The Greek Tragedy Unfolds
Published on: May 1, 2010
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  • Michael Brass

    It is startling to me that a portion of the Greek citizenry refuse to accept the consequences of their poor management of the economy. Blaming it on corrupt politicians ignores the high degree of dependency upon the state, the low level of constructive activism in governance and the ubiquitous level of tax evasion. From my prospective, the Greeks lived off the state, didn’t fund the state and now refuse to take responsibility for too long expecting the state to pay out without funding. As I see the Greeks do their best to commit econo-cide I fear I am seeing the future of the US where politicians refuse to acknowledge that, after this recession, we will have to cut programs and raise taxes if we are to attack this massive national debt.

  • K2K

    One historical legacy that can now be changed:

    “…Various studies, including one by the Federation of Greek Industries last year, have estimated that the government may be losing as much as $30 billion a year to tax evasion — a figure that would have gone a long way to solving its debt problems. …How Greece ended up with this state of affairs is a matter of debate here. Some attribute it to Greece’s long history under Turkish occupation, when Greeks got used to seeing the government as an enemy. Others point out that, classical history aside, Greece is actually a relatively young democracy. …”

  • Dennis

    An excellent analysis. Thanks.

  • Jack D

    I think you are being too kind to the Greeks. Whatever “they” did for democracy was a long time ago and “we” owe them nothing for that. It’s not clear that the modern Greeks are even the direct descendants of Socrates and Plato – they sure don’t act that way.

    It’s true that being an ex-Ottoman country is not exactly fertile ground for success in the modern world, but the Greeks have to look in the mirror before they go blaming others. Regardless of whether capitalism is somehow offensive to traditional Greek culture (which I’m not sure is true to begin with – the marchers march under the banner of Marx, not the Patriarch), the Greek educational system produces “dependency theorists” and not software engineers, rock throwing anarchists and not creators of jobs. Even after all these cuts, it’s not clear that the Greek economy is really a self-sustaining enterprise. Sit around the cafes and chain smoke all you like, but don’t expect someone else (the rich, the Germans, etc.) to pay for it. Psychologically the Greeks are stuck in the juvenile delinquent phase – it’s time for them to grow up.

  • noahp

    I fear the chaos will descend into widespread bloodshed. This will perhaps turn out to be a cautionary tale for our own head in the sand elites who said nothing when Pelosi demagogued Bush’s attempt to forge a consensus for SS reform in 2005 or who continue to pretend that Obama’s economic policies have some sort of sound empirical basis..

  • robin4est

    Capitalism isn’t the problem in Greece.
    The problem is politicians who promise anything for votes and voters that believe them.
    It is low productivity that takes the form of the “culture fairy” in this essay. Such a ridiculous construction. We have met the enemy, and it is us!

  • Peter

    “Will Greek society resist the imposition of savage cuts in salaries and public services, and will the government’s efforts to reform the public administration and improve tax collection (while raising taxes) actually work?”

    Ah, a revolt of the freeloaders. What an obscene sight.

    Will such ugliness be coming to America when economic reality forces sharp cuts in our bloated government work force?

  • mike davidson

    As usual, I enjoyed Mr. Mead’s sober, enlightening analysis within his “God and Gold’ strategic context. Two things scare the heck out of me. First, President Obama clearly does not believe with him that the “global capitalist revolution offers the best and indeed the only hope …. for the relief of poverty, the advance of human rights and the protection of the environment worldwide” and is, in effect, trying to lead a new variant of ‘the anti-capitalist counter-revolution’. Second, the West’s elites are on board with him making it more and more likely it will once again inflict ‘unprecedented misery and harm’ before if it is defeated..

  • NormD

    Even if the majority of Greeks are ubber-leftists who believe all kinds of bizarre conspiracies, how can they possibly feel that other countries should pay for their lifestyle???

    How does Greeks rioting and burning down Greek buildings help their case? Why should the rest of the world care?

    If the Greeks get away with their shenanigans, why won’t other countries try the same thing?

