Sustainability: It is About Building Brighter Futures

There are very few inside Greece, Europe and Global Capital that do not deserve a share of the blame for the current tragedy. This is a classical Grecian tragedy where Greek politicians abused the power that they were given on an incredibly large scale. It is likely that through their hubris and pride that they literally had no idea the consequences of their indiscriminate borrowing to appease their constituency and obtain another term in office...(sound familiar). Then, without notice, their world came crumbling apart. For the literary buff, this current situation makes you marvel. It could have been written 2,500 years ago by Sophocles.

Currently, I hear two reasons through the mainstream media for continuing to terrorize our debtor friends in Greece. 1) They borrowed the money, they must repay it. 2) There will be a contagion effect.

1) Generally speaking, people, businesses, or countries do not borrow more than they can spend. Responsible parties abhor debt, and they could not imagine repudiating a debt. They pay it back as quickly as possible. They must pay it back, they borrowed it.

Grecian politicians were not these types of people. They bought votes by providing special interests with specific benefits. Right wing politicians gave their constituents gifts. Left wing politicians gave their constituents gifts. Center parties gave their constituents gifts. Everybody at the Great Greek Trough got plenty for seemingly nothing. Yes, they are to blame for the 2008 fiasco that Greece found itself in. 

These same politicians looked to extricate themselves from their situation in the least painful manner. This can be managed. They looked North, the responsible Germans, who apparently believe that they have never had to have large amounts of public debt forgiven of their own (see London Debt Agreement of 1953), decided that they must help, but you must run your government the way we decree. Higher taxes, less spending. 

Massively higher taxes, cataclysmic spending cuts. After 4 years, with no end in sight, the Greeks revolted. Greater than 20% unemployment is far worse of a lesson to teach Greek citizens than you must pay back your debts. The Greeks then elected a socialist government to battle for them. Syriza was elected to stand up for them. They are doing exactly what they were elected to do. Syriza was elected by the Greek people to stop blindly believing that a debt must be repaid or the world will end. Greece has tried, but despite 5 years of constant painful struggling have proven that they can not pay their creditors back. This week the IMF even agreed: Greece will not be able to pay back their debts. 

2) If you listen to pro-EU politicians (I am pro-EU), you would think that Economic Ebola is on the loose. Default will be contagious. This is a ridiculous concept. The European Union, the U.S., and other global financial powers have had 6-7 years to create economic buffers to the global economy when small states fail. If they have not done so, there will be significant consequences whether Greece fails today or Venezuela fails next year. The global glut of debt is too large for a number of countries not to fail over the next 20-25 years. 

There are very real economic consequences when a nation fails to pay its debts. Spain, Italy, and Chicago will all work to avoid default on their debts. Time will tell if they can. So what is the contagion if certain states will fail regardless? Certainly, Capital needs to now demonstrate to debtor states and people that default is far worse than austerity. Good luck with that one.

The contagion that I truly feel worries global economic and political leaders is that someone can repudiate their models and succeed. Blind faith in what the specialized business interests want has replaced liberal capitalism. Blind faith in what? Anything that they say. Deregulation, free trade, and consumerism are all necessary for you to have a job where your salary will not rise. The alternative is no jobs for anyone! A repudiation of these models would be catastrophic for the special interests that are busy stealing every last cent, euro, ruble, peso that they can get their hands on from the small business owners, laborers, pensioners, etc.

Building a Brighter Future: Reduce or Eliminate Career Politicians

Sustainable lending practices need to be adopted. Meaningful financial regulation needs to return. The banks are incapable of self-governance, just like the Greek politicians. This is the best means of limiting such a contagion in the future. Creditors are in a really good position to regulate who borrows what before they lend the money. Except, immediate interest gets in the way (CLOSE THE DEAL, GET PAID); then, they blame the borrower for borrowing too much. It takes two: a creditor and a debtor.

Global Sustainability requires more than just sustainable lending policy or sustainable environmental policy. Neither the false mantra of "I must repay what I borrow" or the contagion terrorism justifies both Greece and its creditors from searching for a sustainable solution to the problem at hand. 

With that said, here is what I fear...that people will continue to turn to special interest politicians that cater to their whims. This is not a sustainable governmental structure. Sustainable businesses need sustainable governments. Not "anti-business" or "pro-business" governments, but governments with elected leaders who do what is best for the represented body.

The end of capitalism is strongly correlated with the rise of career politicians. Sustainability requires governments and politicians making hard choices where some people end up angry. Career politicians are about the next election, not building bright futures.