The Greek government's budgetary woes are well known by this point, but a newly-released Flash Eurobarometer survey from last year reveals a different side of the financial crisis:

Greece's latest deficit-cutting measures may help the country escape its debt crisis, but higher taxes and wage cuts will be a hardship for many Greek citizens, who already are the most likely in Europe to report problems paying their bills.

Fully fifty-seven percent of Greeks answered that they are "Constantly struggling and have fallen behind with some/many bills." This number is twelve percent higher than the three runners-up, Latvia, Bulgaria, and Cyprus. Furthermore, forty-three percent of Greeks claimed that though they had no problems paying bills in 2008, they had begun having problems in 2009 and expected them to continue in 2010 -- a number also twelve percent higher than the E.U. average of 31 percent.

It looks like this big, fat Greek economic collapse will last well into the future.

Two weeks ago, European leaders tapped Germany to lead a bailout of Greece. Since then -- sturm und drang and chaos. Germans are infuriated over everything from Greece's hiring of Wall Street firms to hide its debt to the country's retirement age (in Germany, 67, in Greece, 61). In turn, Greeks have accused German papers of racism and western European leaders of paternalism.

Yesterday, a 60,000-person strike shut down Athens and turned violent, Theodoros Pangalos, the deputy prime minister of Greece, brought history into it. In an interview with BBC radio, he invoked the 1941 Nazi invasion of Greece, which caused an estimated 300,000 deaths:

[The Nazis] took away the Greek gold that was at the Bank of Greece, they took away the Greek money and they never gave it back. This is an issue that has to be faced sometime in the future. I don't say they have to give back the money necessarily but they have at least to say "thanks."And they shouldn't complain so much about stealing and not being very specific about economic dealings.

All in all, I can't see anyone benefiting from this diplomatic low blow. The Greeks don't want German help, and the Germans don't want to have to give it to them. But, the alternative is mass unemployment and emigration, deep cuts to social services, and a prolonged depression. As I understand it, even moderate austerity measures combined with very high taxes on the rich, the Greek populist proposal, simply will not work. And, just as an aside, I'll go ahead and guess that Angela Merkel saying "Thanks for the gold!" would not go down well in Athens at all.

This weekend, the New York Times reported that Greece, in the midst of a massive economic crisis, had none other than Wall Street giant Goldman Sachs help it keep its books in the black with some creative financial maneuvers, such as selling away the rights to future lottery earnings.

[Greece] engaged in a decade-long effort to skirt European debt limits. One deal created by Goldman Sachs helped obscure billions in debt from the budget overseers in Brussels. Even as the crisis was nearing the flashpoint, banks were searching for ways to help Greece forestall the day of reckoning. In early November...a team from Goldman Sachs arrived in the ancient city with a very modern proposition for a government struggling to pay its bills.

The story is a bit less fantastic than it seems at first blush. First, Felix Salmon notes, the world has known about the investment banks' advising the Greek government for the better part of a decade. In 2003, Nick Dunbar of Risk Magazine published a long piece on the giant swap deals Goldman was engineering for Athens.  

Second, Greece is hardly alone in papering over or effectively doctoring its stats. The New York Times article notes that Italy partakes in similar banker-confabulated deals and implies that others do too. France pulled a similar 9 billion euro debt maneuver, revealed in 2006. China cooks its books to boost its GDP numbers. Name any of a dozen developing nations (Zimbabwe springs to mind) and someone will have plausibly accused it of lying with statistics.

But, of course, Greece is no Zimbabwe. The ousted Greek government knew better than to amp up the creative accounting as its economy was tanking. It made a bad situation worse, imperiled Greek livelihoods, hurt its partners in the eurozone, and possibly even destabilized the euro itself.

What I can't figure out is how much the Eurocrats and eurozone finance ministers knew about these deals. The European Monetary Union has bureaucrats aplenty to keep track of the eurozone economies and prudential measures to prevent countries from over-extending themselves, debt-wise. Is the issue that they didn't know enough -- or that they didn't act?

Goldman Sachs CEO Lloyd Blankfein

P.T. Barnum, the great American circus showman, may or may not have actually said of his customers, "there's a sucker born every minute," but it's a maxim that could just as well have applied to the recent financial crisis.