  • LuizdoPorto

    Mr. Mead, here in Portugal we are all hoping that the greeks get a clue, unlikely as that is.

    We have made our share of mistakes, and our politicians are not quite finished waking up, but this has gone far enough.

    It’s their debt, they asked for the money, they got it and now they must pay it back. So simple even a politician or journalist should get it. Leftists can’t and won’t, of course. But that’s why they don’t really count.

    If they want to go the Chavez route, though, they should please leave the EU first so that we, and the spaniards, and the irish, and the italians, and the english can muddle through as best we can.

    It will be bad enough to cope with a forced deflation on top of the current crisis without having constantly to worry about what will come out of Athens next.

  • One small matter in the topic of the west’s gratitude for the contributions of classical Greece to civilization is the fact that, like it or not, present day Greeks have little connection to the Greeks of classical times. Athenians were certainly capable of making a mess of their times but they were a different people.

  • Terry Lyden

    Most interesting, but how can modern Greek history be discussed or explained without discussing the pivotal role of the Greek Orthodox Church in forming Greeks and Greek society?

  • SC Mike

    Better, it’s not a good time to be a Greek in Greece.

    The modern Greek diaspora put them in many fine places. Those who’ve made it to Vespucciland have done well, especially in the hospitality trade but also in virtually every profession, and are certainly better off economically than their relatives in their home country. Heck, one of theirs is currently the state treasurer and the Democrat’s candidate for governor of the great state of Illinois, at least for the time being. It does look like he’ll be Torricelli-ed in favor of someone who has a chance of winning.

    But the main point is that Greece serves as a harbinger for other EU nations and the US, and the timing of our crisis seems to be accelerating. Social Security was heading to negative cashflow in 2017 or so, but that’s started already. The so-called “Doc Fix” in just a bandage that restores fee reductions put in to start to fix Medicare. Und so weiter.

    Even in this time of silver-maned radicals rioting during so-called Tea Parties, neither party stands firmly behind a plan to put the nation’s finances on a path away from economic Armageddon. Wisconsin congressman Paul Ryan does have a credible plan, his Roadmap for America, that could work, but there’s no indication today that more than a handful of elected officials at the national level would move in that direction because it would involve some pain. Nobody seems willing to point out that to do otherwise would involve even more pain.

    I’m glad that fortune has not made me a Greek in Greece, but am concerned about what my kids face down the road as Americans in America.

  • I doubt very much if the Greeks will accept or endure the kind of austerity now being demanded. And what will happen when they abandon trust in their government? We will have a real crisis then.

  • G50

    Great article. The global context adds some good perspectives, still awful to see fire I the street.

  • TomA

    Your article states that the Greek government may be required to reduce civil service salaries by up to 15% and calls this a savage cut. The alternative is that Greece could default on its sovereign debt and then no one would lend it any more money. What would the salary cut be under that scenario and what adjective would you use beyond “savage” to describe it? Given the hole that they’ve dug for themselves, 15% does not sound all that terrible.

  • Robert Carson

    Obviously, Obama’s primary goal is to turn the United States into a Greek like society, run solely for unions, government employees, ACORN, and greedy politicians.

    Will November bring forth the changes we need? Don’t count on it. No one ever credited the American voter with common sense, especially when free lunches for all are promised with only “the rich” picking up the tab.

  • It is too bad that they can’t get their act together to spend within their means. On the other hand, governments at various levels in the US are wrestling with the same lack of discipline.

  • Juan de Onis

    Greece is being obliged to take the medecine that the IMF, Washington Consensus, or simply economic orthodoxy, require for a very sick economy to be cured. The treatment has been undertaken by almost every Latin American country and most, if not all, have emerged with stable public finances and growing economies. So, let´s keep the Greek “tragedy” in perspective.

  • Malak

    Another people who found comfort in self-serving delusions, only to have reality bite them.

    No bailouts for deadbeats.

  • cas127

    It isn’t clear why a “debt” to Greeks who are thousands of years dead, should offset the debts of living deadbeat Greeks.

