An anecdote of Athens

by on February 27, 2012 at 1:38 pm in Books, Food and Drink | Permalink

A friend and I met up at a new bookstore and café in the centre of town, which has only been open for a month. The establishment is in the center of an area filled with bars, and the owner decided the neighborhood could use a place for people to convene and talk without having to drink alcohol and listen to loud music. After we sat down, we asked the waitress for a coffee. She thanked us for our order and immediately turned and walked out the front door. My friend explained that the owner of the bookstore/café couldn’t get a license to provide coffee. She had tried to just buy a coffee machine and give the coffee away for free, thinking that lingering patrons would boost book sales.  However, giving away coffee was illegal as well. Instead, the owner had to strike a deal with a bar across the street, whereby they make the coffee and the waitress spends all day shuttling between the bar and the bookstore/café. My friend also explained to me that books could not be purchased at the bookstore, as it was after 18h and it is illegal to sell books in Greece beyond that hour. I was in a bookstore/café that could neither sell books nor make coffee.

From @economistmeg, here is more, none of it especially encouraging.  She is, by the way, one of the very best people to follow on Greece and the eurozone.

Nathan Tankus February 27, 2012 at 1:55 pm

This seems neither here nor there. Is this not-coffee or bookstore the dividing line between a successful or failed Greece? Greece’s problem is capital intensity and current account deficits. are you saying that if these regulations were lifted we would somehow see either of those things change? is the demand for imported capital goods going to shoot up if only all these onerous regulations were lifted? alternatively, will imports suddenly shoot down when the regulations are lifted? I don’t see what this has to do with Greece’s balance of payments problems.

david February 27, 2012 at 2:02 pm

If doing business were easier, Greeks might demand more capital in order to do so.

Andrew' February 27, 2012 at 2:04 pm

“I don’t see what this has to do with Greece’s balance of payments problems”

ROI?

The question remains as to how representative this is. It’s possible they are really concerned about caffeine.

Andrew' February 27, 2012 at 2:04 pm

The other question is who lent these people money?

return February 27, 2012 at 2:37 pm

I would imagine all the banks in the EU. Why perform any risk analysis when the regs state the bonds are as good as Germany’s and you can get a little extra yield?

Anon. February 27, 2012 at 2:43 pm

People keep saying how stupid the lenders were, but forget to mention the part where Greek had been lying on a gigantic scale about its stats for a decade+.

“To keep within the monetary union guidelines, the government of Greece had also for many years misreported the country’s official economic statistics.[12][13] At the beginning of 2010, it was discovered that Greece had paid Goldman Sachs and other banks hundreds of millions of dollars in fees since 2001, for arranging transactions that hid the actual level of borrowing.[14] The purpose of these deals made by several successive Greek governments, was to enable them to continue spending, while hiding the actual deficit from the EU.[15] As reported in the table below, the revised statistics revealed that Greece at all years from 2000-2010 had exceeded the Euros stability criteria, with the yearly deficits exceeding the recommended maximum limit at 3.0% of GDP, and also the debt level clearly exceeding the recommended limit at 60% of GDP.
In February 2010, the new government of George Papandreou (elected in October 2009), revised the 2009 deficit from a previously estimated 5% to an alarming 12.7% of GDP.[16] In April 2010, the reported 2009 deficit was further increased to 13.6%[17], and at the time of the final revised calculation by Eurostat it ended at 15.8% of GDP”

5% to 15.8%. What sort of analysis can deal with that?

return February 27, 2012 at 3:04 pm

Perhaps the absolute size of the discrepancy means the lenders aren’t as stupid but that they were surprised there was a discrepancy at all means they weren’t paying attention. The bonds should have been priced lower but they weren’t, and that they bought at that price signals to me that the banks did not perform even the most basic due diligence.

dead serious February 27, 2012 at 3:27 pm

I’m still not getting why there aren’t public lynchings and perp walks.

Andrew' February 27, 2012 at 3:50 pm

There’s the old quote about Greece being in default in X out of Y years. It seems like a known issue, so I think we need to keep digging.

I’m not saying they were stupid, that’s a discussion ending quote: “We don’t have to worry about their fate, because we’re not stupid like they are.”

I’m assuming they aren’t stupid and that’s what is scary.