I'm reminded of the apocryphal quote after reading Gretchen Morgenson and Louise Story's somewhat convoluted, but nonetheless interesting report in today's New York Times on how the investment bank Goldman Sachs allegedly played both sides of the market for mortgage-backed securities and is now being scrutinized by various regulators looking to determine whether any laws or industry rules were broken:

While the investigations are in the early phases, authorities appear to be looking at whether securities laws or rules of fair dealing were violated by firms that created and sold these mortgage-linked debt instruments and then bet against the clients who purchased them, people briefed on the matter say.

One focus of the inquiry is whether the firms creating the securities purposely helped to select especially risky mortgage-linked assets that would be most likely to crater, setting their clients up to lose billions of dollars if the housing market imploded.

Some securities packaged by Goldman and Tricadia ended up being so vulnerable that they soured within months of being created.

I'm no lawyer, but my take is that it's not Goldman's fault if its customers were suckers; the bank correctly saw that the U.S. housing sector was headed south and adjusted accordingly, while less prudent financial institutions were still making big bucks on complex securities tied to mortgages and couldn't wean themselves away in time to save themselves from disaster. As the firm's spokesman says in the story, it's not like these customers, pension funds and insurance companies, were rubes who didn't know what they were getting into. They were sophisticated financial players looking for high returns and willing to take risks.

Still, Goldman stands accused of some breathtakingly cyncial behavior here: selling products it didn't believe were worthy investments and then betting against them. It's as if McDonald's were caught investing in defibrillators and plus-size clothing companies. Nobody can deny, however, that Goldman made very smart moves and has come out far ahead of its competitors.

One thing I'm struck by in recent accounts of the financial crisis is the extent of "Goldman envy" among other Wall Street firms. Executives at J.P. Morgan, Lehman Brothers, Merrill Lynch, Bear Stearns, Morgan Stanley, and other big banks were obsessed with emulating Goldman's huge profits and resented its employees' reputation for being the smartest, boldest players on Wall Street. In some cases, the interfirm jealously was kind of like that of the character Jan on The Brady Bunch; just replace "Marsha, Marsha, Marsha!" with "Goldman, Goldman, Goldman!"

Yet somehow, with the possible exception of J.P. Morgan, which avoided the worst of the mortgage junk thanks to smart risk management by CEO Jamie Dimon, the other banks didn't follow Goldman's lead when in December 2006 the firm turned bearish on the mortgage sector. Why didn't they catch on?

UPDATE: Be sure to read Felix Salmon's informed analysis. Money quote:

The real lesson here isn’t that Goldman did anything scandalous. It’s just that if you’re making a bet and Goldman is your bookmaker, don’t be surprised if you end up losing.

See also Goldman's response and Salmon's custom answer to my last question.

Spencer Platt/Getty Images

Today, the International Energy Agency said that global carbon emissions shrank 3 percent in 2009, due to the Great Recession. The Guardian reports that for only the fourth time in the past 50 years, the world emitted less of the greenhouse gas than it had done the year before, because of declining industrial production.

Which means, alas, that the world will likely be back to increasing emissions soon. Indeed, the IEA report notes that to avoid climate change and all the catastrophes it promises, countries don't have to shrink their economies, but do have to "[build] more than 350 new nuclear plants and 350,000 wind turbines in the next 20 years. [It] also estimates that by 2020, three-fifths of cars will need to use alternatives to the traditional internal combustion engine."

The IEA report reminded me of a fascinating study out of the London School of Economics, released last month. It found that promoting contraceptive use could be a lynchpin to combating climate change: fewer babies means fewer carbon-emitters, and fewer carbon-emitters means less climate change. 

That, in turn, reminds me of this. Oh dear.

European leaders are starting to follow suit; Britain's five largest banks have agreed to publish the pay of their key staff members, and will spread bonus payments over three years. French president Sarkozy has announced a set of even tougher and more broadly applied regulations.

Of course, not everyone thinks that bonus reforms are the way to go. Nobel prize-winning conomist Robert F. Engle III says

We shouldn't ban bonuses, but restructure the way they're paid so they're more commensurate with the risk the company is taking....What's important is we give the banking system the right incentives to figure this out. When companies get too big and too complex to fail, they would face a higher tax rate, which would go into a rescue fund. The banks are not excited about it, they would rather go back to business as usual."

This past week, Vitaliy Katsenelson wrote a great Foreign Policy web feature on the big old asset-price bubble developing in the Chinese economy, called "The China Bubble's Coming -- But Not the One You Think."

Recent news seems to bear the theory out.

