Marketplace's Paddy Hirsch breaks it down.If there's one man who can break down all the financial complexity in today's world, it's Marketplace's Paddy Hirsch. In his latest video in his "Whiteboard" series, Hirsch explains what the PIIGS are. Take a look below.
Are PIIGS In Trouble Because They Don't Have A Lot Of Jews?
The world hardly lacks for plausible explanations for why Portugal, Italy, Ireland, Greece and Spain have found themselves at the center of the European Financial crisis.
But the most provocative explantion has been offered, half seriously, by Ira Stoll—who says the problem might be that the PIGS lack Jews.
The "PIGS' crisis is roiling the financial markets -- fiscal problems in Portugal, Ireland, Greece, and Spain. One interesting question to consider is why Portugal, Greece, Ireland, and Spain would be in worse trouble than other European countries. We've already noted Greece's high marginal tax rate. Bloomberg News's Matthew Lynn seems to see it as a monetary issue, as does, to a large degree, Paul Krugman.
Let me make another speculative explanatory leap -- or, to use a phrase of Friedrich Hayek's, engage in some "conjectural history" -- and suggest that one reason Portugal, Greece, Ireland and Spain are in rough shape is they have barely any Jews. Some numbers on this are here and here. This is only a half-serious explanation, prompted in part by the idea that observant Jews don't eat PIGS, anyway. There are historically contingent explanations of the paucity of Jews in each country -- most famously, Spain expelled its Jews in 1492, while the Jewish population of Greece was almost entirely wiped out in the Holocaust.
I'm not saying it's the only explanation, or that, if these countries had more Jews, they wouldn't still be in trouble. But it's the sort of thing that could stand some further research and analysis, no? Maybe a next book for Jerry Muller? A column for David Brooks or Thomas Sowell or Joel Kotkin? A blog item for Jeffrey Goldberg, who could come up with some catchy two-word phrase for the theory?
You'd have to think about whether the lack of Jews is an actual cause of economic trouble or just an indicator of something else -- policies or culture unfriendly to business or capital or outsiders -- that is the actual cause. If the theory has predictive power, then Norway and Finland are the next to go. But the theory may not work in countries with large oil reserves.
We've emailed Ira to ask about Italy, which has many more Jews than the other PIIGS, although Jews make up a similarly small percentage of the overall population.
U.K. Decides To Double Down On Capitalism In Bid To Avoid Joining The Debt-Defaulting PIIGS
In a sale of public assets larger than anything seen since Margaret Thatcher's heyday, Britain hopes to raise much needed cash privatizing banks.
The debt laden country is attempting to sell part of the 71.5 billion pound ($116 billion) investment it made in troubled banks during the height of the financial crisis.
Pressure for the sale is mounting as Standard and Poors has called the country's economic stability into question, citing massive debt levels and a beleaguered banking system in need of reform.
They better move fast. Standard and Poors is pointing towards a downgrade for the UK that would make raising money for spending more difficult and potentially put Britain on track to join Europe's PIIGS, states which have been brought to the brink by their sovereign massive debt.
Unfortunately, the opposing parties in Parliament are currently spending more time debating banking penalties than solving the potential debt crisis.
EU Privately Freaking Out About Greece And The PIIGS Breaking Apart The Union
While investors speculate as to whether Greece or the euro is going to crash, it's no surprise that
parties in the EU are questioning their ties to both.
An internal report obtained by SPIEGEL warns that the differing competitiveness among euro zone countries is "a cause of serious concern for the euro area as a whole."
The report said that 'peripheral' countries Greece, Portugal, Spain, Ireland, and Italy would "jeopardize confidence in the euro and threatens the cohesiveness of the euro area."
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