We hear the great tales of the little guy standing against the tyrannical bully and our hearts soar. Most of us can relate. We tend to pull for the underdog. Let’s face it, our favorite ball games are the come from behind victories. The stand of the 300 Spartans against the hoards of Persia in the Battle of Thermopylae grasps our imaginations and can propel our vision to pursue more lofty goals. It’s this very “can do” attitude that once made the US an industrial and economic powerhouse. Even among those who think the Bible is not true history we see the recounting, or at least reference to, David’s daring feat against the mighty Philistine warrior, Goliath (1 Samuel 17). Goliath stood at about nine and a half feet tall. David was still a young lad, bringing food to his brothers who were in the army. And yet this mere boy slew the mighty and mocking giant with a sling; a flap of leather with a couple of strips and a rock.
Enter the European Union. Aside from Another Joe’s aversion to fiat currencies, the idea of the euro makes sense. Uniting the countries in order to give them greater economic strength in the world was a good idea. And, perhaps, if they had stuck to their original agreements and honored the Treaty of Lisbon, it might have worked. But, alas, greed, political intrigue and other various manifestations of man’s depravity have conspired together to rob from the poor in order to prop up the rich once again. Can you hear Prince John telling the Sheriff of Nottingham that he needs more taxes? But where is our Robin Hood? Where are the voices that can pierce the darkness of our faltering political/economic systems with a clarion voice of verity, truth, justice and reason?
Perhaps, just perhaps, Richard Sulik can pierce the darkness of Europe and prevail. Currently, though his shot across the bow has certainly been heard around the world, it seems that he will not be able to stop the continued plundering of the poor people of Slovakia in order to continue to pay for the irresponsible overspending of Greece. According to Sulik, the average Slovak would have to work 300 extra hours to pay what the EU is demanding to prolong Greece’s agony. Greece can’t be saved now anyways; no more than any of the rest of the countries that have sold their futures for yesterday. The troika auditors have already admitted that Greece’s fiscal targets are no longer within reach. And so, if the EU banks get their way, Slovakian people will have to forfeit a couple of months’ worth of wages, wages that average about €780/month – just €30 more than Greece’s minimum salary – to Grecian abyss. To help understand this comparison, Sulik claims that the average German worker will have to work “only” 120 hours to pay their share of throwing more euros into this economic black hole.
Let’s get this straight. Unless Another Joe is missing something, there are some serious imbalances here. All countries that are part of the euro contribute and are benefited by the system; at least in theory. The idea would be to help the poorer countries grow in order to strengthen the region and economic strength of the union. The Germans are known for being hard working and industrious, as well as being frugal and savers. The Greeks, well, not so much. They may be very hard workers. I don’t know. But they’re known for living for the moment (which tends to be typical of warmer climate cultures). The Slovaks have sacrificed and struggled over the past several years. Gaining independence from Czech in ’93, the country became a full fledged eurozone member just a couple of years ago. Still the second poorest country of the EU, they’ve shown great tenacity in climbing from communism 20 years ago to a point where they can almost taste the growth that a free market system affords.
Now the Germans are telling the poor Slovaks that they need to give more (percentage of income) than they’re willing to give to a country that’s failed to follow the rules and has buried themselves in debt. Let’s put it in family terms. George, a fairly affluent man in his latter years, has several children. They vary a great deal in how they’ve approached life. Let’s take a look at two of them, Sally and Greg. Greg has always been likable, friendly, outgoing and the sort of free thinker that attracts friends. Sally, though very friendly and kind, is quiet and simply goes about her business. Neither are lazy, but they’re certainly different. Sally gets great grades and is paying her dues. She works hard through college, graduating with no debt. As she begins working, she knows she has to start at the bottom, but doesn’t complain. She just works steadily. Greg, on the other hand, took out huge student loans for his education and now is a land shark. He finds the deals, sells them, buys them, flips them or whatever it takes to make a buck, borrowing against his investments here and there along the way. Then the real estate bubble bursts and Greg is standing there with debt and no equity in his holdings. There’s no way he can get out of it without defaulting.
