The Greeks are famously in an uproar at their Socialist government, which has stocked the public service roles with non-functioning functionaires even while going on a borrowing and spending binge to pay for it all. This is by no means unique to the (latest) Papandreaou government: Like most governments which preceded it since the 1975 overthrow of the military junta that once ruled the country, the PASOK party chose to use their political power to reward their friends. Nothing much new in that either, but in the Grecian case, these rewards weren’t tax loopholes or highway projects, but safe government jobs where the phone never rang and there was never any paperwork to push.
Of course, you can’t rule an unruly people – the military junta took charge to smother social divisions dating back to the World War II resistance – merely by placing everyone in a government job, so concessions were made to labor as well: Greek hairdressers got to retire on full benefits at age 50 due to the “physical stresses” of their chosen careers. (In this way they resemble California fire fighters, municipal bureaucrats and prison guards, many of whom can earn more after retirement than while on the job. California leads the way!)
So, with their economy tanking, and consequently tax receipts failing to keep up with salaries, social services and debt payments, the Greek government has repeatedly gone hat in hand to the EU – let’s face it, Germany – begging for debt relief and bailout funding, or else. This has placed Angela Merkel in something of a bind, as – being the democratically elected president of a federal republic of her own – she’s rather on the hook to the preferences of a famously productive and spendthrift people who object (quite rightly, in my view) to throwing their own good euros after bad.
Ultimately, the German people, bankers, federal government and supreme court have let it be known that neither their pocketbooks nor their patience were infinite. If the Greeks wanted Other People’s Money, then they ought to, you know: Earn it. Chiefly by showing some willingness to forgo the same kind of behaviors that put them, and the European experiment, in this bind.
Which sensible requirement has hurled the little streets upon the great, with Greeks of every class and station conducting industrial actions and marches to protest Europe’s austerity plans. Yesterday, having wrung a pretty fair deal out of Europe – one whose efficacy was nevertheless in doubt – but facing increased outrage from his disaffected countrymen, the leader of the birthplace of democracy decided to have a plebiscite to allow Greeks to choose for themselves whether to accept the EU’s deal and remain within the eurozone, or go it their own way and return to the drachma (this despite that no legal mechanism exists to unbind a country from the combined currency).
On a superficial level, this seems eminently reasonable, both from a political and a pragmatic point of view: If the Greeks believe they can do better without the euro, they should go for it. If they don’t, they should shut up and get off the streets. Either way, Papandreaou gets to demonstrate his willingness to “listen to the people,” while holding a gun to his own head and threatening Merkel that he’ll shoot.
But “listening to the people” is precisely the point, say his critics at home: The demonstrators aren’t sophisticated enough to understand the consequences of their actions. They might choose poorly. After all, by definition, right around half the people in any given population is of below average intelligence, and you only need a few well-meaning souls from the other half, along with some of the brighter bulbs on the right tail with ambitions to the trappings of political power, to form a lasting political coalition.
Especially when choosing poorly is what the Greeks are especially good at: What they want is to work less, have more, and most of all have someone else pay for it. Their poor choices, and the poverty of choices now remaining to them, are precisely what got Greece into this crisis, dragging the stout Teutonic working man and woman resentfully along with. There’s every chance that the Greeks, having been naive enough to believe the bland promises of politicians that offered them practically everything for practically nothing, might just decide to turn down the EU’s stern hand of assistance, take their drachma and go home.
Such a choice will be as characteristically ill-informed as were the policy choices which landed them where they are today, and result not merely in the detailed destruction of the residual Greek economy, but also stress continental banks to the breaking point. Those stresses will in turn will lead to a fire-sale on the teetering bonds of Italy, Portugal, Ireland and even Spain, reclassifying new borrowing efforts to junk status. Any bond issues that may in fact be sold will be cripplingly expensive to service. This vicious cycle is something the weaker partners of the EU, with systemic cash flow issues of their own, can scarcely afford.
Yeats was right from the beginning: Everything does fall apart.
