Interesting way of looking at it, except I think they rely on the democracy card too much to kill it off. :/
It's a tragic picture you paint regarding your friend and his unfortunate employees. I have had to wind up an operating business in the past, selling assets and finding new jobs for existing employees, so I can appreciate the weight of responsibility on his shoulders and applaud his efforts to find new jobs for his people. But that personal sense of responsibility and effort is a long cry from government stepping in and reappropriating other people's money. What about the employees of your friend's customers? Presumably they are struggling just as much. Should the government step in there also and if so, where should they stop? There is much virtue in a personal sense of responsibility motivating someone to assist others find a job, but no virtue in government raising taxes to provide corporate welfare (wealth redistribution). And I am just as much opposed to the corporate welfare provided to GM, Toyota, Mitsubishi, BHP, etc. as I am to providing it to your mate. If business can't afford to employ people then they obviously shouldn't. It is logical and basic, not complex or confusing, but laying the problem at the feet of government to "solve" creates complexity, confusion and corruption. Beyond sensible and minimal industry regulation, the government should stay well away from the business affairs of private or public companies. The job of government is to provide the environment in which Australians and their enterprises prosper, not tinker with the affairs of individuals and businesses. The sooner they get back to basics the better for everyone. At the moment they are bad and I suggest they will be getting a lot worse in the near future. The premise that bigger and bigger government involvement is any kind of "solution" to the problems we face, is fundamentally flawed. It is flawed because adding more of the cause of a problem is not going to contribute to fixing the problem. Contrary to the fallacy propagated by the politicians in their efforts for self engradisement, they do not create jobs, sustainable industries, affordable homes or lower carbon emissions. They just steal your money and blow a lot of hot air. (See Gillard's address to the US congress). No. If the domino effects of a Greece default progress beyond the currency markets, then those who are dependent on governments for assistance are going to be disappointed. Not because the governments don't care, but simply because they destroy value not create it. And that is the one conclusion we can draw from our history. To quote Jim Rogers, "Someone better be getting prepared" [youtube]http://www.youtube.com/watch?v=ls4lfmj6bQ4[/youtube]
Hmm, hey malachii, couldn't wages have been reduced before axing them or was there no other way? :/ Something is better than nothing under these circumstances.
Sure it may have stretched it out a bit more but at the end of the day - if cashflow is falling you need to fix it rapidly or severe it otherwise the company will bleed out. This guy is a smart cookie - if it could have been fixed with a short term band aid he would have done it. I think he is seeing no quick turn around in the Aussie $ or in the availability of cash so he needs to make some painful decisions now to stop really painful ones in the future. malachii
I am in Greece at the moment, holidaying on the islands...business is good here, tourists are out spending money and no one is worrying about a default etc. The general consensus from the locals is that the "powers that be" are wanting to destroy Greece. Also most locals would welcome the drachma back. Lets wait and see what happens.
Cutting wages is unpopular, but there are ways to manage it depending on how good the relationship is between management and the rest of the staff. e.g. It could be explained that either everyone would have to work harder and get paid the same due to the lack of staff or everyone could maintain current levels of work but be paid less. Perhaps staff could be asked to cast their vote. It's not that far-fetched to call a meeting with everyone, considering that some factories hold big staff parties, BBQs, christmas raffles for a new car, or supply lunch 5 days a week etc.. Anyway, as malachii said, the guy probably factored that in. Not that I meant a company should bleed slowly by being in the red. They should avoid being in the red but get used to not making as much of a profit as previously and likewise adjust wages to reflect the current conditions.
Did you bring along anything in case the banks collapse/close or hyperinflation becomes likely? Got family heading that way in a fortnight and figured they could take a long some US Dollars or some sovereigns just in case. I can't see the whole euro collapsing but I could see prices rising. Fortunately you can always skip into one of the other euro countries.
I didnt bring anything as I do not forsee that scenario playing out in Greece, if it does play out the population will be prepared. Many people I am speaking to are saving their fiat. I hold an EU and Australian passport and have a return ticket and plenty of AUD in my bank account, so if SHTF in Greece I can get out of here quite easy.
MEP opinion article on the inevitability of a Greek default and the ability to underestimate the stupidity of big government. http://blogs.telegraph.co.uk/news/d...eece-will-default-but-the-euro-isnt-finished/
Greece crisis: MPs set to vote on austerity package Greek politicians are to vote later on austerity measures that have sparked nationwide strikes and the worst rioting in Athens for more than year. http://www.bbc.co.uk/news/world-europe-13953077
EU is just prolonging the inevitable, and the longer it goes on, the worse it will be when they do eventually default.
Was just reading the Italians are introducing further austerity measures to parliament, in an effort to save EU50B , I can see that turning very ugly, the Italians are somewhat passionate
Well, the Austerity package was voted FOR by the Greek Government. This will now see the EU give them another bailout payment. Wonder how long they 'think' they can prop up the economy before it all comes tumbling down?
RM, Does that "$40 billion over 5 years" mean only $8 billion a year? If so, then they are only scratching the surface and it will NOT solve the problem, not within a bulls roar of it. OC
I don't know the spread of the higher taxes/public spending cuts over the 5 year period, however the aim is to set them on a course to recover and pay back their debt in the next few years with the help of a massive amount of bailout money from the other EU countries (basically just France/Germany). But bailouts don't work, they just put more money in the pockets of those who made the bad decisions in the first place. The same people who will make bad decisions moving forward. The downward spiral will stop for a while only.
Qoutes from article The EU welcomed the bill's passage, by 155 votes to 138, as a "vote of national responsibility". ....................................... The riot police engaged in behaviour that would never be tolerated in other parts of Europe, throwing stones back at the protesters, says our correspondent. Police corralled demonstrators into the metro station outside parliament in Syntagma Square, and fired tear gas down the stairwells, he adds. Meanwhile, protesters set fire to a post office on the ground floor of the finance ministry in the square. The air outside parliament was thick with plumes of tear gas and smoke as clashes continued near the square between masked protesters - armed with rocks and sticks - and riot police firing tear gas and stun grenades. Dozens of police and protesters were injured in the violence. http://www.bbc.co.uk/news/world-europe-13960947
In the end, a government will desert it's own people and view it's own citizens as the enemy in order to maintain it's power. And this is called the birthplace democracy.
It amazes me that the police will treat their own neighbours and fellow citizens with such violence. The austerity package will affect the police and their families too. Makes me wonder about the kind of people who chose to join the police force in the first place. They are supposed to protect citizens, not assault them.
