We Hopped on a Plane to Athens …

ATHENS, Greece – “It’s finished. The euro finished. Greece finished.”

With this apocalyptic shorthand, our taxi driver described the situation in Athens. The banks here have been closed for two weeks. To try to prop up the crumbling banking system, the government has banned Greek citizens – but not tourists – from withdrawing more than €60 ($67) a day from the ATMs.

The breaking news this morning is that the government and its creditors have cobbled together a deal to keep Greece in the euro zone.

Prime minister Alexis Tsipras has caved in to creditors’ demands on economic reforms. Trouble is his countrymen voted to reject almost the same deal in last weekend’s referendum.

And Tsipras still has to push the reforms through the Greek parliament on Wednesday. Otherwise all bets are off…



clinging onClinging on to the euro train

Cartoon by Ingram Pinn


Like a storm chaser, on Saturday we hopped on a plane from London to Athens to study the tornado moving through downtown Athens. It would be fun to see so many vanities and pretensions fly high, we thought. At the very least, it would be instructive – useful training for the storms coming elsewhere.

But nothing happened: No twister. No train wreck. No panic in the streets. From our explorations in the historical Pláka neighborhood – on the slopes of the Acropolis – we found only tourists. And they seem to have no idea that there is a financial crisis going on.

Last night, we went over to the Syntagma Square – the city’s central square – to look for mayhem and chaos. All we found was a squad of police dozing in an armored bus. ATMs were working; no lines in front of them. Restaurants were about half full.

Nor did we see signs of extravagant spending or reckless investment. In Athens there is no equivalent of the Arc de Triomphe. No Eiffel Tour. No Louvre. No fancy apartments. No gleaming offices. At least, none that we saw…

Its main achievements were completed more than 2,000 years ago. You wonder how Ancient Greeks did it. The Parthenon – a temple on the Acropolis dedicated to the goddess Athena – required huge investment and meticulous organization.


parthenonThe Parthenon: a building from better-organized days …

Photo credit: Steve Swayne


It is breathtaking… an architectural masterpiece. There is no sign of such capability here today. Instead, Athens is a washed-out, slightly trashy Mediterranean burg.

“Hey, can I help you?”

A seedy-looking man approached. We didn’t know what he was offering, but we didn’t want any.

“No… thanks.”

We turned to walk in the other direction. He followed.

“Hey… what are you looking for? I can help you find it.”

“Well, I’m looking for signs of financial breakdown.”

“Oh, I can help you find drugs… women… gambling. But I don’t know anything about financial breakdowns.”

We gave the man another “thank you” and went off.


Makers and Takers

As you know, Greece is just another front in the Great Zombie War. The real issue here is the same as all the other fronts: how to keep the credit flowing. Honest people make. Zombies take.

They take what they can from earnings and savings. But it is not enough. It is credit that keeps them alive. Zombie businesses borrow more and more to keep the lights on. They pay out big bonuses, and their stock goes up!

Cheap credit keeps the feds in business, too. Practically every government in the world is operating in the red. Take away the red, and zombie programs would have to be curtailed.

Cheap credit funds the layabouts, the chiselers, the lobbyists and lawyers, foolish wars and foolish investments, and all the many millions of people who live at the expense of others. Want to know if you’re a zombie?


zombie-walk_2012_business-man_01Sometimes, looking into a mirror will do …

Image via memecenter.com


In theory, the test is simple: If no one were forced to support you, would you still have the same income? If this answer is no, you have been zombified. But in practice, it can be hard to tell a zombie from an honest living, breathing human being.

Often they don’t even know themselves. Some honest professions, for example, have been almost entirely zombified. So have entire countries. Greece, for example, has been able to live beyond its means – on credit provided by Northern Europeans.

Many of its people – especially those who work for the government – have gotten used to earning more than they’re worth. There were few zombies in the world of Pericles, Aristotle, and Euclid. The economy could not support many parasites. Now, the world is full of them.


Tom ToroSophocles invents the referendum to spice up his tragedies

Cartoon by Tom Toro


The above article originally appeared at the Diary of a Rogue Economist, written for Bonner & Partners. Bill Bonner founded Agora, Inc in 1978. It has since grown into one of the largest independent newsletter publishing companies in the world. He has also written three New York Times bestselling books, Financial Reckoning Day, Empire of Debt and Mobs, Messiahs and Markets.




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