Margaret Thatcher once said that the problem with Socialism is that eventually you run out of other people’s money. The Greeks have followed that aphorism to its logical terminus, but we ourselves have not, not yet. The Grecian formula could be instructive to the Occupy Wall Street loons, whose policy preferences, to the degree that they can be discerned at all, are to reject the qualities which once made this nation great in favor of those which are tearing Greece apart. A good lesson indeed, if only they had the wit to attend.
They don’t, of course. Which is why the grown-ups will have to do the thinking for them, while there is still time.
I keep having nightmare associations with the world economy circa 1939 or so. I really hope things don’t fall apart that far, but I don’t have much faith. As they say, hope is not a plan.
I think George is P is brilliant. He could have accepted the euro deal, saving the euro zone and possibly Greece, and forced it down his peoples throats, and then go down in history as a villain with chaos in the streets. Instead, he chose to let them decide between the lesser (or not) of two evils. And if the people decided, and not Georgie P, then thats a different story altogether.
The Greeks want to be in the Euro Zone and not outside looking in. I don’t think they will like the notion of a massively devalued drachma as their currency and an inability to sell bonds to anyone as the alternative.
But at least it will be their choice.
Beware of Greeks wearing sneakers, as they say..
No, better is someone more witty than I who said: “Beware of Greeks bearing IOUs. ” LOL.
We should have some sympathy with the Greeks. Their politicians burnt through German euros only after they had looted all they could from the productive Greek economy. The right and the left of Greek politics both indulged in crony-ism and then made it illegal to prosecute any sitting MP. And now with the ECB bailiffs figuratively banging on the door the MPs cronies will not be the ones paying, partly due to being above the law and mostly because their assets are unproductive (or have been off shored) – blood from stones is seldom got.
From the perspective the Greeks they have been robbed blind by their Greek political dynasties. That those dynasties also managed to swipe a chunk of capital from French and German banks isn’t a surprise. After having been ripped off for 30 years, the Greeks are having difficulty with accepting the supposed facts – that their politicians will face no sanction and that the Greeks must pay back all the money the cronyist politicians stole. From the perspective of the Greeks, if you were stupid enough to loan money to the corrupt useless Greek government you deserve to lose all of that loan and the EU banks were that stupid.
Nope, no sympathy for the Greeks.
Politicians are only as good and responsible as the electorate.
Little seems to have changed from when I was there on “business,” once upon a time. The only maddening aspect of the Greek national character, and which seemed pervasive, was the constant theme in all aspects of daily living and national discourse was that absolutely nothing was anyone’s (or Greece’s) fault. Everything that went wrong, big or small, was never, ever the fault of the person, city, province, etc. allegedly responsible. Excuses and alibi’s were the automatic default mode, regardless of the situation. It is no surprise that it is incomprehensible to the Greek people that they could, in any way, shape or form, be the authors of their own misery.
I can understand their plight. It’s not their fault, they had the Japanese Tsunami, flooding along the Mississippi… Oh, wait…
Constantinople fell. That’s what did it.
One of the enticements years ago for anyone serving their country here was promise of early retirement with a pension and medical benefits for life. Was that wrong? To berate Greeks for wanting the same thing – although excessively irrational in their case– lacks some credibility.
As Angus postulates, the Greeks were had by their politicians. And that is about the only similarity between them and the OWS people.
Is Greece “too big to fail” like our US banks were? Indeed Greece is bigger. Are they worth it? How will it affect my stock portfolio? They have four choices:
1. Raise taxes.
2. Cut spending.
3. Borrow money.
4. Default.
So do we.
I find it interesting that there is some talk of the Chinese bailing out Greece.
And I see nothing from the OWS ‘loons’ rejecting American qualities when they are for less corporatocracy and more democracy, less fraud, less lobbyists, less bailouts to banks, etc. The OWS people are not Socialists, like Fox and others like to portray them. They are us, all of us whose American Dream is being confiscated by a few rich and powerful. Bring back a level playing field for achievement and reward, and an honest democracy.
This is going to sound ugly and I’m sure is completely not feasible on many levels, but I think everyone should just let them fail. We’ll all suffer for awhile… maybe years… and there will be much wringing of hands and gnashing of teeth, BUT it is inevitable. It is going to happen. And then we will all suffer for awhile, maybe years, and there will be much wringing of hands and gnashing of teeth. So let’s just rip off the proverbial band aid now and get it over with once and for all instead of worrying what might happen. Let’s just let it happen and move on.