Jon Smith February 28, 2012 at 10:47 am

Everyone, as a matter of course. It was just what was done. To question it would require further, more uncomfortable questions, with answers that no-one would like.

Best, they thought, to ignore it and hope it would go away.

Anon. February 27, 2012 at 2:16 pm

This sort of thing is 100% pervasive.

Nathan Tankus February 27, 2012 at 2:10 pm

but what will that really do? Does Greece have the infrastructure to do serious capital investment without needed more imports (which will only aggravate their balance of payments problems)? Is there really anyone willing to do that kind of investment in Greece at the moment without first being assured that the crisis is over for good? Even if you could find people willing to do that kind of investment, will that be able to turn around the balance of payments issues in even a medium term time frame (3-5 years)? It seems to me that this is a side show. Even if we accepted that this is a substantial issue (which i have doubts), I don’t think this weighs very strongly on the current Eurozone crisis

Andrew' February 27, 2012 at 2:15 pm

Yours are the questions. I’d summarize them as “did people lend them money not realizing the situation or expecting it to change?”

Now they are sending tax collectors as if to say “we are from the German government, and we’re here to help.”

Peter Russell February 27, 2012 at 2:16 pm

Methinks y’all are missing the point. Much like Wilson’s ‘broken window’ theory about crime, it is the little things that lead to the big things. This kind of regulation shows you the Gordian knot that is Greece’s culture of corruption — all the opportunities for rent-seeking bureaucrats to charge tolls for almost ANY kind of transaction – coffee, books – through a maze of regulation. It’s like seeing a shadow on an X-ray – in this case that shadow is the greed of the state, squatting on human endeavours so it can squeeze money from them.

Andrew' February 27, 2012 at 2:27 pm

Again, why did people lend them money knowing this? They didn’t just discover corruption like Ricky Gervais in The Invention of Lying. And if they can just fix a bit of the problem (big if) it would be low-hanging fruit.

Andrew' February 27, 2012 at 2:35 pm

Wouldn’t properly run corruption price the bribes correctly?

Steven Kopits February 27, 2012 at 5:32 pm

“Wouldn’t properly run corruption price the bribes correctly?”

Now that’s an interesting question! A non-non-market failure. Bribery is full of information asymmetries and–what’s the economics phrase?–deceit. Thus, there is no posted schedule of bribes. Further, bribes are not given to everyone, only key decision-makers. So back-benchers don’t necessarily benefit from bribery.

That’s one reason why an incentive system can be so powerful: it empowers the back-benchers to act as a check on leadership. That’s how you neutralize, say, Orban in Hungary. The back-benchers would be thrilled if the IMF would sign off on an annual bonus of, say, $350,000, if GDP growth is 3% and debt growth is, say, 2%. “Viktor,” they would say, “we appreciate the strength of your nationalist feeling. We share it no less. But is not the core of nationalism a strong economy? While we, of course, also think the IMF misguided and domineering, still, we must find a way to co-exist with them for the good of the country.”

That conversion would take, in Hungary, I would say half an hour. Within two months, fascism there would be largely unraveled without so much as a single minister losing his job.

Stelios Sbyrakis March 2, 2012 at 2:40 am

This is exactly the issue, overegulation that simply does not work. This makes the legal system fail, justice take years to settle most dispute. This creates lack of trust between all parties, an so on…

We need to liberate ourselfs from these laws put in place by lawyers, who are the majority of Greek politicians, to simply serve their interests in the name of the people…

I hope we will get rid of this cast of politicians in the next elections!

Anne March 3, 2012 at 8:07 am

Thank you Peter for summing up what I was thinking as I read the replies.

Lou February 27, 2012 at 2:17 pm

You’re probably right. Why would an economy need profitable businesses?

Nathan Tankus February 27, 2012 at 2:24 pm

What a reasoned, interesting point. Got any other gems to dispense to the masses?

Marian Kechlibar February 28, 2012 at 5:57 am

It seems common sense to me, that killing businesses with onerous legislation cannot help the economy.

Daniel Dostal February 29, 2012 at 3:41 pm

Since when did macro-economics have anything to do with common sense? It’s much too complex for that turn of phrase.

MikeDC February 27, 2012 at 3:02 pm

I’m perplexed that you understand Greece’s problem as simply one of “capital intensity and current account deficits”, but for the sake of argument, it’s pretty basic economics that

1. An increase in the allowed level of economic activity will increase demand for capital goods. If I can legally sell coffee at my shop at a rate that might make it profitable to buy that fancy German or French coffee maker, I might well do it.

