Greek Democracy in Action

By CFS

After more than a year of protests, general strikes, and clashes with authority, the Greek people have been given a chance to decide their own destiny and it looks very likely that voters will reject the debt deal put forward by the EU.  Financial markets reacted very negatively to the news, it would seem that markets aren’t very confident that Greek voters have international banks’ best interests in heart.

Ordinary people given the chance to decide the future of their own democratic country seems almost like a novelty.  I wonder what would have happened had Americans been given the chance to vote on TARP?  We might not have seen the rise of the Tea Party and OWS had it not been the shoveling of trillions of dollars tax payer money down the black hole of Wall Street’s quarterly reports.

Of course, Europe’s and America’s power brokers are just a little displeased, as the Greek PM, George Papandreou, is threatened by the fall of his government for his decision to put this issue in front of voters and will face angry EU leaders who will push for implementation of the plan even in the face of the Greek vote.  I guess he’ll learn his lesson that governing is for technocrats, not people… silly socialist.

The financial deal would force Greece to accept large cuts in public spending and is projected to increase already high unemployment rate partially caused by austerity measures adopted in 2010 in return for another bailout package.  But, as we’ve seen with Wall Street bailouts, such measures aren’t meant to help Greece, but to insure the profits of the bond holders, and of course, the only answer to debt is more debt.  Sound logic if you ask me.  The Naked Capitalist blog has a good post on the success of another country that rejected a financial bailout, even in the face of rising social spending.

I’m personally very interested in how a democratic vote will end up effecting this year’s Christmas bonuses at financial firms.

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  1. Ingemar Johansson

    Ben Franklin: “Democracy is 2 wolves and a sheep voting on whats for dinner”.

  2. Ingemar Johansson

    Then there’s this from my buddy Mark Steyn.

    “Whether Greece defaults or gets bailed out one mo’ time doesn’t really matter: It’s insolvent, and there isn’t enough money in Germany to obscure that fact indefinitely. The longer “political reality” tries to dodge real reality, the bloodier the eventual reacquaintance will be. Europeans are going to have to relearn impulses three generations of Continentals have learned to regard as hopelessly vulgar. Can they do that? A land of 30-year-old students and 50-year-old retirees has so thoroughly diverted the great stream of life that it barely comprehends what’s at stake. ” –Mark Steyn

    • I know not this Mark Steyn. But this is what a little research will do. “The lazy Southern Europe” and “Greeks retire early” are myths. http://www­.spiegel.d­e/internat­ional/euro­pe/0,1518,­763618,00.­html
      Actually the average Greek retires at 61.9 slightly above Germany and Spain at 61.8. The whole Eurozone deal was not universall­y loved by the citizens of many countries. It was pushed through by financial elites to sell stuff from Germany and France to poorer countries who did not have as much to export. Why did Greece need French fighter jets? Same here. The elites aka 1% here have turned the U.S. back into a colony. A colony exports raw materials and imports finished goods. That was why we rebelled against England to begin with. We rebelled against having to buy their finished shoes, furniture, etc. And also have to pay the Bank of England high interest rates. We have come 360º.
      Time for all of us to slow down and think local. And regain our sovereignty.

      • Ingemar Johansson

        Sure, the average retirement age is probably in the low 60’s. But what’s not mentioned is at what level?

        Pre 1992 hires can retire at 58 with 80% of their salaries. I’m thinking the average approaches 62 because they qualify for 100%.

        Then there’s this. More Mark Steyn.

