Today’s post will be brief. I am working on some other content for a multi-installment article and can’t wait to get it published but in the meantime I thought I’d share some thoughts with you. Today is the second day of the November challenge and I am exhausted and recovering from a heavy weight routine. I decided to scan around the internet and landed on some articles concerning the current debt crisis in Greece.
It is easy for those of us here in The United States to look at the unfolding situation over there and quickly put it out of our minds. Unfortunately our economic recession here is tied hand in hand with Greece’s own. If Greece cannot secure a bailout from the European Union their economy faces imminent collapse and they will default on billions of dollars of foreign loans. The fear and probability are that if this occurs other European nations such as Spain will soon follow. The result could be a domino effect across all of Europe. The simple truth of the situation across the Atlantic is this: while our own economy is doing badly, theirs is in shambles and barely holding on.
If Europe’s economy falters and the Euro loses its value the fear and panic it will create would devastate our own fragile stock market. There is very little confidence in Wall Street or the government at the moment and the slightest scare could send investors packing in record numbers. The resultant backlash would crush the banking industry and no amount of bailout would stop the hemorrhaging.
Strangely enough this very scenario was predicted just five short years ago. An author who I will not mention prophesied that Greece, locked in an economic depression would default on its loans and the resulting shockwave would ripple through the European zone and eventually across the Atlantic. This author went on to say that the government bailouts here in our own nation would ultimately fail and would serve only to postpone the inevitable crash of Wall Street. He reasoned that since the root cause of the issues facing the banking, finance, and auto industries were mismanagement and poor decision-making combined with a refusal to accept reality and not lack of funds that throwing more money at the problem was akin to throwing gasoline on a fire. Was he right? From where I sit it definitely looks like it.
Finally I have to throw this idea out there because I think it’s relevant and true. Should Greece be allowed to fail? If you like we can use this nation’s problem as a model for our own. The leaders of Greece and its economy are similar to our own in their mismanagement and inability to handle funds with a realistic appreciation of changing market conditions and global trends. If Greece continues on this down hill slide, the probable outcome within its own borders will be the unrest of its citizens followed by the removal of many officials and politicians in office. It will be a virtual house cleaning followed by more stringent practices and guidelines concerning the used and expenditure of funds by that government.
If Detroit and the big three automakers had been allowed to fail the resulting loss of jobs would have been tragic but in the fallout new companies and business models would have arisen and replaced them and the old good old boy way of doing business would have been dealt a mortal blow there. Change would have been forced and implemented. This propping up of an obsolete business ethic has only forestalled the inevitable. The same could be said of the bailout of Wall Street and the banks there. Their own ludicrous habits drove them to near ruin and by the very principles of capitalism they should have failed in order to clear the way for new banks and smarter managers to rise and replace them. Instead we bailed them out at the cost of hundreds of millions of dollars. In the end, the average American benefitted not at all. Unemployment only got worse foreclosures increased and many Americans are more broke and desperate then they have ever been before. So what will happen now if Wall Street falters? The Government itself came close to defaulting this summer and many global lenders no longer show confidence in our ability to repay our national loans. If the current trend continues, and this recession which was predicted to end last winter continues growing; there will be no bailout or parachute to stop the fall. Then what?
I say all this not to scare or depress you friends, but to inform you. It’s time we as a people in this nation start devoting a little more time to looking at the big picture. Unemployment, debt, and scandals are just distractions they keep us from looking down the road, when that is exactly where we need to be focused. Now is the time to start planning for the future instead of waiting for it to come to us.