Grecian Formula

By lex, on November 2nd, 2011

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.

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Filed under Best of Neptunus Lex, by lex, Carroll "Lex" LeFon, Carroll LeFon, Lex, Politics

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