Beware of Greeks Bearing Bonds

Source: Vanity Fair

As Wall Street hangs on the question “Will Greece default?,” the author heads for riot-stricken Athens, and for the mysterious Vatopaidi monastery, which brought down the last government, laying bare the country’s economic insanity. But beyond a $1.2 trillion debt (roughly a quarter-million dollars for each working adult), there is a more frightening deficit. After systematically looting their own treasury, in a breathtaking binge of tax evasion, bribery, and creative accounting spurred on by Goldman Sachs, Greeks are sure of one thing: they can’t trust their fellow Greeks.

Read the entire article on the Vanity Fair website.

Comments

  1. Fr. Johannes Jacobse :
  2. People who live in glass houses…

    “During the last bubble (from 2002 to 2006) the top 1 percent of Americans — paid mainly from the Wall Street casino — received two-thirds of the gain in national income, while the bottom 90 percent — mainly dependent on Main Street’s shrinking economy — got only 12 percent. This growing wealth gap is not the market’s fault. It’s the decaying fruit of bad economic policy.

    “The day of national reckoning has arrived. We will not have a conventional business recovery now, but rather a long hangover of debt liquidation and downsizing — as suggested by last week’s news that the national economy grew at an anemic annual rate of 2.4 percent in the second quarter. Under these circumstances, it’s a pity that the modern Republican Party offers the American people an irrelevant platform of recycled Keynesianism when the old approach — balanced budgets, sound money and financial discipline — is needed more than ever.”

    David Stockman, a director of the Office of Management and Budget under President Ronald Reagan, NYT, July 31, 2010.

    • Yanni,

      You’re too funny…the budget chief of the current administration leaves office, and does a complete about face (suddenly endorsing continuation of the Bush tax cuts)….and you want to quote a guy who hasn’t held office in 22 years?

      That said…if you read what he says, “balanced budgets, sound money and financial discipline — is needed more than ever…”

      …he’s actually endorsing what the Tea Partiers are suggesting.

      I think you are right…don’t vote Republican…vote Tea Party!

      Couldn’t agree more.

      best regards
      dean

      • George Michalopulos :

        Dean,

        I always get a chuckle when liberals start quoting Stockman and others from the Reagan administration. Being a young man during the Reagan administration, I fondly remember the vituperation and vitriol heaped on the Reagan administration when it was in office. I particularly remember David Stockman becoming a hate figure for the Left when he admitted that “trickle-down ecomonics” was at the heart of Reaganomics. He was right of course and our nation sustained the longest peacetime expansion in our history. I guess JFK was right: “a rising tide lifts all boats.”

  3. George Michalopulos :

    Yanni, there is no reason to be defensive. Anybody who knows anything about the Consservative movement in America knows that we’ve been casting aspersions on America’s troubles parallel Greece’s (and Italy’s, Spain’s, Ireland’s, etc.) The difference is that Greece’s profligacy and corruption is on a level that makes Chicago politics look downright honest.

    Of course, Greece as a sovereign nation-state is probably history. It’s going to go into receivership soon. My concern is America and the rest of the West. Another concern is the spiritual and ecclesial ramifications of the Greek collapse. Consider: when FOX news wanted to interview the “Archbishop of America” [sic] about the destroyed parish church of St Nicholas, where was he? He was on some Greek island we are told paying court to the EP. Instead, some bureaucrat from Phasiane (is that a suburb near Cleveland?) appeared in his place. Is this how a serious American church runs its house?

    Another consideration: time and again, we are told that America is “not mature enough” for autocephaly. Leaving aside the Church of Greece scandals, let us ask, which autocephalous patriarch is the primate of Mt Athos? What makes an honest observer think that such shenanigans won’t happen here in America under the present “mature” overlordship of the Phanar?

  4. So much sadness rises while reading that article. Here a monastery owned by ‘The Green Patriarch’ trades a lake that was a natural preservation for a great many tracts of rental urban real estate generating a scandal that brings more chaos to an already troubled state.

    Let’s have all the monks-are-holier-than-thou-and-Athos-especially types explain the plump monk real-estate moguls amid the ‘thin ones’ who tend and eat veggies and pray. Maybe the ‘athos in america’ types were right all along, it’s just Athos was more like the extensive real estate operation in Arizona than anybody here knew or wanted to believe.

    The central theme running through the economic dimension of Greece’s situation in that article is a deep aversion to elevating the status of printed money to the level appreciated as customary in the rest of Europe and the West. Back when Greece managed its own Drachma it would merely ‘monatize’ the debt– that is, print money and make it ‘go away’ by devaluing the currency, allow the drachma to seek its own level relative to other countries so there would be no important international fuss and then move on.

