Greece Is The Word

If you’re somebody who has been saving for retirement and investing your savings in the financial markets, here’s a bit of friendly advice:  don’t check the markets today, or for that matter all of this week.  You’ll just be depressed.

The problem is Greece.  It defaulted on its repayment of loans from the International Monetary Fund last week, and yesterday its voters overwhelmingly rejected a referendum that would have imposed strict austerity measures.  Greece’s finance minister Yanis Varoufakis, who had opposed the austerity measures — he once said that “austerity is like trying to extract milk from a sick cow by whipping it” — then resigned with a flourish, saying that the referendum result would “stay in history as a unique moment when a small European nation rose up against debt-bondage.”

“Debt bondage”?  That’s a good one!  Try it on your bank the next time your mortgage or car payment comes due.

The problem for Greece is that there is no alternative to repaying its debts.  Greece is paying the piper for electing bad leaders who didn’t recognize the inevitable crash that was coming from constant borrowing to pay for a broken economic and pension system.  After defaulting on its IMF loan, Greece really has nowhere to turn for cash.  Who is going to loan money to an impoverished country where the citizens apparently don’t recognize their obligation to repay their debts?

All of this would be a valuable economic lesson in unsustainable borrowing if Greece were just going down the tubes by itself.  The problem is that Greece is part of the European Union, and its problems therefore are Eurozone problems.  Now European leaders need to figure out whether they have Greece exit the EU — not exactly a ringing endorsement of EU political and financial stability — or extend still more credit to the Greeks, which probably isn’t going to sit well with voters in Germany and other prudently managed EU countries who wonder why they are picking up the tab for Greece’s problems.

All of which loops back to affect those of us who have saved and invested.  Financial markets hate uncertainty, and the Greek crisis has now become uncertain to the nth degree.  Today we’ll be seeing news coverage of closed Greek banks, crowds in the streets trying to find cash, and frowning finance ministers going to meetings in ornate European buildings — not exactly scenes that speak of financial stability.  So even though the Greek problem has nothing to do with the U.S., in our global economic system our financial markets will be affected just the same.

It will be a wild ride until the Greek problem is finally resolved, and there really is only one solution:  Greece will need to leave the EU, issue its own currency, and witness the worst hyperinflation seen in Europe in decades.  After its economic system crashes and its elderly citizens see their savings eaten up by inflation, maybe the Greeks will recognize that some austerity and continuing “debt bondage” really wasn’t so bad.

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Last Visit To The Louvre

Today Richard, Russell and I visited the Louvre. I think it will probably be my last visit. If you’ve been to the Louvre, you may understand what I mean. If you’ve never been there, you won’t. You’ll read the guidebooks, and they will tell you that you absolutely must visit the Louvre, and you will go — because you absolutely must visit the Louvre if you come to Paris. I’m betting, though, that you probably won’t enjoy it.

Today we bypassed the long line for tickets because we had a museum pass, which is crucial — otherwise, you could wait for an hour or more just to get a chance to buy a ticket. Once inside, we headed to the wing of the museum that houses the Mona Lisa and thousands of other paintings from the Renaissance. When you get to the room that houses Leonardo da Vinci’s masterpiece, prepare for a scrum. The room is a wild melee of people elbowing to get close to the painting and taking “selfies.” It’s not a positive reflection of humanity, and it’s simply impossible to enjoy the painting in anything approaching quiet contemplation. The experiences in front of the other famous items at the Louvre, like Venus de Milo, are similarly unpleasant mob scenes.

It’s hard to get away from the crowds, and it’s hard to appreciate the artwork when any movement is likely to insert you into a picture taken by another tourist. And there really is too much to see — room after room after room of Egyptian antiquities, or Roman statues, or Greek busts. I found myself thinking that, if I were an Egyptian visitor, I’d be upset that my cultural heritage has been taken and warehoused in faraway Paris, in a place where countless riches from other countries are on display.

005If you want to focus on one area, such as Flemish and Dutch paintings, you could fill an entire day. And be prepared to walk through room after room of hundreds of Madonna and child and Biblical paintings, still life paintings of gutted animal carcasses, landscapes and sea paintings, arranged in rooms where dozens of pieces are on display cheek by jowl and even the ceilings are painted masterpieces. It’s just too much. At the end of our visit I searched for a room that was quiet and suited for enjoying art, and found a room of beautiful medieval tapestries that would have been worth a separate visit if they had been located in virtually any other museum in the world. In the Louvre, however, they are an afterthought — as the picture included with this post indicates.

After a few hours we departed, having walked for miles on marble floors until our feet ached and our necks were tied in knots, and I swore that I had had enough of clustering, clamoring tourists, and walls crammed with paintings, and bustling guides. I think this will be my last visit to the Louvre.

Calling For Christmas Cookie Recipes — 2012 (V)

Our friends in Greece need all of our moral support these days.  What better way to show our backing than by adding a traditional Greek cookie to the holiday mix?  And any cookies that asks the baker to insert whole cloves and then later remove them sound interesting.

