Greeks Greased Their Own Slide Into Debacle

It is painful to watch such an ancient cultural center as Greece fall so low.  Today they are the beggars of Europe.  Without the alms from Germany and others they will default on their debt obligations  and their economy will melt into mess hard to imagine.  They don’t have enough resources or innovative businesses to sustain themselves very well without participating in the broader economy of Europe but that will be hard to do after default because everyone they deal with will demand COD terms.  Simply put they won’t have the cash and will have to deal internally for almost all their needs.  They can’t supply all those needs from food to high technology with their own resources.

Once they were the epicenter of economic power, cultural development and even military might.  During the 4th and 5th centuries BC they dominated the world stage.  This was the era when they thwarted the mighty Xerxes of Persia and gave the world Socrates, Plato and Aristotle and then later Alexander the Great.  Even after their might militarily and economically had waned they still exerted a tremendous influence over the sciences and cultural matters.  They people had spread around the Mediterranean Sea and they were always the local thinkers, teachers academics of the time.  Though their actual control of Alexandria in Egypt was brief they still held sway with Galen (medicine), Strabo (geography) and Ptolemy (astronomy) several centuries later.  Even the Gospels are replete with references to “Greeks” and always as someone to be admired.  In Roman times it was considered the mark of a truly educated man and sophistication if one could speak Greek.

When the Roman Empire fell they mostly went into the backwaters of history for several centuries.  Later they emerged as one of the principle bulwarks of Europe against the constant encroachment of the Muslims into Europe proper.  That time lasted for almost a thousand years.  Even the great Lord Byron went there to help the Greeks in their struggles because he so admired their cultural heritage.  They were mostly pawns during WWI and WWII because of their diminished standing in the world.  But after WWII they became a battleground between the West and the Soviets.  Harry Truman declared that was the limit of Soviet expansion.  He was determined that they would not overwhelm Greece as they had Poland, Hungary, Romania, Bulgaria and the eastern portions of Europe.  That was the first major battleground for the OSS and then the CIA after WWII.  The CIA had many teams parachuted into Greece and Albania in an effort to hold back the tide of Soviet advance.  The Greeks were split pretty badly during this time between those who favored a Socialist government and those who didn’t.  We kept the Soviets out and prevented outright control from falling into their hands but the local government maintained and very strong socialist agenda and the socialist dominated their governments for decades.  The socialist still play an important and determinative role in the Greek government.

Due to that socialist view the Greek did indeed embark on many socialists programs and they were somewhat propped up by Soviet money and trading agreements for decades.  After the fall of the Soviet Union there was a serious re-thinking by the Greeks about their own future.  It clearly could no longer be an outright socialist state because that philosophy had crashed in flames.  It could provide no future help of any significance to the Greeks.  So they looked West to Europe.  Their new best friends.   You may not recall but it was not an easy sale to many in Europe to admit the Greeks to the European Union and the Euro economy in the first place.  Especially the Germans were reluctant.  They were worried that the socialist legacy ran deep and that the Greek economy was too dominated by the State, there were too may pensioners, too my feather-bedding jobs and productivity was very low.  The Greeks gave mea culpas and pledged to reform and were admitted.

Guess what the Germans were correct two decades ago.  Greece didn’t have enough people working in the real economy to support the favored programs of the “reformed” socialists.  Greece floated more and more debt to sustain its view of a welfare state and then even lied by cooking its books.   Everyone can’t be a clerk, bureaucrat, pensioner, fireman, policeman and some sort of regulator getting envelopes filled with cash to authorize a permit that is required for almost everything in that centrally controlled economy.   Sooner or later creditors begin to ask questions about the ability to repay the money loaned to support the public sector.   Since they share a currency with the others in the Euro zone that makes it a problem for them also.   We have gone through our own problems lately and certainly by now understand the implications of abandoning the concept of moral hazard for bad decisions.  Will the EU be better off helping out Greece or would it and Greece be better off letting them default and suffer the consequences for a generation?  Has all our efforts with bailouts proven to be such a tremendous success that others would want to emulate it?

We should hold dear the lessons and virtues of the Classical Greek scholars and they establishment of the basic frameworks of a democratic form of government.  We also need to watch these events unfold carefully.  Central planning, buying voter support with government handouts, shrinking the private sector and squelching private enterprise has brought Greece to this stage.  We should also use this recent history there as a warning signal for our own future economic policy and concentration of power in a central authority.

The Germans would do well to resort to the Realpolitik of Bismarck.  It would be best for them and Europe and the world as a whole.

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Filed under business, Culture, Economics, government, history, Politics

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