The Financial Times reports:

Chinese regulators on Monday ordered banks to ensure unprecedented volumes of new loans are channelled into the real economy and not diverted into equity or real estate markets where officials say fresh asset bubbles are forming.

The new policy requires banks to monitor how their loans are spent and comes amid warnings that banks ignored basic lending standards in the first half of this year as they rushed to extend [around $1 trillion] in new loans, more than twice the amount lent in the same period a year earlier.

I feel a bit strange saying this.

But, over the past year, in the midst of the worst economic crisis since the Great Depression, I've really come to admire the Chinese central bank. 

This fall, it recognized the need for massive stimulus -- and did it. Then it realized it was pushing too much money into the economy, creating bubbles and distorting the lending market -- and so it stopped. The central bank will raise reserve requirements for lenders. And presto, they'll stop lending so much. The bubble will ease, rather than popping.  

Of course, I'm wary of my own oversimplification here. The Chinese economy has some very trying issues ahead of it, particularly as related to its currency, its U.S. reserves, and the quality of its economic growth. Plus, the impact of the lending spree (and its halting) obviously won't be clear for some time. 

But, for the moment, this move just seems really prudent. Another way of thinking of it? Being a command economy has its advantages when there's need for a whole lot of emergency economic commands. 

In what is surely a disappointment for WALL-E fans everywhere, the New York Times reports growing robot unemployment in Japan: 

At a large Yaskawa Electric factory on the southern Japanese island of Kyushu, where robots once churned out more robots, a lone robotic worker with steely arms twisted and turned, testing its motors for the day new orders return. Its immobile co-workers stood silent in rows, many with arms frozen in midair...

Across the industry, shipments of industrial robots fell 33 percent in the last quarter of 2008, and 59 percent in the first quarter of 2009, according to the Japan Robot Association.

 

Even non-industrial robots are taking a hit. Ugoba, "maker of the cute green Pleo dinosaur robot with a wiggly tail" has filed for bankruptcy, the NYT says, despite selling 100,000 of its creations.

However, there is still hope for the robot industry, or at least baby dinosaur robots. "Pleo is alive and in good hands!" its official website declares. The company has been acquired by the Hong Kong based Jetta Group and will be "re-launched" soon. 

YOSHIKAZU TSUNO/AFP/Getty Images

New U.S. employment numbers out this morning indicate things are getting worse at a less-breakneck pace. A mere 345,000 Americans lost their jobs in the month of May.

The New York Times sunnily reports that the numbers are "a welcome sign that the decline in the job market would not continue forever."

People will say this means the recession is bottoming out. They will call it a green shoot. They will glass-half-full it. Pollyannaism is Pollyannaism. 

But the report is dismal: that graph on the front web page of the New York Times shows change, not the absolute unemployment. The employment-to-population ratio is under 60 percent, the underemployment number is 16.4 percent, and unemployment is worse than the provisional numbers used the stress tests. 

Plus, a Deutsche Bank report notes, "the length of the workweek declined by 0.1 hour to 33.1 hours, which is the aggregate hour equivalent of an additional loss of about 350k jobs" -- making May look much more like April.  

Still, there are signs that even if the employment numbers in the U.S. are really bad, things worse elsewhere. Here's a fascinating graph from Stratfor:

The chart is missing a few key countries, most notably China. (Stratfor says it did not include China because its economy is too different to compare. Fair point.) Stratfor argues the recession is hitting the U.S. much more softly because "the American system is far more stable, durable and flexible than most of the other global economies, in large part thanks to the country’s geography."

It makes some sense: each country's economy grows to take advantage of its geography. Russia, with its massive oil and gas reserves, benefited from the massive surge in commodity prices through 2008; it has been hit hard since because the economy is highly dependent on that one industry. The U.S. economy is much more resource- and industry-diverse.

I wonder what Robert D. Kaplan would have to say about all of this...which countries' have advantageous geographies for downturns? Is this why Australia seems to be doing relatively well?

(h/t The Monkey Cage and Ezra Klein)

Despite a recession dramatically affecting some of the biggest and most robust economies in the world, Australia has managed to have an economic improvement. In the fourth quarter, not only did the GDP creep up 0.4 percent while others stalled or fell, but stocks rose and the value of the Australian dollar increased to 82.40 U.S. cents, the highest it's been in several months, thanks to generous government cash handouts intended to stimulate spending. 

Craig James, the chief equities economist at Commonwealth Bank of Australia explained:

"Rumors of the death of the Australian economy have been highly exaggerated... Much of the credit for Australia's resilience must be given to the swift actions of the Reserve Bank and government in stimulating our economy."

