"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.
