Beware of Greeks Bearing Bonds

Beware of Greeks Bearing Bonds by Michael Lewis

http://www.vanityfair.com/business/features/2010/10/greeks-bearing-bonds-201010

1) Choose one passage from the reading that you found particularly interesting. Why was it interesting?

I found this article to be interesting in that Greek is not talk much about besides tourism or history/English class. I never thought much about Greek’s economy or its monastery. One of the interesting passages in this article is that,

“The Greek state was not just corrupt but also corrupting. Once you saw how it worked you could understand a phenomenon which otherwise made no sense at all: the difficulty Greek people have saying a kind word about one another. Individual Greeks are delightful: funny, warm, smart, and good company. I left two dozen interviews saying to myself, “What great people!” They do not share the sentiment about one another: the hardest thing to do in Greece is to get one Greek to compliment another behind his back. No success of any kind is regarded without suspicion. Everyone is pretty sure everyone is cheating on his taxes, or bribing politicians, or taking bribes, or lying about the value of his real estate. And this total absence of faith in one another is self-reinforcing. The epidemic of lying and cheating and stealing makes any sort of civic life impossible; the collapse of civic life only encourages more lying, cheating, and stealing. Lacking faith in one another, they fall back on themselves and their families.”

This was an interesting passage in the article because it explains the current situation in Greece and if you do not know much about Greeks or its economic situation; it basically states that Greece is not doing so well economically and that Greece is corrupted to that extent that nothing is trustable. Children will not learn anything in public school, and the government and tax collector accepts bribes. This gives Greece a bad reputation as a country but also releases important information about the country. This passage was also were informative.

One of the shocking passages that I have never heard about was the island where women are not allowed.

“Mount Athos now is severed from the mainland by a long fence, and so the only way onto it is by boat, which gives the peninsula the flavor of an island. And on this island no women are allowed—no female animals of any kind, in fact, except for cats. The official history ascribes the ban to the desire of the church to honor the Virgin; the unofficial one to the problem of monks hitting on female visitors. The ban has stood for 1,000 years.”

This was very interesting in that for 1000 years women could not enter Mount Athos and so I found this to be very interesting too because in most areas of the world both male and female are allows to go where they pleased but an island where woman are banned can create an interesting argument for critics or other readers.

2) Greece’s economy is very small compared to other European Union economies, yet problems in Greece threaten the rest of Europe. Why?

Greece’s economy is very small but it threatens the rest of Europe because Greece has been historically a very important region in Europe and had existed for a long, long time. Greece’s economy although it is not going well, it is still one of the important economies in that they recently adopted the Euros and have one of the largest economies in Europe.

3) As part of a European bailout, Greece agreed to an austerity program of large cuts in government spending and increases in taxes. The Greek public has strongly opposed these measures. Use the short-run national Income model to explain this opposition.

Looking at the Short run national income model

GDP = C + I + G + Nx

If Greece agrees to cut government spending and increase tax, this will make

GDP↓ = C↓ + I + G ↓ + Nx


If Government spending is decreasing, Consumption will also decrease causing a decrease in GDP. This follows the contractionary fiscal policy. On the monetary side this will increase the interest rate and decrease money supply.

Works Cited:

"Beware of Greeks Bearing Bonds."Vanity Fair. N.p., n.d. Web. 21 May 2012. <http://www.vanityfair.com/business/features/2010/10/greeks-bearing-bonds-201010>.