Ode to a Grecian Urn

17 June 2012

The Greeks vote today, while the world holds its breath, expecting the populace to either embrace the hard medicine of austerity or to book it to the Drachma and take their chances on a steep devaluation. My bet is that neither will happen, the result will be ambiguous, and the uncertainty that is killing the European economy will continue. Angela is betting on austerity, but that is because she thinks like a German, “I have lived beyond my means, and therefore now I must pay the price and discipline myself back to stability.” But the Greeks think more like Donald Trump, whose ‘Art of the Deal’ really amounted to this: “I will borrow so much money from the banks to finance my casinos, hotels and restaurants that when I can’t pay it will become the banks’ problem, not mine.” Tsipras, like a good politician, offers options that aren’t there. He says Greece can have it both ways: stay in the Euro but reject the reform package. The joke is, he may be right. Germany may be forced to write the big check to avoid catastrophe.

Beneath it all is the hard reality that, with the credit pumped out of it, neither the European nor the U.S. economy is much of an economy at all. At least in the sense of one in which almost everyone who wants a job can find one, and in which, if one makes all the right decision, the reward of an ever rising standard of living awaits.

In contrast to Europe’s leaders, Obama looks like a genius. He alone eschewed the austerity route, defying the calls of the Republicans to follow the example of Europe, focusing in the short term on reducing the deficit and driving the economy even deeper into recession. How can you reduce the deficit when 20% of the population is out of work and not earning a salary or paying taxes?

It’s another hot, steamy morning here in Dubai. Looking at the number of buildings going up, you would think it was Boomtime. If you’re sitting on an ocean of oil, I guess it always is.

Rupert Scofield


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