It happened before my time, but as I understand the story, the Greeks laid siege to the city of Troy in order to retrieve the beautiful Helen, the wife of Menelaus. She had been abducted by Paris, who was the son of Troy’s King Priam, and reportedly something of a hunk.
Paris had a sister, Cassandra, whose beauty caught the eye of one of the gods, Apollo, who was apparently hanging around Troy at the time. She spent some time in Apollo’s temple, and while she was dozing off there, snakes licked her ears in a cleansing process that allowed her to hear the future.
Apollo, of course, defined hunkdom, but when he indicated that he really, really liked Cassandra, she rejected him, and by the behavior code of the gods at that time he was honor bound to wreak revenge. He did so by placing a curse on Cassandra. She would be compelled to foretell the future, but no one would ever believe her prophesies.
Clearly, there was enough going on inside and outside Troy’s walls to invite comparison to a daytime TV soap. Eventually, though, the Greeks built a giant wooden horse, and hid a special ops team inside it, knowing that the horse-fancying Trojans would bring it inside the city’s gates. The rest, as they say, is history.
Lots of things have changed since those days. Many daytime soaps are closing down. Trojan horses have become computer nuisances. Achilles, the greatest of the Greek warriors, had a tendon and a heel named after him and has never really been the same. And over the years the requirement that you had to be beautiful in order to come up with forecasts that no one would believe was dropped, paving the way for modern economics.
The Greeks weren’t done with their impact on economics, though. After all, they gave it its name.
We were reminded of Greek economic influence as the country’s debt crisis, born of corruption and creative public finance methods, threatens to bring down the entire European economic system. Among other things, it has turned the proud European Central Bank into just another supplicant at the door of the International Monetary Fund, standing in line with the semi-solvent national banks of developing economies and loathing every embarrassing minute of it.
Worries about the effects of this financial stink bomb have spread around the globe and U.S. stock and bond markets have seen increased volatility as mood-driven investors alternatively react to or ignore the stench and its implications.
But just as the Greek gods would sometimes bestow gifts on unworthy mortals, the Greek financial crisis offers the U.S. an unprecedented opportunity to wash away all of our financial sins and regain our economic footing. We didn’t do anything to deserve this opportunity, and many, certainly those in Washington, D.C., still don’t yet recognize it for what it is. But the Greek disaster is a gift to us — one of those once-in-a-lifetime deals that is ours to enjoy or miss.
Part of the worry about the Greek mess is that it may push Portugal, Spain, Ireland, and Italy into the same debt spiral — needing to borrow more and more from increasingly skittish lenders.
How can this possibly represent an opportunity for the U.S.? It’s all about forecasts.
Forecast No. 1: If the Greece-inspired European monetary mess hadn’t happened or is ignored by us, the U.S. economic recovery, purchased at great expense with borrowed public funds, would be threatened constantly by inflation and high interest rates. This would mean very slow economic growth and chronically high levels of unemployment.
Forecast No. 2: The U.S. gets its act together and combines both positive actions and a credible plan to control our public spending and reduce the deficit. The reward for this would be a flow of funds from worried European investors looking for a safe harbor — an infusion of capital sufficient to keep short and long-term interest rates low enough to support a robust economic recovery.
The difference between the two forecasts is one of choice, not economics, which will have its way in either case. We can choose the vertebrate option, find the courage to do the right thing and use this incredible second chance to reclaim our prosperity. Or we can bumble along lazily, letting interest groups, including government itself, devour our future.
Shakespeare once wrote,
There is a tide in the affairs of men.
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
James McCusker is a Bothell economist, educator and consultant. He also writes a monthly column for the Snohomish County Business Journal.
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