The social rot of Greece and the politics of dependence
There is a word which European socialists, and their American admirers, invoke in their calls to come together for the greater government — er, good. That word is “solidarity.”
Here’s what solidarity looks like in Greece, where three bank workers died Wednesday after rioters threw Molotov cocktails into their branch:
“Witnesses said that protesters marching past the building ignored the bank employees’ cries for help and that a handful even shouted anti-capitalist slogans,” the English-language Kathimerini newspaper reported.
A columnist for the paper wrote that the man who started the fire “flipped [the bank employees] the finger when he saw them choking on the smoke of his firebomb.” Other media outlets reported that the mob blocked firefighters from reaching the burning building.
Kumbaya.
The proximate cause of these protests was the Greek government’s $38 billion plan to cut public spending and raise taxes. This “austerity package” was a precondition of the $140 billion that other members of the euro currency, plus the International Monetary Fund, are lending to Athens so that it won’t default on its debts and possibly trigger a second global financial panic in two years.
The threat that such a panic would spark a double-dip recession, or worse, is well-documented. So is the cautionary tale Greece offers to Americans about the unsustainability of ever-greater debt.
But there is also a social rot evident here, one that necessarily comes from policies that promise interdependence but deliver only dependence.
There’s no doubt that Greek civil servants fear losing their jobs, and that retirees are angry about losing the pensions they were promised. And while it’s hard to sympathize with those who vent their fear and anger by taking others’ property or even murdering them, there’s a lot of fear and anger to be had.
One in seven Greeks holds a government job, which pays them for 14 months a year — no typo there — until they retire, many of them before age 60. During most of their careers, it is virtually impossible to fire them.
If this system worked, the country would not be on the brink of bankruptcy. But try to take it away, and you get firebombed banks and sneers for the victims.
A politics of dependence such as this one does not emerge by chance. It was the conscious decision of, ironically enough, the father of Greece’s current prime minister, who in the 1980s sought to ensconce himself and his Socialist party in power by adding to public employment rolls and doling out subsidies.
Some of the loot was used to buy off the rich, some to buy off the middle class (very little, in Greece or anywhere else, ends up with the truly poor). It hardly matters; the rot is the same.
Greece is an extreme case, but the problem of politicians’ spending taxpayer funds to buy votes is universal, as is the rot. There is only one way to stop it, and it has nothing to do with favoring one political party over another. It is to limit government’s reach in the first place.
Otherwise, your eventual choices are between ugly (taking away the public trough) and uglier (dealing with the fallout from a default).
Sooner or later, you find out that, no matter how rich your nation, and no matter how clever the people running it, there isn’t enough money in the world to buy what you can’t pay for.
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141 comments Add your comment
jm
May 8th, 2010
8:33 pm
I wonder if Mr. Wingfield is including “corporate dependence” when referring to the politics of dependence. Mr. Wingfield has made his position on the bailouts of Chrysler and GM well known but I would be interested in his opinion of the “incentives” given to Kia. I would also like to hear his opinion regarding price floors for agricultural goods. We all know where Saxby and Johnny stand on those issues (with hat in hand).
neo-Carlinist
May 8th, 2010
9:31 pm
Dusty, we have reached the “firebomb” stage (see: Joe Stack. see: Tim McVeigh. see: eco-terrorists burning new subdivisions and SUVs). we’re just a larger country (larger economy), so the “fire-bombings” are rarely the lead story on the 6:00 news. You need to let go of the Fox News talking points; “Obama wants to enact the European Socialist model…” He wants to enact a “model” that is left-heavy, but we need to worry about the USA and not what’s happening in Greece.
Working Mom
May 8th, 2010
10:12 pm
Real Athens……commented on the writing ability of another poster…….while he/her can not figure out how to post a comment only once. Yes, Real Athens, you are the smartest person alive. But we all know why you atteck the poster…….because you can not debate the facts.
luangtom
May 9th, 2010
12:30 am
On Saturday, one of the pundits on Bloomberg gave a synopsis of the Greece financial downfall, in his opinion. He certainly asked a valid question when he stated,”Why is the Greek financial dilemma having such an impact on the US stock-market? To put their default vs. GDP into perspective, the annual GDP of Greece is equal to that of Philadelphia, PA or Boston, MA. So, why is it so much of an impact on the US economy?” Well, experts, why is it? Why are we spending so much time analyzing the Greek economy when we need to revamp our own?
