Today I remembered that unbelievable thing Angela Merkel said last year about Swabian housewives. She was saying that cutbacks and bailouts were OK because governments should be like housewives in Swabia, which is a part of Germany where they are apparently good at balancing the books.
If Eurozone governments are Swabian housewives then I don’t know what kind of messed up household Angela Merkel grew up in.
So the housewife finds that the books aren’t balancing. What does she do? She starts starving the whole household to death, starting with the kids. Then she stops sending them to school.
This is a traditional household where the man works. Only not anymore. The housewife tells her husband to quit his job. Why? Same reason they can’t send the kids to school: the money they spend on petrol is an expense and expenses must be cut.
She doesn’t kick her online gambling habit. She doesn’t make any kind of plan for getting the books balanced again, or figuring out what got them into this mess, or thinking about what brings in money. Even though she’s built up a load of debt already, her plan revolves around getting loans off the bank, the credit union, friends, family, the mob, anyone!
…and meanwhile hoping beyond hope that some miracle falls from the sky.
She starts selling off the furniture and the tiles on the roof just to pay the interest. When the kids get sick, she says she can’t afford to bring them to the doctor but still there’s a flashy car (that they can’t even drive) sitting in the garage.
The kids are starving, sickening and dying. And whenever they beg for food she throws up her arms and says “That’s all well and good but where are we supposed to get the money?”
I never, ever, ever want to go to Swabia.
One day a mysterious man with scars on his face comes knocking at the door and the Swabian housewife and the man talk for twenty minutes or so. Then the man comes out and takes two of the kids by the hand. The housewife nods at the kids and says it’s OK. The man brings them out to his car and drives off.
The husband asks what the hell is going on. The housewife tells him that man was from the mafia. “We came to a deal on the money I owe him. He takes the kids and we get another two months to pay back the debt, with interest.”
The husband goes ballistic. She soothes him.
“Let there be no doubt, this is no silver bullet to end all our problems,” says the Swabian housewife, “Today, we have secured a vastly better deal on the cost of paying back the mafia. This plan will lead to a substantial improvement in our debt position over time. It will likely materially improve perceptions of our debt sustainability.
“What today shows is that the more we are prepared to help ourselves, the more others will assist us along the difficult path we still have to travel.
“It can give us confidence that our goals are achievable, that our hopes are realisable. Today’s outcome is an historic step on the road to recovery.”