Papandreou: Back to the drachma!

A referendum on fiscal austerity? It's Greek to us. Photo: Carlos Latuff

WASHINGTON, November 1, 2011 – Is Greek Prime Minister George Papandreou really serious about putting the current, somewhat mysterious European bailout package—i.e., considerably higher taxes, far less baksheesh for government employees, and a miserable standard of living for decades to come for the average citizen—to a public vote?

Apparently so. Leave it to the politicians to put their own lucrative careers first before doing anything to solve the problems they continue to cause. The return of the drachma (whatever it may be worth) is now certainly in the cards. As a result: the stock market is tanking again, big time. 

[Breaking: ironically, in spite of his cynical efforts, Papandreou may soon be ousted by his own party leadership. More on fast-breaking developments here at the Washington Times.]

According to numerous, substantive accounts, since the entered the Euro currency, Greek politicians have casually colluded with unions and the general public in ramping up government hiring, larding public employee and union pay packages with catastrophically unaffordable benefits. Everyone looked the other way when it came time to collect the colossal tax bill to fund this massive Ponzi scheme.

Greek attitude toward oppression, then and now.

Greek attitude toward oppression, then and now. (Credit: Carlos Latuff.)

The result of this massive, collective fraud: a national bankruptcy of proportions that would make Homer himself redefine the meaning of the term “Greek Epic.” The only way Greek indebtedness could ever be repaid at this point is to force every living Greek citizen into slave labor (and wages) for at least a generation.

The Greek people are certainly aware of this. Hence, the utter asininity and fecklessness of offering up the current European faux rescue package for a public vote. After all, would you vote for our Federal government to confiscate, say, 90% of your wages for the rest of your life? Didn’t think so. But the public vote will give the politicians cover, which they’re always looking for anyway. “Well, gosh, Ms. Merkel, we wanted to accept your bailout package, but, well, the stupid people wouldn’t let us.”

The real problem, though, does not really lie with Greece—although we are wryly amused at the scope and audacity of this tiny country’s extraordinary embrace of mass fraud on a national scale.

The sheer brazenness of the Greek effort reminds us, in a way, of a similar effort, on a smaller scale, that was depicted in the 1998 English-Irish comic film, “Waking Ned Devine” in which an entire small town colluded to dupe the Irish National Lottery out of a huge grand prize after discovering that the winning ticket had been held by a newly deceased fellow villager. Maintaining the fraud required absolute solidarity among the townspeople, the moral equivalent of the Italian “omertà.” It’s all weirdly similar to the current, very real mess in Greece.

But today, things are bigger than one tiny, fictional Irish town. And more sinister. The Greeks are the proverbial “canary in the coal mine” of the current international fiscal debacle. Part of the reason the Eurocrats are scrambling so hard to paper the Greek mess over is that the situation in that small country is but a microcosm of what’s happened to the collective Western economy, including our own.

Greek dog cartoon.

Greek dog expressing respect for political authority. (Credit: Latuff.)

After the devastation of the Second World War, Western European countries adopted, one by one, an economic model based on a kind of soft, lazy socialism. In some respects, this was a reaction to the continent’s utterly impoverished state after the war. There was little but misery to spread around, and so spread it was, in a relatively civilized hat tip to Soviet-style Communism.

European countries still retain an astonishingly class-dependent societal structure. After the war, this hierarchy was shaken but not stirred. The usual elites gradually regained political power at the steep expense of placating militant public and private union forces ad infinitum with seed money provided by (as usual) the United States, via the Marshall Plan.

The Europe of today is the ultimate result: elite politicians from elite families or schools working behind the scenes with elite bankers, elite industrialists, and (a new wrinkle) newly elite union bosses to create cradle-to-grave socialism characterized by absurdly low working hours, loads of paid vacation, and incredibly early retirements with absurdly generous pensions. Taxes, of course, were high, but the public signed on for this great deal, by and large. Why not have a life of relative leisure when “the rich” were paying for it.

