Greece reveals how globalization can bring a country to its knees.

First, Wall Street investment houses peddle their shady wares to a nation, and when things go bust, speculators batter it to a pulp.

To be sure, the Greek economy has a lot of structural problems that have contributed to its sorry state. When my dad toured the country in the late 1960s, he thought it quite underdeveloped as compared to Western Europe; forty years later, my wife’s cousin had the same assessment when his bank stationed him in Athens for two years (though I found the country immensely charming during a 2007 visit).

But the dark side of globalization has greatly added to the country’s troubles. The New York Times disclosed in February that Goldman Sachs (in the news for its other shenanigans) colluded with the Greek government to hide the size of Greece’s debt burden.

“Records and interviews show that with Wall Street’s help, the nation engaged in a decade-long effort to skirt European debt limits,” the Times reported. “One deal created by Goldman Sachs helped obscure billions in debt from the budget overseers in Brussels.”

Calvin Trillin paid poetic homage to the brainiacs at Goldman:

The Goldman folks said, "Greeks, you're set:
We'll show you how to hide your debt—
And quietly, without a fuss.
It worked at home—at least for us."

In all the world—across the sea
Or in the tropics—could there be
One closed-door shady deal that lacks
Conspirators from Goldman Sachs?

Greece has been in a downhill slide all year, with speculators circling overhead, betting that the Greeks will not be able to make good on their promises. The government has responded with announcements of severe cutbacks in social programs and public employment, which have prompted massive protests.

“Wall Street speculators have swarmed in, playing Greece, as the Financial Times put it, ‘like a pinata,’ ” writes Harvard Professor Richard Parker, an adviser to the Greek government. “The country's tiny bond market—barely a billion Euros a day were trading in Athens in January—makes an easy and tempting target for traders with big bats; by attacking Greek bonds, the traders get to play on an increasingly pan-European volatility in bond and currency rates, thereby leveraging a little nation's problems into gigantic trading-floor gains.”

And now that things have come to this sorry pass, investors are eagerly looking for a bailout, again confirming that the international investing class lives by the dictum of “privatize the profits; socialize the losses.” German Chancellor Angela Merkel, torn between mollifying her people and making the financiers whole, is reluctant to confirm her support for an EU rescue. The IMF quite likely will step in, since a Greek default would spread the crisis to other countries with financial problems, such as Portugal, Ireland, Italy and Spain (the five nations collectively known by the elegant moniker of PIIGS). If that happens, a repeat global recession may be in the works, fears of which caused the markets to tumble around the world on Tuesday.

This is what globalization looks like.

Amitabh Pal is the Managing Editor of The Progressive magazine.