So even though China is on the verge of buying out a huge portion of the country's natural resources, and its soldiers are the world's pickiest eaters, Australia does seem to be doing something right.

Unfortunately, it makes perfect sense: as the world struggles to rebound from the global financial downturn, human rights have taken a backseat. As Amnesty International launches its annual report today, the organization worries: "human rights problems have been relegated to the backseat as political and business leaders grapple with the economic crisis."

So if getting delinquent countries to fix their human rights records was arduous before, now it's downright grueling. There's neither money nor time for addressing the scourge -- even as recession leaves unemployment, cut wages, and even hunger in its path. 

It's not hard to imagine what they're talking about -- and here are a few hypothetical examples:

As the unity government in Zimbabwe tries to get on its own feet, it has been applying for aid to supplement increasingly sparse government revenues. With foreign donors feeling rattled by domestic conditions, it will be that much harder to get help.

In Nigeria, where falling oil prices are drying up government revenues hard and fast, the country's army has responded full force to put down insurrection in the country's oil-producing Niger Delta -- to the detriment of thousands displaced. 

Or take South Africa, just recently hit by its first real economic downturn in a decade. Xenophobia (particularly against an influx of Zimbabweans looking for work) was already a problem last year, when times were (relatively) good. This year could be even trickier.

Today, U.S. Treasury Secretary Timothy Geithner and President Barack Obama laid out a plan to create and enforce stricter tax regulations for U.S. corporations. Obama's opening salvo from the presser:

Most Americans meet their responsibilities because they understand that it's an obligation of citizenship...and yet, even as most American citizens and businesses meet these responsibilities, there are others who are shirking theirs. 

He went on to describe the U.S. tax code as "full of corporate loopholes that [make] it perfectly legal for companies to avoid paying their fair share."

That's right. He was talking about "tax havens": not just countries in which major U.S. corporations hide from U.S. taxes, but a big fat open season sign for fire and brimstone metaphors and sword of Damocles swinging. Democratic speechwriters must adore tax havens. They're like the Newt Gingrich of tax policy: always there to beat up.

Rhetorical fury aside, tax havens really do allow U.S. companies to shore up a whole lot of money, money which Obama hopes to use to revamp the U.S.'s healthcare system, among other things. Interesting factoids from the Treasury release: 

• In 2004, the most recent year for which data is available, U.S. multinational corporations paid about $16 billion of U.S. tax on approximately $700 billion of foreign active earnings -- an effective U.S. tax rate of about 2.3 percent
• A January 2009 GAO report found that of the 100 largest U.S. corporations, 83 have subsidiaries in tax havens.
• In the Cayman Islands, one address alone houses 18,857 corporations, very few of which have a physical presence in the islands.
• Nearly one-third of all foreign profits reported by U.S. corporations in 2003 came from just three small, low-tax countries: Bermuda, the Netherlands, and Ireland.

The closing of three major tax haven loopholes should garner $190 billion in tax revenue for the government in the next ten years. 

Another big beneficiary of the changes? Lobbyists. Corporate America isn't going to like this -- and they're going to pay a lot of money to see the repeal of these changes.  

A man urinates on April 25, 2009 in the toilets of the Sodoma bar in central Reykjavik where photographs of the former bankers who left their country after the financial crash have been stuck on the urinals. AFP PHOTO OLIVIER MORIN.

Someday very soon, a graduate student is going to have a field day with the gender dynamics of Iceland's transfer-of-power.

Lots of big, depressing, IMF-related news this morning:

• The IMF released its biannual Global Financial Stability Report. The big news: the global economy may need $4.1 trillion in write-downs on around $58 trillion in assets before the crisis is over.  It estimates that the United States leads the world in ripping the bandaid off -- completing about half of necessary write-downs; European countries are lagging. Banks will take the brunt of that cost, around two-thirds. The report included European- and Japanese-originated assets for the first time.

• U.S. President Barack Obama sent a message to members of Congress, asking for them to approve a $100 billion loan to the IMF. The loan is part of, not in addition to, the money the United States promised the organization at the G-20 summit.

• Colombia became the third country to come forward and seek a $10 billion "flexible credit line" loan from the IMF, designed to insure the country's ability to meet its spending requirements.

• Look for the first two chapters of the IMF's World Economic Outlook  to be released within the next hour or so. We'll have an analysis up as soon as possible afterwards.