2. If my country suddenly develops a reputation as a cheap and friendly place to enjoy a nice climate and historic wonders, lots of tourists show up with cash. On the other hand, very few people wish to vacation where they can’t easily buy a book, get a cup of coffee, or an aspirin.

3. Most obviously, there’s a large extent to which the coffee shop is a parable for Greece itself. It’s a coffee shop with a trade deficit in coffee. Not because it’s naturally incapable of producing coffee, but because it’s illegal for the coffee shop to make its own coffee but not for them to import the coffee from across the street. Allow the coffee shop to do more itself, and, yes, imports will fall.

Nathan Tankus February 27, 2012 at 3:22 pm

“I’m perplexed that you understand Greece’s problem as simply one of ‘capital intensity and current account deficits’”. What else would it be? It’s simple national accounting. Germany has a large positive net international investment position. Greece has a large negative one (although, according to latest data i have at hand, Spain, Ireland and Portugal have larger ones). This is basically accumulated current account deficits/surpluses and revaluation effects. It seems clear to me that this is what’s driving the national debt issues.

“An increase in the allowed level of economic activity will increase demand for capital goods. If I can legally sell coffee at my shop at a rate that might make it profitable to buy that fancy German or French coffee maker, I might well do it.” as i pointed out, this merely aggravates balance of payments issues.

“2. If my country suddenly develops a reputation as a cheap and friendly place to enjoy a nice climate and historic wonders, lots of tourists show up with cash. On the other hand, very few people wish to vacation where they can’t easily buy a book, get a cup of coffee, or an aspirin.”

Again, this is putting the cart before the horse. Do you really think that a large tourist boom is going to happen if the crisis is still ongoing?

“Most obviously, there’s a large extent to which the coffee shop is a parable for Greece itself. It’s a coffee shop with a trade deficit in coffee. Not because it’s naturally incapable of producing coffee, but because it’s illegal for the coffee shop to make its own coffee but not for them to import the coffee from across the street. Allow the coffee shop to do more itself, and, yes, imports will fall.” but will this solve Greece’s balance of payments problem?

All of these arguments sound more plausible in 2005, as a way to head off a possible future crisis down the road. The thing is, it’s not 2005 and these structural reforms are solutions to problems that aren’t currently occupying the minds of Greeks. The balance of payments issues need to be solved first, then we can focus on whether or not structural reform is needed and what type.

MikeDC February 27, 2012 at 4:28 pm

The balance of payments issues need to be solved first, then we can focus on whether or not structural reform is needed and what type.

We must get out of this hole first, then we can focus on whether or not we should stop digging.

Nathan Tankus February 27, 2012 at 4:48 pm

More like, the car broke down in the middle of the road. we have to focus on getting the car out of the middle of the road and getting home before we figure out what new car we want to buy.

Not to mention that adopting the Euro was like throwing out the steering wheel….

Matt Waters February 27, 2012 at 11:25 pm

Nathan,

Germany and the IMF have been moving the car out of the middle of the road. The funny thing about this car is that its in such bad shape that it keeps wanting to go back to the middle of the road no matter how much Germany and the IMF push.

This situation is not like the bank bailouts where we could be somewhat certain some X number of dollars would keep banks solvent in the short-term. We knew that banks weren’t going to start lending like crazy again for the near future. Greece is instead a leaky vessel, where Euros go in but not all Euros go to help repaying debt due to the horribly dysfunctional economy.

For its level of debt/GDP, the denominator HAS to increase and there is no magic way to increase GDP without fixing systemic economic issues like the coffee/bookstore above. Any money that goes into the leaky vessel before then is purely kicking the can down the road.

Adam February 27, 2012 at 6:47 pm

It’s a funny thing indeed to argue that one problem isn’t really a problem because of a bigger, other problem.

Nathan Tankus February 27, 2012 at 7:20 pm

I never said such thing. I pointed out that it wasn’t the issue in the crisis as it now stands. It may or may not be a significant problem, it’s just not the immediate problem. When someone has a heart attack do you say “you should exercise more and eat better!”?

Marian Kechlibar February 28, 2012 at 6:02 am

Nathan, your comparison with a heart attack is seriously flawed. Even more so than your comparison with the broken car.

