The Crisis In Greece Should Be A Lesson For Governments Everywhere, But It Won’t Be

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        Do not think about, write about or deal with  human behavior without determining the effects of incentives. It’s not their money, of course they’ll waste it.


    Wherein we see what happens when one runs out of other people’s money. Greece is like the brother-in-law who begs for money for his business, keeps getting “temporary” loans to keep it going and then gets really angry when his 10th request is denied.

    National Post – (Latest Edition)
    George Will in Washington
    Washington Post

Cut Greece loose

It can’t be said enough: you can never have too many socialist smash-ups
Will: ‘Greece, is unlikely to cause a contagion by leaving the eurozone.’

Now come Greeks bearing the gift of confirmation that Margaret Thatcher was right about socialist governments: “They always run out of other people’s money.” Greece, from whose ancient playwrights Western drama descends, is in an absurdist melodrama about securing yet another cash infusion from international creditors. This would add another boulder to a mountain of debt almost twice the size of Greece’s gross domestic product. This protracted dispute will result in desirable carnage if Greece defaults, thereby becoming a constructively frightening example to all democracies doling out unsustainable, growth-suppressing entitlements.

In January, Greek voters gave power to the left-wing Syriza party, one third of which, The Economist reports, consists of “Maoists, Marxists and supporters of Che Guevara.” Prime Minister Alexis Tsipras, 40, a retired student radical, immediately denounced a European Union declaration criticizing Russia’s dismemberment of Ukraine. He chose only one cabinet member with prior government experience — a leader of Greece’s Stalinist communist party. Tsipras’ minister for culture and education says Greek education “should not be governed by the principle of excellence … it is a warped ambition.” Practicing what he preaches, he proposes abolishing university entrance exams.

Voters chose Syriza because it promised to reverse reforms, particularly of pensions and labour laws, demanded by creditors, and to resist new demands for rationality. Tsipras immediately vowed to rehire 12,000 government employees. His shrillness increasing as his options contract, he says the European Union, the European Central Bank and the International Monetary Fund are trying to “humiliate” Greece.

How could one humiliate a nation that chooses governments committed to Rumpelstiltskin economics, the belief that the straw of government largesse can be spun into the gold of national wealth? Tsipras’ approach to mollifying those who hold his nation’s fate in their hands is to say they must respect his “mandate” to resist them. He thinks Greek voters, by making delusional promises to themselves, obligate other European taxpayers to fund them. Tsipras, who says the creditors are “pillaging” Greece, is trying to pillage his local governments, which are resisting his extralegal demands that they send him their cash reserves.

Yanis Varoufakis, Greece’s finance minister, is an academic admirer of Nobel laureate John Nash, the Princeton genius depicted in the movie “A Beautiful Mind,” who recently died. Varoufakis is interested in Nash’s work on game theory, especially the theory of co-operative games in which two or more participants aim for a resolution better for all than would result absent co-operation. Varoufakis’ idea of co-operation is to accuse the creditors whose money Greece has been living on of “fiscal waterboarding.” Tsipras tells Greece’s creditors to read “For Whom the Bell Tolls,” Ernest Hemingway’s novel of the Spanish Civil War. His passive-aggressive message? “Play nicely or we will kill ourselves.”

Since joining the eurozone in 2001, Greece has borrowed a sum 1.7 times its 2013 GDP. Its 25 per cent unemployment (50 per cent among young workers) results from a 25 per cent shrinkage of GDP. It is a mendicant reduced to hoping to “extend and pretend” forever. But extending the bailout and pretending that creditors will someday be paid encourages other European socialists to contemplate shedding debts — other people’s money that is no longer fun.

Greece, with just 11 million people and two per cent of the eurozone’s GDP, is unlikely to cause a contagion by leaving the zone. If it also leaves the misbegotten European Union, this evidence of the EU’s mutability might encourage Britain’s “Euro-skeptics” when, later this year, that nation has a referendum on reclaiming national sovereignty by withdrawing from the EU. If Greece so cherishes its sovereignty that it bristles at conditions imposed by creditors, why is it in the EU, the perverse point of which is to “pool” nations’ sovereignties in order to dilute national consciousness?

The EU has a flag no one salutes, an anthem no one sings, a president no one can name, a parliament whose powers subtract from those of national legislatures, a bureaucracy no one admires or controls and rules of fiscal rectitude that no member is penalized for ignoring. It does, however, have in Greece a member whose difficulties are wonderfully didactic.

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    In spite of the increasing cost of the European Union administration which contains, as do all government agencies, employees whose activities are useless or detrimental, it does nothing but shuffle paper and make symbolic announcements.

It cannot be said too often: There cannot be too many socialist smashups. The best of these punish reckless creditors whose lending enables socialists to live, for a while, off other people’s money. The world, which owes much to ancient Athens’ legacy, including the idea of democracy, is indebted to today’s Athens for the reminder that reality does not respect a democracy’s delusions.

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  They thought that the temporary good times would last forever. When they didn’t, almost everyone was shocked and dismayed.

   Churchill thought that a European Union was an inevitable good. I’m very curious about  what he would think of the current situation.

Government Job or Respect–Which’ll It Be?
Cheerio and ttfn,
Grant Coulson, Ph.D.
Author, “Days of Songs and Mirrors: A Jacobite in the ‘45.”
Cui Bono–Cherchez les Contingencies

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One Response to “The Crisis In Greece Should Be A Lesson For Governments Everywhere, But It Won’t Be”

  1. rennydiokno2015 Says:

    Reblogged this on rennydiokno.com.

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