Next Steps: It's Time to Stand Up

Annamaria on Monday

We all want to know what nobody knows.  My theme today is that we must not wait and see.  What happens next is up to us.  

Call me whatever name you like.  I am right about this. Don't believe me?  For one thing I have seen small fringe movements begin to work on what seemed like an unsolvable problem.   Little by little they won over those who doubted at first.  Eventually, they/we changed the course of history.  Actually, in my lifetime, it has happened more than once.

Here is an example from today, of one person who is determined to make a difference.  Regular readers of MIE may recall my friend Sarah Lesiamito, who fights against the cruel way her culture threats girls.  Right now, she is establishing her leadership in her area with a one-woman campaign against the coronavirus in Samburu in Northern Kenya.  She is not waiting for the government to tell her what to do.  She has informed herself and begun to supply the member of her little village with information and, as best she can in the remote place where she lives, give them the tools to keep themselves safe.

Here is Sarah (l.) instructing one of the men of
her village in proper hand washing 

Villagers discussing how to stay safe.  

As of now there no cases of Covid-19 in Sarah's area.  But if the beast shows up, Sarah and her neighbors are armed and ready.  

It is possible, but not certain that, in the aftermath of this pandemic the nations of the world will enact laws and practices that will correct the societal flaws that this crisis has so dramatically revealed.  The gross inequities in distribution of wealth and healthcare can be cured.  The world was in this same position in the early twentieth century and then it lead to two world wars with a pan-depression sandwiched in between.  BUT, fed up with themselves, the world's developed countries began to correct that situation in the decades following the Second World War.  Laws protecting workers rights and taxation aimed at development of the economy and improvement of infrastructure lead to decades of widespread prosperity.

All of that has been undone since the end of the twentieth and into the beginning of the twenty-first centuries.  And there is no guarantee that the current pandemic will right any of the wrongs.  In some countries around the world, dictators have used the disease as  an excuse to clamp down harder on anyone who opposes them.  Imagine if such a development turns into a trend.

Here in the world's first great democracy, the current president tried to seize upon the situation.  He declared that he alone had the sole power to reopen the slumping economy.  He had supporters who would rally round him if he tried that.  Cooler (and Constitutionally) better informed  heads prevailed, but that does not mean we are out of those dense woods. 

So if we want to emerge from lockdown into a better world than the one we had beforehand, we need to stay watchful and get active.  We need to be informed.

We need to be ready to stand up against any government that does not lead the populace away from dystopian widespread poverty and desperation. We want governments that protect the entire citizenry. And that means teachers, healthcare workers, firemen and policemen. The people who pick the vegetables and process the fish and the chickens. Who pick up the trash and clean the hospitals and the public spaces.  You know who they are by now. Those people the pandemic has revealed as essential.

I stole this photo from Stan's Facebook page.

And the journalists.  Be suspicious--VERY suspicious--of any politician who attacks the mainstream media, from the right or from the left.  It should be a human right to say whatever we want.  But no one has the right the hide from the truth.

  

 

One way we can use the power of the people is in chosing where we spend our money.  By supporting businesses that behave themselves, pay their workers well, treat the planet as sacred, not as a sewer.  Wealth come by honestly is one thing.  Greed is NOT good.

Every nation on earth will need to so some work on its economy once we are out of the corona-woods.  Which adjustments are made will be critical.

I have been hearing for years that the United States is a "consumer economy."  After 9/11, after the great crash of 2008/9, we were enjoined to help restore the economy by spending money.  We were supposed to go to stores and restaurants and buy, buy, buy.

Have you noticed?   Every time the latest consumer spending numbers are released, pundits express fear of recession if the numbers are down and optimism if they are up.

Years ago, many voters were sold a bill a goods by the Reagan presidency.  That if the wealthy were allowed to collect unconscionable amounts of money, the wealth would "trickle down" and lift all the little boats along with the big yachts.  This theory sounded like hooey at the time, and so it has proved to be.

So what would work?  Here's an idea.  Let's give the opposite a try.

We now know that when they amass enough money to last four or five thousand life times, what the billionaires do, mostly, is warehouse it.  I guess they enjoy watching it pile up.  But beyond a certain amount, it does not go into circulation to become the life's blood of the consumer economy.  

In the coming months, the economy is going to need a massive transfusion.  Forget trickle down.  Suppose we turn a firehose of buying power on the struggling poor and threatened middle class.  What will they do with cash in hand?  Spend it!  Of course.  They need all sorts of things.  They will buy clothes, furniture, cars, vacations.  Education for their children.  Restaurant meals.  Movie and theater tickets.  Flowers for their mothers.  Books!!!

They will buy the most run down houses in town and fix them up, causing a boom in the lumber and household fixture industry.  In myriad ways, they will feed the economy just at a time it needs it desperately.

The corporations that supply all those goods will thrive.  Hooray!

"Simply hoping that things will move in a progressive direction when the shutdowns end isn’t enough. Creating a fairer, more inclusive economy is hard work, and it will inevitably encounter resistance. Concentrations of economic power have to be confronted. Workers’ rights and bargaining power have to be extended. Democratic freedoms have to be protected. Demagogues have to be defeated, during pandemics more than ever.  –John Cassidy in The New Yorker"

No doubt there are trained economists out there who will be happy to point out the weakness in my suggestion.  I am ready to listen to them.  All I want to know is this.  If this is not the answer, what is?

You tell me what's next.

Is Greece Back on Its Feet?