Okay, what should happen? Well, George is pretty well off. He’s saved and worked hard to get where he is. In fact, if he was willing to, he could probably bail Greg out of the mess he’s gotten himself into. But he wants to maintain family solidarity, so he calls all of the siblings and tells them that they each have to pitch in to help get Greg out of debt. There’s some groaning and moaning along the way. But half the kids recognize that they might be next, while the others simply tow the line for the sake of the family. However, Sally doesn’t get it. She’s worked hard to get where she is. She knows that dear old dad is only pitching in about half as much (according to percentage of earnings) as she is. Greg has been irresponsible. And yet she’s supposed to get set back in reaching her humble goals because of the irresponsible excesses of her brother? She has to give up 15-20% of her annual wages to help her brother maintain his lifestyle, which is obviously much higher than her own?
How would you feel? What would you think? Perhaps, and Another Joe may be off his rocker, this is how the Slovaks feel. They are tired. They’ve gone through hard times. They’re poor, but gaining. Just when they’ve gained their feet someone comes along and pushes them over? If I were in their shoes I think I’d have to say, “Enough! Get us out of this family of bullies and irresponsible miscreants. I’m tired of breaking my back to help the wealthy elites and maintain the lifestyles of irresponsible financial habits.”
But Slovakia is a David in the mist of the European Goliath. And Richard Sulik is a lonely voice in many respects. Though, if I understand correctly, the people back his position. Politically he’s under a great deal of pressure to allow this next vote to go through. The vote will effectually give Greece enough money to last another month. That’s about it. It’s insanity. The poor people of Slovakia will be relegated to working the next two months of their lives in order to help their Greek cousins continue to throw more empty promises down the drain and default later rather than sooner. It’s throwing bad money after bad with no hope of any good coming from it.
So, what should Slovakia do? It’s a tough call from a political perspective. And attempting to divorce a political perspective from an economic one is like divorcing rubber from a tire. You end up with something, but have no clue what to do with it. If you’ll indulge me, Another Joe has a few ponderings that just might work. Slovakia already has a flat tax. This is perhaps the most responsible taxation possible, for it favors nobody. With this good start, it may behoove the Slovakian government to implement a Slovakian currency that can trade along side the Euro. If they were to implement a gold standard then they would become a model for the world to behold. Their currency would stabilize and gain the attention of investors from all over. And this stability would transfer to the people if the markets were allowed to run free in the country. At first it would be tumultuous. But, let’s face it, things are already tumultuous there. In the long run, it would be a road to prosperity for generations. The euro could still be accepted, but it would be traded in accordance with it’s value against their local gold standard.
Well, I guess I might be just naive enough to believe that such a free market system could work. Maybe the political pressures are simply too much to stand against. Another Joe just doesn’t know. But, every now and then, perhaps when we least expect it, a David rises up and stands against Goliath. It would be something else to behold this little country that few of us know much about rise from the ashes of communism to become a model of Austrian prosperity. Frankly, if they stand their ground against the EU, I’d like to live there. It’s hard to find a country willing to tow the line of integrity for the interests of the common citizen.
Keep an eye on Slovakia. In particular, it’ll be interesting to watch this young Richard Sulik over the next few years. Already many Europeans are appreciating his willingness to call a duck a duck and stand against the oppressive operations of the central banks. If he’s the man of integrity that he appears to be, he could gather a massive following. We tend to flock to such voices of reason when they rise above the cacophony of deceit and deception that we’re constantly bombarded with. Men look for someone worth following. If Sulik is such a man, I wonder if he’s hiring.
[UPDATE: As of a few days ago, the EFSF effort went through. Slovakia caved to the pressure, though I really don’t know if Sulik voted for or against. There were 30 votes against. Sulik’s quote in this article, from this interview, is helpful in understanding the injustice of the issue at hand though. “Slovakia has the lowest average salaries in the euro zone,” he said. “How am I supposed to explain to people that they are going to have to pay a higher value-added tax so that Greeks can get pensions three times as high as the ones in Slovakia?”]A good name is to be chosen rather than great riches,
Loving favor rather than silver and gold. The rich and the poor have this in common,
The Lord is the maker of them all. A prudent man foresees evil and hides himself,
But the simple pass on and are punished. By humility and the fear of the Lord
Are riches and honor and life.