    Back when the Drachma was theirs, they were a productive country and exchanged the things they made for the things they needed using money on a very short term basis as basic transaction lubrication. Nobody much kept Drachmas since everyone knew they weren’t going to be worth as much as time passed. So I think that’s the cultural understanding of printed money. But the whole ‘Euro’ concept was different — no printing more of it ‘just because’ that money carries a whole culture along with it that is different than the culture everyone in Greece came to know and grew up with.

    There too we see an Orthodox church predominant in every city and villiage — what assessment has it made as regarding its role in allowing the culture of bribery and acceptable lying about taxes due over against electing those who will enact such taxes as the people really feel they want to pay?

  5. …I once used to deride secular rulers because they distributed honours, not on grounds of inherent merit but of wealth or seniority or worldly rank. But when I heard that this stupidity had swaggered into our own affairs too, I no longer reckoned their action so strange. For why should we be surprised that worldly people, who love the praise of the mob and do everything for money, should make this mistake, when those who claim to have renounced all these desires are no better? For although they are contending for heavenly rewards, they act as though they had to decide merely about acres of land or something else of the kind…..

    PARTICULAR DUTIES AND PROBLEMS 111.15 Pages 90-91 form St. John Chrysostom, 6 books on the priesthood.

  6. From http://www.periscopepost.com/2010/09/beware-of-greeks-bearing-bonds-an-apology/

    ….Michael Lewis concludes with a question: can Greek civic life, once lost, ever be re-created? I would argue that the concept of [national government] civic responsibility and the [national government] public good have not been of paramount importance to most Greeks since classical times [when the most local and family dynamics were highly emphasized and city-states sparred with one another]. Apart from a few truly civic minded politicians, what is desperately needed is for the average Greek to realize that it is truly not in his long term interest to try to live off the state. Those days are over. The many vehicles and mechanisms that have been put in place to safeguard state handouts: the huge bureaucracy, the unions, the cartels, the closed professions; far from protecting the citizen or worker, these now act as a barrier to his prosperity. As in times of war, sacrifices will have to be made, but it is long term self-interest that must lead the Greeks to make these sacrifices.

  7. Fr. Johannes Jacobse :

    I saw how this affected a young person when I lived in Greece. A woman who graduated high school desperately wanted to go to college. College in Greece is basically a closed system. Enrollments have quotas, and getting on the list took — you guessed — family connections, bribes, and so forth.

    She could not get in. Clearly she was qualified; high school grades, test scores, native ability and drive, all met the standards. But because she was not part of the chosen she would not get in. Her family did not have the money to send her to school outside the country.

    What a difference between the USA and Greece I thought. Someone as determined as she was could have ended up in a good college five different ways. In America, you can go to Junior College for just a year and transfer to a good state school if you wanted.

    In America, opportunity is the benefit.

    • Fr. Hans: The article I’ve been looking for but haven’t found yet is the story about where Greek national spending amounting to a national debt of $250,000 per Greek person is now. Money isn’t destroyed when it is spent, it moves from one pocket to another — all that cash is presently somewhere. Where?

      • It’s here: The Market Oracle.

        The are 11 million people in Greece. The nation has run up an operational deficit of $400 billion, plus a government pension fund obligation of $800 billion. That’s $1.2 trillion. This, for a nation with a population smaller than Los Angeles. This is a debt of $250,000 for every Greek.

        • Chrys thanks for that article. It restates much including the extensive lack of paying taxes. The thing it doesn’t touch, the thing I want to know about is this: 11 million people there each have had about $250,000 spent in their name. So, in whose accounts is that money to be found? Spent money isn’t like electricity that leaves the wires and is gone when it is used. It moved from the government’s accounts to, well whose? Plainly the 11 million people there don’t each have $250,000 in their piggybanks. Where is that money now?

    • Apropos your case of the ‘kid with a lot of go denied a future in Greece': I have a cousin who years ago found himself in that same position. He had so much drive, and though no immediate family in the USA he had cousins (I’m one).. The whole ‘Greek American Network’ was really functional and so he asked and my parents and family made it possible to come here, lived here and there with distant relatives, borrowed — and paid back — money and worked his way through college. I remember a few Christmas’s and Pascha’s with him years ago. Then in an amazing development though he could have stayed here he wanted to support his parents in their old age and after his medical training he’s now a dentist in Piraeus.

      — his dad was one of the lead couple of chanters at the Cathedral in Athens, he died about ten or so years ago.

      So, here’s a devoutly Orthodox man who would have received accolades from the Bhuddists– he left the hard situation that did him few favors, really elevated himself, and then under no obligation nevertheless went back.

  8. Well, the modern Greeks of course spent several centuries under the Ottomans, hence making them backward when they received independent. Ancient Greece, particulary Athens had a good system for small farmers, there was a few cancellations of debts and some redistution of land under Solon, but from that time until Percles, small farmers and large farmers were able to market there good with little government inferance. Howerver, the war with Sparta destroyed that and Sparta of course an sort ot a feudal system with helot-serfs working the land.