Maybe you should stop the comparisons altogether – they sound nice but they confuse the issue. I, for one, already accept that you’re good with words.

First, Greece as a nation isn’t going to die if they do not receive immediate aid. They survived the Ottoman rule, after all.

Second, the current crisis is a nexus of many effects, and your simple characterization is probably too simple to be helpful. The entire Greek society must change its functioning if they ever want to be self-sufficient.

Adam February 28, 2012 at 1:56 pm

Yes. When someone has a heart attack that is most definitely one of the things they will be told are key to their recovery.

Marian Kechlibar February 28, 2012 at 6:04 am

“The balance of payments issues need to be solved first, then we can focus on whether or not structural reform is needed and what type.”

That is what I call “proof by vigorous and repeated assertion”.

rpl February 28, 2012 at 7:45 am

MikeDC, I’d add to those:

0. If it’s this hard to start a simple coffee shop, imagine what it must be like to try to open a factory.

I think that was the real story we were supposed to take away from this anecdote.

derek February 27, 2012 at 8:17 pm

An economy is the sum of the transactions between individuals and businesses. You are describing a bunch of abstractions that although helpful, are simply that, abstractions.

The question is whether this type of inane rule is common throughout the economy. It seems that it may very well be. These inane rules actively encourage underground economic activity, ie. criminal behaviour or at the very least a cavalier attitude towards civil authority. If the government goes out of it’s way to rip you off, it is unusual for it not to go the other way.

If this reflects the business environment, how much loss does it cause in the tourist sector for example? How many dollars do not come in due to either the driving away of customers? Or how much effort is put towards circumventing these idiocies instead of, I don’t know, generating wealth?

Maybe in fact the things you describe as ‘Greece’s problem’ are in fact the result of this type of micro mismanagement of the economy.

ricketson February 27, 2012 at 9:31 pm

Maybe I haven’t been following this closely enough, but I’m baffled as to why you think “Greece’s problem” can be summed up so tidily (and abstractly). When I think about the more down-to-earth problems in Greece, the story seems quite applicable:

1) Unemployment.
2) Disdain for the political economy, leading to strikes and riots.
3) A general cultural rot, perhaps aided by an environment where a bookstore/cafe is not allowed to compete with bars.

I dunno, maybe if Greece’s economy were semi-functional, these abstract issues would take care of themselves. GDP growth does wonders.

Cliff February 27, 2012 at 10:36 pm

Surely it is obvious that this sort of thing weighs down growth significantly, and that growth and growth expectations are what is needed to get out of the debt crisis?

Nathan Tankus February 28, 2012 at 12:12 am

I’m baffled at both Ricketson and Cliff’s comments about GDP growth. when has GDP growth ever solved a balance of payments crisis? It may prevent a balance of payments crisis by expanding production, lowering average costs and helping certain industries capture world market share, but I can’t think of one case where balance of payments problems themselves were solved by GDP growth. Historically, at least all the examples i can think of, The balance of payments crisis was solved and then GDP growth resumed or accelerated. Or the country limped into the abyss.

It seems to me that most forms of investment that could expand capital intensity and make Greek industry more competitive would in the interim mean expanding current account deficits or attracting Foreign direct investment, which will generate an outflow of funds for a number of years. Not to mention that their oil deficit, which is already pretty big, would grow even more if they tried to go the energy intensive route. Worsening current account deficits don’t fix balance of payments problems, they aggravate them. Show me one person willing to invest in that capital during a balance of payments crisis in a country with 17+ unemployment and growth that was negative 6.8% last year and I’ll show you someone who isn’t a businessperson.

If you’re arguing that GDP growth from expanding sales to domestic consumers that comes from removing “onerous regulation” will solve the balance of payments problems, I see that as unlikely. Even if it got GDP growth all the way to zero (I see cats raining from the sky as more likely) it would, at best, increase tax revenue somewhat. The public debts and interest payments are too large to be solved by that. On services consumed by tourists, how much do you think this is going to get Greece? The 2011 current account deficit was €21.1 billion. the net services balance grew by 137 million euros but that’s because “travel spending in Greece by non-residents fell by 4.9%, while travel spending abroad by residents fell by 15.8%”. Do you really think that while these problems still exist removing some sales regulations is going to increase the services receipts by anywhere near the amount needed?

