You have to admit that that’s one hell of a pompous title for a humble blog post. A guy’s got to lie awake nights to think up stuff like this.
When I say “political innocence,” I’m not speaking of the innocence of the merry Greeks, who lied to Europe for years about their financial situation,(1) who used those lies to borrow staggering sums of money,(2) who spent that money like drunken Hellenic midshipmen, who promised reforms that never quite came about, and who, when it all came crashing down, had the breathtaking gall to blame their creditors for their problems and to announce that they had no intention of paying back one red euro of the damned blood money.
No, amusing as all this is – amusing because Greece is in Europe, not North America(3) – the “political innocence” I’m referring to is the innocence of Greece’s European creditors. The naïve Europeans honestly believed that you could take any random dysfunctional society and convert it into an honest, hardworking, taxpaying, bill paying, politically moderate Western European society by simply lavishing vast amounts of money on it. We’ll turn in a moment to how otherwise sensible folks could have harbored such a view, but first let’s note that the view was widely held not just in Europe, but also in the US.
In a way, this is bizarre. American had already had its unfortunate experience with the idea that lavishing money on underperforming people could somehow work out. We called it The Great Society. Not only did the Great Society fail to eliminate poverty in America, but it promptly created a culture of dependency and a semi-permanent underclass. It took another Democratic President, Bill Clinton, to convert “welfare” to “workfare,” but it was too late for far too many families who had become addicted to government assistance.(4) Today, the poverty rate in America stands at 14.5%, higher than the 13.7% rate shortly after the Great Society was announced.(5)
Yet, a significant portion of American public opinion – Paul Krugman, the New York Times editorial page, the Obama Administration – continues to demand more aid for Greece and fewer conditions on that aid. Part of this, to be fair, has to do with geopolitical issues, namely, the strategic importance of Greece. Though Greece is a tiny country,(6) its location between the Aegean and Ionian Seas and between Turkey and Italy, and its membership in NATO, lend it an importance belying its miniscule size. The current Greece government, if you can call it that, has exploited this advantage by cozying up to Russia.
But the real reason for being soft on Greece is a congenital insistence on showering money on anybody who seems to need some, despite all evidence that this tactic has proven to lead straight to disaster. Europe’s carrot-and-stick approach to Greece – what critics like to call “austerity” – was actually beginning to work right up through the end of 2014. Greece had returned to a structural budget surplus in 2012, to real GDP growth for three consecutive quarters in 2014, and unemployment began dropping in early 2015.
But in January, the Greeks chose to elect the second most leftwing government in the world (after North Korea), and Syriza promptly reversed already-implemented reforms and announced that it had no intention of repaying its creditors. Predictably, the Greek economy fell apart, sinking back into recession and is, at this writing, teetering into chaos as liquidity evaporates for banks, individuals and the government. The world has seen its share of incompetent governments over the centuries, but a government that could destroy its economy and threaten civil society, all in a mere six months, has earned it place in history right up there with, well, North Korea.
European politics are well to the left of American politics, but even in Europe the bizarre Greek government is considered beyond-radical. We have, for starters, Prime Minister Tsipras himself. Tsipras is a waffling, wavering, indecisive fellow who, when the chips were down, executed one of the worst acts of statesmanship in recent history by throwing up his hands and demanding that the Greek people make his decisions for him. The referendum has only hardened attitudes on both sides, making compromise even harder than it was before.
Then we have the (former) Finance Minister, the pompous and narcissistic professor who is supposedly an expert on game theory. If so, game theory has a lot to answer for. More likely, Varoufakis was simply an incompetent fool.(7) Behind these two we have their three main advisors:(8) the minister for “productive recovery, energy and the environment,” ; a minister of education who announced upon his appointment that Greek education “should not be governed by a principle of excellence” and who plans to eliminate all exams and to give students as many years as they wish to graduate; the head of Greece’s security services, who is mainly known for his attempts to release (initially into home confinement) a notorious terrorist, a member of the infamous November 17 terrorist organization that murdered more than twenty people. Savvas Xiros, the terrorist, was convicted of murder and is serving five consecutive life sentences, though apparently not for long.
These are the people we are supposed to keep bailing out, without conditions. Even in Europe the idea has become preposterous. Well before the outcome of the Greek referendum was known, Greece’s fate had already been sealed in Europe. The “No” vote will result, at best, in a minor compromise that provides a fig leaf for Tsipras but that condemns Greece to many years of hardship. If Tsipras overplays his hand – and when has he not? – the consequences will be modest for Europe but catastrophic for Greece: economic depression, hyperinflation, civil unrest, possibly even civil war.
Sympathy for the Greek people is widespread, and their hardships are by no means trivial. But these are the people who elected corrupt, incompetent governments over and over again for forty years. These are the people who marched in the streets in support of the monster, Slobodan Milošević, even after he was charged with war crimes and crimes against humanity. And these are the same people who celebrated the 9/11 attack on America.(9)
The main point is that Europe’s days of naïve belief in the certainty of progress toward an ever-greater, ever-more-united Europe have died in the conflagration of Greece. Never again will the EU shower money on a society without stringent, enforceable conditions. Portugal and Spain, to say nothing of Italy and France (and the Ukraine), need to take notice.
In my next post we’ll take a look at how Europe became so naïve in the first place, and how that naiveté gradually morphed into realpolitik.
(1) When Pasok won the 2009 national election, it admitted that Greece’s budget numbers were pure fantasy and had been so for years.
(2) So far(!) Greece has borrowed $240 billion euros from the Troika – the European Commission, the European Central Bank and the International Monetary fund. This is just new money and doesn’t include the staggering amount of money Greece borrowed before its shenanigans were discovered. (The third bailout, an urgently needed $33 billion, hasn’t been released because the Syriza government reneged on Greece’s reform pledges.)
(3) But see “Puerto Rico and the End of Political Innocence,” forthcoming in these pages.
(4) When President Johnson announced the “war on poverty” he didn’t go to an inner city ghetto to do it. He went instead to a ramshackle shanty in Martin County, Kentucky, just a bit northeast of Clay County, Kentucky, where my grandmother was born. I don’t know about Martin County, but today 40% of the population in Clay County lives below the poverty line, a figure that is far higher than it was when I first began attending family reunions down there in the 1960s. (Things are a little better in Knox County, where my grandfather was born. Only 35% of the population down there lives below the poverty line.)
(5) US Census Bureau. The data are for 2013 and 1970.
(6) With 11 million people, Greece is a bit larger than Chicago, but it’s GDP is about the same as that of Minneapolis, pop. 3.8 million.
(7) An incompetent fool who was sacked – too late! – by Tsipras in favor of, yes, another Marxist professor. Unbelievable.
(8) See “Faces Behind Greek’s Radical Government,” Financial Times, 4/21/15.
(9) See, e.g., Helena Smith, “The Greek Approach to Tragedy,” The Guardian, 9/25/01.
Next up: Greece and the End of Political Innocence (Part 2)
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