Here’s a thought, for those who aren’t ready to throw Greece
to the wolves.
Why don’t we send them a few hundred billion dollars?
Okay, don’t get all excited.
I’m not suggesting that we give them
the dollars. Just that we exchange those
dollars, at the current rate, for their holdings in Euros.
In other words, offer the Greeks the option of making the
dollar their currency – at least for the time being.
The process is called dollarization,
and it’s neither novel nor particularly radical. At present, ten states – besides the United
states – use the dollar as their official currency. (The largest is Ecuador.) Another dozen or so use the dollar as one of
their official currencies, or peg their currency to the dollar.
It costs us nothing for another country to decide to use
dollars instead of a currency of their own.
Indeed, it’s a sort of compliment – not to mention a boon for American tourists.
But the real advantage of dollarization – for the Greeks –
would be that it would offer them a way of leaving the Euro zone without having to plunge into the chaos
of printing and distributing a new drachma
at a time when its value would be very, very unstable.
It would also – and this is important – offer the Greek
government a weapon with which to negotiate on slightly better terms with the
European Union, the German government, and the bankers who run both.
Now, of course, there are those among us who want to see the
Greek people, and their government, humbled by the European equivalent of our
Wall Street “masters of the universe”.
The Greeks have been profligate, without question. They’ve elected governments which have spent
too freely, made commitments that far exceeded prudence, and done a miserable
job of collecting taxes from the rich and powerful.
That said, Greek democracy is barely out of its infancy.
Yes, that’s ironic, considering where democracy got its start. But since Athens lost the Peloponnesian War, in
404 BC, the birthplace of democracy has been part of the Macedonian, Roman,
Byzantine, and Ottoman empires – to say nothing of spending four years under
the bootheels of the Third Reich.
Modern democracy in Greece dates from 1975 – not much time to
learn to choose one’s leaders responsibly.
A nation with more than two centuries of self-government might be mature
enough to balance its budgets and maintain a reasonable level of national debt –
though you couldn’t prove it by the United States – but that’s a lot to expect
of an adolescent democracy like Greece.
After all, we don’t allow teenagers to qualify for credit
cards with high borrowing limits – and we’d prosecute anyone who offered them
the option.
Yet that’s more or less what the European Union and its pet
banks – not to mention some of the same Wall Street firms which got us into the
recent recession – did to Greece. They
talked a bunch of inexperienced and corrupt politicians into borrowing more
than they could possibly repay – and are now using that excuse to pillage
Greece, privatizing its best assets at a fraction of their value.
The United States, of course, shouldn’t let this happen – but if
we were too spineless to stand up to an enfeebled Russia over the Crimea, we’re
not likely to stand up to our best allies over Greece.
But dollarization wouldn’t really require that. The Greeks could do it on their own.
To be sure, if I were President, I’d go farther. I’d front the Greeks a few billion to bridge
the next few payments to the European banks.
I’d even help to fly in some currency to help them switch to the dollar
more conveniently – flying home the Euros which we exchanged them for.
And then, I’d sit down with the Chancellor of Germany and let
her know, politely but firmly, that we didn’t allow German troops to overrun
Europe in World Wars I and II, and that we don’t intend to allow German bankers
to take over sovereign states in the 21st century.
In doing so, I would note, we are not trying to harm our ally,
Germany. Nor are we trying to destroy
the European Union.
Indeed, you could say we were trying to keep the European
Union from destroying itself.
But whether we act thus boldly or not, there’s nothing to keep
the Greek government from adopting the dollar on their own.
And it would serve the Eurocrats right if they did just that. Or if we helped them.
