While I’m a bit late in reporting on my trip to Europe (coastal Spain, Portugal, and France), I had thought not to say anything at all, given that I learned vastly less about the economic state of play than I expected. But that in and of itself is a data point of sorts.
One reason I wound up learning so little is I travelled in the most removed manner possible: a cruise. I’m not a fan of cruises (way too regimented) but this was a family holiday. But that means you are not only not staying in local cities, it also means if you do shore tours (which is what we did for the most part), you only see what all our guides called the “touristic” parts. You get bussed around, walked to/through certain sites, and often get some shopping time (after all, Americans must shop, right?)
The clearest evidence of distress came in the few days before the trip. We got an offer from the cruise operator to turn our cruise in in exchange for two later cruises, both in the Eastern Mediterranean, neither originating or terminating in Greece, plus a refund of $6000. This would have been way more days than on the cruise we were set to take. It seemed pretty obvious what was happening: people had cancelled out of cruises that had any stops in Greece, and they were willing to shift people into those cruises at severely discounted prices (presumably, they had wait listed people for our cruise). This thus belies a theory in tonight’s Financial Times, namely that a Euro exit would be bad for the Greek tourism business:
The main export earner, tourism, is unlikely to create much additional revenue despite a cheaper drachma. This sector might suffer a reputational setback from the economic crisis and dissolving social cohesion.
It’s a little late to have these concerns. The media has had plenty of coverage of rising suicides, garbage not being picked up, hospitals and individuals unable to pay for medicines. I’m not sure how much incremental damage would occur with a Euro exit.
We started in Barcelona (a terrific city) and the airport was an eye opener. Big, new, beautiful and freakishly empty on a Saturday morning. Our route out gave us a view of lots of departure gates, and there were no flights leaving. There were acres and acres of seats with only an occasional person in view, usually looking intently at a laptop. Maybe it was just the timing of our arrival, but it felt much worse than that.
We were in a ridiculously remote hotel (the doing of our cruise operator, natch, who wanted to upsell passengers on tours rather than put them in a lively ‘hood where they could wander around on their own). But it meant when we finally got up and about, we saw a smidge more of the city than you’d see if you were centrally located, say near the Plaça de Catalunya. And everything we saw looked clean, well maintained. Hardly any shuttered retail stores (which were pretty common in NYC in the worst of the crisis). And the entire trip, the only place I did see a high concentration of closed stores was in Bibao, near the old town.
We stumbled into one restaurant when it was quiet enough for us to grill the waiter, and he said their business was holding up well. But this was in a prime tourist area, very close to one of the Gaudi houses (the Batlló house) and the waiter said this wasn’t typical.
And this was more or less the story of the entire trip. All the tour guides (save a very lively Basque) mentioned the high unemployment rate; the one in Cadiz also pointed out that the cajas were being bailed out. But these were quick mentions, not belabored. It was hard to find signs of distress. Even in Lisbon, the one place we were affected (the cordon of a demonstration was widened, which led our bus to be diverted, delaying our return to the ship), you did see some homes overlooking the Mediterranean on sale. But even then, it hardly seemed like a lot.
This was a classic example of the Buenos Aires effect: if you have good buildings, well maintained, people will assume you are well off. I’m told investment bankers would treat Argentina as a bigger opportunity than it really was because they were taken in by the look of Buenos Aires. And that’s before you factor in that Europe has more and usually much better maintained public amenities than the US: clean and orderly parks, nicely planted medians, well groomed beaches. Look, for instance, at the lovely boardwalk in Bordeaux, with its water mirror and skateboard park.
This of course suited the predispositions of our right-leaning fellow passengers (I managed to restrain myself when I heard references to slovenly Greeks or how if people wanted to stay out of prison, they needed to quit breaking the law). And it was a reminder of how easy it is for the elites to be disconnected. For instance, Washington, DC, is awash in lobbyist dollars. New York City looks to be doing fine. Good houses are hard to find in the better parts of Boston. If you are a member of the policy or chattering classes in these cities, and have inured yourself to the wasteland you can see from the window of the Acela when you trek between these cities, the dire conditions facing many American families are an abstraction. They are literally not visible to these people. And I suspect, despite Europe having less income disparity than the US, that a similar process is at work among top Eurocrats, that where and how they spend most of their time insulates them from them from the harsh realities suffered by many of their charges. Mind you, I’m not saying I have any direct perception either, but I know this is something I don’t know first hand and I’d want a much better feel if I were making decisions that would affect ordinary citizens.
Now having said all that, I did meet some nice people on the ship: a lovely couple from Melbourne, two women from Texas who were owners of a life insurance company, and a blog reader (!). The latter was a former Apple executive out of NeXT, which meant we knew some people in common, another nice surprise. He also commented on the predominance of Republicans on the ship and the need to keep one’s views in reserve. But the bigger lesson remains: irresponsible elites are the norm throughout history. Sadly, our era, despite the world-shriking power of travel and technology, seems to hew to that pattern.