The saga of Greece and its finances continues. Portugal could be next if we are careless say the pundits. Should we be overly concerned?
It is a given in the media business that good news does not sell. For some reason people are upset by good news. Maybe because they didn’t participate. Or maybe bad news makes them feel better. Again because they did not participate.
The Greek financial crisis can be seen in several ways:
- It is difficult for the people in Greece and for that I am sorry. There is an argument that their entitlements were too generous or that some evaded taxes due. Both could be true. The Euro has not been beneficial for them and not for some of their sister countries in Europe. Maybe it is not their fault. Doesn’t matter, really.
- The Greek financial crisis is like a canary in the coal mine. A warning to the other profligate countries and their people. That may be true too, but unless the foundation of the various economies is considered it is hard to make the comparison.
- The Greek crisis will be the first domino in a cascading failure. Again maybe but it is hard to see why.
- It is possible, even likely, that in the context of the world economy, Greece does not matter at all.
When assessing things, proportionality is a useful backdrop.
If a media person talks of the crisis, should I accept that or is it just someone selling bad news. I decided to seek out the relative importance of the Greek economy compared to some other economies.
I found this.
The Greek economy is slightly larger than the economy of Detroit. Or Minneapolis if you want a non-bankrupt. The economy of Greece and Portugal together is a little less than the economy of Houston.
Spain would be a bigger problem It is about three times bigger than the Greece/Portugal combination. Nonetheless, still smaller than the economy of New York City.
Perhaps it is time for the media to find another story.
Financial fear is easy to sow but in this case, outside Greece, it is unlikely to cause spectacular failures other than those that arise from unfounded negative beliefs.
Get a grip folks.
Don Shaughnessy is a retired partner in an international public accounting firm and is now with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.