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Why Ernst & Young and Capital Link Get Greece All “COVID” Wrong

Ernst & Young’s (EY) recent Attractiveness Survey for 2020 revealed at a Capital Link event this week, tourism, logistics, and real estate are set to drive growth for Greece in the coming years. Global investors, according to the study, see Greece as a favorable market in the near future.

The problem with the EY study is that half of the investors studied do not plan to change their investment strategies. In a report that seems sugar-coated to support current investing in Greece, EY paints a rosy picture of somewhere besides Greece. The flaws in past investment practices in Greece have been laid bare by COVID-19, but EY and the investor pool seem blind to the writing on the wall.

Let me begin by bashing EY and every one of the investors at Capital Link in the face. First, and foremost, the COVID-19 pandemic will end our market society for good. One of the biggest problems with investing in tourism or real estate is the fact that tourism destinations like Greece are going to need money for investments in public goods, for the health of the people, and for public services before another line of all-inclusive beachfront hotels go up.

In fact, if Greece is to become a truly sustainable destination, investments in such environmentally unfriendly projects will have to be scrutinized more, and not less. Listen, “cheap” is no longer going to fly if Greece is to have any semblance of growth in tourism or any other sector. A quote from Eric Klinenberg is professor of sociology and director of the Institute for Public Knowledge at New York University seems appropriate here:

“The economy—and the social order it helps support—will collapse if the government doesn’t guarantee income for the millions of workers who will lose their jobs in a major recession or depression.”

In other words, “You want to invest in Greece? Then be prepared to put on your thinking cap to come up with forward models.” Sure, Blackrock or some other pirate outfit can come to Crete and buy up all the land they want in this crisis. But, what’s it worth if Europe and all the world is too poor, sick, or afraid to come visit Crete? Worse still. Where is the value of a place like Crete, if we transform it into Ft. Lauderdale? I won’t get into a cultural argument here, but these “investors” we keep mentioning have a culture of not giving a shit.

Let me reiterate, our market society is about to come to an end because it has failed the people in every sector from pharmaceuticals to transportation. Look at TUI and other giant corporations that have hammered prices down to the point where quality and assurances cannot exist. The German tour company leaning on the people for a bailout from COVID should teach us something. In the U.S. my contemporaries whale about socialism and other political ideologies they do not understand, but in the end, we need to try something new. Another expert, Sonja Trauss is executive director of YIMBY Law offered this via Politico Magazine:

“In 2005, long before Donald Trump, Stephen Colbert coined the term “truthiness” to describe the increasingly fact-lite political discourse. The oil and gas industry has been waging a decades-long war against truth and science, following up on the same effort waged by the tobacco industry.”

The problem with EY, the deep pockets in the investing world, and the Greek politicians that play puppet to big business is this. When morality takes a holiday he stays in a gigantic concrete apartment building with 5 swimming pools, plush sheets and pillows, 4 bars, and a buffet line as long as a rainbow, situated on the most expensive and beautiful real estate on Earth. Money is morality, here in the land of Filoxenia, and on the cluttered beaches of Florida. Another quote fits here, this one from MICHAEL J. SANDEL in the Atlantic in 2012:

“In its own way, market reasoning also empties public life of moral argument. Part of the appeal of markets is that they don’t pass judgment on the preferences they satisfy. They don’t ask whether some ways of valuing goods are higher, or worthier, than others. If someone is willing to pay for sex, or a kidney, and a consenting adult is willing to sell, the only question the economist asks is “How much?” 

Read the story, seriously! Then you won’t have to wonder how come a president can just say “It will go away on its own,” and get by with it. The price for that was $1200 dollars in the form of a COVID check. Here in Greece, officials don’t even have to pay, they just promise to pay. Buying, selling, and investing most of all, govern every aspect of our lives today. And you want to read GTP to find out how we can “trust” EY and the big boys in government to take care of Greece’s future?

The problem in all this is that the premise is all wrong. Greeks are being trained to think that the country needs other people’s money to prosper. This is the biggest lie in since they told us hiding under our school desks would protect us from an atomic bomb. But there is hope.

A BBC story I was just reading offers some hope for Greece and other societies that have been smothered by the failing strategies I’ve described. The COVID crisis, as enormously disruptive and painful as it is, affords society with a “great common purpose, solidarity, creativity, and improvisation.” And, of course, we cannot expect the investing elites to do improv well.

We’re taking a bit more time about things because of the lockdowns and other measures. People are becoming more self-sufficient, more creative, and they’re doing a lot more thinking about the best ways to live. Even though this is manifesting in a lot of anger and frustration at the moment, tomorrow that Crete hotelier convinced he needs TUI may change his attitude. COVID has opened our eyes to the ineptitude of current systems. The climate crisis Mr. Trump blew off, is now in tighter focus. Health systems, the way our governments handle crisis, what we see in social and traditional media, and the mechanisms that clearly failed us are in focus now.

Finally, and most importantly, the pandemic has shown us that corporations and the governments they try to control are full of crap! One way we see this is in this EY report from this investment forum. How, you ask? Well, try to fantasize about how these investing geniuses plan for a future where human interaction has been altered! Yes, follow with me. How can some bean counter in Luxembourg advise that semi-rich pensioner in Baltimore about Greece’s tourism potential, if half the world does not want to, or cannot travel the way they used to? Is that pensioner’s life savings safer investing in virtual reality?

Maybe you see my point. Following how investors used to think is not going to be the bonanza it once was. At least, not until these advisors start thinking outside their tight little box of status quo.