http://www.bankofgreece.gr/Pages/en/Bank/News/PressReleases/DispItem.aspx?Item_ID=3857&List_ID=1af869f3-57fb-4de6-b9ae-bdfd83c66c95&Filter_by=DT

Cliff February 28, 2012 at 12:19 am

I think you are baffling yourself with your obsession with “balance of payments”. GDP goes up, tax receipts go up, use the tax receipts to pay back your debts. And of course when growth expectations increase, interest levels decrease because other people (besides you) know this. Could they make enough regulatory changes to make a significant change in their circumstances? Well, that is just an empirical question, right? Which is what you start to get at in your last paragraph. I don’t claim to know the answer.

Nathan Tankus February 28, 2012 at 12:47 am

“GDP goes up, tax receipts go up, use the tax receipts to pay back your debts. And of course when growth expectations increase, interest levels decrease because other people (besides you) know this”.

So your policy suggestion is for residents and corporations to go on a spending and investing binge to grow GDP, transfer funds to The Troika through taxes so they can pay off Greece’s Public debt? According to reuters the Greek budget deficit last year was 21.64 billion euros. Remembering the 21.1 billion current account deficit number from earlier, That implies that the private sector consolidated with regional governments (which isn’t included in the government budget deficit number) surplus is approximately a measly 540 million. How much Can Greek households and corporations pay in taxes? €1 billion? €5 billion? why are private sector deficits sustainable?

http://www.reuters.com/article/2012/01/12/us-greece-budget-idUSTRE80B0JU20120112

Cliff February 28, 2012 at 10:13 am

Nathan,

Please don’t use the words “investing” and “binge” together, it makes you look a little ridiculous. As I say, it may not be enough in and of itself, but as you apparently admit it would help- and not just now, but forever. So why not do it? It also would help encourage the troika to provide further assistance.

And I don’t even understand the rest of that paragraph. How is it related to what I am saying?

Matt Waters February 27, 2012 at 10:58 pm

True, Greece needs an absolute number of exports to get hard currency to pay back their debt to other countries.

However, the absolute number of exports is not the only issue. Exports/GDP, or how much of the country’s GDP has to be dedicated to making stuff for foreigners, also matters. As Greece’s economy becomes more efficient, then it becomes easier for Greeks to dedicate enough of their productive capacity to paying back their debts.

To put it in personal credit terms, let’s say you have $10,000 in Credit Card debt. Is it easier to pay back the debt when you’re making $20,000 a year or when you’re making $60,000?

Let’s say the Greeks lifted the idiotic barriers to buying coffee or buying books at certain hours. A young Greek starts a chain that is far more efficient at selling coffee and books than the current inefficient mom-and-pop shops. And now a Euro for an average Greek can go farther since books and coffee are cheaper. Or the books and coffee are the same price, but the service and quality are much superior.

The huge barriers to entry to notaries and other professions also hurt Greeks who are on the outside. Remove those barriers to entry and their pay would drop significantly. Every other Greek would then see less of their paycheck and their tax bill going to workers who happened to have the right connections for these gravy chain professions and bureaucrat positions.

Do this across the economy and what happens? Well, the personal credit example doesn’t necessarily extend out to Greece if Greece’s NGDP is constant. Looser ECB policy which merely raises nominal incomes would of course help Greece. But even if NGDP is constant, RGDP would go up and Greeks would have an easier time bearing the load for paying back debt. Higher taxes would not cause such a big loss in living standards on a macro level in Greece.

The only issue is that, on a micro level, there would be severe turnover in the economy as more efficient businesses unseat the businesses which enjoyed political favoritism for years or decades. The gravy chain professions would also see their income personally shrink significantly.

But for the typical Greek, their Euro would go much farther to buy stuff and they could accept Germany’s demand far easier. Pure austerity, which has everyone pay a price but keeps the professions in place, will never work in the long run since the average Greek will have their standard of living reduced far more than it should be reduced.

chris March 4, 2012 at 9:27 am

how about this? it’s not true. Can’t sell books after 6? what a load…strike a deal?.. yeh a mutual benfitial deal where both make some money. (although I wouldn’t use the word “strike” so lightly here!). don’t worry the greeks are smart enough to work around things, and that’s the problem.. now if they could just use their cleveness to just work…

Anon. February 27, 2012 at 2:14 pm

From the link: “It is not true that the Greek government has done nothing overall. There has been a significant fiscal adjustment, with the burden falling primarily on the public. However, insufficient progress has been made in terms of structural reforms, which are far more important in terms of returning Greece to economic growth.”