    Is this some sort of Jungian economics the world is unfamiliar with?

  • AgentRose

    This is not the Greek tragedy. The Greek tragedy is what the U.S. government is not telling the American citizens–that THEY are the ones who will be bailing out Greece.

    Part of the bailout comes through IMF. Guess who is the biggest contributor to the IMF?

    Since the United States is the largest contributor to the IMF, US taxpayers will find themselves footing the bill for the Greek debt crisis.

    Pence and McMorris Rodgers Oppose Taxpayer-Funded Bailouts for Europe
    The House Republican Conference: Washington, DC – U.S. Congressman Mike Pence, Chairman of the House Republican Conference, and Conference Vice Chair Cathy McMorris Rodgers urged their House colleagues today to sign a letter to U.S. Treasury Secretary Tim Geithner, calling on the Obama Administration to block any American taxpayer-funded bailouts of Greece.

    Greece is seeking funding from the International Monetary Fund (IMF), due to the country’s debt, and other European countries, including Portugal and Spain, may soon make similar appeals. Congressman Pence made the following remarks today:

    “The American people are tired of the endless bailouts. The United States is facing nearly 10 percent unemployment and a fiscal crisis of its own, and propping up Greece or any other European Union nation that may face a similar crisis in the future should not be the responsibility of American taxpayers. The EU was created to compete economically with the United States, and if it needs to bailout one of its own, it should do so without bilking the American taxpayer.

    And we should all remember that part of the cause of the Greek crisis is the unions. Is this a foretaste of the U.S. to come with Andy Stern and his thugs?

  • srp

    The problem is that people want the material benefits of the system without adopting the norms and behaviors that underpin the system. A place where everyone demand goodies from the state but also cheats on his taxes and condones tax cheating by others is in a world of hurt. And if that attitude extends to giving an honest day’s work for an honest day’s pay, or not cheating your customer when not watched like a hawk, or paying back your investors…

  • LoachDriver

    Yes, of course one need not, as do I, have a bit of money invested in a Greek firm, to wish the Greeks the best of luck and hope that they muddle through once again.

    At the same time, it’s difficult not to smirk at the Europeans because their Euro project has proven as Americans said it would.

  • Wayne

    What a wonderful article. It’s well researched and written. It’s informative without being preachy, and it speaks to adults as adults. Well done.

  • Danny K.

    Greece has always been Europe’s problem child. It throws temper tantrums and stomps its feet like a spoiled child whenever it doesn’t get it’s way. It lies to it’s people, lied to get on the Euro, doesn’t honor agreements and it can’t be trusted. It stomped its feet until its partners relented and allowed Cyprus into the EU. It broke agreements that it wouldn’t block the ascession of Macedonia into NATO and the EU, and it antagonizes all of its neighbors. Whereever the Greeks go trouble follows: Cyprus, Asia Minor, Macedonia, the Balkans, the EU … even the Church of the Holy Sephulchre where the Greek priests infamously get into spats and even fist fights with other clergy. Problem children only learn to behave when they are dealt with firmly, and it’s high time Greece got a little discipline from its elders.

  • Interested Observer

    I enjoyed your article, and would like to make a few comments.

    For starters, government by and for trade unions and civil service unions (echos of UAW, SEIU, AFSCME . . .?) cannot work (in the sense of keeping your country prosperous and free) for very long.

    The culture of entitlement and dependency seems to control Greece (and Italy, and Spain, and . . .) and has been growing in the USA for many years, and is now starting to grow here very rapidly. It will ensure that countries where it prevails become, or remain, economic backwaters.

    I think your 6th paragraph touches on the heart of the matter: The man (demonstrating) in the street, demanding that the rich be made to pay, not the “blameless people” whose “ONLY sin” has been to vote for GENERATIONS (if they haven’t wised up by now, will they ever?) of demagogic politicians who “promised to give them the moon and PAY FOR IT WITH OTHER PEOPLE’S MONEY(!).” As we have been much reminded of late, other people’s money eventually runs out.