Michael H. Smith
May 9th, 2010
1:45 am
but we need to worry about the USA and not what’s happening in Greece.
Obumer and Democrat company are definitely socialist, leading this country toward socialism as they increase the size, scope and cost of government. This has nothing to do with Fox News; like it or not it has everything solely to do with their actions. We have a great deal to worry about over what is happening in Greece, not so much in the global distributive sense as now national economies are so intricately interwoven that they scantly maintain any economic sovereignty to provide any national immunity to a single one them. Point in case: Our federal reserve is moving in concert to what is happening in Greece, unbeknownst to most of us, whereas otherwise the fed would be taking different monetary actions presently based solely on our national economy.
Time and place serve little importance in the “Flat World”: Gone are the days of undulating economic terrains.
Why are we spending so much time analyzing the Greek economy when we need to revamp our own?
If this were a serious question it might require some time to depose of in a less abrupt manner: Very simply, it is our insatiable SPENDING, primarily on entitlements and government.
Michael H. Smith
May 9th, 2010
2:28 am
Expanding the trough: (oik, oik)
How do socialist deal with the runaway costs of entitlements: Create another entitlement of course.
How do socialist deal with the financial crisis: Create another government regulatory agency to aid the other failed regulatory agencies meant to prevent the financial crisis.
Isn’t the crony capitalism of socialism a wonderful thing?
Wonder why the Greeks are rioting in over in paradise?
“When the people find that they can vote themselves money, that will herald the end of the republic.”
~ Ben Franklin
Dave from GT
May 9th, 2010
9:13 am
Money in – Money out >/= 0 is ok. the amount > 0 is the subject of the debate, also where Money out goes to.
Money in – Money out < 0 is not OK and is unreal unless you factor in an institution like slavery.
CJ
May 9th, 2010
10:56 am
“Sooner or later, you find out that, no matter how rich your nation, and no matter how clever the people running it, there isn’t enough money in the world to buy what you can’t pay for.”
Words that carry little weight from somebody who supports Republican borrow-and-spenders to occupy the White House and lead the Congress.
AntiBoortz
May 9th, 2010
11:23 am
The problem in Greece isn’t that the Greeks are socialist but that they have been Something-for-Nothing-ists. Something-for-Nothing-ism is also modern America’s problem. Americans may disagree as to the proper role of government, and thereby disagree on the proper size of government, but Americans are practically unanimous in their belief that they shouldn’t have to PAY for government.
American take notice: pay up or shut up!
Michael H. Smith
May 9th, 2010
11:39 am
Something-for-Nothing-ists sums-up socialism very well.
Ninja
May 9th, 2010
11:40 am
I suppose the facts that Greece exports practically nothing and has a long history of governmental instability (almost as bad as Italy) have zero to do with the fact that they are collapsing. Oh wait, that’s EXACTLY why, and exactly why we will too. Not some socialist boogeyman. Your hackitude is showing again. But hey, the conservatives who lap up this drivel will never bother to look deeper, so why would you bother?
AntiBoortz
May 9th, 2010
11:56 am
MHS: Socialism may or may not be Something-for-Nothing-ism from the macroeconomic perspective. The question is whether society pays for what it gets?
Certainly from a microeconomic perspective in almost any system there will be some who are net receivers of benefits and others who are net providers. That is not the measure of what is socialism.
Net providers of benefits in America DO receive something of value. First among them may be domestic tranquility. Is a pacified underclass not a requirement of a peaceful capitalist system? I think that it is. The cost of this tranquility is really just another example of how in a capitalist society one must spend money to make money.
Michael H. Smith
May 9th, 2010
12:44 pm
The question is whether society pays for what it gets?
The answer is no. Additionally society cannot afford to pay for what you would want us to get as American society.
One that is wise and desires tranquility should never spend more than one is actually capable of paying for, which is what this blog has correctly stated. The Soviet Union tried getting more than it could pay for and it failed, Greece now has tried much the same thing and it cannot pay for what it is getting – everybody or nearly everybody has a union GUB’MENT job and everyone has entitlements.
