"Welcome to the Journal"

I didn’t grow up with a father, so I grew to my principled liberal ideas largely on my own and with a little nudge from mom; there was one man, however, who helped me focus my ideas and put them into practice. I began listening to Bill Moyers show several years ago because John Stewart was making an appearance and an interview with John Stewart is rare. What I saw was the father that I wish I had.
Since viewing Bill Moyers I have developed; I became a more responsible citizen, I became more informed, I volunteered, my world mattered more and eventually because of something I saw on his show I got a job. I looked forward to his program, the only passion, besides football, I would cancel dates, ignore family, and become upset if I did not catch.
With his white hair and Texas accent I loved Moyers like he was my own family. I knew Bill had daemons. I knew that he was the press secretary during Vietnam espousing the lies that lead to the deaths of millions of people. I also know that he will spend the rest of his life repairing the damage, for which he felt responsibility, but that is what made him real to me and an example for my life, mistakes are made; horrendous ones, but you can still live with purpose and inspire others.
Moyers was my champion, my hero and a voice I never wanted to stop hearing. He has reshaped my world and because of it will be thoroughly missed. So as I heard “Welcome to the Journal” for the last time to Bill Moyers I say thank you and you will be missed; you were like the father I never had.

Cooking With Greece

You may have heard on your nightly news program about a country named Greece and their current bit of financial trouble. As a result of their troubling debt to GDP ratio and the recent downgrade of their credit by Standard & Poor’s not to mention the 54 billion Euro payment due this year that the country seems unable to raise the capital to pay, the country of Greece now finds itself in dire straits and their populace has succumbed to violence. Now, before you stop reading and say, “why should I care about a country thousands of miles away?” WAIT! I am going to tell you: because what happens in Greece doesn’t stay in Greece.

Now, let’s say a Chinese or Saudi official shows up at the United States Department of Treasury to cash one of the trillions of dollars in US Treasury Securities (on which we pay $500 billion in interest a year) only to find out that the US does not have the money to pay. What do you think would happen? 1. The US’s credit rating would fall meaning that we would pay more to borrow money (if anyone decided to lend to us. I mean, would you lend to a person who had bad credit?) 2. The value of the dollar would immediately plummet. Unlike Greece, America is not part of an economic union and unlike Greece, our currency is ours alone. 3. As a result, oil prices would skyrocket and the cost of goods would increase exponentially. Yes, this is bad but because of the high cost of importing goods from other countries, the market would respond with an increase in manufacturing ergo the creation of manufacturing jobs. The unemployment rate would fall to “full” employment meaning the official numbers would decrease from 9.7% to below 5%.

Why? Because oil is traded in American dollars. If the dollar looses value, economies that use a stronger currency--primarily those who trade in Euros--would increase their purchases of barrels of oil. At such a cheap price, these countries could get more oil for their money and gain higher returns on their investments when the price of oil eventually rose. The increase in manufacturing would come as the result of the cheapness of American goods that are manufactured with the now devalued dollar. Suddenly, cars manufactured in America would cost next-to-nothing to a person buying them with Euros. Inevitably, Europeans would buy more of them. American products would not be able to stay on the shelves in other countries because they would be cheaper than those that are locally manufactured. Therefore, if we don’t pay our debt oil goes to 5 dollars a gallon and everyone gets a job. Not a win-win to me, but good enough.

Now, back to Greece, their epic economic crisis and how it affects us: Greece is a small beautiful European country near the Mediterranean. Besides being known for fantastic EVOO, romantic weddings, a history of brave warriors and angry gods, the invention of Western Civilization and the Olympics; Greece is also known for corrupt government, poor budget management, and a lethargic populace. This lead them to try to cover up there budgetary shortfalls by hiring Goldman Sacs (when you need to do something dirty and deceitful, you hire the best) to review their books and hide their debt. This worked until recently when the you-know-what hit the fan and they could no longer hide their debt. It turns out that Greece has more debts than they have in assets and according to some, their debt to GDP ratio is 125% (one of the highest in the world). As it stands, in Greece has been bailed out and provided with a 110 billion Euro rescue package in an attempt to stop the Greek crisis from spreading through the rest of the 16 country European Union. Greece has been forced to cut government spending and is currently faced with an unemployment rate that is over 20%. This in addition to major cuts in social services needed in order to survive this crisis has the Greeks are rioting in the street and burning banks with Molotov Cocktails.

The million-dollar question is what does this mean for you? Greek debt means the Euro will become significantly devalued but unlike what would happen in America, the Greek crisis means the opposite for them than what would happen to us if the dollar decreased in the manner explained above. Unlike the win-win situation that America would have with the devaluation of the dollar in the face this Greek crisis and a possible European one the dollar with rise. The prices of oil will not plummet but the number of American exports to the European Union will keep us in a longer and deeper recession that we expected. In our current global financial system, everything is cyclical: a burst of the American housing bubble leads to a collapse of the banking system, a decline in Greek tourism and a bruised European system with a devalued currency and a decrease of American exports to Europe. What happens in Greece doesn’t stay in Greece, it reverberates throughout the world. Can you feel it?