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Why Greece is failing and how can this be fixed Why Greece is failing and how can this be fixed

08-04-2015 , 10:13 AM
Presumably most people in this forum are American, and resultingly they would not know how life in Greece is and most importantly how Greek people are financially trained. The latter is exactly the problem in my opinion:

It seems to me that one of the major problems in Greece is that the Greeks are not financially trained to deal with the changes in today's global economy. Moreover, they do not have the means to inform themselves well either.

What I mean by this is specifically:

1) No education about the importance of investing (eg as happens in the US)
According to my knowledge, US schools educate people to a basic level about the importance of investing some money as a basic life practice. For example, the idea that one should invest in a balanced portfolio - buy some stocks and some shares - is taught in schools/universities. Such things are not even mentioned in Greece.

2) There aren't many investment banks and hedge funds
The Greek stock market is very small. The trading volume is very small. Simply looking at which countries have a large investing sector immediately shows who has a strong economy. More importantly, those who do not have a big investment sector have a bad economy.

3) Most people do not know how to follow good basic personal financial practices
eg. Most Greeks buy everything new (because they think this is "cool"). They do not buy and selling online enough on markets such as ebay and Amazon. They don't sell things they don't need as often. They do not have basic knowledge about how to save money (eg most simply think that they should just leave their money in their bank account for example and that is enough). They haven't learnt to plan ahead financially, such as making simple financial budgets. Also, there aren't enough websites with good financial information for everyday life.

4) Most people have a bad understanding about the value of money
This is the result of years living with loans coming from abroad, cronyism and not creating a competitive workplace where pay is according to performance.

5) Lack of education about the importance of business startups
As far as I know, Americans are told about startups from a young age. They receive incentive and encouragement about the importance of starting their own businesses in the future. This does not happen in Greece.

6) Not responding to financial changes with solutions (either independently or governmentially)
For example, when in the UK high level bankers were found to be paid big bonuses when investment banks were upsetting the economy, the government changed the bankers' pay scheme (broke it down in instalments).
Moreover, people who disliked working with bankers created new independent lending centers where individuals could borrow and lend money to each other without going through banks.
In the US, when people realised that making a startup requires a capital which most aspiring enterpreneurs do not have, they invented the crowdfunding schemes (eg kickstarter).
Such and similar solutions allowed those countries to grow further in the future despite any setbacks.

Most Greeks do not even know what Kickstarter or crowdfunding is. When the financial crisis started in the US with the property market in 2009, people could not understand the relation to the current situation and why people from other countries protested against bankers. They still do not protest. They do not understand how economy works today even at a basic level.

7) There isn't enough financial information and education in the news
There are no financial talk shows where people can learn about the economy, investing, businesses, and what is happening in the Greek market and the world today.

In my opinion, these are areas which the Greek government should address if they want growth in the country in the coming years. The Greeks need to build a framework to enable it.

Feel free to express your views, ideas and suggestions about what else you may think Greece can do to grow and get back on its feet.

Last edited by BullsFan; 08-04-2015 at 10:26 AM.
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08-04-2015 , 10:18 AM
For the most part, you nailed it. My girlfriend is from Greece and your points are valid for her friends still living in Greece.

1, 3 and 4 are so true.

Also, sexism and nepotism are huge issues in Greece. In the US, if you work hard and follow the right steps you will climb the corporate ladder. In Greece, you have to know someone in a position of power in order have any upward mobility. The ****ty job market in Greece has resulted in the top talent moving elsewhere in Europe.

The idea of being frugal and planning for the future are seen as negatives. You would think that is a joke but it is true.

It is incredibly frustrating to date someone with this mentality but her other positives easily outweigh this slightly annoying mentality.

Last edited by jwd; 08-04-2015 at 10:28 AM.
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08-04-2015 , 10:36 AM
The Greeks are Obama-like socialists on steroids, with an unhealthy measure of pride and denial mixed in.

It's not so much the lack of market forces. Market forces operate anywhere the government does the minimal job of creating the framework then gets out of the way.

It's the veneration of government and government help that's created Greek's mess. The public teet in Greece (via pensions, a large public sector, other welfare, etc) is very juicy, and most people prefer to suck off the teet than do the hard risky task of making businesses and wealth.

It's a socialist utopia, without the hard working (or oil wealthy), homogenous, highly intelligent populations of the north where socialism can do ok.

The other point is corruption. Everyone is in bed with everyone and a lot of getting started in business is who you know. It's not like the US where you can cheaply put a factory or shop and start something. It's classic southern European old world bull****, and why they don't and cant grow.