    You are correct to see capitalism as the best — only — hope for human advancement — economic, social, environmental. I, too, worry about teetering European countries and hope that Greece survives this crisis and finds its footing, but I am even more worried that my own country, under our current president and his party, is itself losing its way and heading for backwater status. What a tragedy!

  • Danny K.

    @Jack D. – “I think you are being too kind to the Greeks. Whatever “they” did for democracy was a long time ago and “we” owe them nothing for that. It’s not clear that the modern Greeks are even the direct descendants of Socrates and Plato – they sure don’t act that way.”

    Depending on which non-Greek sources you believe, when King Otto of Bavaria was installed as ruler of Greece, he was going to make Albanian the official language of the new nation as this was the mother tongue of most of the inhabitants around Athens. Other significant minorities come from ancestry that spoke Aroumanian, Macedonian and Bulgarian, and the settlers from Turkey primarily spoke Turkish. “Greeks” in Ottoman Census figures referred to members of the Greek Orthodox Patriarchate and it’s not clear at all that this definition had anything to do with ethnicity. Yet despite this muddled history, Greeks are adamant, with fascistic insistence, that theirs is a 100% pure nation.

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  • Andrew P

    Greek debt is somewhat analogous to the debts of California, New York, Michigan, or Illinois. However, US States are much less likely to be bailed out than Greece. If a US State defaults, a lot of people will lose some money, but it is nowhere near as bad as Greece defaulting, and even CA defaulting is not as big a Lehman. The reason is simple – the US Federal government insures bank deposits and regulates the banks, but in the EU the States do this function. State defaults in the EU would cause massive bank runs that could be unstoppable, and result in Great Depression II. This is not true in the US. And this is why the EU should Federalize the bank insurance and supervision function immediately if they know what was good for them. They should do this like yesterday, and impose the required Federal taxes necessary to make it work. They really have no time to lose here. Unless they do this, the EU (and the IMF) has no choice but to bail out the EU States, no matter how much money is required to do so. And that is why Greek debt yielding 10% could be a very good buy — as long as the Greek population is rational enough to accept the terms of the bailout.

  • Greg_D

    Here are some debt to GNP ratios. Unless mentioned, they came from the CIA:
    Japan: 192.10% (2009)
    Italy: 115.2% (2009)
    Greece: 108.1% (2009)
    Iceland: 100.6% (2009)
    Belgium: 99% (2009)
    US GBO projected: 90% (2020)
    France: 79.7% (2009)
    Germany: 77.2% (2009)
    Canada: 72.3% (2009)
    UK: 68.5% (2009)
    U.S.: 60.8% (2009)
    Norway: 60.2% (2009)
    Spain: 59.5% (2009)
    Switzerland: 43.5% (2009)
    Sweden: 43.2% (2009)
    Mexico: 42.6% (2009)
    U.S.: 39.7% (2008)
    South Korea: 28% (2009)

    The U.S. is rapidly catching up and the problems in Greece will eventually hit every industrialized country. Iceland doesn’t even have a military and Japan’s military is 1% of it’s GNP so cutting the military will just postpone the problem. Raising taxes will work just a little while, but as we saw with the Soviet Union one can still collapse in debt even with the highest of taxes.

    The problem is that governments are too lavish with their social programs and eventually they will have to be cut severly rather than gradually just like what is happening in Greece.

  • Listen up, my fellow Americans. This essay gives the best explanation of Antiamericanism I have ever encountered in my 30 years as an expatriate. It is exceptional in that it does so with compassion from a robustly pro capitalist point of view. It is not defensive and unapologetic about the prosperity that the modern globalized capitalist economy has brought to all who have been able to participate in it – including Greece. But what is really unusual about this essay is the clarity and sympathy with which WRM explains how the distortions and inequities that come with markets deeply offend Greek and by extension many other cultures. I can testify that Australians feel this way too because they have a strongly held sense of fairness and equality. Whether they say it politely or with real heat their response to the current economic crisis is that “America is finished.” The schadenfreude is palpable. I don’t think they fully understand that their own prosperity is a result of the global economy or that capitalism has proven it can create a bigger pie while systems that insist on equality of outcome have not been able to ‘raise all boats’. The number of bumper stickers here in Australia excoriating GREED riding around on the back of $70,000 Land Cruisers testifies not so much to hypocrisy as a combination of cultural values and economic illiteracy.