  9. George Michalopulos :

    In reading the article again, I can’t see what the monks did was somehow illegal. It seems to me that they leveraged land for increasingly more profitablee transactions. Kind of like house flipping here in the States. Am I wrong about this? Finance was never my forte so any correction would be greatly appreciated. This is not to say that there is no criminality, corruption or massive tax evasion in Greece, clearly there is and was, it’s just I don’t think that Athos should be tarred with the same brush as all the black marketeering that goes on.

  10. The clear implication of the article was that the monks either traded on what they learned in confession or simply the penitent attitude of the government official in order to get them to make real estate decisions heavily economically in favor of the monks and not the Greek people’s interest, except for one who refused to sign off on a bad deal.

    I’m still trying to understand in whose pocket $250,000 for each of 10 million Greek residents the government spent ‘for them’ landed.

    Does any article speak to that?

    • The clear implication of the article was that the monks either traded on what they learned in confession

      This was the utterly heartbreaking implication of the article.

      As for the 1/4 million per, if it is used to underwrite consumption without meaningful production (also clearly implied by the article), it is very possible to generate a massive debt over time without anything much to show for it. It is one way to “measure” the deficit of productivity – or the surplus of consumption – by which one gradually erodes wealth. Lest anyone indict the Greeks too quickly, one can find plenty more of the same elsewhere.

  11. Personally, I think we need to lay off Greece on their economics. The European nations are actually cutting their spending when it comes to attempting to fix their economies. The US, on the other hand, still thinks we need to follow the bailout. Both ends of the “progressive parties” – Neocons and Libs.

    Good article that points this out:
    http://reason.com/archives/2010/09/20/austerity-agonistes

    If we need to focus on Greece on anything, it would be on the Church-State conglomerate they have created and human rights. If hypocracy lies anywhere, it is here.

    • de Rugy is terrific. As the link I posted above shows, there are plenty of other countries (our own included) that have dangerous levels of debt.

      That said, the lead article makes it clear that the economic disaster that is happening in Greece is the consequence of a corrupt – or at least unworkably dysfunctional – social system. There is nothing wrong with being an Emerging Economy, if that is what you are. The article points out that the fraud was trying to pose as a Developed Economy, when Greece is- in many ways- far from it. The institutions are far from professionalized or transparent in the manner the Eurozone required. This apparently isn’t news in Greece. As the article notes, the individuals are likable, yet all view their institutions with something between distrust and disdain. In that light, the monastery scandal was a shock because the Church (and especially Mt. Athos) was one of the few trusted institutions.

      My (admittedly American) concern is that State sponsorship may ultimately engender a dependence and fealty that undermines the proper mission of the Church. Of course, the vast number of Saints and Church Fathers through the centuries were exemplars of that mission despite the relationship with the state, so this fear may be overstated.

      • Surely, as Greek state sponsorship for the Church weakens, many Greek Church projects are going to suffer, and the ripples will be felt by all. Material supports are being knocked out, especially from under the Patriarchates of Constantinople and Jerusalem, as well as the Church of Greece. But it concerns all Orthodox globally – here is some news from Switzerland (translated from Russian by me, original article at http://www.interfax-religion.ru/?act=news&div=37489):

        <<

        Greek authorities refuse to finance the Orthodox Center of the Constantinopolitan Patriarchate in Switzerland

        Sophia. September 22. INTERFAX – Due to the economic crisis and difficult situation in Greece the Greek government terminated the financing of the Orthodox Center of the Constantinopolitan Patriarchate in Chambesy (Switzerland).

        Thus, the Patriarchal Center is on the verge of closing: formally it continues to exist, but in fact it is already not functioning, its staff has been sharply reduced, the Bulgarian web-site “Двери в Православие” reports.

        Meanwhile the employees of the Center had been busy with preparing the Pan-Orthodox Council, of which Patriarch Bartholomew often spoke lately. Many of them had extensive experience in the sphere of inter-Orthodox cooperation and participated in preparatory committees of the Council.

        The Chambesy Center also housed the theological post-graduate program, which, together with theological faculties in Lausanne and Geneva, used to prepare specialists in the Orthodox theology. Among its graduates were prominent Church figures.

        The Chambesy Center included three churches, a chapel and five Orthodox parishes (Georgian, Arab, Greek, Romanian and Francophone).

        >>

        Just thought that the AOI readers might find this instructive. Hopefully, such material shocks will serve to reinvigorate spiritual life.

        • George Michalopulos :

          Ilya, thank you for bringing this to our attention. My first thoughts are somewhat along the lines of “well, what could we expect.” Allow me to explain: I don’t mean to imply that the closing of the Chambesy center will ipso facto invalidate the protocols that were worked out there (although it can’t help but leave a sour taste in the mouths of many).