The problems are both psychological (pride and "face" in spades, leading to denial, which ultimately filters down to the governments they choose and the hard choices they avoid/deny), philosophical, cultural (family oriented life, elder respect, matriarchy and patriarchy creates a preference for socialism), and deeply structural (Greece is old, both in terms of social connections and infrastructure, and you can't just greenfield new developments and businesses like you can in the US).

I don't think you can fix Greece without an invasion and a dictator who strips them of their pride. The Germans are trying that right now.
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08-04-2015 , 11:46 AM
1 - lay in the sun doing no work
2 - dont pay taxes
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08-05-2015 , 02:49 PM
The fact that Greece can't float its own currency only makes things worse.

They should have a very weak currency but instead they have a strong one.
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08-05-2015 , 03:12 PM
Quote:
Originally Posted by Rant
The fact that Greece can't float its own currency only makes things worse.

They should have a very weak currency but instead they have a strong one.
it's a big problem in EU...
the mobility of workforce between states would mitigate that effect like in the USA....
but national barriers of entry make it highly inefficient...
not to mention you would need to dismantle national banks and put only ECB in charge to have the USA effect (aka euro-zone debt not national debt)
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08-06-2015 , 10:44 PM
Greece is what happens when you mix a massive welfare state with a bunch of lazy bums that don't pay taxes.
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08-07-2015 , 10:30 AM
Quote:
Originally Posted by ToothSayer
The Greeks are Obama-like socialists on steroids, with an unhealthy measure of pride and denial mixed in.

It's not so much the lack of market forces. Market forces operate anywhere the government does the minimal job of creating the framework then gets out of the way.

It's the veneration of government and government help that's created Greek's mess. The public teet in Greece (via pensions, a large public sector, other welfare, etc) is very juicy, and most people prefer to suck off the teet than do the hard risky task of making businesses and wealth.

It's a socialist utopia, without the hard working (or oil wealthy), homogenous, highly intelligent populations of the north where socialism can do ok.
So those Mediterranean types are just lazy and dumb, unlike Northern Europeans who are "homogeneous." Holy ****, dude. Thank you SO much for this!!!

Not completely unrelated, but you probably think Germany paid their "fair share" in war reparations after raping Greece for four years. They didn't. Churchill was probably benevolent in massacring leftists movements in Greece, the same factions that helped drive the Nazis out. He wasn't.

Special LOL @ most people should just get involved in "making business and wealth," as if growth opportunities are boundless if you just roll up your sleeves and submit to the force. Great, great stuff.

You are a true cultist of neoliberal "market forces," aren't you? Nevermind that traditional economic theory is mired in numerous false assumptions at the foundation level. Because surely there are no physical limitations to growth if you just "get government out of the way."

Needless to say, you maintain a painfully simplistic and ideological theory for what has gone wrong in Greece. But then, you're probably the kind of person who blamed "ignorant borrowers" for the 07-08 real estate crash, and never the predatory lenders.
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08-10-2015 , 03:00 PM
Quote:
Originally Posted by JiggsCasey
So those Mediterranean types are just lazy and dumb, unlike Northern Europeans who are "homogeneous." Holy ****, dude. Thank you SO much for this!!!
You're welcome. Reality is hard to take (it doesn't conform to polite prejudices), but there's no other explanation for why Germany has been a powerhouse in innovation for 100+ years, even after being utterly destroyed twice, and having much of their talent and IP poached after WWII. The Germans are simply smarter, more community minded, more efficient, and far less lazy.

This isn't necessarily better (it also makes them more efficient and dangerous and emotionless sociopaths under certain circumstances), but it does explain the economic differences.

Quote:
Not completely unrelated, but you probably think Germany paid their "fair share" in war reparations after raping Greece for four years. They didn't. Churchill was probably benevolent in massacring leftists movements in Greece, the same factions that helped drive the Nazis out. He wasn't.
I think the happenings of 70 years ago have no bearing on now. Look at Germany. It was utterly destroyed, had its cities and industries bombed to smitherines, its country split up by the Russians and Americans, its intectually property stolen, and much of its talent emigrated to the US, and was forced to pay substantial war reparations for decades.

50 years later it's one of the strongest countries in the world, economically, and a powerhouse of efficiency and innovation.

Greece, which underwent far less damage, and far more control of over its own destiny, is a clownish basked case with the begging bowl out.

