Greek tragedy holds lessons for US
© by Barbara Anderson

The Salem News
Thursday, November 10, 2011

"Republics decline into democracies and democracies degenerate into despotisms."

— Aristotle (384-322 BC)

I was talking to my treasured bust of Aristotle this week, telling him the joke going around Athens about restoring the military dictatorship — which some commentators were starting to take seriously before it was officially retracted.

Aristotle, from the perspective of 2,300 years, might smile at the predictable follies of modern Greek government.



It is funny in the "laugh, so you don't cry" category.

Since I've found few who've read the October 2010 Vanity Fair exposé by Michael Lewis, "Beware of Greeks Bearing Bonds," I'll quote from it enough to advance understanding of recent headlines like "Greece still in turmoil."

The article is introduced thusly: "As Wall Street hangs on the question 'Will Greece default?' Michael Lewis heads for riot-stricken Athens ... beyond a $1.2 trillion debt (roughly a quarter-million dollars for each working adult), there is a more frightening deficit. After systematically looting their own treasury, in a breathtaking binge of tax evasion, bribery and creative accounting spurred on by Goldman Sachs, Greeks are sure of one thing: They can't trust their fellow Greeks."

Goldman Sachs? Whoa, shades of our own debate about the Fed, not to mention the key players in our own near-fiscal meltdown in 2008, fellow Americans whom tea partiers and Occupiers alike distrust. It's a small world after all.

The government sector problem had already begun when I lived in Greece more than 40 years ago. According to Kenneth Young's 1969 book, "The Greek Passion," "Greek civil servants took twenty-five religious days' holiday every year" before the reforms instituted by the military junta that had just taken over the country. Democracy returned a few years later. The reforms apparently didn't last.

From Lewis' exposé: "I'd arrived in Athens ... exactly one week before the next planned riot, and a few days after German politicians suggested that the Greek government, to pay off its debts, should sell its islands and perhaps throw some ancient ruins into the bargain ... Greece's new socialist prime minister, George Papandreou, felt compelled to deny that he was actually thinking of selling any islands."

As part of the European bailout plan, Papandreou is expected to step down so the country can create a new unity government that includes both his Socialist party and the conservative New Democracy party. As Americans hear that our debt-reduction supercommittee may soon fail, this is something to think about, President Obama.

More from Lewis: "No one was keeping track of (what was) actually spent. ... In just the past decade, the wage bill of the Greek public sector has doubled, in real terms ... the average government job pays almost three times the average private-sector job."

He uses the example of railroad employees: "It would be cheaper to put all Greece's rail passengers into taxicabs."

Regarding the Greek education system, Lewis says, "One of the lowest-ranked systems in Europe, it nonetheless employs four times as many teachers per pupil as the highest-ranked Finland's. ... The retirement age for Greek jobs classified as 'arduous' is as early as 55 for men and 50 for women ... more than 600 Greek professions somehow managed to get themselves classified as arduous: hairdressers, radio announcers, waiters, musicians ...

"The Greek public health system spends far more on supplies than the European average — nurses and doctors leaving the job with their arms filled with paper towels and diapers and whatever else they can plunder from the supply closets ... people who go to public health clinics assume they will need to bribe doctors to actually take care of them. Government ministers who have spent their lives in public service emerge from office able to afford multimillion-dollar mansions and two or three country homes."

Not laughing, are we? We should be estimating how far we have to go to reach that level of bad government.

One interesting difference, according to Lewis, is that Greek financiers and banks did not cause the problem: "Virtually alone among Europe's bankers, they did not buy US subprime-backed bonds, or leverage themselves to the hilt, or pay themselves huge sums of money. ... In Greece, the banks didn't sink the country. The country sunk the banks."

More: "Off-the-books phony job-creation programs ... the easiest way to cheat on one's taxes was to insist on being paid in cash, and fail to provide a receipt for services ... the structure of the Greek economy is collectivist ... but it's real structure is every man for himself. Into this system investors had poured hundreds of billions of dollars. And the credit boom had pushed the country over the edge, into total moral collapse."

The situation, obviously, did not improve in the year following publication of the Vanity Fair article. Only with Greece on the verge of default has a tentative agreement been reached that requires severe austerity measures, including layoffs of government workers, in return for partial debt forgiveness.

It's tempting to simply refer to an October 2009 headline — "Socialists win Greek vote by landslide" — as the reason for all this, but Papandreou had run on a futile platform of reducing government waste.

Maybe my friend Aristotle was right, and all republics are eventually doomed. I hope that with the example of Greece to avoid, we Americans can prove him wrong.

The comments made and opinions expressed in her columns are those of Barbara Anderson
and do not necessarily reflect those of Citizens for Limited Taxation.

Barbara Anderson is executive director of Citizens for Limited Taxation. Her column appears weekly in the Salem News and other Eagle Tribune newspapers; bi-weekly in the Tinytown Gazette.

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