She’s being way too nice. They have done less than nothing.

Every single growth-inducing policy recommendation from the troika is ignored. Instead they cut the spending with the highest impact on the economy. In September 2010 they were supposed to have “opened up” various professions (like hairdressers, taxi drivers, pharmacy ownership, the list continues endlessly). They have still done no such thing, instead they let the special interests win after a couple small demonstrations. And Papademou shows no more negotiational skill than Papandreou.

And of course as all these things go on, the quid-pro-quo appointments to the public sector continue.

“The troika of the IMF, the EU and the ECB demanded that Greece shrink its public sector by only replacing one out of every five people retiring but “between early 2010 and mid-2011, the government added 20,000 people to the public sector payroll”.
http://www.bbc.co.uk/news/mobile/world-europe-16901831

Or how about this: 40% of new hires at tax offices were placed at offices that are being closed, while others are swamped with work.
http://news247.gr/oikonomia/ergasia/proselavan_eforiakous_se_efories_ypo_katarghsh.1668026.html

Quantum Mechanic February 27, 2012 at 2:23 pm

No one from San Francisco better make fun of Athens…

http://www.youtube.com/watch?v=F7R9wXMN5gM

Varun February 27, 2012 at 2:31 pm

Does anybody here understand the history behind the no book sales after 6pm? Is it akin to the Swiss disdain for commerce outside of specified hours?

Andreas Moser February 27, 2012 at 2:43 pm

We used to have these rules all over Europe.
They have only slowly and gradually been lifted. In Germany, car dealers are open on Sunday and you can look at cars, but cannot sell you the car. You’ll have to come back during the week to sign the contract.

The rules about opening hours are supposed to protect smaller shops against large supermarkets, the thinking being that only large chains could afford to be open around the clock. Also, when unemployment was not an issue, the unions were quite happy for their members not to have to work at night.

Roy February 27, 2012 at 4:44 pm

That car dealer rule usedto be, still is in effect in Minnesota, however the dealers are open, they just can’t sell cars.

Sunday closings are almost universal across Europe, I don’t think this is the problem, and there is a world of difference between being closed Sunday and not having shops open in the evening. I have always suspected Germany and Japan’s craziness with this was the reason so few married middle class women worked outside the home.

Adam February 27, 2012 at 6:52 pm

I don’t see the difference. Market-dictated hours are one thing, but regulated opening hours do nothing but harm consumers.

And as you mentioned Minnesota, there was a bill in the legislature last session to lift the blue law that doesn’t allow alcohol sales on Sunday. The liquor store owners lobbied against it and killed it. I was surprised, but they must believe that being closed for a day restricts supply sufficiently to outweigh the advantage of selling more by being open another day.

Marian Kechlibar February 28, 2012 at 6:18 am

I am not so surprised. This is a typical cartel.

If the Sunday ban was lifted, some of the liquor stores would be open on Sunday, thus attracting customers. In a classical race to the bottom, all of the liquor stores would be open on Sunday soon.

Now there is only so much that the people can drink, so the aggregate sales wouldn’t probably increase by 1/7.

As a result, the liquor store owners would lose a guaranteed day off, while not attracting enough income to compensate this loss. Net loss for every liquor store owner.

(Of course, the customers would win this one).

Tomas Lengyel February 28, 2012 at 4:29 pm

According to the Sundays opening hours it is different in post socialistics regions. It is quite usual that we do not have this kind of restriction.

Andreas Moser February 27, 2012 at 2:45 pm

Sadly, if you read the comments below this article, you can see that Greeks don’t address their own mentality, but prefer to blame Germany for everything: http://andreasmoser.wordpress.com/2012/01/24/evangelos_venizelos/

Matt Waters February 27, 2012 at 11:09 pm

Wow, those comments are pretty astounding.

I like the comments that all the IMF does is go about the world stealing assets where it can through privatization. Uh, any country has the option to default and walk away from any IMF deal out there. They don’t default because it turns out that people who make food and oil and coal and other important commodities like to be paid. If the private debt markets dry up and you need to import those items, you would probably have to suffer a huge drop in the standard of living if you don’t take the hard currency from the IMF.

