Destination Greece: Debunking the Myths About Crisis Vacationing

06/17/11 Buenos Aires, Argentina – Ahh…we can almost feel the sweet Mediterranean waters lapping at our feet, the white sand of the Naxos beaches between our toes…the taste of kleftiko on our tongue, washed down with a liberal helping of ouzo, Attika beer and perhaps a sneaky baklava for desert.

Greece is in trouble, Fellow Reckoner…which means it’s almost time for the crisis vacationer to book a few weeks lounging on her splendid islands. More on that thought below. But first…

Yields on 2-year Greek bonds retreated below 30% overnight on news the Germans had softened their position on the welfare-obsessed olive traders. The move came after Chancellor Merkel said that a Vienna Initiative, used to assist Eastern European banks during the 2009 crisis, would be a “good basis” for lining up existing bond holders to voluntarily help Greece through its fiscal crisis. We had counted on Merkel to toe a harder line. So much for “brinksmanship.”

Still, the Hellenic finances are in the toilet…and will eventually be flushed, one way or another. The Olympians run debt-to-GDP ratios similar to that of…gulp…the US! But this is hardly breaking news. In fact, it was hardly breaking news when we first wrote about it way back in 2009.

“That the Greeks are in trouble is hardly breaking news,” we opined in our article “It’s All Greek Debt to Us”, “Heck, even those geniuses at the ratings agencies had time to figure it out! Fitch, one of the agencies NOT responsible for forecasting the biggest economic tsunami since (at least) the Great Depression, just downgraded Greece’s sovereign rating from a single-A-minus to BBB+. So NOW investors run for the hills?”

The slow-motion calamity that is modern day Greek finance continued unraveling over the ensuing twenty or so months, and continues to this very day. But is such a lamentable fiscal trajectory really so astounding? Hardly. Again, from that same 2009 column:

“The only thing really surprising about all this brouhaha is that investors should find it at all surprising in the first place. Did they think Dubai was going to be a one off occurrence? That the same immutable laws of nature would not also apply to other overleveraged, undercapitalized economies? Not likely! If the agencies are crying wolf, dear reader, your lamb dinner is likely already minced meat.”

Yes, predictably, there’s carnage in Athens, where protestors clash daily with police, who in turn fire tear gas on the hapless, misguided crowds as they attempt to surround the Parliament building. Indeed, the news reports make the place sound like a complete hellhole…exactly the sort of coverage that ought to ward off unwanted hordes of British bachelor party revelers and drunken, antipodean beachgoers. Which brings us back to our thoughts above…

The concept of “crisis vacationing” may sit a little uneasily with some folk. These would be the same people who steered clear of Balinese beaches after the 2004 tsunami, who avoided Thailand after last year’s protests and who gave Mumbai a wide berth after the 2008 terrorist attacks. Heading to these places so soon after either man- or Mother Nature-made disasters strike is just cold-hearted, they contend, a slap in the face for those innocents suffering under the weight of the misery visited upon them. Here’s why they’re wrong…

While it’s true that you’ll get cheaper accommodation packages and enjoy less-crowded beaches and other attractions, that’s only one very small, relatively insignificant part of the story. Your editor is here reminded of a trip he took to Mumbai in late 2008, a short while after the terrorist attack there. We happened into Café Leopold one sunny afternoon, a favorite expat haunt on the Colaba Causeway, and one of the targets of those terrible sieges. There were still bullet holes in the walls, as if they had been carved out the day before, and the broken windows upstairs were yet to be fixed. Many of the staff had lost friends and family in the assault, when thugs opened fire in the main restaurant downstairs, spraying bullets from floor to ceiling.

Though we didn’t know it at the time, it was actually the one-month anniversary of the shooting that very day, Boxing Day, 2008. After having spent the afternoon chatting with the locals about their experience and sharing a couple of beers with them, we noticed a strange calm fall on the place. Reporters from the local and national papers arrived outside and crept, somewhat reverently, especially for reporters, indoors. The staff proceeded to dim the lights and to bring out candles to honor those who were so brutally slain. A moment’s silence was offered in their memory. A few relatives gave speeches. Some raised their glasses. Others simply sat motionless, their heads bowed, teary-eyed and silent.

After the short ceremony had concluded, we got to chatting again with a few of the regulars and a couple of staff members. Your editor and his girlfriend were two of only four or five foreigners in the place, a gesture the locals seemed to very much appreciate. A few reporters asked us how we liked India and about our impressions of Mumbai. We responded honestly: that it was one of the most amazing places we’d ever experienced; vibrant, kind and brimming with Rushdie-esque mystique and the winding, intangible poetry of life. They asked us to tell the cameras that we were having a good time, that it was safe for tourists to come back, and that the hospitality so characteristic of the city was eagerly awaiting their return.

We made some good friends that night, a couple of whom we are still in contact with, two and a half years later.

Feeling guilty or offended on other people’s behalf is a favorite pastime of middle class westerners everywhere. It helps us feel like we’re caring, empathetic people when, really, we’re not. Feeling bad from a distance doesn’t help others pay their bills. It doesn’t fill their restaurants and hotels. We offer prayers or make donations to assuage our own feelings of guilt and ineptitude – because we aren’t suffering alongside these people or because we couldn’t help prevent the disaster in the first place – not to make them feel any better. We like to feel bad for people we hope never to have to meet, living in countries to which we wish never to travel, suffering through situations we hope always to avoid.

If politicians really want to help the downtrodden of the world, they should stop giving their rulers cash bailouts, rendering them forever dependent on foreign welfare programs and the degrading, hand-to-mouth living it invariably nurtures. Stop papering over their financial potholes with crippling bridge loans and other unserviceable obligations to be foisted upon future generations. Stop, as Doug Casey so perceptively put it, “the transfer of money from poor people in rich nations to rich people in poor nations.”

As for us as individuals, we can help by eschewing the lure of conscience-cleansing charity and lip-service prayers to the heavens. Our deeds, after all, are performed here on earth. Instead, go and enjoy a beer with those you care to help, both near and far. Stay in their hotels, listen to their stories, visit their cities and enjoy their restaurants and bars…and don’t forget to leave a good, well-deserved, honestly-earned tip.

Joel Bowman
for The Daily Reckoning

Joel Bowman

Joel Bowman is managing editor of The Daily Reckoning. After completing his degree in media communications and journalism in his home country of Australia, Joel moved to Baltimore to join the Agora Financial team. His keen interest in travel and macroeconomics first took him to New York where he regularly reported from Wall Street, and he now writes from and lives all over the world.

View articles by Joel Bowman

Related Articles:

• February 10, 2012 -- Economic Growth in the New Millennium
• November 18, 2011 -- Center Can’t Hold
• November 11, 2011 -- How Greece and Italy Can Avoid a Deep Recession
• July 1, 2011 -- When Lenders Stop Lending
• June 17, 2011 -- Why You Shouldn’t Fear the Markets’ Next “Lehman Moment”

 Print This Post