Since you’re throwing quotes (of Yeats) around, Lex, here’s another:
“Democracy is the theory that the common people know what they want, and deserve to get it good and hard.” – H. L. Mencken
While I deplore Mencken’s atheism, he did cut to the chase on the topic of democracy, everybody’s favorite Greek legacy.
So let’s hear it for democracy and hope the Greeks keep their freedom in the process.
The lady who used to cut my hair is Greek. She didn’t like my asking the obvious questions. As Comjam noticed, it’s always somebody else’s fault.
I’m pretty sure the Greeks will choose default. Just my intuition.
First off, just because you’re below average doesn’t mean you’re stupid. Unless you define stupid as below average. Which is rather…stupid. I don’t know where the average line falls in relation to absolute intelligence in Greece, but the whole principle behind markets and democracy is that all of us are smarter than any of us.
“Have a plan. Have a backup plan. Have a good idea what you’re going to do when the backup plan goes pear-shaped.” It’s pretty obvious that the EU bureaucracy hasn’t given any thought as to what would happen if the Greek bailout failed. They are in pure reaction mode, which is a recipe for disaster.
On a related note, I hope that American, British, French, and German bankers are working on ways to firewall themselves from a Greek default. It’s not like this is an event outside the realm of possibility. Nor is it, at this point, a sudden occurrence. I would have no sympathy for anyone who was unable to foresee this and take appropriate action.
“…but the whole principle behind markets and democracy is that all of us are smarter than any of us.”
I think you’ve got that only half-right, Jeff. It’s certainly the theory behind pure democracy, but the main principle behind the free market is that it rewards any of us that are “smarter” (more productive, more innovative, more creative, better serving of demands) than the rest of us.
There’s more to it than simple efficacy. You can build the best mousetrap in all creation, but you aren’t going to succeed if there aren’t any mice, or if people actually like mice. The distributed nature of the market allows all of us to provide input into where scarce resources should go, leading to a much more efficient allocation than when you rely on the combined intellect of a few “experts.”
Not to mention the fact that markets fail gracefully while oligarchs tend to catastrophic failure.
You left out “dumb luck”.
Yeah, “Blind Luck” beats out skill & cunning every time..
It seems that the common concepts are that:
1) Purely by being alive you are entitled to shelter, clothing and food
2) If you have gone to school and earned a degree and “done everything right” you are owed a job sufficient to fund a middle-class existence
3) “the rich” have gotten that way by cheating
4) “the rich” have enough money to fund point 1 for everyone
5) “the rich” should therefore have that money taken from them to accomplish point 1
My answers:
1) My father told me at an early age that no one owed me a thing and that I needed to earn what I got.
2) Bad things happen to good people. That will never change. No matter what you do, you are guaranteed nothing – and that doesn’t mean it’s anyone’s fault, or that you have a moral claim, even with the consent of the majority, to take money from me to solve your problems.
3) Some of the rich HAVE gotten that way by cheating. That doesn’t mean that they all have, or that it’s properly a default presumption.
4) No, they don’t.
5) Not unless they cheated, and not without due process to determine that.
Yep..as long as you are taking up space..and breathing..You gots to keep shoveling..lol..
Ron, you nailed it. Hope you don’t mind if I share your thoughts.
Not a bit.
There’s been a lot of talk about student loans. There’s more debt out there in student loans than in credit cards. Everyone blames the banks. Few blame the students taking the loans for not finding cheaper ways to get an education (like spending their freshman and sophomore years at a community college).
But here’s what I really don’t understand; why is no one asking why a college education costs so much? How come we’re not talking about the evil overpaid deans and college presidents (and football coaches) are making so much money? Why do they charge $40,000 and $50,000 a year? Why does no one ask them to account for it? Harvard has a $36 billion endowment – that’s $36,000 million. Figure about 8000 undergraduates @ $50K/year, you get $400 million, or about 1% of their endowment. Why do they charge tuition at all? Why is no one calling for them to cut back on salaries and staff and stop charging so much?