  • marco

    In the author’s own words….

    The Europeans’ problem:

    “The … highly cultured …. ‘blameless’ … people … voted for generations … for … other people’s money.”

    The solution for the Americans’ problem:

    “pay cuts for civil servants of about 15% and … government spending cuts set at 10 percent of GDP. (In the United States, that would amount to federal and state budget cuts totaling more than $1.4 trillion, almost one quarter of the total spending of all state and local governments plus the federal government combined.)”

  • Konstantin

    A very good analysis, but somewhat behind the times: this would have been way more accurate a description of Greece in the early 90’s than today. Today 84% of Greeks (latest poll) support the government in its efforts not to default, and to finally do away with corruption and the enormous tax evasion and state dependence it breeds. Greek culture is far from hostile to capitalism: just check out the number of shipping magnates created in the 50’s and 60’s or the fact that Greeks were a market-dominant ethnic group in the Balkans and the Eastern Med for most of their history. (For example check the awesome book “Salonika:City of Ghosts” by the eminent British historian Mark Mazower and wha the has to say in the “Commerce and the Greeks” chapter)

    Also: @Jack D: the idea that the Greek educational system produces dependency theorists and not software engineers is moronic. Greece has a huge overproduction of scientists and engineers: go to the faculty lists of any major US research university and look at the profs CV’s: there are Greeks literally everywhere. In the department I got my Chemical Engineering degree from 1 out of every 7 profs was Greek!

  • Orson

    I think your thesis (geography and culture ‘fairy’) misses out on one factor that explains why Greece is uniquely different from Argentina and other nations that resist global capitalism.

    And old roommate from Athens at my US university pointed out to me that whatever intellectual and political trends occur in France later then occur in Greece.

    It isn’t merely because Greece has so often been occupied, like France in the 20th century.

    It is because Turkish occupation resulted in Greek’s turning to revanchist Orthodox Christian mores of altrusim, and opposed to egosim that Classical Greece once knew. The latter is culturally ego-syntonic – the former (as ethical Objectivists well know) is not.

    Thus, the source of Greece’s unique cultural dysfunction is a product of perverse adaptation of religious mores.These no only undermine modern capitalistic virtues by actually struggle to defeat it.

    Thus, with Papandreou, Greece has found a Nixon to do the unthinkable and go to China.

    asking, as Mead does, will it ‘take’ and work? Of course not! Revolutionary struggle by other means will persist until the bitter end.

    In other words, it will be like Dr House in rehab – rebelling until the ultimate dysfunctional end. And maybe not even then.

  • Gabe1967

    Greece should definitely be allowed to fail. The Germans would benefit in the long run because it will scare the PIGS into real reform. The short term hit to the Euro will bring about improved trade balances for the exporting nations (N Europe), and ultimately strengthen the Euro. Italy, Portugal and Spain are not in so nearly a financial straightjacket as Greece. While their bonds may require higher rates, their behavior will ultimately save them: needed spending cuts.

  • deek


    Look it up.

    “They” are attempting it everywhere.

  • Mike M.

    This is a snippet from that New York Times article:

    “And bribing government officials to grease the wheels of bureaucracy is so standard that people know the rates. They say, for instance, that 300 euros, about $400, will get you an emission inspection sticker.”

    Four hundred dollars to get your vehicle emission inspection in a country where the per capita income is around 30K?? That sentence implies to me that the true cost for doing it legally is even higher.

    Does this sound insane to anyone besides me?

  • pashley

    To paraphrase a wiser Greek than the current residents, democracy doesn’t work in the long run because the demos won’t curb its appetite, and eventually taxes itself into some tyrannical government that at least has the virtue of balancing the budget.