        “I mentioned Greece a moment ago – a great civilization, or it was. Now it’s a basket case. They set up a caring compassionate progressive society and it’s bankrupted them. In Greece, a female working in a quote “hazardous” job can retire with a full government pension at 50. What do you think “hazardous” means? Originally, it means jobs like bomb disposal, and mining. Anyone here want to go into bomb disposal? Don’t blame you, hazardous. But, as is the way of government entitlements, the “hazardous” category growed like Topsy. Five hundred and eighty professions now qualify as “hazardous”, among them hairdressing. Anybody here want to go into hairdressing? Well, you should, because it’s a great deal – you get to retire at 50 because it’s a “hazardous” profession. Quote: “I use a hundred different chemicals every day — dyes, ammonia, you name it,” 28-year old Vasia Veremi told The New York Times. “You think there’s no risk in that?” Not to mention all those scissors. In Greece, TV and radio hosts can retire at 50, because they use microphones which could increase their exposure to bacteria. This very microphone counts as a hazardous work environment in Greece. I’m a writer. Isn’t that pretty “hazardous”? You print stuff out, you could get a nasty paper cut. Takes its toll over the years. Greece is broke, it doesn’t have enough Greeks to stick it to, so it’s getting Germany to bail it out.”

  3. One should be careful comparing Greece with Argentina. First, Greece doesn’t have its own currency. That’s a major problem (although there were many of us that saw the advent of the Euro as a potentially dangerous monetary experiment for exactly the situation that Greece is in.)

    Which brings me to a second point. The referendum is really a vote by the Greeks on the greater EU Experiment. It’s not easy to imagine that the Greeks take issue with being told how to run their economy by the federal EU authority. We must remember, however, that Greeks were early adopters in joining the EU. Hindsight being what it is, it seems that the Greeks have discovered this was a mistake on their sovereignty.

    But, as I always say, public opinion doesn’t always lead to good public policy. I’ll be the first to say that the big European banks that have exposure to Greek debt (and please recall this is government debt) should be the first to take their hits. That, however, includes the Greek banks which have a huge exposure to their own government’s debt. Argentina did not have near the level of exposure in their own debt as do the Greeks. Greeks need to consider what damage will be done to their economy by a collapse of their banking system and what measures and consequences that will have. I’m not arguing that default isn’t a good option. I’m simply pointing out that a plebiscite of this nature likely underestimates the difficulties that are around the corner. For example, if Greece leaves the Euro it’s likely that all foreign deposits in Euros will leave immediately causing a run on the banks. Think 1932 on steroids for the Greeks. Things will be hard for the entire society.

    I won’t get into the debate about what has caused Greece’s economic failure beyond saying that, for some time now, Greece hasn’t produced enough economic output to support their system. In all this talk about debt default little attention has been paid to the underlying disease of which their debt is a symptom. I think the Greeks have a long way to go in accepting that reality.

    Last, and certainly not least, a default to lock Greece out from aid from its fellow EU members. Germany and France will have no incentive to help Greece’s fiscal problems insofar as Greek default will cause a financial shock in their respective financial systems. I doubt, too, that Greece will be able to look to China for help insofar as China will not want to be on the receiving end of yet another default if things go as badly as the potential.

    Liberal democracy is a wonderful thing in many respects. But when a system has become so FUBAR that not even “experts” can agree on a corrective path one has to consider the downside of popular direct democracy. The Greeks, no matter what, are about to see it.

    • carfreestupidity

      You make some very good points Dave, and I agree with most of the them.

      However, I don’t see this as a vote on the European experiment per se, its more of a vote on the single currency and ECB policies driven by Germany and France than it is on the idea of continental integration in general. Yes the Greeks and most of the EU countries were fine with handing off a certain level of autonomy to an EU legislative body, but the decisions that have been made within the EU regarding Greek debt have, for the most part, not been made within that framework. Rather you have national level politicians from the “important” EU countries brokering deals on behalf of Greece in an attempt to save their own countries from the financial and economic repercussions of a Greek – or Irish, or Spanish, or Italian – default.

      • Well, considering that the EU membership was as much about an eventual common currency and agreements by sovereign states to live within strict budget constraints, we’ll have to agree to disagree.

        If the Greek vote does not approve the budget measure I’ll put odds on Greece being expelled from the union. That seems to be a direct referendum to me. As always, however, I could be wrong.

        • Ryan Emmett Morton

          Perhaps booted from the currency union, but I don’t know why they’d be booted from the EU (both Denmark and the UK don’t use the euro currency currently and remain in the Union).

  4. jack ruby

    Man I could really go for a gyro at the acrop right about now.




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