How many times does socialism have to fail before people realize it is a failed system of value that can never sustain itself?
Now cut the entitlements down to size based on sound finance not a ponzi scheme. Put the entitlements in the hands of the people and not the government. Cut federal government down to appropriate size scope and cost.
Rev Al Sharptongue
May 9th, 2010
1:58 pm
I say cut the military budget in half, we spend more than the next top ten combined for defense.
If America would stop trying to spread its brand of white supremacy democracy around the world, most people would not want to attack us and no need to spend so much.
No one likes a bully and the U.S. is a bully thinking they can tell everyone how to run their country all the while stealing assets from those countries and working to destabilize them
Amerikkka, the great White Satan
Linda
May 9th, 2010
2:31 pm
Rev.@1:58, According to the terrorists themselves, they are attacking us because of who we are & what we represent, not because of where we are. Proof is that they are attacking innocent civilians on trips in countries where we have no military presence. They are attacking infidels, not merely soldiers.
As long as I, a woman, can drive a car, alone, sing, dance, vote, inherit, go to school, show my hair & legs, etc., they will continue to attack. Other than the 2 wars, we are present in no country that did not invite us.
We are not a “white” country. Where are all these countries where we “tell everyone how to run their country all the while stealing assets from those countries and working to destabilize them”? You can do better.
Michael H. Smith
May 9th, 2010
3:08 pm
Spending on the entitlements as a percentage of GDP is 9.9%. While spending on National Defense as a percentage of GDP is only 4.9%. Obama’s budget will reduce National Defense spending as a percentage of GDP to 3.5%
Defense Spending Has Declined While Entitlement Spending Has Increased
Spending on national defense, a core constitutional function, has declined significantly over time, despite wars in Iraq and Afghanistan. Meanwhile, spending on the three major entitlements—Social Security, Medicare, and Medicaid—has more than tripled and is rapidly crowding out other programs.
http://www.heritage.org/BudgetChartBook/defense-entitlement-spending
Robert
May 9th, 2010
3:57 pm
“When the people find that they can vote themselves money, that will herald the end of the republic.”
~ Ben Franklin
ABSOLUTELY!!!!!!
Linda
May 9th, 2010
3:58 pm
NJ Govt.Chris Christie said, “One state retiree, 49 yrs. old, paid, over the course of his entire career, a total of $124,000 towards his retirement pension & health benefits. What will we pay him? $3.3 million in pension payments over his life & nearly $500,000 for health care benefits–a total of $3.8 M on a $120,000 investment. Is that fair? A retired teacher paid $62,000 toward her pension & nothing, yes, nothing for full family medical, dental & vision coverage over her entire career. What will we pay her? $1.4 M in pension benefits & another $215,000 in health care benefit premiums over her lifetime. Is it ‘fair’ for all of us & our children to have to pay for this excess?”
Our cities are broke & asking for bailouts from our states.
Our states are broke & asking for bailouts from the fed. govt.
States whose residents & leadership were prudent are bailing out (with their tax dollars) states whose residents & leadership were reckless.
The fed. govt. is broke & owes $13 T plus $106.6T in unfunded liabilities & continues to spend $ it does not have, for junk, prints money & borrows money from China & from the futures of our unborn children & grandchildren.
All the Progressives/Socialists/Marxists have to say is that the Tea Party participants are racists.
turpitude
May 9th, 2010
4:03 pm
God hates America…..
Jess
May 9th, 2010
5:48 pm
Linda,
Amen to your 3:58, but not to worry. Pay as you go is now the law of the land, and Obama’s deficit commission will rescue us from our excesses. We are in good hands.
No More Progressives!
May 9th, 2010
5:50 pm
pig trough
May 8th, 2010
11:30 am
The social rot of the USA occurred when so-called Christian conservatives supported cowboy capitalism with the pre-imptive war of choice over oil and oedipus hubris, leading to the slaughtering of hundreds of thousand civilian innocents,
Hundreds of thousands of civilian innocents? Where, pray tell, oh great sage. Methinks you’ve been reading the tabloids in the check-out line for too long.