    My bet is that the modern demos will throw off the restraints of the current EU regime to continue its march into penury, implicitly admitting that the future of the Greek entity belongs to Albanians, Turks, and Arabs anyway. Let them pay for it.

  • SC Mike

    As tax rates increase, so does evasion. It’s human nature to want to keep what one owns and earns and to rebel against higher taxes. Given the rates of evasion in Greece, even more new taxes intended to fill the revenue gap probably accelerate evasion exponentially.

    I witnessed such personally on a drive through Italy in the late 1970s. A new tax provision required diners to retain their receipts while they were within a kilometer of the restaurant they’d just enjoyed so that if tax authorities were doing an audit in the area that day, they could collect receipts and compare those to what the restaurant reported for that day.

    At the conclusion of a fine dinner at a Michelin rated two-star our waiter presented me and my wife with three receipts the following explanation:

    – The high one was for submission for my expense account,
    – The medium one was the real price, what we were to pay.
    – The low one was for the benefit of any Italian tax authorities who might stop us on the way out of town.

    As for any surprise at riots and other rowdy behavior, such is likely when folks perceive that their livelihood, incomes, and savings are at risk as they certainly are in Greece. But the same thing could happen — and has happened — here in the US.

    It was somewhat funny at the time, but the head of the House Ways and Means Committee, Representative Dan Rostenkowski (D-IL) was attacked by a bunch of old folksafter a meeting with community groups in his district where he tried to explain the
    Catastrophic Coverage Act of 1988
    . That act was repealed the following year.

    Threats of cutbacks to Medicare, Social Security, or other programs could spark even fiercer outbreaks. Right now the Tea-Partiers and others are simply expressing dismay at the nation’s dire financial situation and seem content to rely on the next election or two to force real change. But if the situation seems to be accelerating out of control, they or others may become more assertive.

  • Jack D

    Konstantin wrote :”Greece has a huge overproduction of scientists and engineers: go to the faculty lists of any major US research university and look at the profs CV’s: there are Greeks literally everywhere. In the department I got my Chemical Engineering degree from 1 out of every 7 profs was Greek!”

    Greece has an enormous diaspora with many talented people. Why did all those people feel they had to leave Greece in order to achieve? Why can’t their talents be used at home? Greece is full of the rich, cheating on their taxes and the poor cheating on their government benefits and this leaves the honest person in the middle no choice but to leave. And are those black clad anarchist throwing rocks at the police chemical engineers or scientists?

  • I know that the word ‘Capitalism’ has great provenance. Nevertheless, it always irks me. Capitalism is not an ism. Its what happens when you and I are left alone. If we call it anything, we should simply call it freedom.

    By this measure, the Greek lefties don’t like freedom.

  • SC Mike

    Steve –

    Right on! You da man!

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  • Sorry, my clip of your statement didn’t copy…should have read after “interesting”: “the inequality that so often results from capitalism offends deeply held social ideas about fairness.”

    While I’m sure it’s true, it raises more questions than it answers. How about the inequality resulting from inherently unfair autocracies and other forms of non- or anti-capitalist systems? It seems to me that the major area in which wealth inequities would challenge “social ideas about unfairness” would be by providing capitalistic opportunities for the average unrich joe to be stunningly successful in contrast to his lower or lower middle class peers. After all, the filthy rich are even more differentiated from the lay population in autocracies and other non-capitalist societies than in capitalist ones. So why should capitalism breed a sense of unfairness in a society like Greece that has long had a bifurcated history of wealth distribution unless it was among one’s peers in the lower classes, an opportunity that would only arise under capitalism?

  • Tom

    Greece is a young Democracy even though it created Democracy. The Greeks of today are the way they are because of so much war, land lost to new invaders and population exchanges. Maybe look at it from the American Indian point of view. Their own land taken away and when they when to get it back they were the bad guys. Politicians stealing, big companies taking advantage (as they did in the US and all over the world) how can they trust anyone. You must gain the trust of people and even though they are over doing it a bit you must see where they’re coming from to understand. Once you understand then you plan on doing what you need to do from that point of view. Would you make sudden movements next to a person who has been physically abused? That would frighten them and they would run away in defense or attack because of fear of another abuse. You can’t critisize someone in their own shoes while you can see things only from within your shoes. We must see their side (as we should with all things) and guide them to the right way. It’s easy to say what they’re doing wrong. Show the people that have been treated unfairly by governments that they don’t need to fear them as much. Besides the recent government with some big business put them there.