This is another example's of Greece's ******o pride coming into play. They are mentioning what happened 70 years ago, rather than owning their own problems of today. The Greeks are lazy socialists who avoid paying their taxes, who don't believe in individualism (wanting the government to provide services for free). And yet despite these preferences, they refuse to vote in government that enforce the rule of law (i.e. the existing tax laws!!) and therefore collect sufficient taxes to pay for this. That is the very simple reason they're getting taken over by Germany. And yes, it comes down to pride and the divergence from reality that pride creates. The belief that "we don't have a problem - it's those evil austerity guys who are beating down Greece and Greek pride!!!" leads them to voting in governments that don't actually get to the root cause of the problem, and who instead pander and comfort the Greek people's dopey, reality-denying prejudices.

Quote:
Special LOL @ most people should just get involved in "making business and wealth," as if growth opportunities are boundless if you just roll up your sleeves and submit to the force. Great, great stuff.
The culture defines a people. Greece's culture is very, very sick if they want to be other than an economic basket case.

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You are a true cultist of neoliberal "market forces," aren't you?
I think market forces lead to exploitation and (in the complete absence of government), warlords. I'm a fan of government - in the areas where it is capable of being net helpful and just and efficient.
Quote:
Nevermind that traditional economic theory is mired in numerous false assumptions at the foundation level.
I agree.
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Because surely there are no physical limitations to growth if you just "get government out of the way."
All final limitations are physical. Long before that, limitations are cultural and philosophical, and problems arise first from a poverty of intelligence and imagination and rationality.

In practice this comes out in things like: Lack of making hard spending choices (hope & pride instead of rationality; socialism and paternalism over individualism) Lack of enforcement of laws (cultural). Lack of new ideas (imagination). Lack of openness to new ways of doing things (cultural rigidity, philosophical unsophistication, too much pride & lack of imagination).

None of these things are physical. If you replace Greece's populations with Germans, Greece would be a very functional economy in ten years. It's not physical limits that are holding the Greeks back.
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Needless to say, you maintain a painfully simplistic and ideological theory for what has gone wrong in Greece.
Quote:
But then, you're probably the kind of person who blamed "ignorant borrowers" for the 07-08 real estate crash, and never the predatory lenders.
Who made the decision to keep interest rates low, such that risk was mispriced?

The private sector?
Government?

It's the latter, dude. I think anarcho-capitalists/Austrians are mostly morons, but they're certainly correct on this point. And another question: who provided taxpayer money to bail out the biggest morons who ended up holding the lended debt? The government? The private sector? QED I think.

In terms of fairness, I believe that government backed perpetual ownership of land (for eternity) creates unfairness for those born poor, at least in a world where all land is owned. This can be leveraged on the less intelligent and educated to create serf-like outcomes for the poor. There is certainly a strong case to adjust that outcome. The fact is, you don't understand my politics at all. I am far more socialist and compassionate than you - I just have enough sense and compassion such that I recognize that socialism needs to be intelligently modified, such that long term outcomes are better for the poor (and everyone, for that matter). An intelligent understanding of reality leads to seeing the value of a diverse (ideas as well as skin color - the opposite of the idea-conforming Left), individualist, free market yet rule-following culture that's pretty much the opposite of Greece (or any left-wing ideology).

Now lets get back to the real question: what happened to your oil thread? Care to jump back in, now that you're returned to these parts? Would love to hear your opinion.

Last edited by ToothSayer; 08-10-2015 at 03:12 PM.
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08-10-2015 , 04:20 PM
Step 1: stop doing the germany bailout thing; it's only helping everyone not in greece. (that's where all the $ is going, not greece so it's incredibly stupid for them to keep doing that)

Step 2: see step 1

Step 3: fix the pension thing (welcome to everyone else who won't/doesn't)


It's tough to get greeks to enter a stock market in which a) it at least recently was roughly at late 1980's levels and b) they can't cash out if it goes up anyway b/c of withdraw limits and c) if brokerage goes poof, your account goes poof. (true of US as well; unfortunately, I'm sure someone in here's gonna learn that one the hard way) There's many risks in markets that people think can never happen to them.
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08-11-2015 , 03:32 AM
The culture of corruption is very deeply ingrained in Greek society, they even have a word for it - 'fakelaki' or 'little envelope'.

You want to see a doctor quickly, get a government permit? Expect to enclose Euros with your paperwork if you don't want to sit around waiting for ever.

These payments have been valued at around 2% of GDP, but their true extent is likely unknown and, of course, taxes are never paid. It's like having the entire economy run by the mob.
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