Education costs are increasing exponentially for the same reason health care costs are. There is a disconnect between consumers and customers.
In both industries the person receiving the benefit of the service, the consumer (i.e. the student or patient) is different from the person paying for the service (parents/government/insurance). As a result the cost signal is lost and demand rises uncontrollably.
To put it another way, there are only a finite number of education “goods” out there. When the government keeps shoveling money into education more money chases the same number of goods, causing prices to go up. Hmmm, that sounds like a useful concept. We should give it a short, catchy, name.
Concur..the person who pays the highest is the one who pays cash for service..exactly the opposite from most businesses…there is no one to negotiate a discount fee for service..
” Too big to fail” ….In a pig’s eye.
We should have not bailed out the idjits as new, better run companies would have taken their place.
The Greeks went into hock for the Olympics and now the facilities sit in disrepair & neglect.
On all sides we are beset with fools who have control of OUR money.
We need more “grown-ups” and sadly to say, I have yet to see any on our political stage lately.
When a Greek Prime Minister agrees a deal with the Eu. and then adds a clause of his own once he gets home, is it any wonder that his ministers have to issue statements `backing him`, on the hour, every hour, modifying their definition of the term `backing him` on each our? That’s what’s happening this morning. They are backing him, but it’s into the corner he has backed himself into in the hope of getting backing from the Eu. to see him back. Just taking the experience of people I know who’ve bought properties in Greece, a deal is not a deal even if it’s been agreed in writing and drawn up by a lawyer – and even then it can all go bent. And if that little lot sounded all Greek, it was. I pay my bills in £££’s not Euro’s, but we’ll be shelling out on this one regardless.
I wouldn’t say “yet” for the US. We are actually there, we’re just able to cover things more easily because the dollar is the reserve currency of the world. Once that status ends, I think it will soon, then Katie bar the door.
Our government is just as corrupt as the rest of the governments. We may not have reached the nadir of the non-functional functionaire, but we aren’t far away. Ours just don’t do anything useful.
You misspelled Kalifornia.
Don’t get caught texting in class. They might turn you over to the Marines. In case you don’t know, that would not be good. Or fun. You would not get to sleep until 0700 anymore, you layabout.
The dollar is only to to stop being the world reserve currency when either there is no more international trade, all the major trading nations go back to a gold standard, or the dollar is replaced by something else. None of those are likely to happen anytime soon. There just aren’t any good replacement. The renmimbi is opaque and has been manipulated to benefit China’s trade, the Euro is at crush depth, Nobody else has an economy large enough to provide enough currency.
We may be screwed, but we’re still better off than anyone else. Uh, yay?
I wouldn’t place any bets based on your statement Jeff. Things can change very quickly, and I very much believe they will.
“Democracy is the theory that the common people know what they want and deserve to get it good and hard.” – H. L. Mencken
Saw a bumper sticker yesterday; directed at the the OWS crowd I would imagine: ” Redistribute my work ethic, not my income.”
Seems apropos of something, I would imagine, either here or in Europe.
Been wondering about all this “borrowing” and have a small thought:
Some years ago the Russians needed some cash and sold us Alaska. Before that, the French were in need and sold us the whole mid-west.
So, if the Greeks, or another of the others wanted some cash, what did they put up as collateral? Zip.
If the borrowers wanted some money, they should be willing to put up part of their countries.
I wonder how that idea would do in a general election?
Heh.
(I can see the arguements over “with or without population”.
There’s a link out there to a hypothetical press release by the Queen of England to the effect that as we have mucked up the country and democracy so badly, she’s decided to take the U.S. back. “Except for Utah. Her Majesty does not fancy Utah.”
Except for Utah. One version, anyway.
Thanks for that. Oh how my sides hurt.
There was a young man starting a church that was playing around with the pastor of a large church. “Why don’t you give me about 400 members,” says the young man. Sez the older, “Glad to. I’ll pick ‘em for you right now.”
Cap’n, I am so very happy that you have gotten you a job again flying fast complicated airplanes. I believe that that will leave you less time for thinkin’ and drinkin’ about the collapse of Western Civilization than I have. Some things don’t bear too much thinking about.
Ah, well. This, too, shall pass.