  • Mekonen Haddis

    Neo-Liberalism, and the Greek tragedy.

    May 6, 2010 by

    Neo-liberalism, and the Greek tragedy.

    The country that gave the world the three most important tragedians, Aeschylus, Sophocles and Euripides is facing a major economic tragedy. While economists the world over have differing views on the root cause of Greece’s economic problem, as a non economist, I have been immensely concerned with anarcho-capitalism, (an economic system that destroys government regulation of the economy, and creates economic anarchy within the global economic system).

    The conscious deregulation of the economy that started during the Reagan administration in the U.S. reached its climax during President George W. Bush’s tenure and has brought the global economic chaos the world is in at the moment. Their bankrupt economic theory of the market policing itself, has proven to be as hollow as their dreams of making trillions of dollars without manufacturing anything. (Capitalism without ethics, June, 2009 PSS.WP).

    Sadly, Greek is another glaring example of the failure of neo-liberalism. Developing countries beware neo-liberalism is here to destroy you, not to save you. And those politicians that still praise the virtues of neo-liberalism, as Ashley St.Claire would say, they are either dim-witted or have a personal agenda that would personally benefit them at the expense of the interest of their countries.

    Neo-liberalism is what Susan Strange calls “Casino Capitalism”. She is one of the first to have for seen the dangers of anarcho-capitalism. She has linked “casino-capitalism”, in to a number of trends among which are: government’s deregulation of the economy, (based on the fallacy that, the market and the banks would regulate themselves), and commercial banks turning in to investment banks. Susan Strange’s work is an essential contribution in de bunking the dominant doctrine of neo-liberalism.

    Recently, the EU and the IMF have agreed to extend $147 billion dollars rescue under a three year agreement. This “rescue” plan actually is intended to rescue French and German banks that are holding a large share of Greece’s bonds. Moreover, the “rescue” is meant to temporarily stop a widening debt crisis in Europe which might include Portugal, Spain and Italy. In all this, the Greeks will be burdened with more debt, and are required to take harsh budget cuts.

    In order to comply with the EU and IMF’s “rescue” plan, the Greek government will cut public-sector workers’ pay by 20%, raise the retirement age, increase sales tax to 23%, increase the price of tobacco products, alcohol and gas by 10%, increase taxes on property and businesses, etc. etc. Even if all this drastic measures are instituted according to plan, the actions taken actually would increase Greece’s debt and shrink its economy by 4%. How about a big applause to neo-liberalism?

    Focusing only on dollars and cents, what usually is left out is any discussion of the impact of neo-liberalism’s creation of political instabilities around the globe. The main crime of neo-liberalism is its unparalleled focus on greed some would say debauchery and social injustice.

    I only hope, the violence in Greece would quickly recede before it destroys a country that is the root of European civilization.

    Professor Mekonen Haddis.

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  • blue monkey

    Greece and Spain won’t pay back. The only thing Germans can do is:
    REPOSES 170 Leopard 2AEX Battle Tanks from Greece, and 190 Leopard 2A6E Battle Tanks from Spain.
    U.S.A must REPOSES 170 F-16 Jet Fighters from Greece, … the rest is gone with the wind …forever …
    Greece must stop paying lucrative pensions with borrowed money, reform the free health care system, and cut down, 4 times the military budged.