Greek Holiday Cookies

Ingredients:  1 cup butter, softened; 1/2 cup granulated sugar; 1 egg; 1/2 teaspoon vanilla, 1/2 teaspoon brandy extract; 2 1/2 cups flour; 1 teaspoon baking powder; 1/4 teaspoon ground cloves; 1/4 teaspoon salt; whole cloves; confectioners’ sugar

Preheat oven to 350 degrees.  In a large bowl, beat butter, granulated sugar, egg, vanilla, and brandy extract until light and fluffy.  Add flour, baking powder, ground cloves and salt.  Beat on low speed until a soft dough forms.

Shape dough by heaping teaspoonfuls into crescents.  Arrange the cookies 2 inches apart on baking sheets.  Press two whole cloves into the ends of each cookie.

Bake 10 minutes or until set.  Cool cookies on baking sheet for one minute before transferring to cooling racks.  Dust with confectioners’ sugar while still warm.  Remove whole cloves before serving.

Calling For Christmas Cookie Recipes — 2012

Calling For Christmas Cookie Recipes — 2012 (II)

Calling For Christmas Cookie Recipes — 2012 (III)

Calling For Christmas Cookie Recipes — 2012 (IV)

Why I’m Voting For Mitt Romney And Paul Ryan

On Tuesday, I’ll walk in to the polling booth at the church in New Albany where we vote and touch the screen for Mitt Romney and Paul Ryan.  I recognize that that decision won’t come as much of a surprise for loyal readers of our family blog.  I think it’s only fair to explain why, if only to add one more person’s perspective to the national conversation about this election.

In my view, the most important issue confronting our country is our federal deficit and national debt — the latter of which has passed the $16 trillion mark.  I care about other issues, of course, but I view our debt as the most fundamental issue of all because it involves basic concepts of national sovereignty.  Our debt is so large, and has existed for so long, that we tend to think of it as a kind of abstraction . . . but every dollar of that debt is a real obligation of our country, reflected in an instrument sold by the U.S. treasury to a willing buyer who will be paid a specified interest rate.  With each additional bit of borrowing, we give those people from whom we are borrowing leverage that may allow them to dictate terms — at first, the terms of the debt instruments, by insisting on higher interest payments, and then eventually the terms of how our government operates, by dictating whether we need to adopt austerity measures in how our country operates if we hope to obtain additional loans.  At that point, our national sovereignty is at stake.

We know this to be the case, because over the past few years we have seen it occur in Iceland and Ireland, and in Greece and Portugal.  Those countries borrowed irresponsibly and saw the interest rates on their debt instruments rise as investors became increasingly concerned that the debts might not be repaid and demanded higher rates as the price for accepting that risk.  And, ultimately, outside forces — the International Monetary Fund, European Union bankers, and others — went to each of those formerly sovereign nations and told them what they needed to do if they hoped to continue to borrow money.  Those governments accepted the conditions and agreed to the austerity measures imposed by outsiders because they had no choice.

I don’t want to see that happen here — yet, over the last four years, we have seen the United States move down that very same path, with annual trillion-dollar deficits that have taken our total debt past the unimaginable sum of $16 trillion.  We also passed a significant milestone on that road to perdition when our national credit rating was downgraded.  I don’t think that downgrade has received the attention it deserves.  Imagine!  Credit rating agencies presuming to raise questions about the credit of the leader of the free world, a country so stable that its currency gave rise to the now-antiquated phrase “sound as a dollar.”  But the ratings agencies are so presumptuous, and we are kidding ourselves if we think our many lenders aren’t also carefully considering our credit-worthiness.

I don’t want to wake up one morning and see that our political leaders are having to dance to the tune called by teams of grey-suited bankers from the IMF, or China, or Germany.  If that happens — and if we continue to rack up trillion-dollar annual deficits, it inevitably will — we shouldn’t kid ourselves about what it would mean.  Does anyone think federal funding of NPR or contraceptives, to identify only two of the issues being discussed during this campaign, would survive under the austerity measures forced upon us by creditors?  Does anyone think the bankers would hesitate to require fundamental changes in entitlement programs like Social Security and Medicare?  Does anyone think our country could continue to function as a world leader, and a force for good, as a debtor nation struggling to deal with its overwhelming credit problems?

I recognize this is a dire scenario, and some believe it just can’t happen here.  My response is to look at what has happened in Europe, to countries that have just been ahead of us on the irresponsible fiscal policy curve.  Their experience shows, I think, that it can happen here — and it will, if we don’t do something about it.  I’m too proud of this country and what it has accomplished to let that happen without trying to change course.

I don’t think President Obama places a high priority on grappling with our deficit and debt problems.  He’s talked about them, but his actions speak louder than his words.  He continues to propose budgets that would result in trillion-dollar debts for years into the future, and continues to propose the creation of new federal agencies and federal programs as the solution for every problem.  He hasn’t used the bully pulpit of the presidency to encourage Congress to act.  I’ve seen nothing from President Obama to indicate that his performance over the next four years on this crucial issue of national sovereignty would be any different than his performance over the past four years.