I guess the fact they’re blaming a completely voluntary agreement with the IMF shows a lot of the reasons for their current predicament. Yeah, we want the hard currency from the IMF, but they should give it with no strings attached!

msgkings February 27, 2012 at 3:21 pm

Speaking of anecdotal, here’s a terrific article (paywalled?) on how individual Greeks are living:

http://www.nytimes.com/2012/02/19/magazine/the-way-greeks-live-now.html?pagewanted=all

I’m always fascinated by the ‘real stories’ underneath all the aggregate country-level discussions.

What I’m most fascinated by is how even in countries looked at as ‘disasters’, life goes on.

Floccina February 27, 2012 at 4:52 pm

Thanks msgkings,
That was an interesting read. In this day of great wealth most people get by even in a crisis. Even in places like Iraq with war most people get by.

msgkings February 27, 2012 at 5:47 pm

Exactly. We all have a tendency to opine on various countries and how to ‘fix’ them and so on, as if we knew everything about life there from CNN or CNBC. In reality most (almost all) countries are just normal places with normal people doing normal things.

Marian Kechlibar February 28, 2012 at 6:27 am

Well, normality is a very cultural thing.

If the landlord serves you steaming coffee with a smile, it feels normal.

If he comments casually “we needed to walk for the water, because the Jews poisoned the wells in the neighborhood”, it does not feel that normal anymore for you, but for him, it is still normal.

(Happened to a close friend in Libya. Distance to Israel = over a thousand kilometers. # of Jews in the country at that time – less than 50. Yet this kind of thinking was at least as normal as, say, atheism in Europe – commonplace).

msgkings February 28, 2012 at 10:32 am

I did qualify my comment with ‘most’.

TallDave February 27, 2012 at 6:01 pm

I remember at the very beginning of the Greek troubles a businessman from the UK described Greece’s economy as “Soviet.” It looks like that was not an unfair adjective.

Adam February 27, 2012 at 6:43 pm

Everyone know that books purchased after 18h turn into Gremlins.

Becky Hargrove February 27, 2012 at 7:13 pm

I’m glad that Ryan Avent picked up your anecdote today. It is stories like this that made me turn to the study of economics in the first place.

R. Gregory February 27, 2012 at 7:37 pm

Um, Blue Laws — regulations which prohibit certain sales from certain vendors at at certain times — are quite common in the United States: those who leave the Beltway are often shocked to find that beer cannot be purchased between midnight and 8 AM and spirits cannot be purchased from a vendor who obtains less than 40% of his income from the sale of “substantial entrees” served in “well-lighted” areas. In the US, the sale of books (excuse me, “books not expressing a political viewpoint”) is prohibited if the seller is clothed in a manner unacceptable to the taxing authority.

Some consider thee laws to be obsolete… but we recently enacted a law empowering the Secretary of Treasury (currently Timmy Geithner) to determine each citizens’ level of religious conviction: if Jesus returned to earth today, he’d have to face Timmy’s interrogatories before advising anyone to abstain from medical treatment.

Greece is simply having to face the regulatory crisis — the progressive crisis — today. While Americans don’t have to face similar shame until tomorrow, chuckling at the silliness of Greek regulations (and EPA regulations, etc.) is just not cool.

Matt Waters February 27, 2012 at 11:17 pm

What are you even saying?

Adam February 28, 2012 at 1:15 pm

Oddly enough, I think DC inside the beltway has actually be moving towards more restrictive blue laws. When first I moved there, I could buy beer late at night from the little “grocery” down the street, and at the liquor store on Sunday. Now (starting I’d say at towards the beginning of the last decade), nothing after 10 (or is it 11?) and no liquor stores on Sunday.

I couldn’t believe that a city was adopting such silly restrictions in this day and age.

Robert February 27, 2012 at 11:03 pm

I live in a place where lightbulbs and plastic bags have been outlawed. Is Cakfornia the next Greece?

Komori February 28, 2012 at 12:22 pm

Assuming the below article is accurate, then, quite possibly…

http://www.sacbee.com/2012/02/24/4287094/california-democrats-push-pension.html

davidb February 27, 2012 at 11:34 pm

yay, a bunch of macro-dorks who can’t see the trees for the forest.

