Greece, Economics and The Sweet Meteor Of Death

I guess the rest of the world will just have to foreclose on The Acropolis and peddle the Elgin Marbles on a yard-sale table. The Hellenes have an economy that lacks the palm grease to even pay Chiron to ferry them across the Styx to Economic Hades. This was not in either the EU’s or IMF’s product brochure. They each have sections for dealing with optional features such as cronyism, Enronnish managerial accounting, and low-grade socialist parasitic deadbeats. They forgot the section for an entire national economy embracing The Sweet Meteor of Death like an illicit lover during a secret tryst at a rundown Motel 6.

So IMF negotiations on the current, obviously unpayable Greek sovereign debt are on hiatus. There are sensible solutions to this sort of problem. American Jurisprudence offers numerous flavors of bankruptcy. When any financial entity’s checks become rubberized to the point where you need Quantum Physics equations to estimate where they bounce next, repayment terms on massive debt obligations belong in the discount fiction rack of your local used bookstore. But the IMF isn’t designed to do that. This has led to the problem that an IMF negotiator describes below.

Gerry Rice told reporters Thursday that “We are well away from an agreement.” He added: “There are major differences between us in most key areas. There has been no progress in narrowing these differences recently.”

And yet the various panjandrums across Europe who have foolishly bankrolled Greek financial escapism are not accepting the reality before them.

Rice said the IMF remains engaged. “The IMF doesn’t leave the table.” Donald Tusk, who chairs meetings of EU leaders, said Thursday that “there is no more time for gambling” “The Greek government has to be, I think, a little bit more realistic,” Tusk said.

What a hoot! The time to stop gambling was before the card game was over and the other players discovered that the Greeks had lost a big pile of chips that they never fronted a stake for in the first place. When the Greek government decides to be realistic*, there are four ways in which this financial version of a sad, Middle School AD&D Game can end.

1)Greece gets put on permanent Euro-welfare and some form of “Technical Government” dictatorship gets imposed until the current band of creditors sucks what’s suckable out of the economy and the Greek People.

2)Greece declares a form of national bankruptcy and goes into total default. Hard times follow. Maybe Neil Young and John Cougar Mellencamp can go play them a Farm Aid concert.

3)Greece goes utterly Neo-Reactionary and installs a Maoist or Fascist government that embraces total isolationism and reinstalls the Drachma and attempts to pay back its creditors in what are essentially less functional pieces of toilet paper rather than valuable units of currency.

4)Greece melts down to the point where they are the Somalia of Europe and they make Albania look somewhat functional and organized.

Interestingly enough, we are learning from this unmitigated disaster. I’ve done enough RDT@E and cost work to enjoy this whole situation. It sort of reminds me of the old System Identification problem from engineering. The EU and IMF have input a lot of money and “advice” into Greece. The output seems to be a high degree of overconsumption followed by financial collapse. The end state would seem to be a completely debilitated and dependent chunk of nationhood. Taking the System ID algorithm literally and comparing inputs to outputs to end results would lead me to believe this was exactly the sort of thing that the IMF and the EU were originally designed to produce.

So the EU and the IMF are not creditors in the traditional sense. If such were the case, Greece collapsing would be scored as a System Abort that would impress even Kermit Gosnell. It would be the Hindenburg of international economic accords. The Blazing Zeppelin of Metal you see on the old Led Zeppelin Tour Shirts. If these organizations were primarily concerned with economics; they would have figured out how to handle a credit-laden deadbeat. Greece would be declared insolvent, cut off from further credit and the idiots who cut them loans would take their financial bloodbath after the write-downs and haircuts were appropriately administered.

The fact that this hasn’t happened yet is educational. These two organizations are not quite what you’d call creditors in the same way that The Federal Reserve is not quite called a bank. Loans aren’t getting cut to people on a basis of needs versus projected creditworthiness and collections are not proceeding in a way that would suggest any particular regard for either the creditors or anything financial professionals would recognize as GAAP-compliance. This raises the hoary, gnarled question of just what business the IMF and EU consider themselves engaged in. Greece’s spectacular shotgun drinking of the economic hemlock may well give us a dispositive data point towards answering that question.

*-At or around the time that the leading political parties in Athens are no longer Nazis or Communists….

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