Writing about what I have been reading and encountering in the media.
|When I was a child, I always had my own money because I delivered newspapers. My parents let me figure out for myself how to manage my earnings. At age 5, when I started with a 3 person route, I spent much, if not all of my $.52 per week income in the variety store and a lot of it went to penny candy. Over time, I realized there were other things I wanted and changed my habits. I even participated in buying my own Saxophone on time paying $5.00 a month to my dad who added to it and paid the store. There came a time when lending became an issue. I no longer remember the specific event, but I loaned someone something and didn’t get paid back. I made a rule for myself: “only loan money you can afford to do without.” I have stuck to that rule with good outcome. Some people repay and some don’t and I am okay either way because I made a clear decision about loaning in the first place. So, when we had the 2008 banking crisis, it was pretty clear to me that the banks had made bad choices about loaning. Now, the EU is facing another banking crisis with Greece. Portugal and Spain are watching. So, I found the following article very interesting: “GREECE JUST TAUGHT CAPITALISTS A LESSON ABOUT WHAT CAPITALISM REALLY MEANS” by JIM EDWARDS Jul. 5, 2015, in Business Insider
Mr. Edwards reports this situation is the result of the public European bank taking on Goldman Sachs’ private bad debt with Greece and making it a public loan. The article talks about how debt works in a capitalist economy. It is good information and worth considering as an American voter concerned about the government relationship to private banking. Mr. Edwards points out that loans are “risks” betting that the borrower will pay it back, but in this case, the loans were made with evidence that Greece would be unable to pay it back. It does not mention the forces that motivated the bank to make the loans in the first place and actually makes Goldman Sachs look pretty stupid. Then, when the EU took on the debt, they also had ample evidence that Greece could not pay it back. Germany spearheaded efforts to cause re-structuring of the Greek economy, but these didn’t work because the economy is based entirely on small business, unlike the German economy. I suspect there is very interesting back story to be had. In any case, I liked the article for its explanation of risk and lending in capitalism.
The EU has a mixture of economies with various levels of Socialism in their various Democracies. They could describe the problem from a more socialist perspective, but it is often described from a capitalist perspective. This tug of war over what priority to place on the public good and how to handle the responsibility for the public good has been a part of human organization from the beginning of time. I wish we could be more rational about it. I wish we had access to more public debate in the media without emotional outbursts and people talking over each other on the topic. I suspect this drama, too, is something that will always be present in our society. Meanwhile, socialist, social democratic, and capitalistic organizations alike must come to grips with the problem of risk in lending, and balancing this with the public good in order to have a healthy economy. It isn’t easy, and we, the average voters struggle to understand any of it. Happy reading, everyone!