Jeff—Saturday

This threatens to be a sure-fire eye-glazer of a post, but it’s the #1 question I’ve been asked on tour.  I’m the last person to field that question if you’re seeking investment advice, yet it is encouraging that so many, in so many different parts of the US, care enough to ask it. 

By the way, my questioners aren’t Greeks. Perhaps that’s because Greeks already know the answer; are among those so polarized in their political views that they see the nation’s economic circumstances strictly through the prism of party loyalty; or are so worn down by it all that they don’t want to hear any more about it.

With that in mind, for purposes of reading this post I suggest following the longstanding advice of Warren Buffett, and “put aside personal politics when it comes to investment decisions.”

Let’s start with some of this week’s economic headlines on the Greek economy.

“Spanish, Greek bonds shine after ratings upgrades.”

“Approval of 3^rd review and release of tranche to Greece expected in Brussels.”

“Greek current account deficit shrinks in November, tourism revenues rise.”

Looks promising, and certainly better than going in the opposite direction. So, let’s look at what the headlines mean, starting at the bottom and working up…which seems appropriate for the situation.

According to figures supplied by the Bank of Greece, in six of the past eleven months Greece did better with its account deficit than it did during comparable months the year before.  But, it’s a sawtooth type of graph, not straight-line growth, and improvement is credited almost entirely to a decrease in the balance of goods, raising the question of whether the shrinking deficit is because Greece sold more, or bought less.

Surrounding the impending “final” 6.7 billion-euro bailout tranche payment to Greece (5.7 in February and 1.0 in April) and official end of the bailout program in August, there is a lot of talk over whether this signals the beginning of the end or the end of the beginning to Greece’s fiscal crisis. New taxes, and budget cuts demanded by Greece’s foreign creditors have severely affected much of the country, and anxieties are running high over what’s next to come.  With elections in 2019 (if not sooner), there’s a plethora of suspicion (or a paucity of confidence, if you prefer) in government promises and projections on what the future holds.

On the subject of bonds owed to creditors—not to be confused with the sense of bondage many Greeks feel in service to foreign creditors—for the first time in two years, Greek bonds have kicked up a notch in their ratings! Hallelujah.  But before anyone starts passing out cigars, take note that Greece’s bonds are now rated ‘B’ according to S&P, while Spain—the other peripheral EU economy—was upped by Fitch to ‘A-” despite its Catalan crisis.  The news had yields for Greek short term and five-year bonds falling (going down shows confidence in the bonds), but yields on its long-term bonds actually went up slightly (yields on all of Spain’s bonds fell).  Most analysts agree that the future for Greece depends on how well it manages its exit from its bailout program. That’s the sort of imponderable answer I feel most comfortable leaving for the gods to sort out.  

So, what other relevant news is out there this week suggesting the true state of the Greek economy?  What caught my eye was an article analyzing unemployment figures recently released by the Greek government.  From the story’s headline, I think you’ll see the direction in which the article is headed, but assuming the reporter’s figures are correct (Anthee Carassava, reporting in DW.com), there’s a lot to reflect upon.

Here’s the headline, followed by relevant excerpts from the article: “Greeks stuck in lousy, part-time economy as government claims success.”

“Greece’s once record jobless rate of 27 percent may have dropped seven points since the start of the financial crisis, but nearly six in 10 people are stuck in a market dominated by part-time on-and-off jobs.”  [N.B. For those under 25-years-old, the youth unemployment rate hovers at 40%]

“But worst of all, the gigs have demanded full-time work for part-time terms of employment. ‘You’re hired for a weekly 15-hour Friday-to-Saturday job and before you know it, your boss is calling you in, forcing you to work Tuesdays, Wednesdays, and Thursdays without extra pay or time off.’”

“In Greece, state statistics released this week show a troubling trend: Six in 10 people are stuck in lousy, insecure part-time jobs.  While the trend first exceeded the startling 50-percent mark last year, experts expected the figure to quickly recede as the Greek economy, strangled by seven years of budget cuts and austerity reforms, grew by nearly 2 percent. But it hasn’t, spelling what experts now call ‘hollowed growth’ for a country struggling to claw out of the worst financial crisis ever to hit a European Member state.”

“In the startling statistics released this week, five in 10 Greek workers are owed an average of six paychecks by exploitative employers already paying part-time workers less than €500 [$600] a month.  Women, meantime receive 50 percent less.”

“With the government registering each person who works at least two hours a week as employed…private labor groups and think tanks put the real [jobless] figure around at least 25 percent.”  [N.B. To be fair, for US statistical unemployment rate purposes, one hour a week is considered employed, and the US rate is currently 4.1% (8.9% youth)]

*****

Those figures—if accurate—are alarming.  But what I see as perhaps the greatest threat to Greece “getting to its feet” is reflected in the comment of a 26-year-old female college graduate interviewed for the article: “You can sit and hope Greece plays catch-up, or you can pack up and leave for a better future until then.”

I now have a question for my audience.  Does anyone disagree with the proposition that the greatest threat to a nation’s long-term growth and prosperity is the loss of its industrious and entrepreneurial young to other lands?  After all—and you can take it from me—it’s hard to get back up on your feet relying on creaky old knees.

—Jeff

Jeff’s Upcoming Events

My ninth Chief Inspector Andreas Kaldis novel, AN AEGEAN APRIL, published on January 2, 2018, and here are the remaining stops on the first stage of my book tour:

Friday, February 2 @ 7PM

Centuries & Sleuths (Forest Park)

Chicago, IL

Saturday, February 3 @ 12 PM

Once Upon A Crime

Minneapolis, MN