Posts tagged Spain

Column on Greece in America

Greece in America

Tibor R. Machan

Most of us who are aware of world financial trends know that earlier this year thousands of Greeks took to the street and mercilessly engaged in destruction of property around Athens. They were upset about having to tighten their belts in the wake of the possibility that some of their entitlements will have to be cut and their retirement postponed past age 57. In short, they were upset that the freebies they had come to take for granted may have to be reduced, even completely cut. Few of them seemed to have a clue about how one cannot get blood out of a turnip. After decades of living off the work and incomes of other people and future generations — via borrowed funds — the gravy train is very likely to reach its termination point.

In much of Europe the attitudes of these Greeks is routine. They have welfare states in spades and few have ever warned them about the hazards of living in such systems. These last few years may finally have produced such a warning but only by creating hardship for those who have become completely dependent on the system. Greece, Portugal, Italy, and Spain are just the more drastic examples. But the entire continent is experiencing the consequences of decades of profligacy. Instead of testing a truly revolutionary alternative to socialism — which of course crashed with the demise of the old USSR and its colonies — namely a consistent free market, capitalist economic order (with a proper constitutional framework) — what most Western European politicians chose to do is to turn toward socialism with a human face, of the democratic kind (i.e., without outright police state policies).

This has been a strategy adopted in America as well. Promoters of more and more entitlement programs and top down federal and state government economic regulations have been clamoring for America to become a so called compassionate system (and throwing around accusations that adversaries and critics of government profligacy are mean, lack heart, etc.). These and similar ways were meant to accommodate the moral and political sentiments of the former Soviet system. The only difference is that while the Soviets realized that their planned economy requires the police state and met their demise by applying police state policies, the Western welfare states try to square the circle by preaching compassion and kindness while enacting laws and regulations that in fact require a firm hand by the government.

So after it is becoming clear enough that no system can survive with the reckless economic policies of the welfare state, what is left? We see the answer on the streets of New York and elsewhere with the attacks on Wall Street. Just as the Germans turned upon Jews, whom they irrationally held responsible for their economic wows, the Wall Street protesters are scapegoating a segment of the American population that not only does not deserve this but may actually be the last hope of the American and even world economy. “We don’t much like our situation, so let’s pick on Wall Street traders and companies and blame them for it.” What these people are calling for is just a bit short of stringing up or liquidating the very people who are mostly hard at work trying to earn a living for themselves and their clients.

Yet given the mainly mindless commentaries on the Greek, Portuguese, and Italian economic situations, given how so very few mainstream observers pick the correct culprit — namely, the welfare state and its coercive wealth redistribution and punishment of productivity — it is not all that surprising that young Americans tend to turn on those who are managing to make it in this economy. They feel, having been so urged to feel, that they are owed a living — they have gotten free education and most of them are still getting one (protesting vociferously every time tuition is raised) as an object lesson and now that this can no longer be sustained they are picking on precisely those who carry very little of the responsibility for their circumstances.

Why are so many surprised with this? Almost all of the teachers, from elementary to graduate schools, have preached the welfare statist mantra that we all have a right to be taken care of. So what is one to expect?

Column on Protesting Austerity Measures

Protesting Austerity Measures

Tibor R. Machan

Throughout Europe it is now routine–but it is not unfamiliar by now in the US either–for people to march and otherwise protest (sometimes with out and out reckless violence) austerity measures the government officials have decided to deploy so as to cope with the enormous debt they have amassed, mostly from committing to paying out huge entitlements that are not covered by funds either present or promised.

This is happening in Greece, Portugal, Spain, and other countries and only a few are somewhat prepared to handle them internally, without depending on getting funds from other countries. Of course, many in those other countries are themselves protesting these efforts to rectify profligacy by raiding the treasuries, with EU sanction, of the better managed ones. (Not that any of these welfare states have escaped completely their considerable financial malpractice!) But a substantial portion of the citizenry of Germany, for example, does not view this public wealth redistribution with enthusiasm. And while such welfare states as Germany may have numerous citizens who favor wealth redistribution within their societies, most stop at the border (which goes to show you what kind of “generosity” and “compassion” is involved in welfare statism).

The puzzle is that so many people seem to be aghast at the fact that when the politicians and bureaucrats, most often with substantial support from large segments of the citizenry, accumulate enormous debts, the country not only runs out of funds but looses its credit rating so that borrowing becomes more and more troublesome. Yes, and this is something the USA faces as do Greece, Portugal, Spain, etc.

But why are people protesting? Isn’t it a plain fact of public–not to mention private–finance that one cannot get blood out of a turnip? Aren’t people aware of all this form their own personal economic situations? When one maxes out one’s credit cards, is no longer able to refinance one’s home, and experiences all sorts of economic setbacks–caused, usually, by a smorgasbord of malpractice throughout the economy (which is nearly impossible to sort out so that it might be possible to tell the guilty from the innocent)–why is it that folks insist that somehow, anyhow, all this just get papered over or simply overlooked and that their hefty entitlements based on the fantasy of eternal welfare statism keep being undisturbed?

There can be numerous states of mind that may account for this. One of them is certainly the kind of political shenanigans perpetrated by the likes of those who insist that it is all the fault of the wealthy, who are soaking the treasury somehow–and if so, mostly with the complicity of the self-same politicians–and if only the rich could be soaked back, it would all get fixed. The idea that all this is a zero sum game–so that some are raking in huge gains at the expense of others and it would take but a bit of thorough investigation to sort it all out–is quite prominent in the minds of many, judging by the comments of prominent pundits and media figures on Op Ed pages and talk shows.

Yet there is also the plain delusion on the part of millions of people that one can indeed get blood out of a turnip, a delusion backed by some academic economists’ fancy idea that all it takes to remedy matters is to carry out some kind of magic–like deploying the famous Keynesian multiplier effect whereby the bureaucrats pump a bit of funny money into the economy via artificial money printing and public spending only to have it turn into massive wealth down the road (via the creation of employment based on such phony spending). Still, to make this credible one needs a large portion of the citizenry who all believe in magic to start with, that somehow debts can be wished away, not paid up, for example. That something can come from nothing (and idea that some philosophers actually propose)!

I am sure there are many other sources of the idea that when countries run out of funds, these can be made up by engaging in some imaginative accounting or something, so that there is no need for austerity, certainly for any austerity that will have an impact on the entitlements received by people to whom promises were made based on, well, sheer hope and wishful thinking.

So why aren’t politicians and bureaucrats–and their academic cheerleaders–coming out with some honest explanations, insisting that the citizenry face up to all this and stop throwing hysterical fits when finally the chicken come home to roost? Because most of these public servants are cowards and refuse to make any effort at genuine leadership, statesmanship. So much for their serving the public interest.