The Indelible Bonobo Experience

Economic chaos and mass unemployment are bad news. But to the curious traveler, they are an opportunity for a bargain. So it’s only natural for a cost-conscious American reading headlines about economic catastrophe in Spain and Greece to wonder: Is there a cheap vacation there for me? (via Sl8)

• Try to book yourself into the Madrid Airport Hilton later this month, and you’ll pay a bit more than 100 euros a night. That’s a lot cheaper than the listings I saw for the De Gaulle Airport Hilton near Paris. Prices there were 50 percent higher—or even double—for some May bookings. But the Madrid price is about the same as the $130 or so that the O’Hare Airport Hilton wants here in Chicago. If you want to go to the beach, the Hilton in downtown Miami has May rooms from $159 a night, while the hotel in downtown Barcelona starts at 201 euros, which works out to just over $255. Downtown Athens is 179 euros, also more than $200 a night.
• Why don’t Spaniards and Greeks start charging a lot less for their goods and services? It turns out that prices are “sticky” (i.e., resistant to change) and especially sticky in the downward direction. Some price stickiness derives simply from what are called “menu costs,” in reference to the fact that it would be expensive for a restaurant to print up a whole new set of menus to reflect a minor shift in prices driven by a small increase in the price of food.
• W hat would solve Spain’s problems are the policies tried by Argentina 10 years ago andIceland more recently: currency devaluation and repudiation of debts owed to foreigners. When your currency falls, essentially the price of everything drops simultaneously by an equal amount. Your salary falls, but rent payments, phone bills, and pension costs all fall as well. That means everyone needs to pay more for globally traded commodities, which is unpleasant, but it also makes your country a cheap place to visit. And those visitors can rapidly refill the vacant restaurants and storefronts, re-employing workers and bringing growth back to the economy

the only cheap vacation you’ll get is a free download of Greek philosophy from Gutenberg Project

“GREXIT” is an ugly term for what may soon become an even uglier reality: Greece’s departure from the euro zone. As fury in Athens runs up against frustration with Greek recalcitrance in the rest of the European Union, the EU’s most troubled economy could be heading out of the single currency within weeks. If Greek banks suffer a mass run, as depositors withdraw euros for fear they will be forcibly converted into new drachmas, Greece’s fate could be settled even sooner. (via The euro crisis: The Greek run | The Economist)

It’s been a week since shares in Bankia plummeted on reports, later denied, that customers were pulling deposits out of the Spanish lender. Fears of a full-scale bank run in Greece have not yet materialised. But the possibility of a deposit run in Europe’s peripheral states is still very much alive. It is also the thing that policymakers are least prepared for. (via A run they cannot stop)

Though it was once a pagan festival, May Day’s modern incarnation actually commemorates the Haymarket massacre, when police opened fire on a crowd of workers in Chicago in 1886, after an anarchist had thrown a bomb at them. (via Daily chart: Mayday | The Economist)