But “the rich” were not. They stashed their funds in tax-friendly havens, dodged their own tax-collectors, and, with a wink and a smile, forced their lackeys—elected public officials—to start cranking the treasury printing presses while kicking the due bills, and the truth, down the road in a perpetual game of “keep-away.”

You have to figure that, as in Greece, most of the general public had figured this out a long time ago, with most concluding that they’d best get in on the deal, too, as best they could. “Right wing extremists” who called the colluders out were regularly denounced by politicians and the press as agitators and cranks. It’s the price you pay for rocking the boat.

Once capitalist to its core, the U.S. resisted the siren song of faux socialism for years until Lyndon Johnson decided to repent for his past racist sins by papering them over with Medicare and the rest of his “Great Society.” After the McGovernites took over the Democrats in 1972, Johnson’s entire party took upon itself the role of the Euro-socialists as they promised us the world for no money down. Our own huge bill for this fiscal charade abruptly emerged in the Great Recession of 2007-?? (And it’s not over yet, standard economist-think to the contrary.)

Greece is showing us what’s about to happen next. The dirty, rotten secret of our own fiscal impasse is that the Greeks have turned out to be only the most flagrant and remorseless violators of international fiscal responsibility.

All current European and U.S. solutions to this ongoing debacle are essentially doomed to fail. But it’s not that capitalism has failed, as legacy leftists love to proclaim. What we think is capitalism was slowly, stealthily, and systematically gamed by a small cadre of elites who massively enriched themselves while seducing the taxpaying public into drinking the political and economic Kool-Aid.

Which, on sober reflection, might be why the hapless Papandreou’s Hail Mary Greek referendum might be an unpleasant blessing in disguise. If the current (bound to fail) European bailout/austerity package fails to win support—and we can’t imagine that it will—the European dominos will start to collapse. Greece will have to default and will probably leave the Euro currency.

This, in turn, will force the Eurocrats to face their own Lehman crisis as we were forced to face ours. And it will force voters—both here and abroad—to take a long, hard look at their own mindless support for those lying businesses, politicians, and parties. All three have long booked a swell, lucrative ride on the backs of taxpayers. It’s time to take them all out. And why don’t we claw back their huge, unearned pension plans as well. Since we all will have to pay for them—or at least those of politicians—that’s perhaps a good place to begin.

As voters and taxpayers, though, we have ourselves to blame as well. Everybody got too happy while holding on to too little and failing to question the reasons why.

Will American taxpayers ignore the elite’s paid propagandists in the media and stage a mass political revolt in 2012? If they don’t, what’s going on right now in Greece will prove to be but a prologue to the most massive uprising the United States has seen since the close of the Civil War. People just hate to get caught holding the bag.

UPDATE: According to CNBC, Greek PM George Papandreou has just resigned, having lost the confidence of his governing party after his astonishing order for a referendum on the EU bailout package and conditions. Correspondent Catherine Boyle writes:

‘Earlier on Thursday, Antonis Samaras, leader of the opposition New Democracy, called for a new coalition government to be formed, before snap elections, on Greek television Thursday.

 ‘Samaras said that Greece will stay as a member of the euro zone and that the country’s politicians need to make sure that the government will receive the next tranche of its bailout loan from the troika consisting of the International Monetary Fund (IMF), the European Central Bank (ECB) and the European Commission (EC).”

This appears to be an ongoing fiscal and political soap opera, so things are still subject to change. But 15 minutes before Wall Street begins trading (01/03/2011), futures are pointing to a positive tone for the opening bell.


Read more of Terry’s news and reviews at Curtain Up! in the Entertain Us neighborhood of the Washington Times Communities. For Terry’s investing insights, visit his WT Communities column, The Prudent Man in Politics.  

Follow Terry on Twitter @terryp17

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Terry Ponick

Now writing on investing, politics, music, movies and theater for the Washington Times Communities, Terry was formerly the longtime music and culture critic for the Washington Times print edition (1994-2009) before moving online with Communities in 2010.  



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