Morrus
May 9th, 2010
6:42 pm
Curiously, in a supposed anti-incumbent year, most of the departing are not retiring but seeking higher office. We may recycle more than we replace. The bad news is that a frustrating 114 seats still have but one contestant. Two of them aren’t even incumbents, meaning they will affect state policy without being vetted by voters. And I have to think that we’d be better off if many had run instead for the Legislature — and cut down on the number running unopposed. Georgia’s problems are numerous. They aren’t going away. There’s too much stale thinking at the Capitol, on both sides of the aisle. New voices would be welcome.
Linda
May 9th, 2010
7:14 pm
Jess@5:48, Hogwash!
Michael H. Smith
May 10th, 2010
12:00 am
It is not so much what the President’s “deficit commission” will do as much as it will be how willing the Congress is to accept what the commission says must be done to bring federal government spending under control. That is the making of another blog topic suffice it to say.
On another topic: The supreme court justice selection of Elena Kagan was a wise choice, by far a better candidate and future justice than President Obama’s the last choice.
PS. No More, the worthless individuals in this country who cry “war of choice over oil” have no credibility and worse even less any “moral standing”, when these same worthless individuals decry any attempts of drilling for and using our own oil resources to transition from a foreign oil dependency in leading to an eventual transition to cleaner renewable sources of energy. Anyone who says Spill Baby, Spill has no moral right to cry “war of choice over oil” when it is they, YES THEY, who are most responsible for having made that immoral choice for all of us.
Drill Here, Drill Now; Drill Baby, Drill!
david wayne osedach
May 10th, 2010
8:36 am
We should learn from Greece’s problems. Someday we may be facing the same.
Horrible Horrace
May 10th, 2010
9:07 am
And probably not enough money to reverse this…
http://turbo.inquisitr.com/wp-content/2009/10/chastity-bono-chaz-bono.jpg
Splavistic
May 10th, 2010
9:48 am
The right-wing say they believe in being fiscally conservative…until it comes to a fat, bloated defense budget. Then, they’ll wreck the economy for the sake of the military industrial complex. Please, tell me ONE republican president who was truly fiscally conservative? I do believe it was Clinton who actually balanced our budget, finally. You just can’t spell conservative without ‘con’.
Jess
May 10th, 2010
10:21 am
Splavistic,
Clinton only balanced the budjet with Newt and company holding a gun in his back.
CJ
May 10th, 2010
10:58 am
“Clinton only balanced the budget with Newt and company holding a gun in his back.”
When Republicans both occupied the White House and dominated the Congress, they proved beyond a shadow of a doubt that their claims of fiscal conservatism were equivalent to the false claims of snake oil salesmen. When Cheney asserted that deficits don’t matter, Republican politicians sought to prove him right.
Complaints about necessary deficits under Obama ring hollow from those who consistently vote Republican since these voters couldn’t have cared less about unnecessary deficits and debt when a Republican occupied the White House.
Kyle Wingfield
May 10th, 2010
11:57 am
That’s right, CJ. Keep acting as if magnitude (i.e. http://bit.ly/awaJhl) doesn’t matter.
Boo got shot
May 10th, 2010
12:07 pm
Tucker and Bookman told me that Greece is doing great.
Horrible Horrace
May 10th, 2010
12:25 pm
Stinkin EuroTrash.
CJ
May 10th, 2010
2:10 pm
That’s right, Kyle. Keep acting as if the Republican president (i.e. Republican voters) was not responsible for the economic crisis that triggered the loss of revenue amounting to hundreds of billions plus necessary, temporary, and deliberate deficit spending to fill the gaping hole in private sector spending that resulted from supply-side economics.
Any suggestion that TARP/Recovery deficit spending is somehow the default position of Democratic administrations, even during stable economic times, grossly misrepresents which party is truly fiscally conservative and which party isn’t.
By the way, dismissing unnecessary deficits during under Republican rule as somehow small or inconsequential speaks volumes.
Kyle Wingfield
May 10th, 2010
3:04 pm
Your nonsensical attribution of the global financial/housing crisis to supply-side economics nothwithstanding, CJ, the biggest problem with your response is your use of the word “temporary.” As the chart shows, Obama’s budget plans would lead to deficit spending *every* year at levels that would have been record-setting in *any* year before 2008.
