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by Peter Moskos

February 14, 2012

Poor Greece

Well the bastards burnt down my favorite movie theater in Athens.

Perhaps in the big picture of cultural destruction, it doesn't rank up there with the destruction of the Buddhas of Bamiyan, but man, those red seats were comfy.

Supposedly the theater will be rebuilt. (And supposedly a train will once again connect Athens and Patras).

Meanwhile minimum wage in Greece is to be cut drastically to about €600/month. That's less than $5/hour (and not even that, if you're under 25). You try living on that. Thank you, Angela Merkle.

Why should you non-Greek don't-give-a-damn kind of person care?

Because it's the Republican solution. Cut spending. Cut pay. Balance the budget. No welfare. Limit unemployment to a year. Don't worry so much about getting the rich to pay their taxes (after all, if they paid tax, they may not produce all those jobs for swimming pool cleaners).

Screw the economy because it feels morally right. Gotta balance the budget. F*ck the working poor. After all, I heard on the radio they're kinda lazy.

Bet it won't work.


Anonymous said...

Hah. It won't work b/c they're poor, they were poor before they tried to artificially create wealth by hitching themselves to richer nations and now they have to pay back for spending money they never had.
This is a country where hairdressers were given extra hazard pay pension benefits.
Now the pendulum must swing back the other way.

PCM said...

Swing back to where people with real extra hazard work don't get pay?

That won't accomplish much.

Anonymous said...

swing back to where how much income a people generate has some relation to how much their government spends!

PCM said...

Constricting the economy won't help the government get more money.

How about swinging back to rich people paying taxes? That's the problem. Not old people getting 500 euros a month. Of course the rich people in Greece never paid taxes.

hotrod said...

Greece has low tax compliance, in comparison to the citizens of the US (and the UK and Germany and others) that generally pay their taxes without much more than grumbling. Fixing that, which is probably easier said than done, would probably be part of anything that could reasonably be called a solution. But "austerity" is unavaoidable in this situation, whether it's "right" or "wrong". The political realities of the countries paying the bills demand it, as do the bond markets.

Moreover, the Greeks are, simply put, screwed no matter what they do. They still have a primary deficit - meaning if they simply give the big middle finger to the bond holders and walk away - they still have a deficit and have to borrow money - which no one would loan them following a default.

There is a considerable danger, particularly for American citizens, in seeing a different country's problems through the prism of your own. I'm an American citizen, generally a political conservative by any reasonable definition (though the Republican party's current incarnation would probably call me, at best, a moderate), so I generally favor cutting spending over increased taxes (though America needs to do both to some degree). But Greece doesn't have the choices we do. Different problem set, different institutions, different cultural and economic history, different demographics, and an awful currency situation = different choices. Simply falling back to either Paul Krugman articles or conservative economic narratives isn't helpful.

Lastly - we're seeing what I'm afraid is only the beginning of the fallout from what I think was probably the worst non-war related policy error by a western country since WWII. Ie the creation of the Euro. Frankly, it was a worse, if less bloody, decision than most of the war related errors since WWII. The Greeks are part of a currency zone with counties that they have very, very little in common with. Beind economically different is fine. Pretending like said differences don't exist is dangerous. I'd also note that Greek economic performance was much higher pre-Euro, although there are other factors that make any straight comparision difficult.

I've never been to Greece, but I hope to go soon (I live in Europe, so it's not a pipe-dream). If I make it, I promise to spend a lot.

PCM said...

Thanks for the intelligent reply.

Whatever the solution, it can't happen if their economy constricts. So I don't see how austerity is the answer. They need tax compliance, which isn't easy. People are so sensitive about criticizing the rich, but they are a big part of the problem, especially in Greece. (My rich family-friend in London tell me there a minor housing bubble in London property because the Greeks are buying so much right now, to protect their non-taxed money).

Taxing the rich has to be possible. And doing so might get the masses to support aspects of austerity. Also, the number of government workers does need to go down. Fuck OTE. But don't cut already low pensions. It will hurt the economy. That money you know gets spent right away. And it's mean.

As to the Euro, as an American, I love it. I remember the days. A few months ago, when I was there, I would have had to change money 7 times in a few weeks. But I know my frugal travel needs are not why they went to the Euro. There does seem to be a basic problem when Germany decides economic policy for Greece. But why did economic union work in the US (one answer could be that there is a Fed, and it's not California dictating policy for Wyoming). And union led to more similar social policies in the US states, which isn't the case in Europe.

The problem with breaking up the euro (along with the obvious problems of breaking up the euro) is also that it would have a horrible impact on trans-national economy, industry, and production. That's nothing to sneeze at.

And let's not forget another possible solution. Sure its not part of the current political reality: Just keep giving Greece a shitload of money. Economically, it might even make sense (it *is* a small country, after all) if it prevented a complete breakdown. I think there are moral dimensions here that trump economic rationality.

Let's not forget another ugly possible outcome: revolution, nationalization, and expulsion of foreigners ala Nasar's Egypt in the 1950s.

p.s. Greece is still very nice to visit. Always has been. Too bad, with the euro, it's not cheaper.

Anonymous said...

Compare the Greek incredibly bad tax compliance culture, which exists all income levels, to a culture that would provide front page outrage over a jaywalker, and then try to tell me it makes sense to join them economically.
It doesn't make sense to join them via currency in light of no powerful common government.

PCM said...

I've always believed that societies that don't jaywalk--societies that value blind following of the rules more than individual choice--are much more susceptible to the rise of fascism. There's something very absurd to me, when you're no threat to others, to value obedience to a machine (literally) over your own eyes and common sense.

I really believe that.

The passion Greeks have for jaywalking is matched only by their passion in WWII fighting the Nazis.

Jaywalk to keep the Nazis at bay! (OK, now I'm joking, but only a bit).

Also, learning to see and judge danger rather that follow the rules can be good self preservation. I don't know how many time I've come cross a hit pedestrian who "was in the right." I'd prefer to cross illegal and be safe and put myself at risk by waiting for light (this doesn't apply to cars, just bikes and peds).

Now none of the relates to the economy. I guess it's my way of thinking, you might be right!

I always through Germany wanted Greece in the EU so they could take vacations and buy property without hassle.