to go out, but that you are swimming naked.

If Greece doesn't want conditions place upon it by the IMF or EU, then they don't have to accept them.  Instead, they'll default and fuck themselves when they need to borrow in the future.

Sorry, FLG fumes when people think politics can overcome material reality.

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