If you can read a chart, you can see that the “new normal” thanks to the Obama budget is deficit spending of a greater magnitude than even those awful Republicans achieved. Anyone who knows the difference between the words “bad” and “worse” can see the difference between Bush-era spending and Obama’s plans.
Linda
May 10th, 2010
3:20 pm
CJ@2:10, Keep acting as if the Dems were not responsible for the economic crisis. The Dems used Fannie Mae (& Freddie Mac) to promote Affordable Housing by:
‘91 initiated $10 B Opening Doors to Affordable Housing,
‘92 became the largest issuer & guarantor of Mortgage Backed Securities,
‘93 succeeds the Opening Doors goal of producing $10 B in purchases for low- & moderate-income & other special housing needs by July, more than 16 mts. ahead of time,
‘94 expanded the Opening Doors campaign by launching the Trillion Dollar Commitment by pledging $1 T in targeting housing finance that was to serve 10 million low- to moderate-income families,
‘98 announced natl. availability of Flexible 97, a new mortgage product designed to expand home ownership through a low 3% down payment requirement & reached $1 T in mortgage books of business outstanding,
‘99 changed its mission statement to “tear down barriers, lower costs & increase the opportunities for home ownership & affordable rental housing for all Americans because having a safe place to call home strengthens families, communities & our nation as a whole” (yeah, right), &
‘01 launched the American Dream Commitment, a 10-year, $2 T pledge to increase home ownership rates & serve 18 million American families, a project based on the:
Mortgage Consumer Rights Agenda
Natl. Minority Home Ownership Initative
Opportunity for All Strategy
America’s Living Communities Plan
eHomeownership
Affordable Rental Housing Leadership Initiative
ALL BEFORE BUSH!
retiredds
May 10th, 2010
3:39 pm
Yes, I agree, Kyle. There is an old adage, “you can’t have guns and butter”. You need to pay for one or the other. Also you shouldn’t cut taxes when waging war, much less two wars, with the pie in the sky notion that another’s oil will pay for the whole thing. Also a nation can’t keep funding “earmarks” (buying votes) forever as if the money grows on trees. Oh, my, as I write this I see the US of A (Republicans and Democrats) written all over it. I guess this leads to the other old adage, those who don’t read (or can’t comprehend) history are doomed to repeat it.
CJ
May 10th, 2010
5:17 pm
“As the chart shows, …”
We’ve been through this in a previous thread Kyle.
During the first years of the Clinton presidency, deficits were predicted for as far as the eye could see. Those predictions turned out to be wrong. For the first years of the Bush presidency, surpluses were predicted for as far as the eye could see. Those predictions turned out to be wrong. Yet you continue to treat such prognostications as if they’re as reliable as predictions of the sun coming up.
In short, you’re seeking to pin deficits on Obama and Dems that necessarily resulted from Bush’s Great Recession in addition to blaming them for deficits that simply do not exist.
Kyle Wingfield
May 10th, 2010
5:27 pm
CJ, I’m talking primarily about the years after 2012. That’s when the higher-than-before-2008 deficits become a way of life.
You’re right that those are predictions — predictions made by the CBO, based on the Obama administration’s own budget documents, and incorporating more-realistic assumptions about economic growth than the White House uses. So, tell us why we should expect the post-2012 deficits to fall even back down to Bush-era levels.
CJ
May 10th, 2010
5:51 pm
“So, tell us why we should expect the post-2012 deficits to fall even back down to Bush-era levels.”
Assuming Obama gets re-elected? Because where public policy is concerned, most Dems are, in fact, fiscally conservative and most Republicans are, in fact, not — as evidenced, in part, by the surpluses under Clinton and deficits under Bush.
With regard to the chart you linked to, I noticed that it’s already outdated. Your chart shows the CBO predicting a $1.85 trillion deficit for the fiscal year ending in ‘09 (if I’m reading it correctly), but the deficit turned out to be more than 20 percent less (approximately $1.4 trillion). http://bit.ly/a5hDFI
So with regard to the ‘09 deficit, whose assumptions where more realistic?
CJ
May 10th, 2010
5:57 pm
Correction. Whose assumptions were more realistic?