TW Andrews February 27, 2012 at 11:55 pm

My sympathy for Greece just vanished.

8 February 28, 2012 at 12:27 am

Here’s your scary thought for the day. The people who lent to Greece did so because it is only different from the rest of Europe in degree, not in kind.

ramatin February 28, 2012 at 4:49 am

there is no such rule like ”you can’t sell books after 18.00”. There must have been a misunderstanding. Mondays and Wednesdays almost all shops selling products like shoes, clothes, books, and bla bla are closing at 17.00. In this case the story happened in a bookstore working only as a cafe as it was after 17.00 probably on a Monday or Wednesday. The sad thing is that there was no licence for coffees and the deal with the nearest bar. Yes you can see such funny things in Greece, not the rule though.

Aidan February 28, 2012 at 5:50 am

Most of the proposed solutions to the economic problems of Greece (and the other troubled Southern European economies) take the form of an argument saying “X-economy works better than Greece’s economy does, therefore the Greek economy should become more like X-economy.” This kind of argument is of limited utility. Greece cannot become anything other than Greece, nor would anyone really want it to become so. A more realistic plan for solving Greece’s problems should start from a proper understanding of the nature of the Greek economy and of the strengths and weaknesses it has. Accordingly, it should probably come from the Greek people themselves, rather than foreign investors and international finacial organizations.

What I see in this article is the initiative that Greeks have in working around stupid rules: despite its being legally impossible for the café/bookshop to sell books or coffee, the owners have made it work. That’s initiative. It sounds like a nice place. I’d like to go there.

If you tell Germans to obey stupid rules they will do so. If you tell Greeks to do so they’ll simply ignore them. Rather than attempting to turn the Greeks into something they are not, it would be better to help them to build on the strengths they do have rather than to attempt to create in them strengths which they lack.

ad*m February 28, 2012 at 4:56 pm

Sure, fully agreed. Greeks should have and are getting the government and the economy they want and deserve.

But other countries should not have to pay for that.

Robert March 1, 2012 at 11:46 pm

Exactly what ad*m said. Greece is certainly free to be corrupt and profligate. Just don’t ask for bail outs!

Alex C February 28, 2012 at 7:21 am

Such crazy rules are not exclusive to Greece.

I came across one in Thailand a few months ago – their government has outlawed the sale of alcohol in liquor shops and supermarkets between 2pm and 5pm every day. The only exception is if you buy more than 10 litres of alcohol, in which case you can buy as much as you want.

I discovered this during a bizarre experience at a Tesco. I was trying to buy a few bottles of wine in a trolley one afternoon, and the staff at the counter kept sending me back telling me I needed more. Eventually I got to 10 litres and they were happy. I ended up handing out the surplus wine to anyone standing around who wanted it.

If anyone could conjure a sensible explanation for such a policy, I would be interested to hear it.

TGGP February 28, 2012 at 10:46 pm

He was banned? Does anyone know why? Was a particular comment over the edge?

Timotheos March 1, 2012 at 3:18 am

“My friend also explained to me that books could not be purchased at the bookstore, as it was after 18h and it is illegal to sell books in Greece beyond that hour. ”

As Greek I am confident to say that this is definitely inaccurate.

chat March 2, 2012 at 2:44 pm

thank admin ı like nice web site

Mike Sims March 2, 2012 at 7:00 pm

The problem isn’t something about the Greek people or land, but the anti-capitalist system imposed upon them. Greece ranks 119 out of 179 in the 2012 Index of Economic Freedom, last of the EU countries. Maybe fixing that would help the economy grow out of the debt situation. It would also help with the culture situation, free people do tend to take the initiative a little more often.

Athens could be the next great place for a capitalist haven. Just as Hong Kong, Macau, and Taiwan (1st, 18th, 19th in the rankings respectively) are high growth off-shore havens beating the state-controlled Chinese economy (ranked 138th), Athens could be the nearby haven for the increasingly sclerotic European Union. If they let nanocivics operate organically, they might actually accomplish it.

msgkings February 27, 2012 at 3:17 pm

So there’d be no chance you would show up there.

msgkings February 28, 2012 at 10:33 am

CBBB’s recent banning makes a lot of comments orphans…

Dan Weber February 28, 2012 at 11:22 am

It couldn’t even find them in the google cache.

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