  • A

    This is a great analysis of the history leading to the problem, but I think the West generally fails to understand what the average Greek in Greece wants from the politicians: to the extent austerity must be adopted, politicians should go first. So an average Greek does not want to pay a toll on a bridge if a politician goes free. This means that the politician must not use the official car to go free on weekends, when he is going to his village. Same with taxes – an average Greek does not want to declare his true salary if a politician (whose salary is known) declares only E15,000 whiles driving his late model mercedes. To say that 30% of the economy is underground misses the point. The 30% that does not pay taxes is not primarily undocumented people and poor people. It is rich HNW income earners, and capitalists, and the civil servants who are not paying taxes. The cheating on stamps, stickers and licenses is unbelievable, but it comes from two issues: first, it is so hard to accomplish anything on a productive scale that people became willing to pay in “fakelaki” to get the thing done and second, because it is renting certainty for a short time period, a trait that became valuable when Greece was not in control of itself. Thus, the habit and tendency toward underground actions was established, and the government, by making everything take so long, facilitated its own employees actions. I wish the English-speaking media would concentrate on whether the civil servants and elected officials including parliament are complying with the income tax and VAT rules regarding receipts, because it would appear that compliance in this regard has been missing for a very long time.

  • Mekonen Haddis

    Neo-Liberalism and the role of Government.

    May 23, 2010 by

    Neo-Liberalism and the role of Government.

    When a government abdicates its responsibility in regulating the economy (as did the U.S. government), capitalist greed accompanied by all sorts of illegal amassing of wealth by the few, at the expense of the majority in society takes place. In other words, policies of neo-liberalism compel governments to abandon regulation of the economy, so that only profit- making becomes the law of the land. Society be damned. The citizen is only a consumer. The government is only a facilitator of business exploitation.

    A government as a body that has the power to enforce environmental, labor and consumer laws was required by neo-liberal philosophy to abandon its most critical responsibility of social policy to “market forces”. While it is true that Democracy gives ordinary people a significant voice in government, at the end of the day, who makes the policies that the U.S. government pursues, is what matters. When that question is properly answered, then, we will find out who has power in America.

    If a government relinquishes its central and essential duty of protecting the poor. If it fails to tackle unemployment, poverty, and income disparity in society, then, who is it working for? When the government makes it its religious duty to propagate privatization and market deregulation, then we see the sleeper hold neo-liberalism has on government. “Under Neo-liberalism everything either is for sale or is plundered for profit”. Giroux.

    Explaining the danger of neo-liberalism on society, Henry A. Giroux writes,

    “Neo-liberalism has become one of the most pervasive, if not, dangerous ideologies of the 21st century. Its pervasiveness is evident not only by its unparalleled influence on the global economy, but also by its power to redefine the very nature of politics itself. Free market fundamentalism rather than democratic idealism is now the driving force of economics and politics in most of the world”.

    Unlike president Reagan who believed that the “government was a problem, not a solution”, President Obama says, “ that the real issue was not whether government ought to be big or small but whether what it did actually worked”. President Obama in his speech on overhauling financial regulation, seems to have understood the failure of neo-liberalism and the economic destruction it has brought on the U.S. in specific, and the world in general. Moreover, he has made the government’s ceding its responsibility as one of the main culprits for the United States’ financial meltdown. Obama said:

    “Now, one of the most significant contributors to this recession was a financial crisis as dire as any we’ve known in generations — at least since the ’30s. And that crisis was born of a failure of responsibility — from Wall Street all the way to Washington — that brought down many of the world’s largest financial firms and nearly dragged our economy into a second Great depression. A free market was never meant to be a free license to take whatever you can get, however you can get it. That’s what happened too often in the years leading up to this crisis”. (Neo-Liberalism, Anarcho-Capitalism).

    For the first time in the last thirty years, the bankruptcy of neo-liberalism is so obvious that neither sorcery nor religion could save it. According to Naomi Klein, Neo-Liberalism “has been a class war waged by the rich against the poor, and I think that they won. And I think the poor are fighting back. This should be an indictment of an ideology. Ideas have consequences. Wall Street crisis should be for neo-liberalism what fall of Berlin Wall was for Communism”.

    Professor Mekonen Haddis.


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  • Can’t wait to see you guys in Rochester NY!!!!When and were will it be???

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