Kyle Wingfield
May 10th, 2010
6:22 pm
This contemporary Reuters report suggests the difference for FY09 resulted from lower-than-expected TARP spending: http://bit.ly/1dXs6A
The difference between WH and CBO projections for 2010 onward, OTOH, relate in largest part to projections of economic growth: http://bit.ly/cRMKLM
george
May 10th, 2010
6:47 pm
I wouldn’t look to Greece as a model of socialism, if there is such a thing. Of course I wouldn’t look to the U.S. in the last couple of years as a model of how “perfect” capitalism is. What has happened in Greece is most definitely a failed attempt at some idea of socialism but it certainly is not what international socialism aspires to. Elected officials in Greece are as corrupt as any and if we dug deeper in our own government I am sure we would find corruption aplenty. Greece’s difficulties seem to be a lack of unity and consistency. Lots of accommodations for businesses to escape their share of taxes, a strong underground economy that evades taxes, political appointments that create a bloated government, an economy that is simply not robust enought to support spending. Socialism does and can work where it is democratic and responsible. Look to socialist leaning societies of northern Europe for more successful implementation. Greece’s failures cannot be used to say that socialism won’t work just as our own failure cannot be used to say that capitalism won’t work. It isn’t that simple. If you are really interested in what socialism is really all about see:
http://socialistinternational.org/viewArticle.cfm?ArticleID=31
I am sure that in the U.S. we don’t want the kind of capitalism we have had in recent years. We want something better. The socialist world is not different.
joan1
May 11th, 2010
11:11 am
All I know is this. I am a 69 year old taxpayer, self-employed, paying about 50% of my income in taxes, including those self employment taxes. My back is breaking from this load and it just doesn’t seem fair to me that others live as well as I do, because they are subsidized by my work. I think it makes sense to retire.
CJ
May 11th, 2010
11:38 am
For Joan1’s benefit:
“Amid complaints about high taxes and calls for a smaller government, Americans paid their lowest level of taxes last year since Harry Truman’s presidency, a USA TODAY analysis of federal data found…
Federal, state and local taxes — including income, property, sales and other taxes — consumed 9.2% of all personal income in 2009, the lowest rate since 1950, the Bureau of Economic Analysis reports. That rate is far below the historic average of 12% for the last half-century. The overall tax burden hit bottom in December at 8.8.% of income before rising slightly in the first three months of 2010.”
http://www.usatoday.com/money/perfi/taxes/2010-05-10-taxes_N.htm
Kyle Wingfield
May 11th, 2010
12:25 pm
CJ, these are aggregate numbers. What does the fact that a lot of people have lost their jobs or had their pay cut — thus moving them into lower tax brackets — have to do with the amount of taxes that joan1 pays?
CJ
May 11th, 2010
12:43 pm
It’s highly unlikely that joan1 pays 50 percent of her income in taxes. That’s the same figure that all Fox News addicts claim to pay because, well, they believe everything they hear on Fox News.
She’d have to be in the top income tax bracket to come anywhere close to that figure, and if she were, her back would not be “breaking from this load”, as she claims. To the contrary, she’d be doing quite well.
With regard to others being subsidized from her work, I assume she’s talking about agricultural subsidies, bloated military spending, nuclear subsidies, and investment tax breaks that increase the burden on those who make most of their income through employment.
Kyle Wingfield
May 11th, 2010
12:54 pm
joan1 is a big girl and can answer that argument — a wholly different one from your original one — if she wants. My point was that the USA Today article is irrelevant to her situation.
CJ
May 11th, 2010
1:05 pm
My point is that her situation, as described above, is one of make believe.
George Washington
May 11th, 2010
5:14 pm
The meltdown we are witnessing in Europe is only the tip of the iceberg.
The money isn’t real. We are witnessing the precursor to financial armageddon.
Ron Paul was right all along.
"Information becomes a distraction, a diversion, a form of entertainment"
May 11th, 2010
5:22 pm
Net Neutrality is government control, regulation and censorship of the internet. Oppose it with everything you can do. If you value your right to speak, read and communicate then call your Congressman and Senators. Call the White House. Call the FCC.
Tell them NO ! Hell No !!!