Tuesday, November 1, 2011

It's Looking Like the Greek Bailout Might Need a Bailout too

You know, it was just last month – just last week! – that Europe announced it had reached a solution to keep Greece from sliding into official bankruptcy (as opposed to unofficial bankruptcy, which – let’s face it – it’s already in).

Everybody rejoiced, the markets rallied and people breathed a sigh of relief knowing that the problem was covered up (with a very thin blanked, mind you) for the time being. Maybe not for very long, but it didn’t have to be dealt with again right away at least.

And why do something today that can be dealt with tomorrow… especially when tomorrow never comes?

After three years of throwing money into one black hole after another, nobody with even a smidgen of common sense believed that this latest round of lunacy was going to work long-term. But it turns out that it might very well not work short-term either.

The UK’s Telegraph predicted as much just on Saturday in a piece entitled “Why the latest eurozone bail-out is destined to fail within weeks.” Economic agenda writer Liam Halligan said that “the responses of our politicians to recent financial troubles – hiding behind complexity and kicking the can down the road – have not only failed to temper the volatility, but have actually made it much worse.”

Politicians making things worse: Whooda thunk?

They’re like little children trying to avoid punishment by making up one really stupid, obvious lie to cover up another really stupid, obvious lie to explain away the living room lamp that they broke when they conveniently even though they knew they weren’t supposed to be playing ball there in the first place.

If you want the nitty gritty details of just how royally they messed things up this time, feel free to read the rest of Halligan’s comments on the subject. But be aware that it might sound like a lot of technical gobbledygook, mainly because it is, since politicians convoluted the whole situation long before the 2008 global financial meltdown.

The situation doesn’t have to be convoluted though, or at least not any more so. Greece was naughty and spent money it never had – mainly on social spending, union pensions and the like – so now it needs to face the consequences.

I think I speak for many when I beg the eurozone to just let Greece fail already! Because everybody knows it’s going to happen eventually anyway.

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