Mitt Romney and Paul Ryan, on the other hand, do focus on the issue of our deficit and our debt and have proposed approaches.  I think they understand the fundamental nature of the problem and would make working with Congress to address the issues in a meaningful way their top priority.  I want someone in the White House who will tackle the debt problem, not let us drift into catastrophe.  That’s why I’m voting for Mitt Romney and Paul Ryan.

Saving The Trevi Fountain

If you’ve been to Rome, you’ve likely seen the Trevi Fountain.  It is a magnificent attraction, with its depiction of Neptune and sea horses and other sea creatures atop craggy rocks.  When we visited Rome during a very hot summer some years ago, the Trevi Fountain was a delightful place to sit, enjoy the spray of the cool water, and appreciate the beauty while taking a break from sightseeing.

Unfortunately, the Trevi Fountain is badly in need of repair.  Earlier this year, some pieces of the 250-year-old fountain — commissioned by one of those civic-minded Popes, Clement XII — broke off.  Fortunately, an Italian mineral water company, Acqua Claudia, has agreed to foot the $250,000 cost of the immediately needed restorations.  Whether funding will be located for the more long-term repair work on the fountain that is desperately needed is another question.

The condition of the Trevi Fountain is  symptomatic of a larger problem in countries with significant cultural sites.  Italy, Greece, and Spain, to name just a few, are terribly cash-strapped.  It’s hard to believe that such countries, which reap huge economic benefits from tourism, would neglect the sites that attract those tourists in the first place, but paying to maintain crumbling monuments, old buildings, fountains, and churches, is pushing budgets to the limit.

I hope that other companies step up, as Acqua Claudia has, to help the Italian government maintain Italy’s many irreplaceable architectural and artistic landmarks.  Generations to come should have the chance to see the Trevi Fountain in all its glory, rather than a heap of dust and rubble.

Adverse To Austerity

Elections have occurred in Greece, France, and Italy in the past few days, and voters have cast their ballots against the austerity measures that were imposed to try to put a brake on the European debt crisis and, in Greece and France, have thrown out the governments that agreed to those measures.

In France, the flamboyant Nikolas Sarkozy was replaced by a Socialist, Francois Hollande, who says he seeks an alternative to austerity and vows to increase taxes and spending.  In Greece, voters deserted the parties that had dominated the political landscape for decades and splintered their support among a broad range of parties, including the disturbingly neo-Nazi “Golden Dawn”.  The same trends were seen in local elections in Italy.

No one should be surprised by these results.  Austerity is hard; Europeans are soft.  They’ve become accustomed to rich benefits, lots of vacation time, a short work week, and generous pensions that allow them to retire at an early age.  The problem is that their lifestyle has been financed by debt, and now people are only willing to lend them more if they agree to actions that will bring their fiscal house in order.  The fact that Greek voters and French voters don’t like the austerity doesn’t change that result.  Why would you want to lend money to someone who hasn’t shown the responsibility or willpower necessary to pay you back?

This likely means that the Eurozone concept will fail.  Appeals for continental unity only go so far, and hardworking and thrifty German and Dutch voters aren’t going to support the unrestrained spending of the Greek and Italian and Portuguese governments forever.  The Euro will end as a unified currency, the responsible northern European countries will return to their highly valued local currencies, and the southern European countries will slink back to their devalued and debased drachmas and lire, look around for new saps to loan them money with no hope of being repaid, and find there are no takers.  At that point, the current days of “austerity” might begin to look pretty good, in retrospect.

There’s a lesson in here somewhere for America.

 

It’s Their Loss

A recent study reported that fewer nations are modeling their constitutions on the U.S. Constitution.  In the ’60s and ’70s, new constitutions were patterned on the American version, but that apparently is no longer the case.

The explanation for this trend is that our Constitution is miserly when it comes to guaranteeing “rights.”  Popular “rights” found in other constitutions, but not ours, include women’s rights, the right to work, the right to education, and the right to strike or unionize.  On the other hand, our Constitution provides for the right to keep and bear arms, whereas most modern constitutions do not.

The implication of the study is that our Constitution is somehow passe.  In the “rights race,” we’re falling behind!  We’re not keeping up with modern trends followed by enlightened nations everywhere!

Is anyone really troubled by this?  Ours was the first true written constitution, and it has served us well.  Other nations have them because our form of government has served as a model.  But there is a big difference between writing words on paper and actually living up to the concepts they express.  History shows that lofty ideals often are written in the otherwise ignored “constitutions” of repressive regimes.

Let’s not forget, either, that our Constitution was designed to sketch our government, its officers, and its functioning in broad strokes, allowing for flexibility and development over time.  In contrast, the “constitutions” described in the study sound more like statute books that leave little room for creativity and the need to respond to unexpected circumstances — like a crappy economy that interferes with the “right to work.”  The Greek Constitution, for example, includes “right to work” provisions.  How’s that working out for Greeks these days?

So, I don’t care if our Constitution has fallen out of favor with the camp followers who are drafting constitutions these days.  I’ll listen when their so-called “constitutions” have endured for 225 years, survived a civil war, and allowed their countries to become the most prosperous, democratic countries on Earth.