          More to the point, we Orthodox have been placing all our eggs in the upcoming pan-Orthodox council when there has never been any real need to do so (after all, we are guided by the Holy Spirit, not men).

          So, what will happen if and when Chambesy closes? Will the “Great and Holy Council” take place? I don’t know. We should instead ask cui bono? (Who benefits?) In my estimation, it would be the Church of Russia, after all who would have the resources to fund and host such a conclave? Or the ROC could ride to the rescue and supply the funds needed to keep it going (although at a paltry rate, constantly reminding the Phanar who it is that’s paying the bills).

          In order to stave off this eventuality, the Phanar might turn to its friends in the globalist community for help. That wouldn’t set will with the Russians and the more conservative patriarchates.

          We shall see…

  12. Ilya,

    Thanks for the translation…it was much better than Google’s.

    I hope you do not mind that i used your translation in posting the story at http://members5.boardhost.com/STANDREWHOUSE/msg/1285174044.html

    And thank you for calling the story to our attention. This may be only the first of many actions.

    Best Regards,
    Dean

  13. Vatopedi loss yet to be confirmed

    Following a request by the government, the judiciary has launched an investigation into the conduct of former Supreme Court prosecutor Giorgos Sanidas during his probe into the Vatopedi real estate exchange, although sources told Kathimerini that it has yet to be established that taxpayers lost out in the deal that saw public land end up in the hands of the Mount Athos Monastery.

    Justice Minister Haris Kastanidis instructed the Supreme Court to investigate whether Sanidas was guilty of any wrongdoing in the way that he handled the original probe into claims that the state had transferred prime real estate to the Vatopedi Monastery in return for land of a much lower value.

    It was confirmed yesterday that the task of investigating Sanidas has been assigned to Supreme Court deputy prosecutor Roussos Papadakis.

    In April last year, then outgoing Supreme Court prosecutor Sanidas prevented the Vatopedi case file from being resubmitted to Parliament for the House to decide whether any politicians should be investigated, insisting that no new evidence had been uncovered.

    However, Kathimerini understands that the entire Vatopedi affair may be based on a misconception. The initial probe into the real estate deal was launched after it was suspected that the property the New Democracy government signed over to the monastery a few years ago was worth at least 100 million euros more than the land it received in return. Some estimates have indicated an even larger discrepancy.

    The state’s official evaluators have delivered two reports on the property swap and neither was able to establish that the deal had left taxpayers worse off. The evaluations were both scrutinized by independent property evaluators, who found that the state officials had got their sums right. The parliamentary committee investigating the swap has now ordered a third evaluation.

    “Wherefore, not those that are slandered, but the slanderers, have need to be anxious, and to tremble, for the former are not constrained to answer for themselves, touching the evil things which are said of them, but the latter will have to answer for the evil they have spoken, and over these impends the whole danger.” — St. John Chrysostom

    • May it be so. I sure hope that such a venerable monastery is exonerated after this distressing affair. I understand the defensiveness of many of the monastery’s friends, since I would count myself among them. However, whenever someone we love is slandered, it is natural that we who love them will rally to their defense. What is difficult but important to realize at such times is that a full hearing (at least one not driven by partisan interests) will do more to restore the honor of those slandered than a hastily closed investigation. It is unfortunately painful – but in the end, we rely on the Truth to set us free.
      This is hardly unique to the monastery, since we have plenty of examples – to both the good and the bad – much closer to home. Yet out of all of this pain, there may come considerable blessing: not only the renewed honor of the monastery, but humility for all (including the accusers, we hope), and a rich reward for those who have suffered unjustly yet remained faithful. In God’s hands, our greatest cross always becomes our greatest blessing. May it be so here.

      • Chris, from the Vanity Fair article it’s pretty clear there are two in the monastery who have real estate and other agendas on the one hand, and everyone else in the place on the other. I’m not ready to lay misdoing (if any) upon ‘the venerable monastery’ because of a couple of per the article) ‘not so narrow’ monks there.

        • Harry – well said. It would indeed be unjust to lay this at the feet of the entire monastery. And, as you note, the article’s depiction is focused on the two, er, “robust” monks. The potential misuse or abuse of confession (which is clearly implied) was – as I noted above – heartbreaking, if true. And the endeavors described are indeed difficult to square. Even so, it is my prayer that this, too, will prove to be a slander to these two. Either way, we grow only through truth. And whether though vindication or purification, may humility bloom, repentance deepen and may God be glorified.

  14. Didn’t the Vanity Fair article describe state owned urban parcels with occupied buildings and homes being traded for monastery owned bits of an undeveloped lake in a nature preserve? Hard to see how ‘even swap’ can fit.

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