gracchusdixit

One of those who read the last Gracchus, which concerned itself with the financial crisis in Greece, complained:

One of the keys to poor journalism is to say things like this does (sic): ‘The EU austerity program had decimated (sic) the Greek economy.’  Greece has and has had an unsustainable economy and political and socialist-like system.  It got the subsidies and loans in the first place because of that.  Greece people (sic) do not often pay their taxes, for example…try that in the USA.

To which I can only respond by quoting the late Daniel Patrick Moynihan: “Everyone is entitled to their own opinions, but they are not entitled to their own facts.”

To begin with, it should be obvious by now that the utterances of Gracchus are not, and do not pretend to be, “journalism”.  They are expressions of opinion regarding political, economic, social, and religious questions.  But the opinions expressed are grounded in facts.

And regarding Greece, the facts are these:

The Greeks elected their first socialist government in January of this year.  Before that, a conservative government had held power for four years, and in the fourteen years since Greece joined the eurozone, conservative governments held power for eight.  Indeed, a conservative government was running the country when the global financial meltdown occurred in 2007, precipitating the current crisis.

Since austerity was imposed on Greece five years ago, with the promise that growth and financial stability would follow, GPD has declined 25 percent, the country’s debt to GDP ratio has increased more than 70 percent, unemployment has tripled, and per capital income has declined 20 percent.  As a result, one in five Greeks now lives in a household with no income at all, one in three lives at or below the official threshold of poverty, and the country as a whole is functionally bankrupt.

These consequences shouldn’t be surprising, since ninety percent of the so-called “subsidies” Greece has received from the International Monetary Fund and the European Central Bank have gone to rescue the country’s creditors from their own improvident and risky lending decisions rather than benefitting the Greek economy or the Greeks themselves.

That shouldn’t be surprising, either.  Similar interventions in Spain, Portugal, Italy, and Ireland have only made matters worse.  In fact, the International Monetary Fund’s theology of budget-cutting, privatization, and debt-repayment has for decades failed to produce economic growth almost everywhere it has been tried.

None of which is to suggest that Greece bears no responsibility for its own problems.  As I stated in the original Gracchus, the Greek economy needed, and still needs, reform, particularly to its troubled tax regime.  In that regard, however, Greece is not alone, nor is “try that in the USA” a particularly relevant or useful observation.  As in Greece, so in the United States: many of our largest corporations and wealthiest individuals avoid paying taxes altogether by sheltering their earnings in foreign tax havens, often quite illegally; many more game the system quasi-legally to pay far less than they owe.  If we expect the Greeks to reform their tax code, as we reasonably should, we might provide a more helpful example by doing the same.

Finally, let me say this.  It is widely believed (particularly in Northern Europe) that the Greeks are lazy slackers who’ve been living a pampered existence on somebody else’s nickel.  The truth is otherwise.  The average Greek works more than 2,000 hours per year.  That’s more than the British, more than the Dutch, more than the industrious Swiss, far more than the sanctimonious Germans, and, yes, more than notoriously overworked Americans.  Greece has many problems, but laziness isn’t one of them.

For all these reasons, the Greek people voted a resounding “oxi”—”no”—to another toxic dose of voodoo economics.  Instead of lamenting that decision, the judgmental power-brokers of Europe and the United States should listen.  They might actually learn something.